Commons Sitting of 18 June 1934

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

PRIVATE BUSINESS.
St. Helens Corporation (Trolley Vehicles) Provisional Order Bill,
Read the Third time, and passed.

ORAL ANSWERS TO QUESTIONS.

  LEAGUE OF NATIONS (NEW BUILDINGS).
  Mr. BARCLAY-HARVEYasked the Secretary of State for Foreign Affairs how many contracts for the new League of Nations buildings at Geneva have been awarded to countries which are up to date in their subscriptions to the League, and how many to countries which are in arrears with their subscriptions; and what is the total value of the contracts in each case?
  The SECRETARY of STATE for FOREIGN AFFAIRS (Sir John Simon): As regards the first part of the question, I must refer my hon. Friend to the reply given by the Prime Minister to my hon.
  2
  Friend the Member for Aston (Captain A. Hope) on 30th May. The only firms among those who have obtained contracts which belong to countries in arrears with their subscriptions are the German and Hungarian. I am obtaining from Geneva the information asked for in the second part of the question, and will communicate it to my hon. Friend in due course.
  Mr. HANNON: Is it the case that in the League of Nations, when contracts of this kind are being considered, discrimination is exercised in favour of countries that pay their contributions?
  Sir J. SIMON: The matter is in the hands of a committee, and I cannot answer the question without notice.

  LENA GOLDFIELDS, LIMITED (ARBITRAL AWARD).
  Sir WILLIAM DAVISONasked the Secretary of State for Foreign Affairs whether his attention has been called to the official announcement by the Russian Soviet Government denying that any agreement or understanding had been arrived at between themselves and the British Government, prior to the signing of the recent Trade Agreement, that they would reconsider or amend their former offer for a settlement of the arbitral award of £13,000,000 in favour of Lena Goldfields, Limited; and what action he proposes to take in the matter, in view of the fact that this announcement conflicts with previous declarations on the subject?
  Lieut.-Colonel J. COLVILLE (Secretary, Overseas Trade Department): I presume my hon. Friend has in mind a letter from the Press Attaché to the Soviet Embassy published on 11th June. As regards the nature of the understanding with the Soviet Government which led to the recent negotiations in Moscow, I would refer to the reply which I gave to my hon. Friend's question on 29th January.
  Sir W. DAVISON: Is the hon. Gentleman aware that, in replying to that question, he informed the House that the Soviet Government had intimated that it was their desire that the company should approach them again and that, as the result of that intimation, the British Government requested the company to go to Moscow, and they are now saying that no such request was made?
  Lieut.-Colonel COLVILLE: The facts are that there was an understanding based on a mutual amendment of terms. The mutual amendment has taken place, but in our view the amendment made by the Russian side cannot yet be regarded as satisfactory.
  Sir W. DAVISON: Is my hon. Friend aware that, when the Russian representative of the company went to Moscow, they disclaimed the idea that they wished to see him and they had no proposals whatever to make?
  Lieut.-Colonel COLVILLE: Proposals have in fact been made, but not proposals which we can regard as satisfactory.

  JAPAN AND CHINA.
  Mr. RHYS DAVIESasked the Secretary of State for Foreign Affairs if he can state the number of Japanese troops who are still south of the Great Wall; and whether, in view of the provisions of the Nine-Power Treaty affecting the integrity of China, it is proposed to press for their removal from Chinese territory?
  Sir J. SIMON: My information is that the only Japanese forces at present stationed in intra-mural North China are those normally maintained there under international agreement for the protection of the Japanese Legation at Peking, and of the railway from Peking to the sea. There are also Japanese troops at Shanghai among those belonging to other
  4
  foreign Powers. I cannot give the numbers in either instance. The answer to the second part of the question is in the negative.
  Mr. DAVIES: Does the presence of troops in these areas in any way conflict with the integrity of China?
  Sir J. SIMON: I think my previous answer showed that, as far as my information goes, they are there either under international agreement or because, like other troops, they belong to foreign Powers at Shanghai.
  Mr. HARTLAND: What is China within the meaning of the Act?

  GERMAN LOANS (MORATORIUM).
  Sir ASSHETON POWNALLasked the Secretary of State for Foreign Affairs if his attention has been called to the default by the German Government on the Dawes and Young loans; and what action the Government intends to take with regard thereto?
  Mr. HANNONasked the Secretary of State for Foreign Affairs if his attention has ben called to the protest submitted to the German Government by the directors of the Bank for International Settlements, following the announcement of the suspension of interest payments on the Dawes and Young loans; and, as the non-payment of interest on those loans constitutes a violation of the relevant clauses of the treaties of the Hague and Lausanne, what action, if any, is contemplated by His Majesty's Government?
  Sir J. SIMON: I would refer my hon. Friends to the reply given by my right hon. Friend the Chancellor of the Exchequer on 15th June last.
  Mr. THORNE: Does the right hon. Gentleman recognise that the Germans have any amount of money to spend on armaments, and yet they cannot afford to pay their debts?

  EUROPE (PEACE CONVENTION).
  Mr. HANNONasked the Secretary of State for Foreign Affairs whether any recent approach has been made to the German Government with a view to

  5
  establishing a convention, of the states of Europe to prepare the way for permanent peace?
  Sir J. SIMON: I have no knowledge of any approach to the German Government for the purpose suggested in my hon. Friend's question.
  Mr. HANNON: Has the right hon. Gentleman's attention been called to the Prime Minister's speech last week in which he said he was prepared to meet Germany and suggested a convention as adumbrated in my question?
  Sir J. SIMON: I do not think the Prime Minister's declaration in any way conflicts with my answer.

  ITALY, AUSTRIA AND HUNGARY (AGREEMENTS).
  Mr. MABANEasked the Secretary of State for Foreign Affairs whether he is in a position to make any further statement on the economic arrangements recently made between Italy, Austria, and Hungary?
  Sir J. SIMON: No, Sir. I can add nothing to the reply which I gave to my hon. Friend on 11th June.
  Captain CAZALET: Has this country waived most-favoured-nation treatment under these arrangements?
  Sir J. SIMON: There has been no formal decision to that effect. I think there is a good deal of sympathy with the view that Austria is in a particular position.

  AGRICULTURE.

    SMALLHOLDINGS.
    Sir THOMAS ROSBOTHAMasked the Minister of Agriculture what progress is being made in the direction of setting up the association of smallholdings, to take advantage of the grant of £50,000 per annum for three years offered by the Government?
    The MINISTER of AGRICULTURE (Mr. Elliot): Further discussions have taken place between representatives of certain of the voluntary bodies interested and of the Government Departments concerned in order to settle various points of principle and detail, but I am not in a position to make any definite announcement at present.

    EGGS AND POULTRY.
    Mr. HASLAMasked the Minister of Agriculture if he has considered the terms of the resolution adopted by the Conference of Egg and Poultry Producers at Caxton Hall, on 8th June; and if, in view of the statement that distress is spreading amongst egg producers who, as a rule, have but small capital resources, he will consider taking measures to tide the industry over the intervening period until the Government are able to introduce their long-term policy?
    Mr. ELLIOT: The answer to the first part of the question is in the affirmative. As regards the second part, I would refer to the reply I gave the hon. Member for Ormskirk (Sir T. Rosbotham) on 11th June, a copy of which I am sending to my hon. Friend.

    MEAT IMPORT RESTRICTIONS.
    Mr. HASLAMasked the Minister of Agriculture if he is in a position to state what restrictions on dead-meat imports, both from our Dominions and foreign sources, will be proposed after 30th June; and if he can make any statement of policy?
    Mr. ELLIOT: I regret that I am unable to add to the replies I gave to my hon. Friend on 4th June.
    Mr. HASLAM: When will the right hon. Gentleman be able to make a statement?
    Mr. ELLIOT: I am afraid I cannot give any date.

    TUBERCULOSIS ORDER, 1925.
    Mr. RHYS DAVIES (for Mr. T. WILLIAMS)asked the Minister of Agriculture how many qualified veterinary surgeons are employed by his Department exclusively for inspecting cattle, and farm sheds and buildings, and other duties involved in the Tuberculosis Order, 1925; and how many inspections were carried out during the last year for which figures are available?
    Mr. ELLIOT: There are no qualified veterinary surgeons employed by the Ministry exclusively on duties involved under the Tuberculosis Order, 1925, which, in the main, is administered by the local authorities and their veterinary staffs. Imported cattle are examined in the landing places by the Ministry's veterinary staff for tuberculosis as well as for other

    7
    scheduled contagious diseases, and on this work 11 veterinary inspectors are employed full time.
    Mr. DAVIES: May I ask the right hon. Gentleman whether he is aware of the present number of persons employed upon those inspections, and, if he is not satisfied, will he be good enough to look into the matter?
    Mr. ELLIOT: As my hon. Friend knows, we have proposals before Parliament for the improvement of the dairy herds.

  SOUTH AFRICAN PROTECTORATES.
  Captain CAZALETasked the Secretary of State for Dominion Affairs whether he will consider issuing a return of all instruments, showing the nature and extent of the authority and relevant documents, covering the relationship of this country with the three protectorates: Bechuanaland, Basutoland, and Swaziland?
  The SECRETARY of STATE for the DOMINIONS (Mr. J. H. Thomas): I am arranging for my hon. and gallant Friend to be supplied with a list of the Orders in Council providing for the exercise of His Majesty's jurisdiction in these territories. Copies of these Orders are available in the library of the House.
  Captain CAZALETasked the Secretary of State for Dominion Affairs what is the total amount of any grants-in-aid made to Basutoland, Bechuanaland, or the Swaziland protectorates, respectively, since the passing of the Act of Union in 1909?
  Mr. THOMAS: As the reply is somewhat long and contains a number of figures, I will, with my hon. and gallant Friend's permission, circulate it with the OFFICIAL REPORT.
  Following is the reply:
  The total assistance granted from the United Kingdom Exchequer in aid of administration in the territories in question from 1909 to the end of the last financial year is as follows:

  £

  Bechuanaland Protectorate

  232,000

  Swaziland

  142,900

  Basutoland

  Nil

  In the case of the Bechuanaland Protectorate the total is made up of grants amounting to £55,000 made during the years 1909 to 1912 and a grant of £177,000 made in the year ended 31st March last. In the case of Swaziland the grants cover the period from 1928 onwards. In addition, further sums of £65,000 and £60,000 are included in the Estimates for the current year in respect of the Bechuanaland Protectorate and Swaziland respectively. In the case of Swaziland loans totalling £23,600 bearing 5 per cent. interest and repayable after three years by 10 annuities, have also been made to the local administration for advances to settlers, and a further loan of £l,500 for this purpose is included in this year's Estimates. These figures are exclusive of loans and grants amounting to about £61,000 issued or promised to these territories from the Colonial Development Fund.

  ROYAL AIR FORCE (OIL SUPPLIES).
  Major-General Sir ALFRED KNOXasked the Under-Secretary of State for Air, with regard to that part of the oil for the Royal Air Force which is obtained from Russian Oil Products, whether he will consider the desirability of discontinuing the use of any oil which is drawn from wells confiscated from their British owners?
  The UNDER-SECRETARY of STATE for AIR (Sir Philip Sassoon): I am advised that the British firms who hold the contracts for the supply of aero engine lubricating oil would find it impossible to guarantee that the Russian oils which they buy do not emanate from any particular oil fields. I may add that these purchases are not made from Russian Oil Products, Limited, but from other Russian agents.
  Sir A. KNOX: Is it not possible to get oil from an untainted source? There are lots of oil without the British Government becoming a receiver of stolen goods.

  AGRICULTURAL RATING (EXCHEQUER GRANTS).
  Mr. LEONARDasked the Minister of Health what is the total sum paid out of the Exchequer to recoup local authorities for loss of rating revenue through the whole or partial exemption of agricultural land and buildings since 1893?
  The PARLIAMENTARY SECRETARY to the MINISTRY of HEALTH (Mr. Shakespeare): The grants paid to local authorities in England and Wales under the Agricultural Rates Acts, 1896, 1923, and 1929, and under Section 112 of the Local Government Act, 1929, so far as it relates to the derating of agricultural hereditaments, amounted to £70,719,008. These grants were in respect of periods up to 31st March, 1930. As from 1st April, 1930, a general Exchequer contribution is distributed annually to local authorities under the Local Government Act, 1929. This includes amounts, calculated on the basis of the figures of the standard year 1928–29, equivalent to the grants previously paid under the Agricultural Rates Acts, 1896 and 1923 (amounting to £4,733,095) and to the losses on account of rates caused by the derating of agricultural, freight-transport and industrial hereditaments. It is not possible to state how much of the total losses on account of rates is attributable to any particular class of hereditament.

  HOUSING (SLUM CLEARANCE: COMPENSATION).
  Mr. VYVYAN ADAMSasked the Minister of Health what is the Government's policy with regard to compensation in respect of good house property condemned in a bad area?
  Mr. SHAKESPEARE: I would refer my hon. Friend to the reply given to the question put by my hon. Friend the Member for South-West St. Pancras (Mr. Mitcheson) on 3rd May, of which I am sending him a copy.

  QUEEN ELIZABETH'S GRAMMAR SCHOOL, BARNET.
  Mr. YOUNGasked the Parliamentary Secretary to the Board of Education whether he is aware that since the Queen Elizabeth's Grammar School for Boys, Barnet, has been removed one mile from the centre of the town the lunch interval has been shortened from one and a-half hours for senior and two hours for junior scholars, to one hour for seniors and one and three-quarter hours for junior scholars; that a good proportion of the scholars are scholarship boys whose parents cannot afford the high charges for lunch provided by the school autho-
  10
  rities; that 297 parents and local residents have been refused an opportunity of stating their case before the board of governors of the school and the Herts Education Authority; and what action he proposes to take in the matter?
  The PARLIAMENTARY SECRETARY to the BOARD of EDUCATION (Mr. Ramsbotham): My Noble Friend is aware that there has been some controversy in regard to the hours of attendance at the Queen Elizabeth's Grammar School for Boys, Barnet. The matter is one for the discretion of the governors and the local education authority, and my Noble Friend understands that in April, 1933, the authority decided, after investigation, that the mid-day interval, which had then been extended by 10 minutes beyond the times stated in the hon. Member's question, was adequate having regard to all the circumstances of the case. My Noble Friend is not aware that there has since been any substantial change in the position, and does not consider that the matter is one in which he can usefully intervene.

  TRANSPORT.

    TAXIMETER CABS (SAFETY GLASS).
    Sir A. POWNALLasked the Secretary of State for the Home Department if he will take steps to make the use of safety glass obligatory for all taximeter cabs that may be licensed in future?
    The SECRETARY of STATE for the HOME DEPARTMENT (Sir John Gilmour): The requirement as to the fitting of safety glass is the same for taxi-cabs as for other motor vehicles, namely, that vehicles registered after 1st January, 1932, must have safety glass fitted to windscreens or windows facing to the front on the outside, and that vehicles registered before that date must be so fitted before 1st January, 1937. It is not proposed at the moment to make any additional requirements for cabs. Most of the new cabs presented for licensing in London are, however, fitted with safety glass throughout.

    PEDESTRIAN CROSSING-PLACES.
    Captain Sir WILLIAM BRASSasked the Home Secretary what instructions have been issued to the Metropolitan Police in connection with the pedestrian crossing-places recently

    11
    painted on the carriage-ways of a number of London streets to enable constables stationed at the crossings to decide the action to be taken to ensure the safe use of the crossings?
    Sir J. GILMOUR: These crossing-places are in the nature of an experiment, and the police are instructed to do all in their power to make the experiment a success by seeing that drivers of vehicles give reasonable time to pedestrians to cross at these places, preventing traffic from encroaching on the marked crossings, advising drivers and pedestrians who are observed to infringe the Regulations, and encouraging pedestrians to use the crossing-places. I will send my hon. and gallant Friend a copy of the detailed instructions which have been issued to the police.
    Sir W. BRASS: Could special instructions be given to the police not only to hold up traffic but also to hold up pedestrians at these crossings, which is the practice in Paris; and would he consider either sending some of the police to Paris or going himself?
    Sir W. DAVISON: Will the right hon Gentleman consider the desirability of an official statement being made to the public with regard to these crossings, because they are in very great ignorance as to what is required of them and what they are intended to do?
    Sir J. GILMOUR: All I can say is that arrangements were made to give the information to the public, and I think that if the public will take the opportunity of reading what is printed there, they will see a great deal of what is desired. In any case, the instructions to the police at the present time are experimental and will be modified as experience shows necessary.
    Captain STRICKLAND: Is the right hon. Gentleman aware of the great confusion which exists in people's minds with regard to these crossings, and that neither motorists nor pedestrians understand them?
    Captain A. EVANS: Will the right hon. Gentleman request the British Broadcasting Corporation once a day for the next fortnight to issue instructions to the public, so that through that means they will get to know what is required?
    Sir J. GILMOUR: I will draw the attention of my hon. Friend the Minister of Transport to that suggestion.
    Sir W. BRASSasked the Minister of Transport what steps he has taken before making the regulations relating to foot-passenger crossings in London to ensure that the pedestrians and drivers of vehicles shall know what they are expected, or required, to do when walking or driving in the streets at the places to which the regulations relate; and whether these steps were taken on the advice of the London and Home Counties Traffic Advisory Committee or in consultation with representative organisations of road users?
    The PARLIAMENTARY SECRETARY to the MINISTRY of TRANSPORT (Lieut.-Colonel Headlam): Early in April my hon. Friend issued to the Press particulars of proposals for pedestrian crossing places in London. On Friday, 8th June, he sent a notice to the British Broadcasting Corporation and to some 75 newspapers and periodicals announcing the introduction of the experiment on Monday, 11th June, and explaining the duties of both pedestrians and drivers of vehicles under the regulations. The normal procedure was followed regarding publicity and as the regulations embodied the advice of the London Traffic Advisory Committee, no further consultation was necessary.
    Sir W. BRASS: Is my hon. and gallant Friend aware that complete chaos exists and has existed for some time at these crossings in London, and will he not consider having the simple system of Paris where every crossing is in fact a sanctuary, and will he not go with the right hon. Gentleman the Home Secretary to Paris and see how the system works there?
    Lieut.-Colonel HEADLAM: Nothing would give me greater pleasure than to go to Paris with my right hon. Friend the Home Secretary, but I would point out to my hon. Friend that the chaos to which he alludes is not nearly as bad as it was at the beginning, and it always takes a certain amount of time to learn anything.
    Sir W. BRASS: My hon. and gallant Friend is not quite correct in answering that question. Will he not consider the

    13
    suggestion which I have made that these crossings all over the country should in fact be sanctuaries, which is a perfectly simple procedure?
    Sir PERCY HARRIS: Is the hon. and gallant Gentleman aware that crossing the streets in Paris is far more dangerous than it is in London?
    Sir W. BRASS: No, it is not.

  BRITISH UNION OF FASCISTS.
  Mr. THORNEasked the Home Secretary if he has received a report from the police inspector at Leicester in connection with a Fascist meeting to which Fascist detachments from the various Midland centres marched, and after which the police escorted the Fascists and a motor coach for about a mile from the meeting place?
  Sir J. GILMOUR: Yes, Sir. I have obtained a report from the Chief Constable of Leicester, who informs me that the local branch of the British Union of Fascists held a meeting in a hall in that city on the 14th instant. The meeting was attended by about 150 persons including a party of about 30 or 40 Fascists from Birmingham who arrived by charabanc, but the police have no evidence that Fascists from any other town were present. The police were not present at the meeting, which is reported to have been quite orderly, the only incident being the ejection of two persons who failed to stand when the National Anthem was sung. A large crowd was present in the vicinity of the hall at the conclusion of the meeting. On the advice of the police, the Birmingham contingent went away immediately, marching a distance of about a quarter of a mile to their waiting charabanc, escorted by the police in order to prevent any possible disorder.
  Sir W. DAVISON: Does not my right hon. Friend think that it is much more reasonable for the police to escort processions away from a meeting than the action which they took in London in escorting to a meeting a procession having the avowed purpose of breaking it up?
  Mr. THORNEasked the Home Secretary if he has received a report from the police inspector at Plymouth in con-
  14
  nection with a Fascist meeting disturbance in Lockyer Street; whether anyone was arrested; and if any of the cases have yet been heard in the police court?
  Sir J. GILMOUR: Yes, Sir, I have obtained a report from the Chief Constable of Plymouth regarding the disturbance which took place in Lockyer Street on Wednesday the 13th instant. I am informed that a crowd of about 1,000 persons attempted to go in procession to the Fascist headquarters in that street to demonstrate their opposition to Fascism. There was a considerable disorderly element in the crowd who had been incited by their leaders with inflammatory speeches to the effect that they should not be deterred from their intention by the police. In view of the disorderly behaviour of the crowd and of the proximity of the Central Hospital, the police decided to throw a cordon across the street. Some of the crowd refused to obey the directions of the police who were endeavouring to clear the street. In the course of the disturbance, three persons were arrested and were subsequently brought before the courts on the 14th instant on charges of assaulting the police. Two of these persons were sentenced to three months' imprisonment each. In the third case the magistrates found that the charge was proved but decided to accept the explanation of the defendant that he was carried away by excitement and in view of his previous good character dismissed the charge with a caution.
  Mr. THORNE: I take it for granted that the Home Secretary and Scotland Yard are making a mental note, and other notes in regard to these matters?
  Mr. MACQUISTEN: Are not these people who try to obstruct meetings mental cases?

  BEET-SUGAR FACTORIES (EXCISE DUTY).
  Captain HEILGERSasked the Financial Secretary to the Treasury the amount paid in Excise Duty by the beet-sugar factories from the commencement of the subsidy period until the end of the 1933–34 season?
  The FINANCIAL SECRETARY to the TREASURY (Mr. Hore-Belisha): The amount of Excise Duty collected on sugar

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  and molasses manufactured from homegrown beet from the commencement of the subsidy to 30th April, 1934, was £12,244,000.

  UNCLAIMED DIVIDENDS.
  Sir NICHOLAS GRATTAN-DOYLEasked the Financial Secretary to the Treasury whether he has any information as to the amount of unclaimed dividends lying to the balance of special accounts throughout the country of all limited and private limited accounts?
  Mr. HORE-BELISHA: The answer is in the negative.
  Sir N. GRATTAN-DOYLE: May I ask whether the Treasury or His Majesty's Government have any settled policy in regard to the enormous amount of unclaimed dividends and balances?
  Mr. HORE-BELISHA: The policy with regard to unclaimed bank balances has not changed since the Select Committee in 1919 reported upon the subject and said that, from the point of view of the State, they are not of any great concern.
  Mr. THORNE: Is it not a fact that all these unclaimed balances do not belong to the banks, and ought to belong to the State and the hon. Gentleman ought to take charge of them?
  Mr. HORE-BELISHA: I have answered that question.

  MONETARY POLICY.
  Mr. DAVID MASONasked the Prime Minister whether, in view of the importance of the subject and the widespread interest displayed, he will allocate a day for the discussion of monetary policy?
  The PRIME MINISTER (Mr. Ramsay MacDonald): I regret that in the present state of Parliamentary business I can hold out no hope of special time being given for such a discussion.

  UNITED STATES (BRITISH DEBT).
  Captain ARTHUR EVANSasked the Prime Minister if His Majesty's Government propose to reply to the United States War Debt Note with regard to payment in kind by this country; and if
  16
  they will consider handing over Bermuda, or other island territories adjacent to the United States, which are no longer of defensive value to the British Empire?
  The PRIME MINISTER: The answer to the first part of the question is in the affirmative. In reply to the second part of the question, I would refer my hon. and gallant Friend to the reply which I gave to my hon. Friend the Member for West Islington (Mr. Donner) on the 6th March last, when I stated that there could under no circumstances be any question of such an arrangement.
  Mr. LAWS0N: As the Government have gone off the Gold Standard, and have defaulted, could the right hon. Gentleman give a guarantee that really the British Empire will be left intact before the next election?
  The PRIME MINISTER: I think that my hon. Friend is in some confusion on the matter.
  Sir A. POWNALL: Does my right hon. Friend realise that the mere asking of a question of this sort is most strongly resented in the loyal Dominions?
  Captain EVANS: May I ask the right hon. Gentleman the Prime Minister if there is any doubt in his mind as to any patriotic motives I may have in asking such a question?
  Lieut.-Colonel SANDEMAN ALLEN: Will my right hon. Friend try and persuade the United States to take over the Free State of Ireland instead?
  Mr. MACQUISTEN: Is not the right hon. Gentleman aware that the Island of Bermuda and the other islands adjoining the United States have been of great value to American citizens during the week-ends in that they have been able to get away from the Prohibitionist party and enjoy a liberty which they could not get at home?

  SCOTLAND.

    MILK PRICES.
    Mr. TINKER (for Mr. KIRK-WOOD)asked the Secretary of State for Scotland if he has received any report from the Scottish Milk Marketing Board as to the offer of Scottish co-operatives to sell milk retail at Is. 8d. a gallon instead of 2s., the price dictated by the board

    17
    during the summer; and will he make representations to the board to have the price reduced to 1s. 8d. so that consumers may get the benefit of the abundant supplies during the summer?
    The UNDER-SECRETARY of STATE for SCOTLAND (Mr. Skelton): The answer to the first part of the question is in the negative. As regards the second part as the hon. Member is aware, the Committee of Investigation for Scotland are at present considering the question of the retail price of milk.

    HOUSING.
    Mr. TINKER (for Mr. KIRKWOOD)asked the Secretary of State for Scotland if he is aware of the serious decline in the building of municipal houses in Scotland owing to the refusal of local authorities to build under the 1933 Act because of the inadequate subsidy; and what action is contemplated by the Government in view of the reduction in the number of houses under construction from 23,503 in May, 1933, to 14,681 in April, 1934?
    Mr. SKELTON: My right hon. Friend is aware that there has been a temporary decrease in the total number of municipal houses under construction in Scotland due to the decrease in the construction of houses other than for slum clearance as a result of the ordinary subsidies having been brought to an end. On the other hand, the number of houses under construction by local authorities for slum clearance purposes is increasing, having reached on the 30th April, 1934, the highest figure on record, namely, 8,857; and it is confidently expected that this figure will shortly be surpassed. With regard to the latter part of the question my right hon. Friend is at present engaged in considering what additional measures are necessary for the provision of further houses to abate overcrowding in Scotland. These measures, it is hoped, will be such as greatly to stimulate the construction of houses for this most important purpose.

  GAS WARFARE (DEFENCE MEASURES).
  Mr. TINKER (for Mr. KIRK-WOOD)asked the Secretary of State for Scotland under what authority Army officers have been giving private lectures
  18
  in Maryhill Barracks, Glasgow, to members of the Red Cross and Voluntary Aid Detachment on how to deal with victims of gas attacks from the air; are similar lectures being given in other parts of Scotland; and, if so, are these part of an official scheme to prepare for war in the air?
  The FINANCIAL SECRETARY to the WAR OFFICE (Mr. Duff Cooper): I have been asked to reply. Training in defence measures against gas attacks, whether from the air or otherwise, is part of the normal training of the Army. The Voluntary Aid Detachments provided by the British Red Cross Society undertake to assist the medical services of the Army should they be required in time of emergency, and measures of protection in gas warfare form part of the training given to these detachments. Army officers are accordingly allowed to assist this training by giving lectures.

  PALESTINE.

    AKHI MEYR.
    Colonel WEDGWOODasked the Secretary of State for the Colonies whether he can yet state under what ordinance Akhi Meyr is charged and when the association with which he is alleged to be connected was declared illegal?
    The SECRETARY of STATE for the COLONIES (Sir Philip Cunliffe-Lister): The High Commissioner for Palestine has been consulted by despatch. I will communicate with the right hon. Gentleman when I have the reply.

    RATES AND TAXES, JERUSALEM.
    Colonel WEDGWOODasked the Secretary of State for the Colonies whether the inhabitants of the old city of Jerusalem are still to be exempted from the future payment of local rates or taxes, in view of the services to be supplied under the new ordinance?
    Sir P. CUNLIFFE-LISTER: It is not the case that the inhabitants of the old city of Jerusalem have been exempted in the past from payment of municipal rates and they will not be so exempted under the new Municipal Corporations Ordinance. It was, however, the practice under the Ottoman régime to exempt registered owners of immovable property

    19
    within the old city from payment of house and land tax, which has now been superseded by urban property tax. This practice was continued by the Palestine Government after the War and maintained in the Municipal Ordinance of 1926.
    Colonel WEDGWOOD: Am I to understand that this urban property tax does not go to the local authority, but to the central Government?
    Sir P. CUNLIFFE-LISTER: I should require notice of that question.
    Colonel WEDGWOOD: What are we to understand from that reply? The right hon. Gentleman says that they do pay rates. Do they pay the normal form of income which goes to the municipality in Jerusalem?
    Sir P. CUNLIFFE-LISTER: The right hon. Gentleman asks me whether certain property in Jerusalem is exempt from the payment of rates. I have given him the answer that it is not exempt from the payment of rates. If he wishes any further information, perhaps he will be good enough to put the question on the Order Paper.
    Colonel WEDGWOOD: Are there any rates levied in Jerusalem? Is it not the case that the urban property tax takes the place of rates?
    Sir P. CUNLIFFE-LISTER: There are rates levied in Jerusalem.

ORDERS OF THE DAY.

  FINANCE BILL.
  As amended, considered.
  Mr. SPEAKER: The first new Clause on the Order Paper—[Repeal of tax on mutual profits]—would impose an additional charge, and consequently it is out of order.
  3.14 p.m.
  Sir STAFFORD CRIPPS: May I ask if you will be good enough, Mr. Speaker, for the information of the House, to explain how an extra tax could be charged as the result of the passing of this Clause? As I understand the position, the point is that the original Clause exempts from taxation certain co-operative and other societies, as regards their taxation under Schedule A, and if this Clause were passed they would lose the benefit of the rebate under the original Clause. That rebate of taxation only arises because of the extra tax which was imposed by the legislation that this Clause is designed to repeal. In my submission, this Clause by repealing that tax cannot in fact impose any additional charge, because in the circumstances which this Clause will put back there would be no possibility of there being an additional charge.
  Mr. SPEAKER: I do not think that this Clause, if it were accepted by the House, would of itself directly impose an additional charge, but it might have the effect of removing an exemption which the co-operative societies now enjoy under the existing law, and to that extent they might in certain circumstances have to pay more than they do at the present time, because they would not get that relief. If I might put it in more legal language, with which I am not so familiar, under the existing law an industrial and provident society if it makes a loss in trading is liable to pay tax, but it is entitled under Section 34 of the Income Tax Act, 1918, to claim relief in respect of that loss. If Section 31 of the Finance Act, 1933, were repealed and Sub-section 4 of Section 39 of the Income Tax Act, 1918, were reinstated, a society would remain liable to pay tax under Schedule A, but a claim for relief in respect of loss under Section 34 of the Income Tax Act, 1918,
  24
  would not be admissible. The hon. and learned Member will see, therefore, that the effect of this new Clause is merely one of getting back something in these circumstances both on the swings and on the roundabouts. The effect of this would be that what they lose on the one they might gain on the other, or vice versâ. As far as I am concerned, the only question I have to consider with regard to the inclusion of this new Clause in the Finance Bill is that the particular taxpayer affected would not be able to claim this remission in relief which he would otherwise be entitled to claim under the existing law.
  Sir S. CRIPPS: May I point out, with respect, that the remission of which you speak is the remission of the extra tax imposed under Section 31, and it was because of the extra tax under Section 31 that the incidence of relief was given as regards the tax under Schedule A? This Clause will put back the taxpayer in exactly the position he was before Section 31 was passed. Therefore, the relief came in as part of the fresh piece of taxation, and it is absolutely essential that one should repeal the two together if one is going to repeal them at all.
  Mr. SPEAKER: I am advised that the effect of this would not be the simple one of removing the tax imposed by the Finance Act of 1933, but would still leave the co-operative societies liable to be taxed under Schedule A. The effect of this Clause would be that, unless we repeal something else as well, they would not be able to get relief under another Section which they enjoy at the present moment. As a matter of fact, this Clause would not leave them exactly as they were, as it would have the effect of taking that relief from co-operative societies.
  3.19 p.m.
  Mr. LEONARD: As one whose name is associated with the new Clause, might I say that this is the second effort to get on the Order Paper something that will enable us to return to the position prior to the last Finance Act. I can assure you that we have made a very special effort to remove the disability which we thought had attached itself to the previous Clause. The present Clause is the result of the efforts we have made and the guidance we have received from those who thought that it would meet the

  25
  position. From what you have stated, I am at a loss to find out whether there is any avenue at all through which we may reach the status quo.
  Mr. SPEAKER: I am quite aware of the circumstances of the case that the inclusion of these words "in so far as," if inserted, is with a view of getting out of a difficulty. As to the advice which the hon. Member has had, I can only say that I have had advice in the opposite direction.

  FINANCE BILL.

    NEW CLAUSE.—(Repeal of 22 and 23 Geo. 5, c. 30.)
    The Irish Free State (Special Duties) Act, 1932, is hereby repealed, and any Customs duties imposed under that Act shall cease to be charged.—[Mr. G. Hall.]
    Brought up, and read the First time.
    3.21 p.m.
    Mr. GEORGE HALL: I beg to move, "That the Clause be read a Second time."
    This is a short but important Clause. We are asking that the Government should take the initiative in an endeavour to arrive at a settlement of the unfortunate dispute which is continuing between the Irish Free State and this country. That dispute arose as a result of what may be regarded as default by the Irish Free State; there was a difficulty concerning the payment of Irish land annuities. Unfortunately these are the days of default. Very few debtor countries in the world are paying the debts they owe, but, if every nation had adopted the same attitude as this country did at the time when this difficulty arose between us and the Irish Free State, the world would be in a very sorry pass to-day. I do not intend to go into the history of the dispute; it is well known. For the last two years there has been a fiscal war between us and the Irish Free State. It is not altogether a question of a few million pounds per annum which is in dispute between us. We tax the commodities which they send to us, and they immediately retaliate by taxing the goods which they import from this country. This fiscal war is inflicting great damage on the trade of both countries; and I am not sure whether we are not suffering worse than the Irish Free State.
    The position is serious enough in regard to the export of the commodity upon which South Wales depends. This
    26
    fiscal war has affected that part of the country more than any other. For the first five months of 1932, before this conflict arose, we exported nearly 1,000,000 tons of coal to the Irish Free State, but for the first five months of this year it has been less than 500,000 tons. There are thousands of miners unemployed almost entirely as a result of this fiscal conflict between the two countries. It is not only the coal trade that is affected, although other trades may not be affected to the same extent. For the first five months of 1932 we exported 24,000 tons of cement from South Wales, but for the first five months of this year it was only just over 5,000 tons. The same can be said of almost every commodity. I have also figures of the imports into this country from the Irish Free State. For the five first months of 1932 the bacon imports were 83,000 cwt., but for the first five months of this year they were 120,000 cwt.
    I am not basing my argument solely on the amount of money involved in this dispute. It is not so such a question of money as of getting rid of a state of mind so that negotiations may be opened up between us and the Irish Free State. If the Government would be generous and accept the new Clause, there is the possibility of a settlement of this unfortunate dispute. It is evident that this fiscal war, which has now lasted for two years, is not leading to a frame of mind which is likely to produce a settlement. Both sides appear to be determined to fight it out, as we were when the duties were imposed, but we on this side of the House are of the opinion that the time has arrived when a new effort should be made to try and arrive at a settlement. This country can afford to be generous. The dispute originated largely upon a question of money, other questions have been raised since, but, if we can dispose of the matter it would create an atmosphere which would lead to better relationships and probably bring about a settlement. For these reasons, we move the new Clause.
    3.29 p.m.
    Mr. RHYS DAVIES: As one who has not taken a keen interest in the dispute between the Irish Free State and ourselves, may I say how I view the situation. I support the new Clause, and the appeal made by my hon. Friend. Since

    27
    the Government came into power we have made trade agreements with nearly all the countries of the world. Very recently we have decided that we shall not pay our debts to America if we can avoid it. Frankly, it seems to me the most strange thing of all, in the relationship between this country and foreign countries, that as a matter of fact we are least generous to the country that is nearest to us almost than we are to any other country in the world. We ought to make a gesture from this country to settle this problem. I speak with a little feeling because I live in Lancashire, and, as hon. Members know, the trade between Lancashire, and especially between the Ports of Manchester, Liverpool and Birkenhead, and the Free State, has been badly hit, and these ports feel very keenly the loss of trade, especially the trade in cattle from the Free State. In fact members of my own trade union have complained that they are out of work because the abattoirs on the banks of the Mersey and in Manchester have suffered by the loss of this trade.
    I appeal to the Chancellor to do something in the matter. Let him compare the attitude of our country towards the Free State and towards other Powers. I understand that Germany has declared a moratorium. I have yet to learn that we shall do anything to penalise Germany in any trade agreement that we may enter into with that country because Germany may default in her payments to us. I am sure the Chancellor would feel very much offended if the United States of America, immediately we decided that we would not pay our debt to her, imposed such tariff barriers against us that she could get by customs duties the very money that we declined to pay direct. I see that the Postmaster-General is trying to help the Chancellor to find some arguments against our contention. I shall, therefore, be more delighted than ever to hear what the Chancellor has to say in reply.
    Of course it is said that if we had someone at the Dominions Office other than the right hon. Member for Derby (Mr. J. H. Thomas) we might make progress, and it is said too that if another President of the Irish Free State came into being we might make greater headway. Anyway we have these two gentle-
    28
    men in the seats of the mighty, and we cannot alter the fact that the present President of the Irish Free State is the gentleman who occupies that position today. Of course we might with some effort change the personality of the right hon. Gentleman who is handling the problem on this side of the Channel, but that would be rather a dangerous argument to put forward, especially on my part. I hope we have put our case to the Chancellor in such a way that he will tell us whether there is a possibility of removing the difficulties between us and the Irish Free State, and whether he can hold out any hope that the feeling expressed in our negotiations with the Free State is likely to be altered for the better in the near future.
    3.34 p.m.
    Mr. HASLAM: Before my right hon. Friend the Chancellor of the Exchequer replies, I would like to point out that there is one branch of industry in this country which has derived some benefit from these duties. Both the Mover and the Seconder of this new Clause alleged that certain trades in this country were being penalised as a result of the tariffs imposed by both sides. "It is an ill wind that blows nobody any good." Although these duties were not originally imposed in order to benefit the hard-pressed British livestock raiser, yet they have done a good deal to mitigate the difficulties with which he has been faced in the last few years. I do not hesitate to say that if the Chancellor repealed the duties straight away and threw on to the British market a large quantity of additional Irish cattle, he would inflict a blow on the British livestock industry the consequences of which it would be difficult to foresee. The British livestock industry is suffering very acutely now. We have already to meet quite enough imports of meat. If the Government suddenly allowed Irish cattle raisers to send in any number of cattle, it would be a very serious thing. I hope the Chancellor will take this point of view into consideration in coming to a judgment on the matter.
    3.37 p.m.
    Sir PERCY HARRIS: We have now had the cat let out of the bag. These particular duties which, it will be remembered, were put on most reluctantly, purely in order to protect revenues and

    29
    to enforce the principle of the sacredness of contracts made between two component parts of the Commonwealth of Nations, are now frankly and blatantly advocated as pure Protection against what should be a part of the British Empire. It has been most significant, almost sinister, how the Minister of Agriculture has used this instrument in order to placate various interests in this country. I am very glad the Chancellor of the Exchequer is here. I hope he will make it clear not only to the Irish Free State but to the world that we stand firm in our position, that as soon as the Free State is prepared to negotiate about the annuities all these duties will be immediately swept away. If not an impression will be created not only in Ireland and in this country and in Europe, but particularly in the United States, that will react very quickly, because of the large number of Irishmen in that country.
    I never defended the attitude of the Irish Free State about these annuities. I think the Irish Government made a blunder, undoubtedly because of promises made at a fiercely contested election. The present President of the Free State made pledges that once he got into power no longer would the annuities be collected and handed over to this country. I thought his attitude was most unfortunate. But I felt it was equally unfortunate that we had to resort to the unsatisfactory method of collecting these duties at the ports. That was not only injuring Ireland but injuring our own traders also. The dispute has interfered with a very important industry, particularly in Scotland—the fattening of imported Irish cattle. Birkenhead too carried on a considerable trade in the handling of these cattle and killing them at the port. The dispute has also interfered with out textile exporters and, as has been stated, with our coal industry. The tragedy of it all is that the longer this internal war goes on the more difficult will it be to end it. It is creating bitterness and bad blood which a few years ago had largely disappeared between the two countries, and, what is far more serious, it is setting a bad example to the Continent of Europe, where we have been constantly condemning economic tariff wars as being so harmful to the new States which have
    30
    been created in Central Europe like Czechoslovakia, Hungary, Austria and so on.
    I agree that this is a difficult problem. You are dealing with a difficult people and a very touchy people. They are suffering, perhaps, from one point of view, from an inferiority complex, as a small people, sensitive about being dictated to by a great neighbour and with a long history of domination. From another point of view they are influenced by a superiority complex and are anxious to show the strength and power of the newly-formed State. I realise, as every Member of the House must, how difficult the problem is. It is difficult to give way, to surrender revenue which we claim as our just due. On the other hand, I have always contended that this country, as the big brother, as the stronger hand, ought to be prepared to take the initiative. The Secretary of State for the Dominions is always riding the high horse and saying that we have made our offer and that the door is open, but the longer this controversy continues the greater the weakness cause to the Commonwealth of Nations. Ireland is our nearest neighbour and we are irretrievably bound together by economic laws. It is unfortunate that we should have arguments on this question like that put forward by the hon. Member opposite which are narrow and parochial arguments, when big political issues are at stake—
    Mr. HASLAM: Since the hon. Baronet his pointedly referred to me, may I ask him why it is right for hon. Members opposite to put forward arguments concerning trades in their constituencies, while it is wrong and, indeed wicked, for me to put forward an argument about the trade which is affected in my constituency?
    Sir P. HARRIS: Of course I know that a new atmosphere has been created during the last three years regarding trade considerations and political considerations, and that we are becoming accustomed to regarding Imperial problems from a narrow local point of view.
    Mr. RHYS DAVIES: I think the hon. Member will have noticed that the arguments submitted in favour of the propased new Clause from these benches were arguments on national grounds.
    Sir P. HARRIS: I did not make any charge against my hon. Friends above the Gangway. I was referring to my hon. Friend opposite who is sensitive—and I am glad to see that he is sensitive—at the suggestion that he is taking a parochial point of view. This problem is much larger than the mere question of the levying of duties on certain Irish products for the collection of revenue which we regard as our due. It is a controversy which will weaken the Empire at its very heart and which must have reactions among the Irish race in Australia, in New Zealand, in Canada and also in the United States. Therefore, I hope the Chancellor of the Exchequer will send some message of hope to-day and will make it plain that these duties are only looked upon as temporary duties and that on any excuse or any opportunity which offers itself for doing so, they will be removed even at the sacrifice of some revenue.
    3.44 p.m.
    Captain CROOKSHANK: I do not think we can let the hon. Baronet get away with the suggestion that it is action on the part of this Government and this Parliament which is weakening the Empire. It is nothing of the sort and, as the hon. Baronet has had his little quarrel with the hon. Member for Horn-castle (Mr. Haslam), I would now like to make one or two comments on the speech of the hon. Member for Westhoughton (Mr. Rhys Davies). The hon. Member is usually so well-informed in his speeches, which generally show considerable thought and care, that one is surprised at some of the observations made by him just now. One can only suppose that this Debate having come on earlier than was expected he had not provided himself with any kind of brief and was merely waiting for whoever was to speak from the Opposition Benches to produce their case. He said first that it was very wrong of us to impose these duties with regard to Ireland at a time when we were making trade treaties with other people. Why not make a trade treaty with Ireland he asked, when we make such treaties with foreign countries? Such was the gist of the first part of his speech. Why not make a trade agreement with the Dominion which is nearest to us? He knows the answer. It takes two to make a treaty. We are making treaties with foreign countries because, as a result of
    32
    the new system which has been introduced, they are only too willing and anxious to have trade agreements with us in order to retain at least some part of the market into which they used to pour their goods in floods.
    It is an entirely different proposition, however, in the case of the Irish Free State. If they want an agreement they can have it. The Secretary of State for the Dominions has said so time and time again. But they have gone out of their way so as not to pay their just debts and it is not a question of an agreement there, it is a question of fundamental rights and of arrangements made between this country and the Irish Free State when the Free State was set up. This country has not been in the last two years at all backward in regard to a settlement. In fact the Government has gone a great deal further than many Members of this House desire them to go. That is the answer to the question, why do we not make a treaty with them as we do with foreign countries.
    What was the second part of the hon. Member's argument? He said that just because the Irish Free State had not paid their debts to us, we had put on special duties to recoup our own Exchequer for what it has had to pay out in this respect and he asked what would we say if the United States Government thought that we had defaulted and put on high duties against our products in order to recoup themselves? The answer to that is that they have already got such high duties that that would be an impossible procedure for them to adopt. As a matter of fact if the hon. Member studies the latest returns, published only last week, of various tariff changes he will find that so far from having raised duties against us they have in certain specified commodities, more especially motor cars, reduced the duties. That is the end of that argument. His other point was that he wanted to get rid of the Secretary of State for the Dominions. I have no doubt that for purely internal political reasons the hon. Member would like to get rid not only of the Secretary of State for the Dominions but of all the occupants of the Government Front Bench. But he is not going to achieve that end by coming to the House on a warm afternoon and making the kind of speech which we had from him just now

    33
    —though most Members, I imagine, were not listening to what he was saying.
    This case has been argued several times in this House, and on every occasion the Government have fully justified the position which, unfortunately, they have had to take up. The Government and the Members who support the Government are by no means happy that this situation should have come about. We are only too glad to hear from time to time that there is no obstruction to the settlement as far as Downing Street is concerned. But it is no good for the hon. Member opposite or anybody else to seek to blame us for a situation which we did not cause. It was the Irish Free State, in the first instance, which defaulted, which refused to act up to its obligations and which has acted during the last few months in a manner contrary to the interests of the whole Empire. For the hon. Baronet the Member for South-West Bethnal Green (Sir Percy Harris) to say that it is the attitude of the Government which is doing harm to the Empire is absolute nonsense, and I am surprised to hear that suggestion coming from him—
    Sir P. HARRIS: I said that it was a great weakness to the Empire to have this open sore, but I did not put the blame for it entirely on this country. I did not defend the attitude of the Irish Free State in refusing to pay the annuities. What I said was that this canker should be removed because it was having a bad effect on the whole Empire.
    Captain CROOKSHANK: I am glad to have given the hon. Baronet an opportunity making clear how he stands in regard to this matter. Of course, it is a source of weakness when any member of a family behaves in a naughty way, but because the Government have seen to it, as far as they can, that the taxpayers of this country shall not suffer because of the naughtiness of one of the children of the family, it is no good blaming overmuch, as he tried to do, the attitude of the Dominions Secretary and the Government. I certainly hope that this new Clause will not be adopted. We none of us like the existing situation, but it is the only way that anyone has been able to suggest so far for dealing with the difficulty, and we shall not solve the difficulty by running away from it, as the Labour party would like apparently that
    34
    we should do this time as they themselves have done before.
    3.51 p.m.
    Mr. JOHN WILMOT: The House has listened with great interest to the speech of the hon. and gallant Member for Gainsborough (Captain Crookshank), but I was rather surprised at some of the things that he said. He referred to the Irish Free State as a naughty child. In fact, they do not admit themselves to be children at all. We claim them as children, but they want to be claimed as brothers, and while we may differ from them very profoundly, we are bound to say that they have as much right to their opinion as we have to ours. This dispute has arisen, and, if we were going to consider it as a father dealing with a naughty child, the first duty of a father, if he is an intelligent father, with great experience, as this father has, would be to consider the circumstances from which the naughtiness arose, and not seek blindly to punish the child in the hope that some sort of repentance would be extracted. I do not think there is any Member of this House who knows the Irish people and who has followed the history of the Irish nation who can be anything but certain that no settlement of this dispute is to be made along those lines, and that, when the right hon. Gentleman the Dominions Secretary took this line in dealing with what is admittedly a highly difficult problem, he took the one step that made a settlement impossible. Anybody who understands the Irish people will know that that is true. It is in fact a tragedy, not only for Ireland, but for Great Britain, if I may say so with respect, that the office of Dominions Secretary, under which this problem falls, should be held by the right hon. Gentleman who occupies that position.
    Mr. HOLFORD KNIGHT: The hon. Member refers to some step. Will he mind telling us what step? The right hon. Gentleman the Dominions Secretary made an offer of arbitration when a dispute fell out over a difference in regard to the tribunal. Is that the step to which he refers?
    Mr. WILMOT: I should have thought the hon. and learned Member would have appreciated the step of which I spoke, but, if he is not quite clear, I will indicate it. It is the very step

    35
    which we are trying to undo m this Clause, namely, the step of imposing a duty as a means of settling a difference of opinion, a dispute arising out of very much deeper and more fundamental causes. The final manifestation of the dispute was an argument about the form of a tribunal. It seems to me remarkable that statesmen should try to solve a problem of that kind, a problem which has its roots right down in racial history, by clapping on a duty. Of course, no solution is to be found on those lines. The hon. and gallant Member for Gainsborough said that the party to which I have the honour to belong would run away from this question, but I think he would find that if that party were in power, so far from running away from the question, they would settle it. [HON. MEMBERS: "How?"] They would settle the question to the honour of both sides. [HON. MEMBERS: "How?"] Hon. Members say "How?" In the only way that such a dispute can be settled.
    Mr. SPEAKER: We are not concerned to deal with the Government of Ireland. The only question before the House is the discussion of the proposed new Clause.
    Mr. WILMOT: I bow to your Ruling. The hon. Member opposite spoke of recouping the Exchequer, and I think it will be very interesting to learn from the Chancellor of the Exchequer how the revenue from these duties is being treated. Is it being treated as just revenue, as the revenue from any other tariff or duty is being treated, or is it being set off against the liability? If a settlement is reached with the Irish Free State, is the amount which has been collected by way of duties on goods imported from the Free State to be set on the credit side against the debit of payments due? If that were the case, there might be, upon those lines, a way of opening this door, which seems to be now for ever closed.
    The hon. and gallant Member for Gainsborough referred to the American debt, and I am glad he did. What I think is happening in America is what eventually will happen in Great Britain. The wheel will come full circle, and we shall realise the economic fallacy that every nation can export and not import, the fallacy of believing that prosperity
    36
    depends upon keeping goods out, and we shall find that in destroying the imports, we have not only destroyed the relative exports, but we have also destroyed the whole system of international payments. The German default is merely a symptom of the disturbance of international trade caused by these various methods of implementing the fundamental fallacy that the less goods you have, the richer you are, and I hope the Chancellor of the Exchequer will indicate that these Irish Free State duties are not regarded, as apparently the hon. Member for Horncastle (Mr. Haslam) regards them, as part of our tariff system—
    Mr. HASLAM: Might I make a small correction in the hon. Member's statement? I specifically said that they were not put on for the purpose of a tariff, but that they had done a certain amount of good to the livestock breeder.
    Mr. WILMOT: If I understood the hon. Member rightly, he put it this way: They were put on for one purpose, but they must be kept on for another.
    Mr. HASLAM: Hear, hear!
    Mr. WILMOT: I am glad that I interpret the hon. Member aright. If it be true of the industry in respect of which he was speaking, I have no doubt it is true in respect of a large number of other industries, and so this door is not only closed, but is becoming hermetically sealed, because the worst thing that could happen to the hon. Member and those for whom he speaks, and no doubt for other industries as well, would be that circumstances should arise in which these duties were to be repealed. Then, I have no doubt, he or those to whom he was referring would go to the Chancellor of the Exchequer and say, "It is impossible to take these duties off, because, if you do, you will ruin this, that, or the other industry." That shows the vicious atmosphere in which you get when you try to deal with a problem of this kind by that sort of method.
    Mr. HASLAM: I seem to be a very wicked and even a vicious person, but still I am not yet clear as to why it is a right and a statesmanlike thing for hon. Members opposite to speak of the injury which has been caused to cement, coal, textiles, and the particular things

    37
    which they represent, and so very vicious and wrong in me to point out that these duties have done a certain amount of good to the unfortunate livestock raiser.
    Mr. WILMOT: I did not suggest that it was vicious, but I think it was unwise. How is it going to be read in Ireland? We shall be described as "perfidious Albion" again. The hon. Member's speech will be quoted, and it will be said, "It would be no use our paying our debt if we could or would, because it is quite certain that the duties would not be taken off." That is what I regard as dangerous in the hon. Member's speech, and I sincerely hope that the Chancellor, in his reply, will indicate quite clearly that these duties are not to be so regarded, and that any trade interests who feel that they now have a shelter, in which they can hide in the event of their inefficiency, behind the bulwark of these special duties, will be told definitely that they must not so regard them, that this is not part of the mechanisation of subsidising private interests out of the pocket of the consumer, but that, as a matter of fact, these duties are put on for another purpose. I hope he will indicate that the Government are unhappy about it, and are not content merely to sit down and collect these duties, but that he will say they are being specially treated in the national accounts, that they are being held in part liquidation of the indebtedness and that a new endeavour will be found along some other lines to end this unhappy deadlock.
    4.2 p.m.
    Lieut.-Colonel SANDEMAN ALLEN: I should like to implement the first part of the speech of my hon. and gallant Friend the Member for Gainsborough (Captain Crookshank) where he pointed out the fallacies which had arisen on the other side of the House with regard to trade treaties. I would remind the House that the Free State were asked to attend the Ottawa Conference with the special purpose of making a trade treaty, and getting the relations between this country and that country on a sounder footing. If hon. Members opposite would care to remember that sort of thing instead of levelling unjust accusations against the Government, the peace between the two countries would be much more likely to be strengthened than weakened.
    4.3 p.m.
    Mr. ANNESLEY SOMERVILLE: The hon. Member for East Fulham (Mr. Wilmot) has made this discussion an excuse for an attack on the Government, and particularly the Dominions Secretary. He seemed to pride himself on his knowledge of the mentality of the Irish people. The annuities, which were paid without question for 10 years by Mr. Cosgrave and the Irish Free State, were withheld by Mr. de Valera, and the proof that Mr. de Valera considers that the annuities should be paid by the Irish farmers, for whose benefit they were originally levied, is the fact that he is levying them himself. Therefore, seeing that they are justly due to this country, and that these Customs Duties have been put on in order to meet the default, I sincerely hope that the Government will continue them.
    4.4 p.m.
    Sir WILLIAM DAVISON: Of course, every Member of the House regrets the difficulty which has arisen between the Irish Free State and this country, but it does not get over the difficulty, when a person, after having made an arrangement and carried it out for many years to the apparent satisfaction of both parties, suddenly announces that he is not going to continue it, and it is suggested that one should sit down and say, "If you do not want to pay any more, and as we want to live in friendship and amity, we will not ask you to pay." The hon. Member said that the object of the settlement was to settle a difference of opinion, but when that settlement costs the taxpayers of this country £4,000,000 a year, I do think that the Government would be very lax indeed if, in view of the great gesture made by the taxpayers of this country in order to benefit the farmers of Southern Ireland when we were responsible for the government of that country, we were now deprived of the comparatively small sum which we were to receive from it.
    If Mr. de Valera were to say, "Your terms are extortionate. You are grinding down these poor people when, in the present state of agriculture, it is impossible for them to pay," or if he had said, "Will you give us an extension of time in view of the present position of agriculture"—to all these things, I feel sure, the British Government and this House

    39
    would have been prepared to listen; but he simply says, "I will take the money from the Irish farmers" and he pays the money into the Irish Free State Treasury and uses it for Free State purposes. There is no remission, so far as I am aware, to the Free State farmer, and I do ask the House to consider whether it is fair to the British taxpayers who, as I have said, have made this arrangement for the benefit of farmers in Southern Ireland. It is a very small sum compared with the rents which these men previously paid for their farms—in many cases little more than half the sum—and they are gradually getting the freehold of their farms. If any farmer in this country could have obtained terms like those, he would have jumped at it. British farmers have never had any such chance, so far as I am aware.
    As hon. Members opposite know, we are only too desirous to come to an arrangement with the Free State. No one likes a row in their family, and in a case of two countries so closely joined together as the Irish Free State and this country, of course it is an unhappiness to members of either community, unless warped in their imagination, that there should be this estrangement. Both parties want a free circulation of goods and people between the countries, which we hoped would have been the case now that Southern Ireland is able, in every sense of the word, to manage her own affairs. I submit that there is no ground whatever for the proposed Clause, and that everything has been done by the British Government to show their desire for friendliness towards Southern Ireland. But we cannot ask the British taxpayers, having done so much for the farmers of Southern Ireland, to refrain from this reimbursement to the extent of these duties.
    4.9 p.m.
    Mr. WEST: The hon. Member who has just spoken has frequently spoken in this House about those who default, but I notice in recent debates he has not been so keen about defaulters, I suppose because default is now more in fashion than in years gone by.
    Sir W. DAVISON: This is no question of default; it is simply refusal to pay. We are not told that the farmers cannot afford to pay.
    Mr. WEST: I thought that a person who refused to pay was a defaulter. I hope that when we get the Government's reply we shall be given some suitable explanation of the advantages which are being derived from these duties. I can see that they have been harmful to Irish trade. I am not sure that that is to be wished for. I do not think that in putting Irishmen against this country we are really achieving anything substantial. I do not know whether there have been any real advantages from our point of view. The hon. Member opposite has mentioned the stock-raising industry, as if indeed these Customs duties have been very beneficial to that particular industry. I think that within the last few days we have been told of the rather desperate position of the stock-raising trade, so that it seems that even the most favoured trade in this country has not had any real benefit from these duties.
    Mr. HASLAM: I am 10th to rise again. No doubt the livestock industry is very badly off now, but it would certainly be very much worse off but for these duties.
    Mr. WEST: It seems to me that the hon. Member is making confusion worse confounded. I think it is true to say that the stock-raising industry complain that they are in a much worse financial position than they were two years ago. I gather that from this morning's Press. So that the duties, even from the hon. Member's point of view, have not been very successful in helping British trade. I hope that in the reply from the Front Bench opposite we shall be given some reasons which will show the solid advantages, apart from punishment, of these Customs duties. I do not think that hon. Members will regard as a very substantial benefit the fact that we are harming the Irish or getting our own back. We ought to pursue a policy with higher ideals and motives than that. Further, it seems to me that our policy towards general defaulters, those who cannot pay, or only pay 2s. 6d. in the £, has been very generous in the past. I think that we have been extraordinarily generous to continental semi-defaulters. I urge, therefore, that the Government should adopt a policy of as kindly tolerance towards the Irish non-payers as they have in the past adopted towards the French and Italian semi-non-payers.
    4.13 p.m.
    The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain): After the arguments, such as they were, which were addressed to the House by the Mover and Seconder of this proposed new Clause and the flamboyant and rather vacuous declamations of the hon. Member below the Gangway, which my hon. and gallant Friend the Member for Gainsborough (Captain Crookshank) so effectively dealt with, I do not think that I need spend any more time on those speeches; but I would like to make some response to the question put to me by the last speaker, namely: Would the Chancellor of the Exchequer give some reasons for the continuous imposition of these duties which the Clause seeks to remove? His speech and that of the hon. Member for Westhoughton (Mr. Rhys Davies) were illustrations of what I call the deplorable inability of the party opposite to go underneath the very superficial meaning of phrases. To them there is no difference in meaning between one kind of land tax and another kind of land tax, or between one kind of duty and another kind of duty, or between one kind of default or another kind of default: it is all covered by one word, and therefore, to their mind, there is no distinction.
    Mr. COVE: This is what the right hon. Gentleman says in every Debate.
    Mr. CHAMBERLAIN: I am taking it from the speeches of the intellectual party opposite.
    Mr. COVE: And in a snobbish manner.
    Mr. CHAMBERLAIN: I expect that I shall do it again. The hon. Member for East Fulham (Mr. Wilmot) spoke of these duties as a means of settlement of the dispute between the Irish Free State and this country. If he thinks that that was the purpose of the duties, he must have forgotten the statements that were made at the time that they were proposed. I say that he makes no distinction between one kind of duty and another, because he seemed to think that the default of the Irish Free State is exactly the same thing as the default of Germany, or as the technical default on War Debts of this country to America or of other countries to one another. There is all the difference in the world
    42
    between them. The British Government in this matter is merely a channel between the Irish farmer, who bought his land and agreed to pay annuities on it, and the owner who sold the land to the farmer. The British Government agreed to pay the owner, the Irish Government agreed to collect the annuities from the farmer and hand them over to the British Government for the purpose of meeting the obligation which the British Government had undertaken towards the owner. The Irish Free State is still collecting the annuities from the farmer but is withholding them from this country. There is a great difference between a default of that kind and the default of a country which says, "I do not repudiate my obligations and I should like to pay if I could, but my financial position is such that I cannot pay"; or the position of this country with regard to war debts, which is that these debts are entirely different from other debts; and that there are difficulties of transfer and a great number of other considerations as set forth in Notes addressed by us to America. You cannot lump all these things together as if they were exactly the same thing.
    This dispute between the Irish Free State and ourselves, although it originated in its present form with the withholding of the payment of annuities and certain other payments by the Irish Free State, is really a political dispute. This is an incident in a political dispute, and it is not therefore to be supposed that that dispute will be settled if we do what we are bidden to do by hon. Members opposite and turn the other cheek and say, "Do what you like to us and withhold any money due to us, and we will always give way to you." It is not to be supposed that that will settle the political dispute unless we were prepared to concede to the Irish Free State Very large and much more far-reaching and fundamental weakenings in the British Empire than anything that the hon. Baronet has been contemplating. If we were prepared to concede that the Irish Free State should become a Republic and that certain other breaches of the treaties between us shall take place, we might perhaps settle this dispute. These duties were not put on to punish the Irish Free State for having withheld the annuities or in order to protect any British in-

    43
    dustry. They were put on in order that we might recoup, as far as we could, the British taxpayers for the loss which has been unjustly and unfairly imposed by the action of the Irish Free State. We have not been entirely successful, but we have gone some way to attain our object. In 1932–33 the deficiency owing to the failure of the Irish Free State to pay the annuities was £4,774,000, and we have recouped £2,384,000 out of that. In the last year, 1933–34, the deficiency was £4,900,000, and we have recouped £4,107,000.
    Mr. LOGAN: What is the net balance owing, the arrears up to date?
    Mr. CHAMBERLAIN: We expect the default on the 31st March, 1935, to be £14,512,000, out of which we expect to have recovered by means of the duties something over £10,000,000, so that the deficiency will be about £4,500,000. This is not the occasion, in fact Mr. Speaker has ruled that it is not the occasion, to discuss how to settle the Irish question. All I can say is that if anyone thinks the Irish question is going to be settled by the repeal of this Act, he must have a different idea of the Irish mentality than that which I have gained from my experience.
    4.20 p.m.
    Sir S. CRIPPS: The right hon. Gentleman adopts the attitude of the hon. and gallant Member for Gainsborough (Captain Crookshank) as regards this problem, and he made perhaps one of the most striking statements we have had from the Government Front Bench in the present Parliament, that is to say, that the Irish Free State is to be treated as a naughty child by this Government. That is a complete reversal of the whole policy with regard to the Empire since 1926, when the attitude of mother and child was finally abandoned and, instead of the old conception of the Empire built up on that basis, the Commonwealth of Nations was substituted; it was an equal brotherhood with equal rights for all the individual Dominions within the Commonwealth of Nations.
    Mr. CHAMBERLAIN: Will the hon. and learned Gentleman remind me of any phrase which I used which justifies his assertion that I said the policy of the
    44
    Government was to treat Ireland like a naughty child?
    Sir S. CRIPPS: The right hon. Gentleman started by saying that it was unnecessary to answer the arguments that had been put forward because they had been dealt with fully by his hon. and gallant Friend the Member for Gainsborough, that he approved of the way in which they had been dealt with, and that therefore it was unnecessary for him to say anything more. I presumed he meant that he adopted the arguments that had been put forward by the hon. and gallant Gentleman. If the right hon. Gentleman now says that he is wrong and that he is only too anxious to get the matter right, perhaps he will tell me whether I am right or wrong, and whether he does approve of the arguments of his hon. and gallant Friend.
    Mr. CHAMBERLAIN: I do not approve of the hon. and learned Gentleman's own version of those arguments.
    Sir S. CRIPPS: We are to understand then that the right hon. Gentleman pays a compliment to the hon. and gallant Gentleman with his lips but not with his heart, that he likes the way in which the hon. and gallant Gentleman spoke but that he does not believe what he said. As long as I manage to prevent the impression getting abroad that the Government consider the Irish Free State a naughty child, perhaps it will be some assistance in this discussion. The right hon. Gentleman says that we on this side seem to be unable to distinguish between different kinds of debt and default. The right hon. Gentleman or someone else on the Government Benches made that remark on a former occasion when this matter was being discussed. I think I then expressed the view that the only really vital difference was whether you happen to be the debtor or the creditor. That was the vital difference in the -outlook upon debts or default. If you are the creditor, you always think that there is every good reason why the other man should pay, and you are perfectly satisfied you are right and that he is wrong if he does not pay. Anybody who has recently been in America, especially after the announcement of the Budget surplus, must have come up against that atmosphere very strongly, as I did when I was in Washington.

    45
    If, on the other hand, you happen to be the debtor, you think you are perfectly right in defaulting. There is an absolutely unarguable case why you should not pay up. It is contrary to international interests, and it would be bad for the man to receive the money. It always strikes me as a comic argument when the debtor tries to persuade the creditor that it is dangerous for him to be paid the money. The debtor also says that he is not able to pay or that circumstances are such that he does not think he ought to pay. The debtor always has a good argument, and the great difficulty which arises in this and all other questions is as to who should decide who is right. That is the reality of the problem. The hon. and gallant Member for Gainsborough said that we did not look at the realities of the situation. That is the reality of this problem. You have to accept the proposition that, whether stupidly or foolishly or mistakenly, the present powers that be in Ireland take a different view from that which we take, and that we can never settle this matter by each of us continuing to affirm that we must be right unless there are some means by which the question can be settled between us as to who is right. I have very little doubt, if the legal case were examined, that this country would be found to be right. I have always taken that view, but that does not mean that it is unnecessary for the matter to be settled somehow. The mere assertion of one side of their belief that they are right does not help the matter forward.
    Captain CAZALET: Is it not a fact that in the 1926 Conference the members of the Empire agreed that if differences arose between them the settlement should be made by a tribunal composed of representatives of the Empire, and that it should not be settled by any outside interference? It was because Ireland refused the tribunal composed of members of the British Empire that this issue has arisen.
    Sir S. CRIPPS: The hon. and gallant Gentleman is wrong. It was at the Empire Conference in 1930 that the matter was discussed, and neither South Africa nor Ireland would agree to compulsory arbitration by an Empire tribunal. As a result, there was incorporated in the report a recommendation that it should be done and that some
    46
    form of panel should be set up from which arbitrators could be drawn. Unfortunately, such a panel was never set up, and, if the hon. and gallant Gentleman will look at the Debates on the Statute of Westminster, he will see that I ventured to suggest then that, unless we, at the same time as passing that Statute, set up an arbitral tribunal which could decide matters between equal partners, as the Dominions were then, we should inevitably have some such difficulty as this, and we should find it insoluble. That is exactly what has happened. We have found ourselves without any means laid down beforehand to settle this dispute. The result is that we cannot agree on who is to settle it. That is really where the difficulty lies at the present moment. I am afraid I have been drawn off into a. matter which is not in order according to the Ruling which Mr. Speaker has given.
    The Chancellor of the Exchequer also said that in this case we were really only acting as a channel to pass the money to the people who were entitled to it as interest or repayment on the land bonds. That is exactly the argument which the United States put up with regard to our default, namely, that they have simply to pass the money to the Liberty bondholders, and that, if we do not pay, the United States Government will have to pay; they will have to raise the money in the United States to pay the people who have the Liberty Bonds, upon which we should otherwise be paying the interest. The fact that you are passing the money on to some third party really does not make any destruction in quality or nature.
    Mr. ALBERY: In following that argument the hon. and learned Gentleman is leaving out one important point. Mr. de Valera is able to collect the money, whereas we are not able to collect the money.
    Sir S. CRIPPS: I appreciate that fact, but it does not make the slightest difference if this is the liability of the Irish Government any more than it makes a difference if we happen to collect the money we send to America from the taxpayers or anyone else from whom we choose to collect it. If Mr. de Valera likes to tax the farmer by collecting the land annuities, it does not make any difference to his liability so far as

    47
    this country is concerned. I was pointing out the similarity between the two cases to show that neither of those things meant any difference when it is a question of payment from one country to another.
    Then the right hon. Gentleman said that these duties were not put on to punish the Irish Free State. Surely the position is that, unless we had held that the Irish Free State had done something wrong, she would have been treated like every other Dominion. She was entitled to be treated like every other Dominion and this exceptional treatment was imposed for the specific reason that we held she had done something wrong; and we judged the case and then put in an execution in order to levy the money. It is no good saying that we did not do this because the Free State had to be punished. It is the express purpose for which we did it.
    The danger of leaving these duties on indefinitely has been expressed in the speech of an hon. Member who has now left the House, who said they must not be taken off because of the position of the fat stock industry in this country. I should venture to doubt very much whether our fat stock industry has really benefited on the whole, because in certain parts of the country the young beasts imported from Ireland were the raw material for that industry. Young beasts were brought over here at the beginning of the year and fed on grass throughout the year. The profits of the fat stock industry, at any rate in certain parts of the West and South West, were very largely made by getting these cheap young cattle, fattening them on our pastures, and finishing them off in the yards. Even if this policy were an advantage that had come by the way to the fat stock industry there is an added danger if we are now going to argue, "This policy is very favourable to the agricultural policy of the Ministry of Agriculture," because the longer the duties are left on the more difficult it will be to remove them. If we create vested interests, then at any moment when there is a proposal for a settlement with Ireland they will say, "It will ruin our industry; you cannot do it now; the duties have been on too long." We have brought forward this Clause, because we are anxious that that difficulty should not grow up, and that the Government
    48
    should face up to the realities of the situation. As the right on. Gentleman said, we are dealing with a political question; it is a question of the independence of Ireland, and that is not going to be solved, as the hon. Member for Windsor (Mr. A. Somerville) believes, by keeping on these duties in order to protect any interests.
    Mr. A. SOMERVILLE: If, as an Irishman, I know anything about the mentality of the Irish, they thoroughly understand these duties and the worst way of trying to settle the matter would be to take them off now.
    Sir S. CRIPPS: In other words, if we continue to beat them long enough they will give in. I should not have thought that was the mentality of the Irish, but, if the hon. Member says so, it must be so. We shall certainly go into the Lobby in support of this Clause, as a protest against the continued levying of these duties and against the failure of the Government to face up to the reality of the Irish situation and to get down to a solution of this difficult problem, which they are allowing to drift from bad to worse.
    4.34 p.m.
    Mr. WALTER REA: There was one small point of importance to which the Chancellor has not replied and which may give rise to some misunderstanding. An hon. Member for one of the Divisions of Lincolnshire suggested that, though these duties were imposed solely for the sake of securing revenue which we considered to be due to us, it would be necessary to keep them on as protective measures. If that impression gets abroad in Ireland, it will add enormously to the difficulty of a settlement—if it is thought that there are no means of coming to an agreement by which these duties can be withdrawn. Therefore, I think we might ask the Choncellor of the Exchequer, without committing himself too far, to give an assurance that these duties are considered solely from the point of view of the purpose he had in mind when they were enacted, and that there is no intention of keeping them in existence after the dispute is settled merely for the benefit of certain industries in this country.
    Mr. CHAMBERLAIN: I must decline to give any such assurance. I have stated perfectly definitely what was the purpose

    49
    for which these duties were imposed, namely, to recoup the British taxpayer for the losses imposed upon him unjustly by the Irish Free State. In the course of warfare of this kind, all sorts of things do occur which after a time may be very difficult to remove, and I am not prepared to say at this moment on what terms I shall be able to settle with the Irish Free State. I should like to know, and perhaps the hon. Gentleman will tell me, whether it would be a term of the settlement that the Irish Free State would pay up the arrears of the annuities and would be willing to pay in full in future. Those are matters to be taken in account, and I cannot at this stage commit myself to any particular conditions.
    4.35 p.m.
    Major PROCTER: An effort has been made to draw an analogy between our debt to America and the debt which Ireland owes this country. I would like to point out that this country has not used the debt as a means of trying to attain some other object. The object of withholding the annuities is to twist the lion's tail. It is part of a deliberate policy of using every opportunity to advance another step on the road to what they call their republic. Whatever concession were made by this country it would not be appreciated. Every concession in the past has simply been used as a stepping stone in another demand. In the past they made a claim that rents were too high and this country set up a Land Court, but as soon as new rents were fixed, though they were not on an equitable basis from the point of view of the landlords, the Irish people still said, "We want something more." The next step was to provide them with houses to be let at a rent of half-a-crown a week.
    Mr. SPEAKER: It appears to me that the hon. Member is going far beyond the terms of this Clause.
    Major PROCTER: I was trying to show that, historically, every offer we have made to Ireland has been made the basis for asking for something more. After the last trouble with Ireland we made a Treaty with them, and these annuities were part of the bargain, and now that has been abrogated. They have refused to pay not because they cannot pay but simply because they wish to secure a republic, and to cut themselves away from the Empire. The right
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    hon. Gentleman must remember that the Irish people have a peculiar mentality. They would rather have the harp that hangs on Tara's walls than any grand piano. They want to go back to the ancient times. If they wish, they can do exactly as they want to do in their own sphere, but for us at this stage to throw in our hands and say, "Very well, do not pay us, but stay in the Empire" would be a very foolish thing indeed. We shall have to face up to the situation at some time, and I, for one, hope that we shall not allow this condition of affairs to go on. [HON. MEMBERS: "What condition?"] Allowing the lion's tail to be twisted all the time—their using these annuities as a means of gaining a republic. If they want to go out of the Empire I should not be one to keep them in. The time has come when they ought to be thrown out of the Empire as being unworthy of it. Therefore, I hope the Government will stand firm. The hon. and learned Gentleman opposite has spoken of coercing Ireland and beating the Irish. Members of the Labour party have acted on that principle. If an agreement made between a trade union and employers has been broken by the employers the unions have threatened a strike.
    Mr. SPEAKER: I do not see how that question can arise on this Clause.
    Major PROCTER: I was trying to show the analogy between the sanctions the unions apply and the sanctions that we are applying in this dispute, because it is a dispute. We have availed ourselves of the only means at our disposal. We have tried to conciliate the Irish, we have tried to arbitrate the question within the Empire, but they simply say, "We won't pay, we won't pay, we won't pay!" Again I say I hope the Government will stand firm. I, for one, thank God that we have a Government which has some backbone in it and will not whittle away our rights in the weak manner which some - hon. Members opposite desire.
    4.42 p.m.
    Mr. DAVID MASON: There is one aspect of this question which I would like to put to the Chancellor of the Exchequer. He was very severe on the hon. Member for Dewsbury (Mr. Rea), the hon. Baronet the Member for South-West Bethnal Green (Sir P. Harris) and the

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    hon. and learned Gentleman who led the Opposition. If I heard him aright, he said the annuities amounted to some £14,500,000 and that we had recovered something like £10,000,000, leaving a deficiency of £4,500,000. Surely he does not suggest that we have been getting this money from the Irish Free State? Who pays the duties, after all? It is the British consumer who pays the duties. He has to pay more for what he imports. The idea that the Chancellor of the Exchequer is recovering this money from the Irish Free State is a pure delusion, a pure fallacy. By his duties he has brought about a rise in the cost of living. That is borne out by what was said by the hon. Member for Horncastle (Mr. Haslam).
    Sir W. DAVISON: On a point of Order. Is this any more in order than the observations of my hon. and gallant Friend the Member for Accrington (Major Procter)?
    Mr. MASON: The Speaker is quite capable of keeping me in order. The hon. Member for Horncastle is alive to the true inwardness of the situation. He wants the duties kept on in order to help the livestock industry in this country, to increase the prices of cattle, and thereby benefit the industry, in which he is interested. It is a fallacy for the Chancellor of the Exchequer to suggest that he is recovering some of this loss by these duties. On the contrary, he is increasing the cost of living. It is doing no good to anyone except to the vested interests of the livestock industry.
    4.43 p.m.
    Sir JOSEPH LAMB: I wish to oppose this new Clause and to protest against the effort made on this and other occasions to bring agriculture into this question. It is not an agricultural question at all. We are trying to obtain justice for British bondholders. What has been done has not been done in the agricultural interest; whatever the effect of it may have been on agriculture is of secondary importance. British bondholders have not received payment in the ordinary way from the Irish people, and, in justice to those bondholders, we are entitled to obtain payment in whatever way we can.
    4.44 p.m.
    Mr. LOGAN: I am rather surprised that the Chancellor of the Exchequer, in
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    discussing a question of this importance, should have raised the question of warfare. If there be anything untactful in dealing with these Special Import Duties it is to talk of warfare to the Irish people. I am not going into that aspect of the affair. This nation should strive for friendly relations with Ireland. An hon. Friend speaking from these benches made a useful suggestion. I know something of the Irish movement, and that suggestion, if carried out, would be a wonderful gesture. I am very discreet in my statements on this subject in this House, because I do not want to embitter the situation. A short time ago when £4,500,000 was advanced by this House to the Austrian Government, I asked the Chancellor a question about it, and he intimated that the deficiency was about £4,500,000. He said that it was not possible for the British people to come to an understanding when there was no machinery by which to get rid of the deficiency. If this House can be generous with the taxpayers' money in regard to the Austrian people, I should imagine that no more successful gesture could be made at the present moment than to find £4,500,000 as a solution of the Irish situation. Such a gesture would lead to a settlement and to a better understanding between the peoples. If the gesture were made now, it would be most beneficial.
    I am not saying one hard word about the Chancellor's remarks, but this is a matter of great importance to the welfare of the nation, and I say to him that in those circumstances you cannot afford to be too flippant in your treatment. The matter should be treated seriously as it is being treated from these benches by our proposal for a repeal. I have tried as much as possible all my life to reconcile the English and Irish peoples, between whom I am anxious to see a better understanding. The Irish are our people, and have shed their blood in the wars of the Empire equally with any other race, and they should be given equal treatment upon equitable terms. They are a population of not more than 2,500,000. I am convinced that a great gesture can be made, and that the National Government can, in this regard, rise very high in the estimation of many races of people. If that gesture were made by way of repeal, the National Government would have done something worth doing.
    4.50 p.m.
    Mr. JOHN WALLACE: All my political life I have taken the greatest interest in Irish affairs, and I have been an Irish Home Ruler from the time that Gladstone introduced his Bill in 1886. I listened with great care to the Chancellor of the Exchequer, who made a clear and most convincing statement, which, so far as I could see, was not in the least exaggerated. I was surprised at the speech of the hon. and learned Member for East Bristol (Sir S. Cripps). It was unfortunate that he should try to draw a parallel between the Irish debt and the debt which we owe to America. The hon. and learned Gentleman occupies a position of importance in this House and in his party, and he knows as well as most of us that anything that he says here is repeated abroad, where it carries a weight which some of us might not attach to it in this House. I say that with all respect. In attempting to establish that parallel, he has been a victim of some form of mental obliquity which we do not usually associate with his utterances here, or with those of the learned profession of which he is a member. He knows the position between this country and America to-day, and he knows that there is not the slightest—
    Sir S. CRIPPS: I said it because I knew what was being said in Washington about the English debt. It is almost exactly the sort of argument which is being put up in regard to the Irish debt in this country.
    Mr. WALLACE: I have not been in America so recently as the hon. and learned Gentleman, but on a comparatively recent visit I met men of considerable standing in the banking and commercial world, and they took an entirely different view from that which has been represented as the view of America in the speech of the hon. and learned Gentleman. I found in America many thinking and responsible men who appreciate the position in this country towards America, and they know from the long historical association of the two countries that the last thing that this country would want under any conditions, except those that are unavoidable, is repudiation of the American debt. The thinking men of America are aware of the implications and modifications regarding the debt which are in
    54
    the minds of the thinking people of this country.
    The hon. and learned Member has stated his belief that, from a purely legal point of view, the dispute between Ireland and ourselves would be settled in our favour. If that be the case, it makes the position of the Government all the stronger in taking up their present attitude. In no sense has that attitude been vindictive. The representations which were made by the Dominions Secretary were of the most friendly character, but they were received unfortunately in a very different spirit by the other side. I am not going to enter into the fiscal question, but I appreciate the issue raised by the hon. Member for Dewsbury (Mr. Rea), that the duties will not ultimately be regarded as an integral part of our fiscal system, and that if this dispute is settled the duties will disappear. I hope that both the duties and the dispute will disappear ere long.
    4.55 p.m.
    Mr. BERNAYS: On this question of the removal of the duties when the dispute is settled, I was very much surprised that the Chancellor of the Exchequer could give no assurance. It was certainly my recollection that when these duties were put before the House there was an expressed assurance that they were only for that purpose. Lest I might be at fault in my recollection I have been to the Library and have looked up the passage in the speech of the right hon. Gentleman the Secretary of State for Dominion Affairs. In that passage the right hon. Gentleman seems to have made the position very clear. This is what he said:
    "The Government ask with confidence for power from the Committee to impose in their own way, at their own time, but immediately—to impose it in such a way as they feel the circumstances warrant, but only to obtain the amount due and not one copper more. When the amount is obtained, we shall cease."—[OFFICIAL REPORT, 4th July, 1932; col. 56, Vol. 268.]
    I ask the Chancellor of the Exchequer very seriously whether the Government have now retreated from that position. If they have, I suggest that they are not going to gain by it.
    4.57 p.m.
    Mr. CHAMBERLAIN: The hon. Member for North Bristol (Mr. Bernays) has read a passage, but apparently he does

    55
    not fully appreciate the meaning of the passage. The particular sentence on which he laid special emphasis was one in which the Dominions Secretary said that those duties were imposed for the purpose of recouping the Exchequer for the loss laid upon them by the default of the Irish Free State, and that when that amount had been acquired or made up, the duties should cease. That was not the question I was asked. [HON. MEMBERS: "Yes, it was."] Hon. Members might allow me to put my case. I was asked whether, if a settlement with the Irish Free State were attained, one of the terms of the settlement would be the total abolition of these duties. I declined to give any such assurance. I do not know what the terms of the settlement with the Irish Free State might be. The terms might, for example, include and allow for the forgiving of part of the money, which would therefore never have been handed to us or recouped by the duties, and in that case the conditions laid down by the Secretary of State for Dominion Affairs would not have been
    fulfilled, although not through any fault of the negotiation of the Secretary of State for Dominion Affairs. It would be monstrous to ask that I should tie the hands of one side or party, when the other side is not so tied.
    4.59 p.m.
    Mr. REA: I was not asking the right hon. Gentleman to tie his hands, but to refrain from tying them. An hon. Member suggested, with considerable acceptance on the Government side, that once these duties had been imposed they were there in perpetuity. I asked the right hon. Gentleman not to give any such definite pledge, but to make it clear that the situation was open to negotiation, and was not such that, if settlement were negotiated, the duties had to remain. If that were so, there would be no hope of the Irish people beginning to negotiate. I merely asked the Chancellor of the Exchequer to keep the door open.
    Question put, "That the Clause be read a Second time."
    The House divided: Ayes, 32; Noes, 245.

    NEW CLAUSE.—(Import Duties Act, 1932, not to apply to foodstuffs.)
    As from the first day of July, nineteen hundred and thirty-four, the provisions of the Import Duties Act, 1932, shall be deemed not to authorise the imposition of customs duties upon foodstuffs imported for human consumption, and the customs duties chargeable on such articles under that Act shall cease to be chargeable.—[Mr. D. Grenfell.]
    Brought up, and read the First time.
    5.8 p.m.
    Mr. DAVID GRENFELL: I beg to move, "That the Clause be read a Second time."
    We regard this as a very important Clause, and it is put forward seriously on behalf of the Opposition. It covers, perhaps, apart from Income Tax, Death
    58
    Duties the largest item of the revenue which the Chancellor of the Exchequer hopes to get in succeeding years, and it is very important from that standpoint, and also from the standpoint of the consumer who will pay and who in this case represents the whole of the people of this country. The Import Duties Act, 1932, made provision for the collection of duties upon a very large number of commodities coming into this country. It laid down the procedure by which, first of all, a flat-rate duty of 10 per cent. is imposed upon all commodities, except those coming under the Free List, and it also made provision for the placing of additional duties upon certain commodities for various reasons. During the past year and a half we have seen a large number of Additional Import Duties

    59
    Orders appearing in this House and receiving but scant attention from the House on their appearance. We feel that on the occasion of the annual Budget not only should the amount of such duties be subject to supervision, but that the whole principle embodied in the Import Duties Act, especially as it concerns the foodstuffs of the people, should be very carefully examined.
    The Chancellor of the Exchequer is not here at the moment, and I am not risking his displeasure in saying this, but I am very sorry that the laudable efforts of the hon. and gallant Member for Gainsborough (Captain Crookshank) to cheer up the House on this very sultry afternoon were not more successful. I hope that somebody will act the part of good Samaritan and again try to enliven the proceedings. It is very difficult to get the interest of the House on a sultry day such as this, but on a normal occasion, I feel sure, the House would give its earnest attention to the question of the continuation of the Import Duties Act and the extensions which we have seen from time to time arising from that Act.
    It is said that we now have a National Government. We have contested that title from the beginning, and it fits hon. Members on the other side of the House less comfortably to-day than ever it did. There is much dissension, there is much disagreement, there is much mutual misunderstanding and confusion on the other side of the House, and to-day we find the House divided against itself. There are only two Members at the moment on the Treasury Bench, and I remember the time when those two were in violent opposition to one another on this very question. The Financial Secretary, who is sitting opposite to me and who appears to be trying to look satisfied with himself and his Government, is finding it very difficult, because he has a good memory—a handicap which some hon. Members find it difficult to overcome. The hon. Member for Horncastle (Mr. Haslam), who is both a Protectionist and a Conservative, has never doubted the efficacy of tariffs and Protection, but he and the hon. Gentleman in front of him, whom he follows so willingly to-day, were not always of the same opinion, and I question whether the Financial Secretary is even now as fully convinced of the advantages of this kind of machinery and of
    60
    this principle as is the hon. Member for Horncastle. We have heard all along the years from leading Members of the present Government that never would they consent to the taxation of food—that they would be quite willing to experiment with modified forms of Protection, with regulation of imports, with limitation of imports, but never would they agree to the taxation of food. Nevertheless, we find that a large number of food commodities which we now have to import into this country—agricultural products, produced for human consumption, to the value of nearly £200,000,000 a year—are taxed in this country by import duties in a variety of forms and under a variety of procedure, according to the particular case.
    We have just concluded a discussion on the Irish Free State (Special Duties) Act. Under that Act there is taxation on livestock, taxation on dairy produce, taxation on poultry, varied in its incidence and in its form of application, but touching every single agricultural product that comes from that country. Large quantities of commodities coming from every part of the world are subject to these duties, and we find that the Free List, which was designed to save our raw materials and essential foodstuffs, is diminishing every day as these special Orders appear, the general duty of 10 per cent. being augmented by additional duties of 15, 20 or 25 per cent. according to the insistence of hon. Members and their supporters in the country. These import duties are imposed finally in form by the House it is true, but they are assessed and determined by the Import Duties Advisory Board, which is removed from the House, to which the House has no access, and from which the House only-gets the very barest explanation and reason for the changes which come from time to time. Yet this body has enormous power. It is already adding considerably to the cost of foodstuffs.
    Mr. HANNON: Does the hon. Gentleman contend that the cost of living has been raised since we put duties on imported goods?
    Mr. GRENFELL: We now pay a larger price for a smaller quantity of imported food than we did in 1932. The volume of imports was 3.6 per cent. less in 1933 than in 1932 and the value was 8.9 per cent. less, and that in spite of the general decrease in the world price

    61
    of agricultural produce of all kinds. World production has increased very considerably in the present century, and the increase has been responsible for the tendency for prices to fall. But, despite the world tendency to falling prices, we in this country have experienced a rise in retail prices, and agricultural foodstuffs are dearer than they were 12 months ago. The Government say that only proves their success, but the additional price has to be paid by the consumer. The hon. Gentleman who looks at me so benignly and is so anxiously waiting for me knows that purchasing power has not been increased at all. The wages index is no higher than it was five years ago, but is actually lower. Actual wages are lower than they have been for a considerable number of years.
    Mr. HANNON: Surely the hon. Gentleman will admit that the wages fund at present, with 880,000 more people at work than 12 months ago, must increase purchasing power.
    Mr. GRENFELL: I admit that there are more people at work than there were 12 months ago, but with the cuts imposed by the Government and wage reductions imposed in the last 12 or 13 years, we have, after making allowance for the increase in employment, not yet reached in the aggregate the purchasing power of 1931. From that contracted purchasing power these higher prices have to be paid. Retail prices are higher in proportion to 1930 than are wholesale prices. Taking the year 1914 as 100, retail prices of foodstuffs are to-day 127. Wholesale prices, it is true, are less. They stand at about 107 or 108. But retail prices are higher, and the use made of these duties is to add more and more to the retail prices which the consumer has to pay. This is really of vital importance. We are engaged, as is every one else, in a struggle to keep our place in the industrial life of the world. There has been a considerable contraction of our export trade. We find competition more and more keen. We have competitors who now stand out in rivalry with every prospect of successful competition against us. We hear complaints of the dangers of Japanese competition, which is the more menacing because the Japanese worker gets cheaper food. It costs him less to live and he is able to work for lower wages and his goods are
    62
    produced at a lower cost, and they find their way into the markets in competition with goods from this country. Hon. Members opposite cannot have it both ways. If we are to induce the working people to accept low wage standards because of the existing low wage standards in competing countries, we cannot also raise the cost of goods, because it must inevitably happen that, if you raise the cost of living, wages somehow or other must be raised to the same extent.
    We do not believe in producing agricultural commodities at a price less than the cost of production, but we believe that there is a considerable margin between retail prices and agricultural costs which we should thoroughly explore before we artificially raise the prices of imported foodstuffs and at the same time raise the retail prices of foodstuffs produced at home. After all, the consumer is a producer in his turn. In the main we are an industrial country. If you handicap the producer by adding unduly to his cost of living as a consumer, he will find himself in a competitive world out of employment and unable to play his part as a producer.
    The intention of the Import Duties Bill was threefold. First of all, it was to restrict imports. We heard a good deal about abnormal importation, which the Government said they had to provide against. The next thing was to provide a remedy where a foreign country discriminated against British products. A good many of us would agree that, if we were subject openly to discrimination, we should take measures to protect ourselves, but we should exhaust every possible means of conciliation before adopting this kind of defence. The third object of the Act was to increase revenue. The hon. Gentleman must know by this time that there are much more convenient ways of providing this addition to the revenue than to go to the cupboards and the pockets of the poorest people in the country, extracting it in small sums of a ½d. and a penny, so much on bacon, so much on cheese and so much on butter. Because we believe that this taxation does infinite harm to our position as an industrial country and imposes a great hardship and handicap upon our people in their capacity as citizens and producers for the markets of

    63
    the world, and because we believe it is a wasteful and ineffective way of collecting national revenue, we move this Clause.
    5.27 p.m.
    Mr. HANNON: I have no complaint to make of the moderation with which the hon. Gentleman presented his case. It is a typical example of the sort of reactionary speech that we always had from the protagonists of Free Trade in the years gone by. If the Clause were added to the Bill, we should have a complete change in the present progressive, hopeful and helpful policy which the Government are prosecuting in the interests of agricultural revival. The hon. Gentleman made a strong case from his own point of view in relation to the cost of living, but he is aware that, taking food, clothing and shelter into consideration, at present we can purchase for 17s. as much as we could purchase for a £1 two and a half years ago. Does not that prove that, while we are trying to help agriculture by the imposition of these duties, and endeavouring to raise wholesale prices we are at the same time bringing down the cost of living.
    The most interesting feature of the policy of the Government is that which it is doing for rural industry. I am certain that the hon. Gentleman would be the first to associate himself with any movement to help the people on the land, those who cultivate small farms and gardens, to get the largest volume of production out of the soil. Does he contend that that policy can have any effective result unless we give some measure of protection to those engaged in production? He has referred to the expediency of employing retaliatory measures when we are prevented from entering the markets of foreign countries. How can we increase the purchasing power of the farming community unless we protect them from the flood of competition in foodstuffs from every corner of the world? I am sure the hon. Gentleman will agree on reflection that he and his party are advocating a policy which is not to the advantage of the country as a whole.
    One of the most interesting changes in the atmosphere of this country, social and political, in recent times is the gradual rapprochement which has been
    64
    established between agriculture and industry. My right hon. Friend and I have endeavoured for many years to bring agriculture and industry into closer contact so that a material understanding might be created where both branches of enterprise in this country might be mutually helpful. In the course of the last few years in all the great centres of population in the country, and indeed in the very region for which the hon. Gentleman opposite is so honourably one of the representatives, there has been a great feeling of kindly sympathy towards agriculture, and an anxiety to make the position of the man who produces on the land more secure and profitable than it has been for many years past. I hope that that policy will be continued. The future of this country is largely bound up with the prosperity of the countryside. We have paid little attention to the countryside in the past and have neglected opportunities in this country of making the people happy on the land. The hon. and learned Gentleman smiles.
    Sir S. CRIPPS: I was smiling at the hon. Gentleman's condemnation of the Conservative party for the last 200 years.
    Mr. HANNON: I was really thinking of the weaknesses of the Whig party, out of which he arose, 60 or 70 years ago. He lives in one of the most charming districts in this country, amid surroundings which are most pleasurable and delightful, in the lovely Cotswold country, and would like to see every means possible brought into play to strengthen fertility and production in order to help the people. I am certain that he would, and is to-day going to vote for this Clause which prevents the machinery being vigorously operated to bring about the very effect, which, I am sure, he has at the back of his mind. For years past in this House Members of all parties have been too mealy mouthed in pleading the cause of agriculture. The time has come when the rural life of this country must be supported by every means which this House can provide for it. The Government have a policy of progress and recuperation in industry and agriculture, and it would be a reactionary process on the part of the House of Commons to accept a Clause of the kind proposed by the hon. Gentleman, although no doubt he has done it with the very best of intentions,

    65
    and in his own congenial way. Nevertheless, it would be a fatal blow at the present policy of promoting steadily, hopefully and helpfully, the improvement of the agricultural life of this country.
    5.33 p.m.
    Mr. MAINWARING: The speech to which we have just listened, associated with a number of other declarations which have been made for some time past, seems to indicate that the policy surrounding the Clause which we are now discussing is one instituted for the purpose of defending agriculture in this country. It would be well before discussing the need for the defence of British agriculture to examine very carefully why British agriculture so lamentably fails in face of world competition. May I suggest an examination of why farmers within very few miles of London are unable to compete with farmers 5,000 or 10,000 miles away from London? What are the basic reasons which prevent farmers, on the most advantageous soil in the world, from competing against farmers abroad? Is there anything surrounding governmental conditions in this country? Are there rates and taxes which they have to pay compared with the foreigner? What are the circumstances? I should be glad to avail myself of any information at the disposal of any Government Department likely to convince me that the British farmer next door to London requires to be protected on the lines suggested against a poor old farmer thousands of miles away. The whole thing is incomprehensible from the point of view of common sense.
    Mr. HANNON: The unit of production, taking wages, overhead charges, rent and rates and everything else into consideration in England, as compared with foreign countries, is precisely five or six times as great.
    Mr. MAINWARING: In any case I would invite the hon. Gentleman to provide us with authoritative figures on that point. If he could prove that a farmer in one of the home counties was burdened by economic disadvantages of that character, it would be something for this House to consider. Until he does, and without the production of such information, I am prepared to lay it down that there is no such economic disad-
    66
    vantage in this country at all. British agriculture suffers from conservatism more than anything else. I am not referring to political Conservatism but to the conservatism of its economic methods which prevent it from holding its own with any other country. I could understand hon. Members, if they were dealing with the problem from the standpoint of world agricultural policy, associating themselves with monetary questions. The idea has been advocated and pursued in many countries, as has been the case in the United States of America, that the way out of the present crisis is to raise the price level of commodities. The Lord President of the Council, speaking during the weekend, indicated a measure of dissatisfaction in regard to price levels. It was thought that if the price level could be raised somehow or other the depression in the agricultural industry, and possibly in some other industries, would, in some miraculous way, be swept aside.
    The assumption is that agriculture suffers from depression to a much greater degree than other industries in that agricultural prices have fallen to a much lower level than the prices of other commodities. It may be true that the relative fall in agricultural prices is much greater than the fall in prices in other industries. It is said that if they could raise agricultural prices to a higher level they would be able to give to the producers, and to the whole agricultural population, a far higher purchasing power which would be expended not only in the purchase of agricultural products, but of industrial products. Unless you start a movement which would indicate a line of development to sweep away the whole of the depression which affects the various countries at the present time, how is the raising of prices of agricultural products to be attained? There are two ways I suggest in which it might be done. The one is by interference with currency, which was begun when we went off the Gold Standard. It was copied by other countries going off the Gold Standard, and it was hoped that the price level would rise.
    Mr. DEPUTY-SPEAKER (Sir Dennis Herbert): We cannot discuss that question, as the Clause is limited to the question of import duties on foodstuffs.
    Mr. MAINWARING: I was mentioning that particular theory as one of the two ways in which we could effect a rise in agricultural prices. That particular theory fails in that it would raise all prices uniformly and therefore would not affect agricultural products as distinct from other products. Therefore, it fails for that reason. The hon. Member for South Croydon (Mr. H. Williams) shakes his head.
    Mr. DEPUTY-SPEAKER: Really the hon. Member cannot discuss that question.
    Mr. MAINWARING: I accept your Ruling, and therefore I mention the other suggested remedy, which is, protective tariffs against a particular class of goods. In this case, the tariffs refer to agriculture, and it is assumed that the operation of the tariffs' against the imported agricultural produce will stop altogether with that class of goods. My hon. Friend the Member for Gower (Mr. D. Grenfell) pointed out that, while the effect of the protective tariff was to raise the price of agricultural goods, it must also raise the cost of living to the average working man.
    Mr. HASLAM: The policy of the Government is directed to raising wholesale prices, and not retail prices.
    Mr. MAINWARING: The hon. Member must face the reality of the situation. The moment you raise wholesale prices, the raising of retail prices will follow. [HON. MEMBERS: "No."] I have heard hon. Members complain that retail prices have not fallen in comparison with wholesale prices. If the protective tariffs aimed at are set in operation for the purpose of raising prices, obviously the effect is not attained unless the cost of living is increased for the working man. My complaint, and the complaint of work-ins; men and women in this country, is that if you seek to raise agricultural prices automatically in this country, you are imposing a very grave injustice on the working class unless you provide an increase of wages for them at the same time. We find that the increase of prices simply accumulates as a benefit in the hands of a section of the community in this country. If the effects are to be met by each class as they suffer, first of all, an increase in the price of agricultural products, land, secondly, an increase in
    68
    the cost of living to the working class, and the working class succeed in securing a rise in wages, the effect will be pushed from one to another until finally the whole of the community comes back once again to the status quo. I will put this question to hon. Members and to the Minister in charge. If protective tariffs are now required because agricultural prices are at an abnormally low level, so much lower than the prices of industrial products, would they be prepared in the event of the protective tariffs improving the comparative level of agricultural prices, to withdraw the protective tariffs? It is a fair question. [An HON. MEMBER: "Wait and see."] I shall wait and see.
    Mr. HERBERT WILLIAMS: May I ask a question as a corollary? Will the hon. Member support them until that happens?
    Mr. HARTLAND: That is not a bad one.
    Mr. MAINWARING: It is not a bad one, land I am prepared to answer it frankly. If wages among the working class were supported, I would agree, to it, and I believe that my party would agree to it. The fact of the matter is that wages have been reduced for the last 10 years to meet the position, and wages are the only commodity in this country the price of which has been forcibly reduced.
    Mr. WILLIAMS: Is the hon. Gentleman suggesting that in the last 10 years wages have been reduced, taking the percentage, more than retail food prices? If so, will he give me his authority?
    Mr. MAINWARING: That is not the point at all, and I am not prepared at the moment to say what the relative proportion may be. The hon. Member may be correct. What I do assert is, that under this policy, in endeavouring to recover lost ground, wages have been reduced to an inordinately low level.
    Mr. WILLIAMS indicated dissent.
    Mr. MAINWARING: The hon. Member shakes his head. Does he realise that 75 per cent. of the mining industry in this country are paupers, that they cannot live on the wages they receive, and that they are not doing so? Does he realise that?
    Mr. WILLIAMS: No, because it is not true.
    Mr. MAINWARING: It is true. Let me invite my hon. Friend to ask Mr. Evan Williams, President of the Coal-owners' Association of Great Britain, to deny what I say. I guarantee that Mr. Evan Williams will confirm my statement to the full.
    Mr. WILLIAMS: I do not know whether Mr. Deputy-Speaker will allow me to intervene further. There are about 1,400,000 people and their dependants in this country in receipt of Poor Law relief. That number represents 400,000 workers and not more than a fraction of them are coal miners. There are 750,000 coal miners. Therefore three-fourths of them cannot be in receipt of Poor Law relief.
    Mr. MAINWARING: The disadvantage under which the hon. Member labours is that he does not realise the source from which the poor relief comes to the miners. They do not receive it from public assistance. They get it from the coalowners. That is the distinction. The wages of the miners are actually the smaller sum in the total that they carry home from the offices every week. That is because the coalowners as a body have been compelled to recognise that the wages they agreed to pay and the wages they do pay, are inadequate. No one insists more upon making the distinction between wages and subsistence allowances than do the coalowners. They say to the miners: "We pay you a wage and we pay you an allowance."
    Since the wages of the working classes have been reduced to such a level that their own employers directly and voluntarily agree that they are insufficient to enable a man to live, we are justified in asking that if the policy of raising the price, levels of general foodstuffs is to be embarked upon, then the wages of the working classes ought to be raised at the same time. Unless the purchasing power and the standard of living of the working class are safeguarded, we are justified in opposing to the utmost of our power the continuation of the Government's policy. In reply to the hon. Member for South Croydon (Mr. H. Williams) I would say that if the Government were prepared to guarantee the standard of life and the purchasing power of the working
    70
    classes we should be quite prepared to support them in raising agricultural prices to a point where they could recover their competitive equilibrium with the prices of industrial products. Unless that can be done, the Government must find new ground for continuing this policy, or they must justify the ground upon which they introduce this principle.
    5.50 p.m.
    Mr. E. J. YOUNG: When I was listening to the speech of the hon. Member for the Moseley Division of Birmingham (Mr. Hannon) I was reminded of the great battles we had in 1903, before the outbreak of war. Protection under the name of tariff reform was thrust upon us in those days, and Liberals and Free Traders took up the challenge and we fought out the issue year after year, in season and out of season, until the Great War began, little thinking that after the War the spirit of narrow nationalism would thrust us into the Protectionist vortex. We used to beat the Protectionists every time in those days. They used to tell us that if we had Protection we should keep out foreign goods, and that we should raise revenue. We had also other inconsistent arguments. We said that as soon as the people understood the question, Protection would break down. I believe that the arguments for Free Trade to-day are as sound and unchallengeable—if we could lay aside party spirit or the spirit of international differences—as in former days.
    Mr. HANNON: Is the hon. Member advancing that as a serious argument?
    Mr. YOUNG: Certainly. We have had a revival of the old Protectionist arguments that we used to hear 25 years ago, which were proved to be unsound and illogical before the War. They are now offered to another generation, which has had a little experience of these things, but they are equally unsound.
    Mr. HANNON: They have been accepted.
    Mr. YOUNG: The hon. Member has suggested that you can help one section of industry by putting an import duty against goods from abroad. That particular section is agriculture. We have always agreed as Free Traders that if you protect one section at the expense of the rest, you certainly can give that

    71
    section a good deal of benefit. The hon. Member comes from Birmingham, where they make brass pots and tin ware. Obviously, if you exclude competition with those goods the manufacturers of Birmingham—
    Mr. DEPUTY-SPEAKER: The discussion is going rather wide. I do not think that brass pots from Birmingham are articles of food.
    Mr. YOUNG: I was simply using an illustration to point out that one section of people can be benefited by tariffs by the exclusion of competition, because they secure advantage thereby, but if the tariffs were applied to the whole of industry then that benefit automatically disappears. The argument has been used to-day that tariffs have assisted agriculture. We who are associated with the industrial areas maintain that prices are higher because of tariffs than they would have been if the tariffs were not there. I had hoped to be able to say something about the importation of meat from Ireland. Exactly the same argument applies to the question of imported foodstuffs.
    Mr. GURNEY BRAITHWAITE: Am I correct in thinking that the hon. Member followed us into the Lobby the other day for the purpose of continuing for an indefinite period the duties on imported iron and steel?
    Mr. DEPUTY-SPEAKER: I must ask hon. Members not to make these interruptions. They lead us away from the subject before the House.
    Mr. YOUNG: I would answer the hon. Member in the affirmative if Mr. Deputy-Speaker gave his permission, but he has not done so. Also, if I could have been allowed, I would have explained my position, but that is not permitted. I put this question to hon. Members opposite. Is it correct that import duties raise the cost of goods to the consumer? Let me put a proposition. If I go abroad and I buy a ship-load of wheat and that wheat is placed aboard a ship, the captain or officer in charge is given a bill of lading, giving the purchase price. When the ship arrives on this side the Customs' officer goes aboard, inspects the bill of lading and adds the value of the tax to the cost of the goods. The man who takes the goods from the ship adds special charges
    72
    to the goods, and where he has the chance to do so he makes a profit on the taxes as well as a profit on the goods themselves. When the goods have filtered through several stages and have reached the consumer, is it not true that the consumer is paying not only the normal charges and profits on the goods themselves, but several profits on them as Well?
    Mr. H. WILLIAMS: Can the hon. Member give me any example in which it is true to say that that happens?
    Mr. YOUNG: I have had something to do with the business of importing cargoes of timber, but I have not a bill of lading with me.
    Mr. WILLIAMS: Can the hon. Member tell me where the price has risen since the duty was imposed, in cases where there is trade competition?
    Mr. YOUNG: Effective trade competition? Yes, in four-panel doors.
    Mr. DEPUTY-SPEAKER: Four panel doors must be almost as indigestible as I find some of this discussion.
    Mr. YOUNG: The hon. Member opposite must excuse me from pursuing the subject further. I may be able to give him more information on another occasion. We are discussing the removal of taxes from food, and our position as representatives of industrial areas is that taxes make food dearer when it should be cheaper. In spite of these hypothetical drops in the cost of living, people are not getting as much food as they ought to have. They are not getting sufficient to maintain health and strength. Those who have watched the same people year after year in the same industrial area will accept that dictum. This is one of the occasions when we join with hon. Members above the Gangway, although their position is inconsistent. I cannot quite appreciate the association of Free Trade Socialists. Our claim as Free Traders is that people should have the right to buy where they like and to sell to whom they like. I believe that even hon. Members opposite would accept that proposition. It is inconsistent to suggest that the State should be the only producer and the only distributor. We are supporting hon. Members above the Gangway in the effort to get food prices reduced by the removal of this tax.

    73
    The hon. Member for Horncastle (Mr. Haslam) said that the effect of the tariff would be to raise wholesale prices but not retail prices. Are not wholesale and retail prices related in this way, that if there is sufficient competition among the wholesalers to sell their goods to the retailers prices will be pushed down, but if the competition between the wholesalers is limited, as it would be limited if a tariff were operative, then there will be a tendency for retail prices to rise.
    Mr. HASLAM: I should like to point out that the sudden fall in the wholesale prices of agricultural products was not accompanied by a sudden or corresponding fall in retail prices. The recent rise in the price of certain agricultural products, such as mutton, which has risen 41 pe rcent., has been accompanied by a rise of only 6 per cent. in retail prices.
    Mr. YOUNG: From the statement of the hon. Member I must charge the retailers with profiteering. If only that small increase has followed substantially the steep rise in wholesale prices, we must assume that the retailers had been getting far more out of the public than they were entitled to do.
    Mr. HASLAM: I should like to enter a caveat against that statement. Retailers have their own difficulties to contend with, and I should not like my words to be taken as meaning that there has been profiteering.
    Mr. YOUNG: I do not wish to be drawn further into arguments, because I have the reputation of making short speeches, and a large number of hon. Members wish to take part in the Debate. I affirm that tariffs make prices higher than they ought to be, that goods are dearer with tariffs, and I say that to make the poor pay more for their food than is necessary is a criminal action. A very important Member of the Conservative party, Mr. Balfour, afterwards the Earl of Balfour, summed up the tariff position when the tariffers were not quite clever enough to trap him completely. He said that the object of Protection was to encourage home industries, and that the means by which it attained that object was a manipulation of the fiscal system to raise home prices. If they were not raised, he said, industry was not encouraged. That, in a nutshell, is Protection properly
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    understood. I rose to make one point, and that is that the new Clause suggests that food taxes which press more heavily on the poor than on the rich should be removed. I have the greatest pleasure in supporting the Clause.
    6.2 p.m.
    Mr. McKIE: In view of the vigorous enunciation of the Free Trade policy to which we have just listened, I feel that one hon. Member who represents a purely agricultural constituency should be allowed to say a few words. The hon. Member will forgive me if I do not follow him into the old question of Protection and Free Trade, and I am quite sure, Sir, that you would not permit me to do so. May I make one observation with regard to the speech of the hon. Member for Moseley (Mr. Hannon)? I listened to him with great pleasure, as I invariably do, but I was somewhat surprised to hear him speak in such glowing terms of the agricultural policy of the Government. We all know that the present Government have done more for agriculture in general than any other administration, but as a protagonist of the Protectionist policy I expected the hon. Member to be somewhat firmer in urging upon the Government to go on from strength to strength.
    The proposed new Clause, of course, raises the whole agricultural position. We want more, and hon. Members above the Gangway want less. I respectfully suggest to them that they cannot have it both ways. We have heard a great deal about higher wages and adequate remuneration for the worker, whether in agriculture or in the great heavy basic industries of the land. I agree; but what do they propose in their Clause? Surely it is somewhat in the nature of a wrecking Amendment with regard to agriculture and industry in general. They would hold us back; we are to be stayed in our great endeavours in this Parliament to do something for agriculture in particular and for industry in general. They say, "If we are to have wholesale prices raised, you must do something about wages, by legislation." Let me point out to them that the flaw in their argument lies here. Good as are the intentions of the Government with regard to agriculture, their efforts so far, in regard to raising the wholesale prices of agricultural products, have not met with the success which we should all like to see. The

    75
    Minister of Agriculture has said so with regard to meat, and the Lord President of the Council in his speech at Osbaston Manor said, referring to agriculture, that he could say nothing more at the moment but that they would be prepared to stand the racket in the House of Commons and on the platform when the right moment arrived. I have in my pocket a copy of a resolution passed by beef producers in livestock-raising areas deploring the present catastrophic prices which prevail in regard to their products and the terrible anxiety with which they view the future.
    In view of all the circumstances of the case, I feel that I ought not to be silent when a Clause like this is put before the House which, as I have said, suggests that we should even do less than it has been possible to do in the two and a half years since this Parliament was elected with the doctor's mandate instead of assisting and stirring the Government on to resuscitate and reinvigorate all the great industries of the land. That is why I ask the Financial Secretary to have nothing to do with the proposed Clause. I am sure that he will not have anything to do with it. He is directly connected with the innermost councils of the Government, and no doubt realises that I have not overstated the case with regard to the agricultural industry. He knows that every county Member in this House is appalled, and everybody connected with agriculture outside is appalled at the present trend of affairs. Agriculture was keenly discussed at the last Election and the doctor's mandate was hailed by every farmer, large and small, as something which would give the industry its chance, though somewhat late in the day, thanks to the efforts of hon. Members of the Liberal party.
    I ask the Financial Secretary to turn a very deaf ear indeed to this Clause, and to make a vigorous pronouncement of the Government's policy. The hon. Member for Middlesbrough East (Mr. E. J. Young) spoke very strongly from the Free Trade point of view. I am glad that he did so, because it lets us see that the Liberal party are digging their own graves as fast as they can. Agricultural labourers will not be taken in by arguments such as have been advanced. They realise to-day, all orders
    76
    in agricultural society realise—owners, occupiers and workers—that their interests are one. We have long since left the good old days of Queen Victoria when people connected with the Liberal party did their best to bring strife into what ought to be normally the most peaceful orders of our society—
    Mr. E. J. YOUNG: Does the hon. Member not realise that in the days of Queen Victoria a great Conservative leader said that Protection was not only dead but damned?
    Mr. SPEAKER: I do not think it is necessary to go back to those days.
    Mr. McKIE: I do not wish to be guilty of prolonging the Debate, so let me say in one sentence, in reply to the hon. Member who has interrupted, that I think Mr. Disraeli when he spoke in that way failed to realise the great—
    Mr. SPEAKER: I have already said that I do not think it is necessary to go back to those days.
    Mr. McKIE: No doubt there will be another opportunity of making what, I think, is a very cloudy position perfectly plain. I hope that the Financial Secretary will resist the proposed new Clause with all the energy he possesses, and I promise him that if he does so he will have my support on this occasion, which, I hope, will stimulate him and his right hon. Friends to initiate a more vigorous livestock policy.
    6.12 p.m.
    The FINANCIAL SECRETARY to the TREASURY (Mr. Hore-Belisha): The Debate has aroused deep feelings on both sides of the House, but we are not concerned here with the general controversy in which hon. Members have participated. This is a very restricted proposal. It is not large enough to carry with in its bosom the wider conflict of views with which both sides are familiar. It raises this question only: Protection being granted as a principle, is it right to deny to the producers of foodstuffs the same advantages which you give to producers of other commodities? That is the whole issue. Hon. Members opposite say that it is proper to deny to the producers of foodstuffs the advantages which you grant to the producers of other commodities. In order to make out their case they must show that the cost of foodstuffs is

    77
    high relatively to other items in the working-class budget—not only high, but so high as to be intolerable. What are the facts? The facts are that whereas the general cost-of-living figure is to-day 38 per cent. above what it was in 1914, the cost of foodstuffs is only 17 per cent. above what it was in 1914. They must also show that since the Import Duties were put on the cost of foodstuffs has risen in an alarming manner—so alarming as to call for the intervention of the Legislature. What are the facts there? They are that when the Import Duties were put on foodstuffs, the cost of foodstuffs was 26 per cent. above what it was in 1914; to-day it is only 17 per cent. above.
    Sir S. CRIPPSCan the Financial Secretary tell us or give us the list of foodstuffs to which he is referring?
    Mr. HORE-BELISHA: I am referring to the cost of foodstuffs in the cost-of-living index.' I will give the hon. and learned Member the months. The last figures I gave referred to April, 1932, and to June, 1934. There has been a fall in the cost of living so far as foodstuffs are concerned. Even if it were true that the cost of living in respect of foodstuffs had risen, it would still also be true that what a man might have lost as a consumer he would have gained as a producer. That is true by the increased employment, the figures of which are so familiar to the House. In any event, I think that the Movers of this new Clause are under a misapprehension. The Clause does not propose—here I am surprised—to sweep away the duties on all foodstuffs. The arguments have been addressed to the evil of taxing all foodstuffs. The new Clause is much more restricted. It does not make any interference with the Revenue duties, the taxes upon tea, sugar, coffee, and alcoholic liquors. It leaves them. It does not suggest sweeping away any of the Ottawa duties. Those are to remain. The two kinds of duty which I have mentioned, the Revenue duties and the Ottawa duties, cover the vast bulk of the food duties in this country. We are therefore left with a proposal which invites us to abrogate—here I am speaking in general but fair terms—duties upon oats, oat products, some vegetables some fruits, and sundry other commodities. That is all we are asked to do.
    78
    I trust that the House will agree with me that the proposal is not large enough or wide enough to carry so serious a controversy as has been raised, and that all that is at issue is, having agreed to protection generally, should you deny to the producers of foodstuffs what you deemed to be good for the rest of the community? The answer of the Government is in the negative.
    6.18 p.m.
    Mr. CHARLES BROWN: I have been very interested to hear the reply of the Financial Secretary. I was not surprised to hear him say in effect that he was familiar with both sides of the controversy. That, of course, is well known to every Member of the House. I have not the slightest doubt that if he had had to put forward arguments for the new Clause he would have done it quite well, because of his past political history. He has managed to put the argument against the Clause quite effectively by evading the main point that we have in mind in the Clause. He knows as well as any one in this House that taxes on food were not an issue at the last election. I know of no National Government candidate, at any rate in my area, who openly came out with proposals to tax food. The contrary was the case. What the Financial Secretary has failed to understand in our case is that we are objecting particularly to the method of putting taxes on food through the Import Duties Act.
    The Financial Secretary has reminded the House that if our proposed new Clause is carried, we repeal by it a very small proportion of the food taxes. That we admit. The hon. Gentleman called attention to the fact that the food taxes in existence are largely put on through the instrumentality of the Budget. When the Budget is before the House and such taxes are imposed all the people know what the Government are doing, and what items of food are to be taxed. But here, through the machinery of the Import Duties Act, the Government can do these things with very few people knowing what they are doing. An Order may come up late at night in this House and the Government carry through a new tax on some item of imported food in the dietary of the working classes. We object. We say that the Government have no mandate to impose food taxes in

    79
    that way. We strongly object to the machinery of the Import Duties Act being used for this purpose. If the Government are going to do it let them do it openly and above board, through the instrumentality of the Budget.
    As some of my colleagues have already said, on principle we are opposed to food taxes. I have ever borne in mind a very important statement that will be found in the speech of the Chancellor of the Exchequer during the Second Reading Debate on the Import Duties Bill. I speak from memory, but I think that in one of his speeches the Chancellor said that we had reached a situation where it was necessary to broaden the basis of taxation. That was the phrase he used. One of the methods of doing that is by the imposition of food taxes on large masses of the people. The Financial Secretary might very well say to us today, "We have not done much in that direction yet, at any rate not through the instrumentality of the Import Duties Act." But we must have some regard to the speeches that have been made to-day. I was astonished when the hon. Member for Moseley (Mr. Hannon) said that the advocates of agriculture had been mealy-mouthed in the past. They have never been mealy-mouthed while I have been in the House; their demands on the Government have been insistent. They are still making their demands. The hon. Member for Galloway (Mr. McKie) has made a similar demand today. We gather from the speech of the Lord President of the Council that new measures are contemplated to deal with the situation.
    Mr. McKIE: We hope so.
    Mr. BROWN: We are naturally suspicious. We say emphatically that the Government have no mandate for food taxes, and that they ought not to impose taxes through the machinery of the Import Duties Act. I shall have no hesitation in going into the Lobby in support of this Clause.
    6.23 p.m.
    Mr. HENDERSON STEWART: I do not know in what kind of world the hon. Member for Mansfield (Mr. C. Brown) lives, but his speech makes one think that he has no practical connection whatever with any farm-
    80
    ing area or any community which lives on agriculture. Without wishing to speak from any selfish point of view I would say that I represent a very important agricultural area in Scotland, and I ask my hon. Friend, and other hon. Friends who support him, to face the practical issue. They ask that there shall be no sweated labour. Is that demand to apply only to industrial workers? Is the argument to stop short at every farm gate? The fact is that until we took these measures, the necessity for which I regretted, farm labourers were being sweated, and even now they are being sweated.
    Mr. MAINWARING: And by wealthy farmers.
    Mr. STEWART: So long as the returns of agriculture were as small as they were, and indeed so long as they are as small as they are to-day, sweated labour is almost inevitable. It is to avoid that, to make it possible for the farmer—who is just as generous in general as hon. Members opposite—to pay his workers a living wage, that these measures, unfortunate if you like, are essential. It is in that practical way I look upon these protective measures. I was brought up as a Free Trader, and I confess frankly that when these taxes were imposed I did not like them. One cannot all of a sudden like something that one has denounced all one's life. But to-day is different from 1913 or 1912, to which reference has been made. We are living under new conditions. Goods are being thrown upon our market as they never were before. I have read Adam Smith with a great deal of care and I am sure that when he advocated Free Trade he never contemplated dumping conditions such as we have now. Certainly when I learned my Free Trade lesson in the olden days dumping and currency problems were not in the text-books at all. These are new factors that make a completely new picture. It is hopeless to approach the present-day problem with no contribution except what was learned in 1913 and 1914.
    Therefore I say, regrettable as these taxes may be to one brought up as a Free Trader, they are essential at this time. To come forward with a proposal like this new Clause, to rob farmers of what protection they have, for oats, barley and I hope, potatoes, to open our markets to

    81
    a flood of these goods at prices shillings and pounds below cost of production, is to destroy agriculture in this country. When conditions of fair trade return, when there is no more currency problem, when there is no more of this subsidising of exports by the method adopted in France and Germany, I am prepared to stand with hon. Members opposite and to ask for the freest possible trade between this country and others, but so long as we are subject to these exceptional methods of trade. I support a continuation of the Government's measures. I regard this Amendment as one of the most foolish I have ever seen put on the Paper. As has been said, it has not any size and it means nothing. It refers to one or two products about which I really believe hon. Members opposite have no knowledge whatever. I wish they would come with me to an agricultural market one day. I spent this morning at such a market. They would see farmers offering their produce for sale. They would see the price that was got. Then they could go back to the farmer and examine his accounts, as I have done. They would find out where was the great profit that is supposed to be obtained.
    When the hon. Member talked about these import duties being carried through in the dead of the night, I wondered whether he was talking to some dramatic society or to sensible men and women in the British House of Commons. What nonsense is the suggestion that the thing is done in an underground way! The Import Duties Committee's reports are published. They appear in the Press. Every one can examine them for weeks. They are debated in this House, and if the Debate is late it is very often hon. Members opposite who are to blame. There is, indeed, no ease for this new Clause or for the wealth of groundless arguments with which it has been advanced.
    6.29 u.m.
    Sir P. HARRIS: We have had a very eloquent speech from the hon. Member for East Fife (Mr. H. Stewart), who was almost lyrical in his enthusiasm for food taxes. His conversion is comparatively recent. Even at the last General Election he was not converted to these views. Of course I respect the hon. Gentleman for his conversion.
    Mr. STEWART: In the altered circumstances.
    Sir P. HARRIS: In any circumstance. The hon. Member has changed his ideas—I do not think there can be any contention about that—but I am more concerned about some of his Liberal-National colleagues who represent industrial constituencies and who have not only given pledges against food taxes but, to their credit, have consistently stuck to their principles although supporters of the National Government. There is also that section, of which the Financial Secretary to the Treasury is so distinguished a Member, who take the line that their business is to support the Government. There is the President of the Board of Trade, whom my hon. Friend regards, I understand, as his leader and who is representative of the Liberal-Nationals in the present Government. He gave a very clear and emphatic pledge at St. Ives, not in 1912 or 1913, but during the last General Election. He then said that while he would not be a party to a permanent tax, he was prepared to take such steps as were necessary to preserve the national position, and he went on to say:
    "I would not be in favour of import duties on food. What you ought to do is to cut off ffthe imports of luxuries."
    That is laid down as the position of the Liberals supporting the National Government, and I would say to hon. Members who are nervous about the position that one of the reasons why we have not got a duty on imported beef is because of that pledge, because Members for industrial constituencies, led by the right hon. Gentleman the President of the Board of Trade, gave that pledge to the country and got Liberal support for the National Government by that pledge. This proposed new Clause is very narrow. It is strictly limited; it does not do away with all food taxes nor does it sweep away revenue taxes like those on tea, coffee, tobacco and wine, referred to by the Financial Secretary. But because it tries to implement the pledge given on behalf of the Liberal-Nationals who supported the Government and who are against food taxes, I propose to support it.
    Question put, "That the Clause be read a Second time."
    The House divided: Ayes, 50; Noes, 246.

    Division No. 290.]

    AYES.

    [5.0 p.m.

    Attlee, Clement Richard

    Gardner, Benjamin Walter

    Malnwaring, William Henry

    Banfield, John William

    Greenwood, Rt. Hon. Arthur

    Salter, Dr. Alfred

    Batey, Joseph

    Grenfell, David Rees (Glamorgan)

    Thorne, William James

    Bevan, Aneurin (Ebbw Vale)

    Hall, George H. (Merthyr Tydvil)

    Tinker, John Joseph

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

    Hicks, Ernest George

    West, F. R.

    Cocks, Frederick Seymour

    Jenkins, Sir William

    Williams, David (Swansea, East)

    Cove, William G.

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

    Williams, Edward John (Ogmore)

    Cripps, Sir Stafford

    Jones, Morgan (Caerphilly)

    Williams, Dr. John H. (Llanelly)

    Daggar, George

    Lawson, John James

    Davies, Rhys John (Westhoughton)

    Leonard, William

    TELLERS FOR THE AYES.—

    Dobbie, William

    Logan, David Gilbert

    Mr. John and Mr. Wilmot.

    Edwards, Charles

    McEntee, Valentine L.

    NOES.

    Acland, Rt. Hon. Sir Francis Dyke

    Bowyer, Capt. Sir George E. W.

    Croft, Brigadier-General Sir H.

    Acland-Troyte, Lieut.-Colonel

    Bralthwaite, J. G. (Hillsborough)

    Crooke, J. Smedley

    Albery, Irving James

    Brass, Captain Sir William

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

    Allen, William (Stoke-on-Trent)

    Broadbent, Colonel John

    Cross, R. H.

    Anstruther-Gray, W. J.

    Brocklebank, C. E. R.

    Crossley, A. C.

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

    Brown, Ernest (Leith)

    Dalkeith, Earl of

    Apsley, Lord

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

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

    Aske, Sir Robert William

    Browne, Captain A. C.

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

    Atholl, Duchess of

    Buchan-Hepburn, P. G. T.

    Davison, Sir William Henry

    Bailey, Eric Alfred George

    Burnett, John George

    Dawson, Sir Philip

    Baldwin, Rt. Hon. Stanley

    Butler, Richard Austen

    Denman, Hon. R. D.

    Balniel, Lord

    Cadogan, Hon. Edward

    Dickie, John P.

    Banks, Sir Reginald Mitchell

    Campbell, Sir Edward Taswell (Brmly)

    Dixen, Rt. Hon. Herbert

    Barclay-Harvey, C. M.

    Campbell-Johnston, Malcolm

    Drewe, Cedric

    Barrie, Sir Charles Coupar

    Castlereagh, Viscount

    Duckworth, George A. V.

    Barton, Capt, Basil Kelsey

    Cazalet, Capt. V. A. (Chippenham)

    Dugdale, Captain Thomas Lionel

    Beauchamp, Sir Brograve Campbell

    Chamberlain, Rt. Hon. N. (Edgbeston)

    Duggan, Hubert John

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

    Chorlton, Alan Ernest Leofric

    Eden, Rt. Hon. Anthony

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

    Clarke, Frank

    Edmondson, Major Sir James

    Benn, Sir Arthur Shirley

    Clarry, Reginald George

    Elliot, Rt. Hon. Walter

    Bernays, Robert

    Cobb, Sir Cyril

    Eillston, Captain George Sampson

    Betterton, Rt. Hon. Sir Henry B.

    Cochrane, Commander Hon. A. D.

    Eimley, Viscount

    Blindell, James

    Colfox, Major William Philip

    Emrys-Evans, P. V.

    Borodale, Viscount

    Colville, Lieut.-Colonel J.

    Everard, W. Lindsay

    Bossom, A. C.

    Cook, Thomas A.

    Fermoy, Lord

    Boulton, W. W.

    Cooper, A. Duff

    Fuller, Captain A. G.

    Bowater, Col. Sir T. Vansittart

    Copeland, Ida

    Galbraith, James Francis Wallace

    Bower, Lieut.-Com. Robert Tatton

    Cranborne, Viscount

    Ganzoni, Sir John

    Gillett, Sir George Masterman

    Mabane, William

    Samuel, Sir Arthur Michael (F'nham)

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

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

    Sandeman, Sir A. N. Stewart

    Gluckstein, Louis Halle

    MacAndrew, Capt. J. O. (Ayr)

    Savery, Samuel Servington

    Glyn, Major Sir Ralph G. C.

    McCorquodale, M. S.

    Scone, Lord

    Goldie, Noel B.

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

    Shaw, Helen B. (Lanark, Bothwell)

    Goodman, Colonel Albert W.

    MacDonald, Malcolm (Bassetlaw)

    Simon, Rt. Hon. Sir John

    Gower, Sir Robert

    McKie, John Hamilton

    Smiles, Lieut.-Col. Sir Walter D.

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

    Maclay, Hon. Joseph Paton

    Smith, Sir J. Walker- (Barrow-in-F.)

    Granville, Edgar

    McLean, Major Sir Alan

    Smith, Sir Robert (Ab'd'n & K'dine, C.)

    Grattan-Doyle, Sir Nicholas

    Macquisten, Frederick Alexander

    Smithers, Sir Waldron

    Greaves-Lord, Sir Walter

    Maitland, Adam

    Somervell, Sir Donald

    Greene, William P. C.

    Makins, Brigadier-General Ernest

    Somerville, Annesley A. (Windsor)

    Grimston, R. V.

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

    Sotheron-Estcourt, Captain T. E.

    Gunston, Captain D. W.

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

    Southby, Commander Archibald R. J.

    Hacking, Rt. Hon. Douglas H.

    Marsden, Commander Arthur

    Spencer, Captain Richard A.

    Hales, Harold K.

    Mayhew, Lieut.-Colonel John

    Spender-Clay, Rt. Hon. Herbert H.

    Hamilton, Sir George (Ilford)

    Mitchell, Harold P. (Br'tf'd & Chisw'k)

    Spens, William Patrick

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

    Mitchell, Sir W. Lane (Streatham)

    Stanley, Rt. Hon. Lord (Fylde)

    Hannon, Patrick Joseph Henry

    Morris, Owen Temple (Cardiff, E.)

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

    Hartland, George A.

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

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

    Harvey, George (Lambeth, Kenningt'n)

    Morrison, G. A. (Scottish Univer'ties)

    Storey, Samuel

    Haslam, Henry (Horncastle)

    Morrison, William Shephard

    Strauss, Edward A.

    Haslam, Sir John (Bolton)

    Moss, Captain H. J.

    Strickland, Captain W. F.

    Headlam, Lieut.-Col. Cuthbert M.

    Muirhead, Lieut.-Colonel A. J.

    Sueter, Rear-Admiral Sir Murray F.

    Hellgers, Captain F. F. A.

    Munro, Patrick

    Sugden, Sir Wilfrid Hart

    Henderson, Sir Vivian L. (Chelmsford)

    Nation, Brigadier-General J. J. H.

    Sutcliffe, Harold

    Hepworth, Joseph

    Nicholson, Godfrey (Morpeth)

    Tate, Mavis Constance

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

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

    Thompson, Sir Luke

    Hore-Belisha, Leslie

    Patrick, Colin M.

    Thomson, Sir Frederick Charles

    Horsbrugh, Florence

    Peat, Charles U.

    Todd, A. L. S. (Kingswinford)

    Howitt, Dr. Alfred B.

    Penny, Sir George

    Touche, Gordon Cosmo

    Hunter, Capt. M. J. (Brigg)

    Percy, Lord Eustace

    Tree, Ronald

    Hutchison, W. D. (Essex, Romford)

    Petherick, M.

    Tufnell, Lieut.-Commander R. L.

    James, Wing-Com. A. W. H.

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

    Wallace, Captain D. E. (Hornsey)

    Janner, Barnett

    Pownall, Sir Assheton

    Wallace, John (Dunfermilne)

    Ker, J. Campbell

    Procter, Major Henry Adam

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

    Kerr, Hamilton W.

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

    Watt, Captain George Steven H.

    Keyes, Admiral Sir Roger

    Ramsay, T. B. W. (Western Isle)

    Wayland, Sir William A.

    Knight, Holford

    Ramsbotham, Herwald

    Wedderburn, Henry James Scrymgeour-

    Knox, Sir Alfred

    Rankin, Robert

    Wedgwood, Rt. Hon. Josiah

    Lamb, Sir Joseph Quinton

    Rathbone, Eleanor

    Whyte, Jardine Bell

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

    Reed, Arthur C. (Exeter)

    Williams, Herbert G. (Croydon, S.)

    Leech, Dr. J. W.

    Reid, David D. (County Down)

    Willoughby de Eresby, Lord

    Leighton, Major B. E. P.

    Rhys, Hon. Charles Arthur U.

    Windsor-Clive, Lieut.-Colonel George

    Lennox-Boyd, A. T.

    Rickards, George William

    Winterton, Rt. Hon. Earl

    Lewis, Oswald

    Ropner, Colonel L.

    Wise, Alfred R.

    Lindsay, Noel Ker

    Rosbotham, Sir Thomas

    Womersley, Sir Walter

    Lister, Rt. Hon. Sir Philip Cunliffe-

    Ross, Ronald D.

    Wood, Rt. Hon. Sir H. Kingeley

    Llewellin, Major John J.

    Ross Taylor, Walter (Woodbridge)

    Wood, Sir Murdoch McKenzie (Banff)

    Lloyd, Geoffrey

    Ruggles-Brise, Colonel E. A.

    Worthington, Dr. John V.

    Locker-Lampson, Com. O. (H'ndsw'th)

    Runge, Norah Cecil

    Young, Ernest J. (Middlesbrough, E.)

    Lodor, Captain J. de Vere

    Russell, Alexander West (Tynemouth)

    Loftus, Pierce C.

    Rutherford, Sir John Hugo (Llverp'l)

    TELLERS FOR THE NOES.—

    Lovat-Fraser, James Alexander

    Salmon. Sir Isldore

    Sir Victor War render and Captain

    Lyons, Abraham Montagu

    Salt, Edward W.

    Austin Hudson.

    Division No. 291.]

    AYES.

    [6.34 p.m.

    Acland, Rt. Hon. Sir Francis Dyke

    Gardner, Benjamin Walter

    Maclean, Neil (Glasgow, Govan)

    Attlee, Clement Richard

    George, Megan A. Lloyd (Anglesea)

    Mainwaring, William Henry

    Banfield, John William

    Greenwood, Rt. Hon. Arthur

    Mason, David M. (Edinburgh, E.)

    Batey, Joseph

    Grenfell, David Rees (Glamorgan)

    Owen, Major Goronwy

    Bernays, Robert

    Hall, George H. (Merthyr Tydvil)

    Rea, Walter Russell

    Bevan, Aneurin (Ebbw Vale)

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

    Salter, Dr. Alfred

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

    Harris, Sir Percy

    Thorne, William James

    Buchanan, George

    Hicks, Ernest George

    Tinker, John Joseph

    Cocks, Frederick Seymour

    Holdsworth, Herbert

    Wedgwood, Rt. Hon. Josiah

    Cove, William G.

    Janner, Barnett

    Williams, David (Swansea, East)

    Cripps, Sir Stafford

    Jenkins, Sir William

    Williams, Edward John (Ogmore)

    Daggar, George

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

    Williams, Dr. John H. (Llanelly)

    Davies, David L. (Pontypridd)

    Jones, Morgan (Caerphilly)

    Wilmot, John

    Davies, Rhys John (Westhoughton)

    Lawson, John James

    Young, Ernest J. (Middlesbrough, E.)

    Dobbie, William

    Leonard, William

    Edwards, Charles

    Logan, David Gilbert

    TELLERS FOR THE AYES.—

    Evans, David Owen (Cardigan)

    McEntee, Valentine L.

    Mr. John and Mr. Groves.

    Foot, Isaac (Cornwall, Bodmin)

    Maclay, Hon. Joseph Paton

    NOES.

    Acland-Troyte, Lieut.-Colonel

    Dixon, Rt. Hon. Herbert

    Leech, Dr. J. W.

    Albery, Irving James

    Donner, P.W.

    Lees-Jones, John

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

    Drewe, Cedric

    Leighton, Major B. E. P.

    Anstruther-Gray, W. J.

    Duckworth, George A. V.

    Lennox-Boyd, A. T.

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

    Dugdale, Captain Thomas Lionel

    Lewis, Oswald

    Astbury, Lieut.-Com. Frederick Wolfe

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

    Lindsay, Noel Ker

    Atholl, Duchess of

    Eden, Rt. Hon. Anthony

    Lister, Rt. Hon. Sir Philip Cunliffe.

    Bailey, Eric Alfred George

    Edge, Sir William

    Llewellin, Major John J.

    Baldwin, Rt. Hon. Stanley

    Edmondson, Major Sir James

    Loder, Captain J. de Vere

    Balfour, George (Hampstead)

    Eimley, Viscount

    Loftus, Pierce C.

    Balfour, Capt. Harold (I. of Thanet)

    Emmott, Charles E. G. C.

    Lovat-Fraser, James Alexander

    Banks, Sir Reginald Mitchell

    Emrys-Evans, P. V.

    Lyons, Abraham Montagu

    Barclay-Harvey, C. M.

    Evans, Capt. Arthur (Cardiff, S.)

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

    Barrie, Sir Charles Coupar

    Everard, W. Lindsay

    MacAndrew, Capt. J. O. (Ayr)

    Barton, Capt. Basil Kelsey

    Fremantle, Sir Francis

    MacDonald, Malcolm (Bassetlaw)

    Beauchamp, Sir Brograve Campbell

    Fuller, Captain A. G.

    Macdonald, Sir Murdoch (Inverness)

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

    Ganzoni, Sir John

    McKie, John Hamilton

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

    Gillett, Sir George Masterman

    McLean, Major Sir Alan

    Beit, Sir Alfred L.

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

    McLean, Dr. W. H. (Tradeston)

    Betterton, Rt. Hon. Sir Henry B.

    Glucksteln, Louis Halle

    Macquisten, Frederick Alexander

    Blindell, James

    Glyn, Major Sir Ralph G. C.

    Maitland, Adam

    Bossom, A. C.

    Goff, Sir Park

    Makins, Brigadier-General Ernest

    Boulton, W. W.

    Goldie, Noel B.

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

    Bower, Lieut.-Com. Robert Tatton

    Gower, Sir Robert

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

    Bowyer, Capt. Sir George E. W.

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

    Marsden, Commander Arthur

    Boyd-Carpenter, Sir Archibald

    Grattan-Doyle, Sir Nicholas

    Mayhew, Lieut.-Colonel John

    Braithwaite, J. G. (Hillsborough)

    Graves, Marjorie

    Mitchell, Harold P. (Br'tf'd & Chisw'k)

    Brass, Captain Sir William

    Greaves-Lord, Sir Walter

    Mitchell, Sir W. Lane (Streatham)

    Broadbent, Colonel John

    Greene, William p. C.

    Molson, A. Hugh Eisdale

    Brocklebank, C. E. R.

    Grimston, R. V.

    Monsell, Rt. Hon. Sir B. Eyres

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

    Guinness, Thomas L. E. B.

    Morris, Owen Temple (Cardiff, E.)

    Brown, Ernest (Leith)

    Gunston, Captain D. W.

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

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

    Hacking, Rt. Hon. Douglas H.

    Morrison, G. A. (Scottish Univer'ties)

    Browne, Captain A. C.

    Hales, Harold K.

    Morrison, William Shepherd

    Buchan-Hepburn, p. G. T.

    Hamilton, Sir George (Ilford)

    Moss, Captain H. J.

    Burnett, John George

    Hannon, Patrick Joseph Henry

    Munro, Patrick

    Cadogan, Hon. Edward

    Hartland, George A.

    Nation, Brigadier-General J. J. H.

    Cayzer, Sir Charles (Chester City)

    Haslam, Henry (Horncastle)

    Nicholson, Godfrey (Morpeth)

    Cazalet, Thelma (Islington, E.)

    Haslam, Sir John (Bolton)

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

    Chamberlain, Rt. Hon. N. (Edgbaston)

    Headlam, Lieut.-Col. Cuthbert M.

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

    Chapman, Sir Samuel (Edinburgh, S.)

    Heilgers, Captain F. F. A.

    Patrick, Colin M.

    Clarke, Frank

    Henderson, Sir Vivian L. (Chelmsford)

    Pearson, William G.

    Clarry, Reginald George

    Hepworth, Joseph

    Peat, Charles U.

    Cobb, Sir Cyril

    Hopkinson, Austin

    Penny, Sir George

    Cochrane, Commander Hon. A. D.

    Hore-Belisha, Leslie

    Petherick, M.

    Colfox, Major William Philip

    Hornby, Frank

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

    Colville, Lieut.-Colonel J.

    Horsbrugh, Florence

    Potter, John

    Cooper, A. Duff

    Hewitt, Dr. Alfred B.

    Powell, Lieut.-Col. Evelyn G. H.

    Copeland, Ida

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

    Pownall, Sir Assheton

    Cranborne, Viscount

    Hume, Sir George Hopwood

    Procter, Major Henry Adam

    Craven-Ellis, William

    Hunter, Capt. M. J. (Brigg)

    Pybus, Sir Percy John

    Croft, Brigadier-General Sir H.

    Hunter-Weston, Lt.-Gen. Sir Aylmer

    Raikes, Henry V. A. M.

    Crooke, J. Smedley

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

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

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

    Jackson, Sir Henry (Wandsworth, c.)

    Ramsay, T. B. W. (Western Isles)

    Croom-Johnson, R. P.

    James, Wing-Com. A. W. H.

    Ramsden, Sir Eugene

    Cruddas, Lieut.-Colonel Bernard

    Ker, J. Campbell

    Rankin, Robert

    Dalkeith, Earl of

    Kerr, Hamilton W.

    Reed, Arthur C. (Exeter)

    Davies, Edward C. (Montgomery)

    Keyes, Admiral Sir Roger

    Reid, David D. (County Down)

    Davison, Sir William Henry

    Lamb, Sir Joseph Quinton

    Reid, William Allan (Derby)

    Dawson, Sir Philip

    Lambert, Rt. Hon. George

    Remer, John R.

    Denman, Hon. R. D.

    Latham, Sir Herbert Paul

    Rhys, Hon. Charles Arthur U.

    Dickie, John P.

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

    Rickards, George William

    84

    85

    Rosbotham, Sir Thomas

    Sotheron-Estcourt, Captain T. E.

    Train, John

    Ruggles-Brise, Colonel E. A.

    Southby, Commander Archibald R. J.

    Tree, Ronald

    Runge, Norah Cecil

    Spencer, Captain Richard A.

    Tufnell, Lieut.-Commander R. L.

    Russell, Alexander West (Tynemouth)

    Spender-Clay, Rt. Hon. Herbert H.

    Turton, Robert Hugh

    Russell, R. J. (Eddisbury)

    Spent, William Patrick

    Ward, Irene Mary Bewick (Wallsend)

    Rutherford, Sir John Hugo (Liverp'l)

    Stanley, Rt. Hon. Lord (Fylde)

    Warrender, Sir Victor A. G.

    Salmon, Sir Isidore

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

    Watt, Captain George Steven H.

    Salt, Edward W.

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

    Wayland, Sir William A.

    Samuel, Sir Arthur Michael (F'nham)

    Storey, Samuel

    Wedderburn, Henry James Scrymgeour-

    Sandeman, Sir A. N. Stewart

    Stourton, Hon. John J.

    Whyte, Jardine Bell

    Sanderson, Sir Frank Barnard

    Strauss, Edward A.

    Williams, Herbert G. (Croydon, S.)

    Scone, Lord

    Strickland, Captain W. F.

    Willoughby de Eresby, Lord

    Selley, Harry R.

    Sueter, Rear-Admiral Sir Murray F.

    Wilson, Lt.-Col. Sir Arnold (Hertf'd)

    Shakespeare, Geoffrey H.

    Sugden, Sir Wilfrid Hart

    Windsor-Clive, Lieut.-Colonel George

    Shaw, Helen B. (Lanark, Bothwell)

    Summersby, Charles H.

    Winterton, Rt. Hon. Earl

    Shaw, Captain William T. (Forfar)

    Sutcliffe, Harold

    Withers, Sir John James

    Smiles, Lieut.-Col. Sir Walter D.

    Thompson, Sir Luke

    Wolmer, Rt. Hon. Viscount

    Smith, Sir Robert (Ab'd'n & K'dine, C.)

    Thomson, Sir Frederick Charles

    Womersley, Sir Walter

    Smithers, Sir Waldron

    Thorp, Linton Theodore

    Somervell, Sir Donald

    Titchfield, Major the Marquess of

    TELLERS FOR THE NOES.—

    Somerville, Annesley A. (Windsor)

    Touche, Gordon Cosmo

    Lieut.-Colonel Sir A. Lambert-Ward and Major George Davies.

    Mr. SPEAKER: The new Clause standing next on the Paper in the name of the hon. Member for St. Rollox (Mr. Leonard) deals with an amendment of the law as to rebate on certain hydrocarbon oils. There are several other new Clauses on the Paper dealing with various aspects of the duty on hydrocarbon oils, and it appears to me that it would be to the advantage of the House if on the new Clause of the hon. Member for St. Rollox the discussion were to include the various points raised by other hon. Members in the proposals which appear lower down on the Paper. That would include the new Clauses in the names of the hon. Member for Melton (Mr. Everard)—[Exemption from hydrocarbon oil duty in favour of owners of aircraft]—the right hon. and gallant Member for Caithness and Sutherland (Sir A. Sinclair)—[Reduction of duty on heavy hydrocarbon oils]—and the right hon. and gallant Gentleman the Member for Ripon (Major Hills)—[Repeal of duty on certain spirits].

    NEW CLAUSE.—(Amendment as to rebate on certain hydrocarbon oils.)
    Sub-section (1) of Section six of the Finance Act, 1933 (which reduced the rate of rebate on certain hydrocarbon oils), shall cease to have effect, and as from the seventeenth day of April, nineteen hundred and thirty-four, the rate of rebate to be allowed under Sub-section (3) of Section two of the Finance Act, 1928, on the delivery for home consumption of any oils other than light oils shall be eightpence per gallon.—[Mr. Leonard.]
    Brought up, and read the First time.
    6.40 p.m.
    Mr. LEONARD: I beg to move, "That the Clause be read a Second time."
    86
    In moving this Clause, I desire to deal specifically with one type of industry. There is no denying the fact that since this duty was imposed a certain section of industry has suffered a considerable burden. I refer to industries which function, in the main, close to industrial centres and large towns and cities and particularly those concerned with the distributive trades. Those industries connected with the distributive trades have in the past answered to a considerable extent the appeals made to them by local authorities to help in the great work of purifying the atmosphere and removing the palls of smoke which at the present time constitute such a menace to the health of the people in industrial areas. Not only has there been a response by industries of that type to such appeals, but they have themselves indulged in a great deal of advertising in connection with the efforts which they have been making both to purify the products which they present for consumption to the public and to purify the air in the localities where their works are situated.
    In Glasgow the smoke abatement inspectors have applied themselves to this work in a magnificent manner, and for some years past they have not only visited large factories in order to acquaint those responsible, with the advantages of scientific firing, but they have held classes at which firemen accustomed to the use of coal fuel have been asked to attend. Notwithstanding the advantages to be derived from these courses of instruction, the results have not been fully to the satisfaction of those officials as regards getting away from the difficulties associated with coal-burning. In a previous reply on this subject, the Chancellor of the Exchequer gave details

    87
    as to the number of factories which had turned from the use of coal and coke to the use of gas, but that is not always a suitable medium and is not available in all localities. There are localities that have had recourse to oil-burning in order to keep the atmosphere clear, and because of that fact I am putting forward this Clause and endeavouring to allow such organisations as are concerned to escape the imposition which has been placed upon them.
    With regard to the price of fuel oil, I am informed that the present price is 52s. 6d. per ton, which works out at 2½d. per gallon, so that last year's imposition of 1d. per gallon placed an increased cost of 40 per cent. on the working of these factories, and that, I think, is something to which the Chancellor should pay some attention. A London co-operative society, of which I have some details, have had to meet last year, because of this 1d. on the cost, no less a sum than £4,000. That has to be met, and other industries will be placed in the same position. The Wholesale Co-operative Society, which uses a tremendous lot of this fuel, has had to meet, this last year, no less than £26,000 extra taxation put on by the Finance Act of last year. Therefore, I suggest that in putting forward this proposal we are not only helping the industries that have responded to the appeal made by local authorities in the past in order to make the air purer, but we are also helping many industries of an exporting character, and they have sufficient difficulties at the present time without any further imposition being placed upon them.
    Mr. D. GRENFELL: I beg to second the Motion.
    6.48 p.m.
    Mr. EVERARD: I desire to raise the question, in connection with this Hydrocarbon Oils Duty, of civil aircraft. The Chancellor of the Exchequer will remember the extra tax on petrol which was put on by the emergency Budget of Mr. Snowden, as he then was, in September, 1931. That was a very great burden, not only upon the motoring industry, but also upon the young and ever-growing civil aircraft industry, and the Chancellor of the Exchequer has this year seen fit to make some reduction of the burden for
    88
    the ordinary motorist in this country. He has reduced the licence duties upon motor vehicles which move along the roads by, I think, 25 per cent., and, of course, that in some way goes to neutralise the extra taxation imposed by the Budget of 1931, but, as far as civil aircraft are concerned, they have received no concession at all similar to that received by the motoring community. I should like to ask the Chancellor of the Exchequer whether it will be possible for him to consider a total remission of the duty on petrol when used by civil aircraft or whether he could go some way towards making us a reduction?
    The amount at stake is not very great. I have been to a considerable amount of trouble with the various petrol companies to find out the amount of petrol which is used by civil aircraft in this country, and I find that of the total amount used, only about 3,250,000 or 3,500,000 gallons were used by civil aircraft last year; and of the total petrol duty of £36,000,000 last year, only£ll6,500 was the amount paid on petrol used by civil aircraft. Therefore, it will be clear to my right hon. Friend that the amount at stake, so far as the Exchequer is concerned, is a matter of £116,500, if he gave a complete remission of the duty on petrol for civil aircraft. I am not including in those figures, of course, any petrol used by the machines of the Royal Air Force. It must be obvious to all Members of the House what a great stimulus it would be to civil aviation in this country if the Chancellor of the Exchequer could make some concession.
    May I put the position, first of all, of the large aircraft companies which are operating in this country? As the Chancellor is aware, Imperial Airways, which receive a large subsidy from the Government, of approximately £500,000 a year, pay very little in petrol duty, because, as is well known, any aircraft leaving for abroad gets a remission on that amount of petrol which it takes in its tanks when it leaves the shores of England. Therefore, the chief burden of the tax of 8d. per gallon falls on the unsubsidised aircraft, which have recently been developed in this country, and I think the House generally will be in agreement with me when I say that it is the small concerns, which are beginning to be of such enormous value throughout the country to-day in assist-

    89
    ing our communications, which really should receive some consideration from this House and from the Chancellor.
    If I may, I will pass from that to another very important section, which I look upon as probably the most important movement for our national life to-day, and that is the light aeroplane club movement and the flying schools. Of this total petrol consumption which I have given of some 3,500,000 gallons a year, 500,000 gallons, or one-seventh, are used by the flying clubs and schools, and I think it is of enormous importance for this country that we should make it as easy and as cheap as possible for people to learn to fly in these various clubs and schools. Very often I have heard people say, "I have just got enough money to take out an 'A' licence, but I am afraid I shall not be able to join a club for flying, because the costs of flying are too high."
    Therefore, I should like to show what effect a rebate would have on the figures of one of these light aeroplane clubs, and I take the one with which I am associated, the Leicestershire Club. We charge 36s. an hour for a certain section of people learning to fly, and 28s. for another section. The cost per hour of running our machines—flying time—is about 50s., and the average receipts work out at about 30s., which makes a loss of 20s. on every hour flown. At present that is made up by 9s. subsidy and l1s. subscriptions of members and profits of one sort and another that the club can produce. In this particular club, 1,100 hours were flown last year, and if the Petrol Duty could be withdrawn, it would enable us to reduce our rate to our members by no less than 4s. 6d. per hour. I think it must be clear to everybody, to hon. Members opposite as well as to hon. Members on this side, that if we are to get a large reserve of people who have not only learned to fly but who have kept in training and are able to fly to-day, we must get these costs of instruction and of flying down, and this is one of the ways in which the Chancellor of the Exchequer could really assist us very materially. After all, 4s. 6d. or 5s. an hour to a man not very well off—perhaps a clerk who comes in the evening to learn to fly at one of the clubs around London, or someone in my own division, or someone from the City of Leicester who wants to learn to fly after work—makes an enormous dif-
    90
    fernce, and I stress that point very strongly. The Chancellor of the Exchequer would help enormously to increase the number of trained pilots in this country if he could make us this concession.
    There is one other point that I would like to put forward. From the point of view of the aircraft industry, it is abundantly necessary that British aircraft engines should be the best and most powerful in the world, and the question of the Petrol Tax and the use of petrol by these companies and, indeed, by people purchasing engines from them very materially affects the design of these engines. It is probably true to say that the reason the United States of America have so much faster aeroplanes and aircraft engines than we have for ordinary commercial flying is that they have not the same burden put upon their civil aviation, because they have a higher subsidy—for which I am not asking to-day—and because also they have not the same burdens to contend with and their Government treat them more liberally. If our aircraft engine manufacturers could obtain this small rebate, I believe it would materially affect the design of aircraft engines and that we should be able in this country to produce more powerful engines, to the advantage not only of civil flying but of the defence of our own nation.
    The right hon. Gentleman the Chancellor of the Exchequer may say that it is difficult to make any concession, but I purposely framed my Clause on the lines of the Finance Act, 1928, when the Chancellor of the Exchequer gave a remission of duty. Under it, the owner would fly his machine or the club machine and in six months' time would send in to the Excise officer a detailed list of the hours his engine had run. He would take from the manufacturer the average amount of petrol which that engine consumed in an hour, a very well known figure, and it would be for the local Customs man, as indeed he does in many other cases, to examine the log books of the aircraft concerned to see whether or not that number of hours had been flown. There would be very little likelihood of anybody trying to make out that an aeroplane had flown a longer number of hours than it actually had, because, as a matter of fact, the average club machine uses six gallons of

    91
    petrol per hour, and if you put in an extra 100 hours' flying in a year, you would only get £20 back in Petrol Duty, but you would actually reduce the value of your machine by double or treble that amount. I hope very much that the Chancellor of the Exchequer will treat this case with some sympathy, and if he cannot do anything now, perhaps he will give the matter his full consideration, in order that he may do something to further the interests of those who are connected with civil aviation.
    6.59 p.m.
    Rear-Admiral Sir MURRAY SUETER: I rise to support the new Clause standing on the Paper in the name of my hon. Friend the Member for Melton (Mr. Everard), and I ask the Chancellor of the Exchequer to give this concession if he possibly can, for one reason and one reason only, and that is that we are so behindhand in civil aviation in this country. Compared with the other nations, we only have a few hundred civil aircraft, while America has thousands of them, and Germany has thousands of them, and it is the same with France. If hon. Members will only look at the number of hours flown in other countries, they will find that America is first, Germany second, France third, and this country sixth. I do ask the Chancellor of the Exchequer to look into this matter and see if he cannot give some encouragement to civil aviation. The hon. Member for Melton said it would reduce the cost of flying by 5s. an hour. I always hear from people who want to fly the complaint of the great cost. If the Chancellor of the Exchequer reduced that cost, he would help young men and young women to fly. We should encourage in every way possible the young people to take up flying. My hon. Friend the Member for Melton is a pilot himself and flies about Germany and France. He will agree, I know, that if anyone visits Germany he will see the encouragement given there to flying. When I was in Berlin on naval duty some years ago I noticed especially the encouragement given to young people to be air-minded. The same thing happens in France. In this country we have great difficulty in getting aerodromes, and then there is the great cost that fliers have to meet to get into the air.
    92
    I would ask the Chancellor of the Exchequer to consider this Clause. I am glad to see that the Under-Secretary of State has entered the Chamber, and we would ask the hon. Baronet to press on the Chancellor of the Exchequer that this concession be made. As my hon. Friend the Member for Melton said, £116,500 is paid in Petrol Duty, and this is a small sum. I ask the Chancellor of the Exchequer to help the airmen all he possibly can.
    7.2 p.m.
    Captain HAROLD BALFOUR: I should like to associate myself with the appeal of the hon. Member for Melton (Mr. Everard) to the Chancellor of the Exchequer. In doing so I should like to bring forward for one moment the anomalous position of the Petrol Duty in aviation, in the hope that consideration of this anomaly will give added appeal to that sense of justice of the Chancellor of the Exchequer which we know he possesses. The hon. Member for Melton says that £116,500 was paid by aviation in petrol tax, and I find that a total of £36,000,000 was collected by the tax, of which £25,000,000 was appropriated for roads. The proportions are as 36 to 25 or 116 to 78. Therefore, you may deduce that of £116,500 paid by civil aviation, no less than £78,000 went straight to roads which aircraft do not use, except on unfortunate occasions when the wings are dismantled, and they have to be dragged home. It is rather unfair that aviation should pay this very considerable sum for advantages it does not possess or make any use of—in fact does not wish to associate itself with. It does not use the roads, causing wear and tear, and on that ground I cannot see how this anomalous position can be justified. One more anomaly. This is robbing Peter to pay Paul. You are taking £116,500 from aviation, and, on the other hand, giving a sum of £663,000 as a subsidy.
    As regards machinery, I am not quite sure of the difficulties of administration advanced, because fishing coastal boats were relieved of this petrol tax burden. If in the case of fishing coastal boats this can be done, surely it can be done in the case of this new industry. This is one of the new industries springing up taking the place of old industries, such as the coal industry and the cotton industry which may never revive, and it is taking

    93
    its place among the new industries in the world as a leading pioneer. I appeal to my right hon. Friend to give this deserved encouragement to an industry, which pioneering efforts have built up to the present position. Sacrifices have been made of money and lives, and the Govern-men have encouraged civil aviation in nearly every way possible.
    7.7 p.m.
    Mr. SIMMONDS: May I briefly add my appeal to the Chancellor of the Exchequer with regard to this tax on petrol for flying? The hon. and gallant Member for Thanet (Captain Balfour) has just adduced one argument why this tax is in fact inequitable. May I give my right hon. Friend another view? If one takes a five- or six-seater car of 16 to 20 horsepower, it uses a gallon of petrol to about every 16 miles, or a tax of a halfpenny per mile. If we take a five- or six-seater aeroplane using 12 gallons an hour, assuming that craft travels at 100 miles an hour cruising speed, it pays a tax of 8s. per hour. That aircraft is in fact paying a penny per mile for the roads it does not use, whereas the car is paying a halfpenny n mile for roads it does use. If anything could bring home to my right hon. Friend how unjust and hard this tax is on aircraft and aircraft operators, this should. That is not the whole story. One is apt to think of aircraft paying this tax and then being free of other duties. That is by no means the case. Aircraft pay to the Treasury £173,000 in dues of one sort and another, mostly in connection with landing. If there is anything comparable to use of the roads it is these dues. If they are paying a lump sum such as this for landing, it is very hard for them to pay again through the petrol tax. I think the National Government may take even a broader view than that.
    The Minister of Transport is continually urging the necessity for greater care on the roads. One way of making the roads safer is to clear them of people who need to get to places quickly. If, therefore, we could induce those people to take to the air, there is not the slightest doubt that it would tend to make the roads safer. I think that is a point to remember when the Government is urged further to find a solution for the terrible toll of death on the road. If we take the cost of the Royal Air Force, it works out that every aircraft and pilot cost the State
    94
    £20,000 a year. A civil aeroplane may in time of war be of equal value to the State as some of those which the State is paying enormous sums each year to maintain. I do hope the Chancellor of the Exchequer, urged by the Under-Secretary of State, will see his way clear to take the broadest possible view of this matter. If there is one question upon which I am somewhat drawn to dictators it is this fact that they all seem to be extraordinarily air-minded. Every one of them has put the development of the air in the forefront of his national programme. But I do not believe that is necessarily only a feature of dictatorship, I believe that the National Government, particularly one whose finance is in the hands of one so able as my right hon. Friend, is capable of equal enthusiasm where the case is so clear and forthright.
    7.12 p.m.
    Mr. LYONS: I wish to add my appeal to that of the hon. Member for Melton (Mr. Everard) in asking for this concession. With my hon. Friend who has just sat down, I do not desire to dissent, except to say that when he tells us dictators are air-minded, I would say not so much air-minded as hot air-minded. It has long been felt that aviation is suffering to-day from a serious and inequitable burden in being called upon to pay a tax on a fundamental necessity, for petrol is the source of power behind every flight. Aviation to-day is no longer a luxury, and is appealing to the whole of the populace. Our desire is to make the whole community air-minded. Aviation is unlimited in its appeal to all sections of the community. We see light aeroplane clubs established, first for flying, then for instruction and then these clubs are used, and should be used, by people who take advantage of the amenities offered otherwise than for flying. In road transport so far as privately-owned motor cars are concerned, there is in individual ownership still some element of luxury remaining. It may be argued that there is some case for taxation, even if taxation does not remain so high in incidence.
    With regard to aeroplanes, however, it seems that every private owner is a source of strength to the State. If there is one thing that has to be encouraged in these days it is light aeroplane ownership, which is not a matter of individual

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    advancement so much as national progress and security. So far as commercial air transport is concerned, it makes a great effort to become self-supporting. My hon. Friend the Member for Melton dealt with the position of Imperial Airways, and one days not want to decry the great work they are doing throughout the Empire, but they are in a peculiar position. We do desire that the light aeroplane owner should be advanced in every way, and invited by every conceivable method to go further than the flying to which he has turned his hand, and we want to invite the people to the aeroplane. We need not discuss now the need for certain emergency measures that were necessary in 1931, for the financial stress then existing does not operate to-day. Largely due to the work of the National Government that financial stress of the country has been eased.
    I join in the voices that have already been heard in asking the Chancellor to make some concession with regard to aeroplanes. It happens that in the city and county of Leicester, with which both my hon. Friend the Member for Melton and I are proud to be associated, there is a very successful aeroplane club. We find that something like 4s. 6d. an hour goes to the State in petrol taxation by everybody who employs an aeroplane from that institution. That puts a brake upon the development of civil aviation. We want to see that brake come off, because we feel that it operates as an injustice to those who are concerned in doing their best to further the cause of civil aviation. It retards utilisation in commerce and in tuition.
    May I say a word about flying schools and light aeroplane clubs, because it occurs to some of us that they in particular are more than ordinarily prejudiced? A refund of the Petrol Duty to these organisations would mean that the cost of tuition would decrease, and there would be a greater incentive and greater opportunities for the general public to take up flying, and there would be a consequent benefit to everybody concerned. I want to reiterate, and it cannot be repeated too often, that flying is no longer the privilege of the few. We want to see the whole country, irrespective of section or class, air-minded, because this is a national matter in which
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    the whole community should become, and desires to become, interested. The way to encourage and promote civil aviation is to give this concession, which could be given without any prejudice to the nation.
    May I remind the House that there is a grant given to light aeroplane clubs? Last year, I believe, they received something like £13,000. So far as can be ascertained, these clubs paid back to the State in Petrol Duty something like £15,000. The flat rate of 8d. per gallon taxation operates both on aeroplanes and motor cars, and the view we desire to submit to the Chancellor is that it operates somewhat harshly and unfairly on the light aeroplane owners and the light aeroplane clubs. They do not use the roads but the air, and they have all the incidental expenses to pay just the same, but they are called upon to pay the same 8d. per gallon tax as the motor car drivers while in no way having the same facilities given them by the roads that are maintained in this country. When it is realised that while £13,000 is received something like £15,000 goes back to the State, it will be agreed that it is a little hard that there should be this limitation of subsidy on the one hand and the same incidence of taxation on the other. We believe that if this tax could be reduced, or if my right hon. Friend the Chancellor of the Exchequer could see his way to offer a ray of hope in the immediate future, people of this country would be induced to fly more, to become more competent and better trained, to spend more flying time in the air. The light aeroplane clubs would be able to run at less loss in their flying than they do to-day, and there would be a great national asset in a big reserve of pilots and air-minded people in the case of any emergency. More and more would the aeroplane be used in trade. The reduced cost of operation would induce many people who might then be able to afford it to possess their own aeroplane, and that would help to build up a strong aircraft industry.
    In his desire to increase the motor trade and to promote the employment of those concerned, my right hon. Friend thought fit to make a concession in the case of the horse-power tax on motors. There can be no doubt that the whole country—not merely the manufacturers

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    but the users as well—is grateful for that concession. There can be no doubt that that aid will be of great benefit to the motor car industry and to the trade and employment in that industry. These are matters about which there can be no doubt. Is it too much to ask my right hon. Friend, with the same eye to the future and the same desire to protect a great trade, with the same concern that he always has for national affairs, that he will offer this concession and so give an encouragement to an industry, to a science, which is no longer confined to one limited class but which is really national in its enjoyment and nation-wide in its outlook, for which there is the need for this additional fillip to give this country the leadership in civil aviation that so many of us desire?
    7.21 p.m.
    Sir ROBERT HAMILTON: I feel some sympathy with the Chancellor of the Exchequer when he has such excellent arguments put before him from all sides of the House for rebates and reductions of duty which inevitably must make a hole in his Budget. The arguments that are put before him in connection with hydrocarbon oils are powerful, because there is not one of us who would not like to see all sources of power free from taxation. That is the ideal way of approaching this subject. Nothing can more seriously handicap an industrial country than that its sources of power should be taxed, and in some cases very heavily taxed. In the old days, when coal was practically the only source of power, who in his senses would ever thought of taxing it? Now we have got new sources of power in hydrocarbon oils. We have a source of power that competes very seriously with coal, and it is a matter of grave consideration whether we may not be seriously handicapping ourselves in our future as an industrial country if we place too heavy taxation upon these new sources of power in order to bolster up the old source—coal.
    I do not think that the country half realises yet what the future developments of the heavy oil engine may be. I can visualise a time, not very far distant, in which coal will no longer be burned on our great railways as it is burnt to-day. We shall have heavy oil engines generating electricity and stream-lined trains travelling at 100 miles an hour instead of 60 miles an hour. Will the Chancellor
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    of that day be prepared to say that such development shall not take place because it puts miners out of work? These are very serious considerations. I should like to ask the House to look at the reasons which were given by the Chancellor of the Exchequer in the Debate on the Committee stage for the action he has taken and intended to continue to take. In the first place, he said he intended to weight the balance in favour of coal and employment. I will quote his words:
    "There is no industry in the country—I will not say with a higher record of unemployment—in which unemployment on such a large scale is so concentrated as in the case of the coal industry. That is one of the difficulties which make the problem of dealing with unemployment derived from the coal mining industry specially difficult and complex to handle. I am sure that every Member of the Committee would desire to see the coal industry preferred, other things being equal, to a fuel which has to be imported from abroad."—[OFFICIAL REPORT, 12th June, 1934; col. 1602, Vol. 290.]
    There is not one of us who does not regret to see miners out of work because coal is not wanted, but we ought to consider what is meant by the right hon. Gentleman's expression "other things being equal." Are other things equalled in this case? Is it more important that a certain number of miners shall be back at work and continue in work if that is going to handicap the future industrial development of the country? That is a question which requires very serious consideration, land I should like to draw the attention of the House to a letter which some hon. Members may have seen which appeared in the "Times" the other day from Mr. F. L. Halford, with reference to the position in Germany. He said:
    "In spite of Germany's great need of revenue and her desire to do everything in reason to help her coal industry, she has come to the conclusion that unemployment would be increased and damage done to her general trade by any increase in the tax on the fuel used by internal combustion engines of the Diesel type, which would far outweigh any advantage that could be gained by her coal industry."
    If that be a correct statement of the conclusions to which Germany has come—the Germany where the Diesel engine was invented and the Germany which sees what the great possibilities are in the development of power from the Diesel engine—I think that we should not be too hasty in saying that we are achieving a

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    great thing in putting 2,000 miners back to work. I am accepting the number of 2,000, but nobody knows exactly how those figures have been arrived at. It obviously a computation of considerable difficulty, but I think that these are the numbers which the Chancellor gave the other day. Would it not be a great deal cheaper and more to the advantage of the country in the long run—I am looking at it as a long-term policy—to say that we regret very much that this change has come, but the country has got to adjust itself to a new condition of things, and we should not be justified in sending 2,000 miners underground to dig coal from which we could obtain power when we could obtain that power equally as good and cheaper and with a great many other advantages from other sources. If the policy is definitely adopted now of bolstering up the coal trade in that way, it needs no argument of mine to tell hon. Members how seriously such a line of policy may handicap our developments in future.
    The next reason which the Chancellor gave was that we must preserve some balance in our taxation system. It is rather amusing to notice that the first reason was to weight the balance in favour of coal. The next reason was to preserve the balance of taxation. It is an anomaly, he said, that a particular kind of fuel should be exempt. I would rather say it is an anomaly that any sort of power should be taxed. That is the line along which we should approach this problem, and we should endeavour to take off all the taxes we can from every source of power, and where the taxes have to be imposed they should be kept as low as possible. The revenue coming in is considerably in excess of the amount for which the Chancellor budgeted. He budgeted for £2,000,000, but the revenue in the first year was £2,800,000. Therefore, it must be obvious that, in spite of the extra cost to users more heavy oil is being used because it is the most efficient and most satisfactory power for certain industries. If the balance had really been weighted, as the Chancellor said, in favour of coal, we should have seen a reduction of the imports of oil into the country instead of an increase. The Chancellor of the Exchequer quoted a number of instances of
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    oil users going back to coal when the duty was imposed, but it is obvious from the increase in the revenue from this source that there are a great many other cases where a change-over has not been made and where industries must have started to use heavy oil instead of coal.
    I should like to ask why our fishing boats and coastwise steamers are exempt. What reason is there for exempting users of this oil in one industry and not in another? It is clear that the coastwise steamers found the new source of power much more suitable in their competition with foreign vessels, and if they were deprived of this cheap source of power by the imposition of a heavy duty they would be severely handicapped, and perhaps put out of business altogether. In their case the argument was so strong and convincing that the Chancellor gave way. It is not always as easy to put forward such convincing arguments in the case of other industries, but the basis of the argument applies to their case just the same, because it is obvious that if a private person who is not a philanthropist sees that a particular form of power will best serve his interests in business, and then the Government taxes that form of power in the interests of another industry, a severe handicap is put upon him.
    After these remarks on the general question, I should like to refer to the new Clause standing in the name of my right hon. Friend the Member for Caithness (Sir A. Sinclair) and myself [Reduction of duty on heavy hydrocarbon oils]. We put down that Clause to draw particular attention to the difficulties which this duty imposes on public utility undertakings. If exemption were granted in their case the loss to the Exchequer would amount to only a comparatively small sum. Many of these statutory undertakings have been started by the Government advancing them money at a cheap rate, and to make the best use of those financial facilities they have installed heavy oil engines, and in those circumstances it is very curious that the Government should then proceed to tax the power they use. With one hand the Government give them cheap financial facilities, and with the other hand taxes them in the interests—because that is the only argument—of coal. I do not know whether hon. Members realise how hardly many of these small undertakings, especi-

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    ally electricity undertakings, have been hit by the duty. I refer in particular to undertakings with only a small area to serve and with limited financial resources. To them an extra £100 or £200 a year on their operating costs is a very serious matter. It means that the advantage of cheaper electricity is being delayed to their consumers. The Government, when assisting those undertakings financially, obviously debit with the idea of giving consumers the advantage of the cheapest supply of electricity possible, and I put it to the Chancellor that it is illogical and unreasonable that these undertakings should be put in the position of not being able to give to their consumers the cheap services which otherwise they might furnish.
    Major PROCTER: Will the hon. Gentleman give us the name of one undertaking which has raised its charges for electricity?
    Sir R. HAMILTON: The hon. Member has misunderstood what I said. I was pointing out that owing to the extra cost of running these undertakings, through this duty on the heavy oil they use, they were unable to lower the price of electricity to consumers. Their object is to give as good a service of electricity as possible at the lowest rate, but if the cost of the power they use is increased unnecessarily by this duty it follow, naturally, that they cannot provide so cheap a service. The final argument I will put before the Chancellor is this, and it must apply to all the pleas made to him for exemption whether of heavy or of light oils—that it is in the interests of the country as a whole and of the consumers of power that power should be taxed as little as possible, and that industry should be left free to choose that source of power which it thinks best in its own interests.
    7.37 p.m.
    Mr. ATTLEE: I intervene only for a moment, because I find myself impressed a good deal more by the arguments of the Chancellor of the Exchequer than by those of the hon. Member for Orkney and Shetland (Sir R. Hamilton). It seems to me that he has been putting rather the old-fashioned, individualistic point of view. The essential matter we have to consider in putting on duties like this is, as he said, the good of the country as a whole, but I do not think he really worked
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    out what was the good of the country as a whole. This country has certain sources of fuel and it also imports fuel from abroad, and the price at which those fuels are sold has an effect on the standard of life of great masses of our people. We on this side do not believe that we ought to leave these matters to what is called the free play of competition. When the hon. Member for Orkney and Shetland was instancing the case of public utility undertakings I thought he was making an extraordinarily weak case, because, after all, they are not fighting against foreign competition. We believe the whole question of the fuel used in this country ought to be co-ordinated, in the interests of making the most of our home resources and of the work of our own people, holding, as the Chancellor of the Exchequer said, something of a balance, but I do not think that is possible as long as we are living under a system whereby the various producers of fuel are working on a private profit basis.
    I think we must go a great deal further in control than can be accomplished by putting on a tax here and a tax there, because that does not effect the purpose. I suggest seriously to Members of the Liberal party that they must think more of the interests of the country as a whole than of the interests of some particular groups of consumers. I agree that by this taxation some consumers may be hit, but we have to consider the balance of advantages, and as this discussion goes on I am regretfully more on the side of the Chancellor than on the side of my hon. Friends below the Gangway; but, then, I have always felt that on these particular matters they do not move sufficiently with the times. We can never tackle the question of the coal trade as a whole apart from considering rival forms of fuel, and to say that we are getting something cheaply can be no answer to what is happening in the coalmining areas. Therefore, I am opposed to this new Clause, because it seems to me to leave out of account the interests of the nation in favour of the purely temporary interest of certain users.
    7.43 p.m.
    Mr. A. SOMERVILLE: There is a new Clause on the Order Paper which has been included in the scope of this discussion—(Repeal of duty on certain spirits). It stands in the name of my

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    right hon. and gallant Friend the Member for Ripon (Major Hills) and my hon. and gallant Friend the Member for Wycombe (Sir A. Knox). Unfortunately, they are not able to be here, and have asked me to present the case for this Clause. It asks for the repeal of the duty on vegetable turpentine and white spirit, because they are the raw materials of a very considerable industry in this country, the manufacture of paint and varnish. This duty was imposed in 1928 and has been debated regularly in this House since then. In 1931 there was an interesting Debate, in which Members on all sides spoke in favour of the repeal of the duty, and, indeed, I believe the Chancellor of the Exchequer was himself in favour of its repeal, and I would ask him to return to that favourable frame of mind and to listen to this appeal for the removal of the duty. Vegetable turpentine is not suitable for use in internal combustion engines, and consequently, there would be no loss of revenue in that direction if the duty were repealed. The hon. Member for Orkney and Shetland (Sir E. Hamilton) has pointed out the advantage which Germany enjoys in competition with this country in the case of hydrocarbon oils. Manufacturers in Germany who use white spirit are able to purchase it duty free, and that gives them a considerable advantage in competition with articles in this country which involve the use of paint and varnish. White spirit, also, is not suitable for use in petrol engines, because of its low flash point. In view of the fact that these two commodities are the raw materials of an important manufacture in this country I ask the Chancellor of the Exchequer whether he cannot see his way to accept the proposals of my hon. Friends. Any loss of revenue which may occur by reason of the repeal of the tax would be more than compensated for by the increase resulting from the sale of paint and varnish.
    7.45 p.m.
    Major Sir ARCHIBALD SINCLAIR: I listened with very great interest to the speech of the Leader of the Opposition against the Clause which was moved from his own benches. The other day, a discussion took place when you, Sir, were not in the Chair, upon what constituted an official Amendment, and whether private Members sitting on the benches above the
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    Gangway had the right to have their Amendments regarded as official Amendments. There will be great difficulties for the Chair if private Members above the Gangway are to claim official status for Amendments which are then thrown over by the Leader of their own party.
    The Leader of the Opposition asked us to consider this matter from the point of view of the national interest as a whole, and he proceeded to consider it from the point of view of the mining industry which is, of course, a very large and powerful interest in his own party. I would ask the House to consider this from the point of view of the nation as a whole. The Chancellor of the Exchequer has introduced this tax as a prop for the coal industry, but so far as it is an artificial and adventitious help to the coal industry, it must diminish the competitive power of our export industries and reduce their efficiency. I am not arguing that it is necessarily reactionary or retrograde to turn from oil to coal. In many fields of industrial activity steam is well ahead of oil and in others oil is ahead of coal, while in some they are racing neck and neck. Sometimes an improvement in the oil-using prime movers of industry puts oil ahead and then some new invention or development in steam comes along and puts steam ahead.
    The right people to judge whether or not it is advisable to turn from oil to coal or from coal to oil are those who are using the fuel. If an industry turns from one to the other on economic grounds, that is in the interest of the country as a whole. In the last year or two industries have turned from oil to coal with distinct advantages to the industry and to the nation as a whole. If an industry turns merely because the Chancellor has artificially made oil dearer, then that must be to the disadvantage of the industry and of the nation. The Chancellor of the Exchequer feels confident that he is the right person to decide—or that this House should do so—whether industries should use oil or coal. He thinks he knows best. In the course of his speech on the last occasion when this matter was under discussion, he represented himself in the somewhat novel guise, for a Chancellor of the Exchequer, of a fairy godmother. He said, philosophically:
    "I think I remember pointing out at the time that it is only human nature that when

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    a new impost is suggested those who may be liable to it see only the objections, but when they find that the impost is a fact they set themselves for the first time seriously to see how they can mitigate the burden as far as possible."—[OFFICIAL REPORT, 12th June, 1934; col. 1601, Vol 290.]
    He went on to describe particularly certain industries having been induced, by the slight weighting of the balance, to look into the question seriously. They found that the difference, instead of being in favour of oil, was in favour of coal. The Chancellor went on to assure us that the Mines Department had had a conversation with representatives of a firm who stated that they were satisfied that they could get as good results from the use of gas made on their premises as from oil. Finally he reached the culmination by telling us that the director of a firm who had called upon the Chancellor of the Exchequer to demand that he should remove the tax now says that he wishes to thank the Chancellor for putting the tax on as it has meant the saving of fuel costs. When industries have had time to digest that speech, instead of the Chancellor receiving deputations asking for taxes to be removed, he will be receiving deputations asking him to put them on, and we shall see the shares on the Stock Exchange going up, not of those who have had taxes removed but of those who have had the Chancellor's blessing of additional taxation conferred upon them in his Budget.
    The Leader of the Opposition feels drawn by the arguments of the Chancellor of the Exchequer. He is quite right. On this point, he is much nearer to the Chancellor of the Exchequer, and they are much nearer to each other than they are to us. If the Chancellor of the Exchequer is to give these strong artificial inducements to industry to use a particular fuel, the Leader of the Opposition feels that the next Chancellor might issue orders telling industry that it is in the interests of the coal industry to use that fuel. That inevitably means nationalisation, because if these great difficulties are being put in the way of industry there will come a time when the leaders of industry will say, "Take industry over from us." We are being led steadily downwards to the nationalisation of industry. I know that hon. Gentlemen above the Gangway do not regard that as calamitous, but most of those who support the Chancellor of the Exchequer would so regard it.
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    The Chancellor of the Exchequer does not attempt to deny that some industries must burn oil. It seems wrong to penalise them and to add to their burdens by this tax, handicapping them in their competition in world markets. The Chancellor of the Exchequer was very happy about the results of the tax so far, and in the speech from which I have already quoted he read out a long list of industries and institutions which had converted from oil to coal and in which the results, he said, had been very satisfactory. He rather tripped up over hospitals as I had pointed out earlier in the Debate what heavy additional burdens this tax had imposed upon them. Hospitals have indubitably and indisputably suffered from this tax.
    It is a remarkable comment on his speech as my hon. Friend the Member for Orkney and Shetland (Sir R. Hamilton) has shown, that the tax has yielded £800,000, or over 40 per cent. more than the Chancellor expected. That shows that industries have continued to use oil, and are paying the tax rather than convert, and it shows what a serious handicap the tax is upon those industries. I have great sympathy with the case that was put for some alleviation of the burden on the aircraft industry. I do not know what answer the Chancellor of the Exchequer would give to that, but, if the relief be at all possible, I join with other hon. Members and urge him to give it. It is in the national interests to give every possible encouragement to aviation at the present time. I wait to hear what he will say. I realise that a very considerable sum of money is at stake, but, if he sees his way to give the relief, I will gladly give him my support.
    The new Clause which I have on the Paper—[Reduction of duty on heavy hydrocarbon oils]—is a much more modest one. It merely asks that the tax shall be remitted in the case of public utility undertakings. No one denies that the tax is a burden upon certain industries and is a handicap to trade recovery and an obstacle to employment. For those reasons, as has been pointed out, certain exemptions are provided. The fishing industry is one and coastal steamers are another. My Clause was put down at the suggestion of the Chancellor himself. On the last occasion, when I was speaking against this tax,

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    the Chancellor of the Exchequer interrupted me and said:
    "Has the right hon. Baronet an Amendment down to that effect?"
    that is to say to except electricity undertakings, about which I was speaking at the time and I have now added gas and water undertakings. He said later:
    "The reason why I asked if he had a Clause down to that effect was because he was arguing on a Clause which would have a very different effect—a Clause which halves the duty all round, the cost of which to the Exchequer would not be £30,000, but probably from £1,250,000 to £1,500,000 a year. The whole position has to be faced, and obviously it is not much consolation to say that if I did something quite different from what the Clause asked me to do it would not cost very much money."—[OFFICIAL REPORT, 12th June, 1934; cols. 1598, 1600 and 1601, Vol. 290.]
    Now we have put down a Clause which would not mean very much money. The Chancellor of the Exchequer's interruption reminded me that when we were discussing a similar Amendment last year, when this tax was first proposed, an Amendment to exempt the coastal shipping industry, he expressed his willingness to give such remission as seemed to him to be justified by argument, but he drew our attention to the relevant consideration—which seemed to him to be fundamental—that industries which had newly received protection and had freshly benefited from protection duties—and we have never denied that individual industries can obtain advantage from protective duties at the expense of the interests of the nation as a whole—that those industries should not complain of this measure of protection to the coal industry.
    The industries to which my new Clause refers derive no benefit from Protection, and the tax is definitely a handicap to their extension and progress. So much is that extension and progress in the public interest that Parliament has passed in recent years a series of measures to that effect. The provision for which our new Clause asks would be at a relatively small cost and would remove a burden from undertakings which obtain no benefit from Protection. It would also remove obstacles to the provision of light and power to industries and to millions of consumers, and would give a stimulus, out of all proportion to the amount of tax, to employment in a wide range of industries.
    7.58 p.m.
    Mr. CHAMBERLAIN: The Clauses which we are discussing together have this in common, that they all deal with oil; but at the same time they deal with somewhat different aspects of the Oils Duty, some of them being confined to the heavy oils and others touching upon the petrol duty. The observations which I now rise to make deal with each of the Clauses which are the subject of our discussion. May I begin with the one in the name of the hon. Member for Windsor (Mr. A. Somerville)? He recognised that the proposal to exempt white spirit and turpentine from the duty is not a new one. It has been discussed here on a number of occasions, and the proposals have always been rejected. The main reasons for the rejection are that they affect a principle which is of very great importance to the Customs and Excise Department, namely, that you should not begin exempting from a particular duty an article by reason of the use to which that article has to be put. The moment you begin to give a concession upon those lines it is almost impossible to keep the door closed to further concessions, because it is always possible to bring up fresh instances of the way in which the article is being used and fresh reasons why it should be exempt from duty. On this occasion my hon. Friend will no doubt realise that it would conflict with the principle which I laid down for myself in the Budget to grant this concession, which would cost the Exchequer £700,000 if it were confined to the articles which he has mentioned, but which, if it were extended to other industries which could logically claim similar treatment, would probably involve me in a loss of over £2,000,000 a year. I may, however, in expressing my regret to my hon. Friend that I cannot accept his Clause, be able to offer him some consolation by pointing out that the paint manufacturing industry does not seem, at any rate at present, to be suffering very seriously from the fact that it has to pay duty on these oils. The chairman of Messrs. Pinchin, Johnson and Co., at the annual general meeting, remarked to his shareholders:
    "We may congratulate ourselves upon having passed through a difficult transitional period with flying colours."
    The chairman of another large company, speaking at the annual meeting in April, said that the first three months of 1934

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    showed an increase in their sales of 15 per cent. over the corresponding period of last year, while their net profits for the same period had increased by 25 per cent. He, therefore, appears to be all right. In the case of another company, the chairman said in May that the shareholders met, not only with a good record as regards the past year's results, but also under conditions and prospects better than for many years. He recorded an improvement in the net profit of no less than 42& per cent. as compared with the previous year. I could quote further illustrations of the general fact that on the whole paint manufacturing companies do not appear to be doing badly.
    The first Clause, which would repeal altogether the duty on heavy oils, raises the broad question whether it is right and proper that we should, to use the words quoted by the hon. Member for Orkney and Shetland (Sir R. Hamilton), weight the balance in favour of our own industry as against the imported article. This is really a particular instance of the general question whether Protection is desirable for industry or not. Of course, we know very well that the hon. Member thinks that it is not, and so does the right hon. Baronet the Member for Caithness (Sir A. Sinclair). They are against the protection of home industries, and in favour of allowing everybody to buy foreign articles if they happen to suit them better; they would not even weight the balance in favour of home industries. But I venture to suggest that that is a matter upon which Parliament has already made up its mind and given its verdict, and that to attempt now to go back upon those general principles would be merely beating the air.
    The right hon. Baronet the Member for Caithness was kind enough to read to the House part of a speech which I made on the subject of this duty on heavy oils not very long ago. He seemed to read it with almost as much pleasure as if it had been one of his own speeches. I will pursue that practice, and say that it seemed to me to be a very good argument in favour of the course that I was advocating at the time. He said that I had tripped up in regard to hospitals, but even there I am afraid he was not quite correct, because, since I made that speech, there has been brought to my attention the case of a well known hospital, the name of which I shall be very
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    pleased to give him in confidence. Indeed, I do not think there would be any objection to my giving it in public, but as a matter of fact I have not had leave to do so. That hospital, since that time, has had exactly the same experience as the director of the company quoted by the right hon. Baronet. Their attention was drawn, by the imposition of this tax upon fuel oil, to the possibility that they might do better with some product of coal, and they have been able to adopt a system which in the end has actually saved them money.
    With regard to the suggestion of the right hon. Baronet that public utility undertakings are being very seriously handicapped by this duty, I really cannot accept that view. The right hon. Baronet himself seemed to be a little inconsistent, because, when he was emphasising the difficulties under which they suffered, he said at the same time that the amount of oil that they used was so small that the loss to the Exchequer would be trifling. To take the case of electricity; only.59 per cent. of the electricity generated in 1932 was due to oil; or, to put it in another way, only 30,000 tons of oil were used in the production of electricity, as against 8,736,000 tons of coal.
    Sir A. SINCLAIR: I would point out that the undertakings which use oil are very largely small undertakings, dealing with small areas, such as small towns. They are not near to water power, and have not coal handy, and the proportion of such undertakings which use oil is very much higher.
    Mr. CHAMBERLAIN: The right hon. Baronet said that they derived no benefit from Protection, but they are not subject to foreign competition, and, therefore, have no need of Protection in the ordinary sense of the word, such as ordinary industries have. Moreover, I do not know if the right hon. Baronet is aware that these very gas and electricity undertakings were some of the strongest petitioners for the imposition of this tax. I have here some observations made by chairmen of gas companies which bear upon this subject. The Governor of the Gas Light and Coke Company said that, although the oil they used had cost them more since they had to bear this tax of 1d. per gallon, it had already brought about an advantage in many directions,

    111
    particularly as regards the use of coke, and, on weighing up the advantages and the disadvantages, he concluded that the advantages outweighed the disadvantages. The chairman of the Croydon Gas Company said that, while the tax of 1d. per gallon was a burden, it was at the same time an advantage to them when it came to a question of competition between gas and oil for heating purposes. The chairman of another provincial gas and coke company said that this tax on heavy oil had beyond doubt been of assistance to them and it was a noteworthy effort of the Government to assist our own people instead of helping the foreigner. That is the general case in favour of the duty on heavy oils, and I am afraid, therefore, that it is quite impossible for me to consider with sympathy the appeal of the right hon. Gentleman.
    I come now to the Clause which I think has received the greatest amount of vocal support this afternoon, namely, the one which proposes to exempt from tax petrol used in aircraft. This again is another instance of an industry claiming exemption from duty for a particular article by reason of the purpose for which it is used, and it is open to exactly the same objection which I have felt obliged to take to the proposal with regard to turpentine and white spirit. I listened very carefully to all the arguments of my hon. Friends who have spoken in favour of the proposal, but they seemed to me to be based, at any rate in some directions, upon misunderstanding. My hon. Friend the Member for Melton (Mr. Everard) put the case very persuasively. He said that motors had received a concession in the reduction of the Horse-power Tax, but no similar concession had been given in respect of aircraft. Of course, the answer is very obvious. It would not be possible to give a similar concession with regard to aircraft, because there is no tax upon the horse-power of aircraft. It seems to be rather a curious idea that, where one article is taxed and some concession is made, that should be made the ground for demanding that the same advantage should be given to some other kind of article which is not subject, in the first instance, to any such tax.
    Mr. EVERARD: What I meant, of course—I am sorry if I did not make myself clear—was that the motor owner
    112
    had received some rebate on the cost of running his machine, and the Chancellor of the Exchequer has made it, not by reducing the tax on petrol, but by reducing the Horse-power Tax. This has made it cheaper for the motorist to run his machine, but nothing has been done to reduce the cost of running aircraft.
    Mr. CHAMBERLAIN: That argument might be used in the case of every other kind of machine in the country. I cannot see any reason why aircraft, in particular, rather than the user of any other kind of apparatus or machinery, should claim an advantage because an advantage has been given to the motor car owner. I wonder that my hon. Friend the Member for Melton did not make use of an argument—or perhaps I should say a fallacy—which was apparent in the speeches of several other hon. Members, who were evidently under the impression that the tax which the motor owner pays upon his petrol is used to finance the maintenance and construction of roads. That is an entire misapprehension. It is not used for anything of the kind. The Petrol Tax is a general revenue tax, and the finance of the Road Fund comes entirely out of the Motor Vehicle Licence Duties. Therefore, it is an entire misapprehension to base any argument for the special consideration of aircraft on the ground that they have no roads to keep up and do not derive an advantage similar to that which the motor owner is alleged to get.
    Only one of the arguments used on this subject seemed to me to be susceptible of any serious consideration. That was the argument that it was to what I might call the military advantage of this country to encourage aviation among the civilian population, because it would give us a reserve of pilots and of machines—perhaps more especially of pilots—to operate in what was rather euphemistically called an emergency, machines of a more destructive character. If it is to be a question of the safety or security of the country, then, indeed, there may be something to be said for that argument, I am not saying whether there is or not, but if it should be thought desirable that, for the sake of the security of the country, we should give some artificial stimulus or encouragement to the industry of aeroplane engine making and to the practice of flying by the civilian population, I would much prefer to see that done by a

    113
    subsidy given for the purpose stated, so that everyone might know what it was for, rather than by a method of this kind which probably could not be anything like so efficient, because, in spite of what has been said, it could not make a very great difference to the aeroplane engine industry. It could be done in a way far more efficient and could be directed exactly where it is wanted to be directed. To give this exemption is rather a blind sort of proposal. I doubt very much whether it is the most effective way of effecting the purpose that hon. Members have in their minds, and I suggest to thorn that, if a really serious argument in favour of doing something more for the aviation industry and for flying in general is intended, it is desirable in the interests of the defence of the country that they should apply to the Air Ministry and put their arguments to them and, if the Department think they have made out a good case, they could put to the Government what is their view about the desirability of subsidising the industry in one form or another.
    8.16 p.m.
    Major PROCTER: It would appear that hon. Members opposite prefer to fight for their political principles rather than for the salvation and the advancement of one of the greatest basic industries of the country. The right hon. Baronet the Member for Caithness (Sir A. Sinclair) has spoken about the use of oil in public utility undertakings. The Chancellor of the Exchequer, quite lightly, said that the amount of heavy oil used in these utility undertakings is very negligible indeed, and the reason is not far to seek. The cost of firing boilers in a public utility station is far less with the use of coal than with the use of oil. In a pound of oil there are 19,000 British thermal units and in a pound of good Welsh coal there are 12,000 British thermal units, but the price of oil is £3 10s. a ton while the price of coal ranges from 7s. 6d. to 15s. Therefore, on a heat basis, oil is from 50 to 75 per cent. dearer than coal. There was a great deal of ignorance on the part of the executives of many buildings in London. They formerly used oil and they thought this tax would be a heavy blow. Some of them saw me and asked if I would represent their case to the Government. They thought it would cost them at least £l,000 a year
    114
    if they had to revert to coal, but the precise opposite has taken place. Some large buildings have taken out their oil firing apparatus and adopted up-to-date firing, and one vast building in London is saving £l,000 a year by using coal, which is the fuel of the country and the raising of which gives a great deal of employment to our miners and to the derelict areas where some of these public utility concerns are operating. The hospitals, too, formerly used oil because among the members of the committees there was no one who had any technical knowledge. Many hospital committees do not know that they can increase the efficiency of their boilers and at the same time reduce their costs.
    There is no industry, so far as I know, with one possible exception, in which coal fired scientifically does not give far better effects than oil can ever do. I know a steel firm which used oil firing to heat their ingots. The sulphur content of the oil interfered with the quality of the steel produced. They got a quick heat, but when they turned over to powdered coal, they got a lambent heat which was far better than oil firing, and they would not go back to oil if you offered it to them at anything like the same price per B.T.U. In power stations and smelting works as well as in other industries, many employers do not take sufficient interest in what happens in the boiler room or furnaces. They leave the matter of firing to the engineers. When this tax was put on, they were forced to go into the cost of firing, and to their amazement they found that coal was far cheaper and far better than they thought was the case. Hon. Members opposite must make up their minds whether it is their policy still to stand for the great battle flag of Free Trade which flew over the great victories of the Liberal party in the past. Their ideas may have been true then, but they were only true for that time. I hope the Chancellor of the Exchequer will stand by his guns. Coal is not dead. Old King Coal still lives. Modern technical experience clearly proves that coal fired scientifically under boilers, or for the smelting of iron, or annealing billets is a cheaper proposition than oil. I hope it will not be very long before the Admiralty sets an example to the country.
    Mr. DEPUTY-SPEAKER (Captain Bourne): There is nothing in the Clause that can possibly affect the Admiralty.
    Major PROCTER: I was trying to show that oil firing is the method now used in the Navy, and it seemed to me to be quite relevant to the Debate.
    Mr. DEPUTY-SPEAKER: This could in no circumstances affect the Admiralty, and the hon. and gallant Gentleman must confine himself to the Clause before the House.
    Major PROCTER: I was thinking of the example that could be set by responsible authorities who are great consumers of oil. By research and experiment in colloidal fuel or in the use of pulverised fuel their example might enable coal to supplant oil altogether wherever steam-raising is used. Therefore, it seemed to me that, if we could get Government Departments burning coal exclusively, if the Government were to use propaganda—
    Mr. DEPUTY-SPEAKER: I must remind the hon. and gallant Gentleman that we are not having a full dress Debate on oil and coal. He must keep to the new Clause.
    Major PROCTER: I hope that the Government will stand by this tax, and that in future the Liberal party will look at the technical side of the case as well as the political side, and assist in bringing renewed prosperity to a great industry in which every Member of the House is vitally concerned.
    8.26 p.m.
    Mr. HALES: The Debate has been an apt illustration of the old saying that in a multitude of counsellors there is wisdom, for there is no doubt that there has been a great concensus of opinion as to the possibility of the Chancellor of the Excheuqer making a concession on this tax. I would emphasise the fact that this is an industry to which surely a small concession might have been given. I presume that this is one of the cases where it may be said literally that the Chancellor of the Exchequer's feeling has been torn between love and duty, and duty has won. There is one aspect of the question which has not been touched upon, and that is in regard to the carriage of luggage by aeroplane. The consumption of an aeroplane is about a gallon a mile, which makes it almost impossible for any long distance to be travelled without having one's luggage cut down to such a small amount that it is hardly worth while going. I would instance the cost of bringing a typewriter from Karachi to this country. The charge is £4 10s. on that alone, a clear instance of the need for cheapening the cost of the running of aeroplanes. That is the point which I would impress upon the Chancellor of the Exchequer when the matter comes up for reconsideration.
    Question put, "That the Clause be read a Second time."
    The House divided: Ayes, 25; Noes, 211.

    Division No. 292.]

    AYES.

    [8.28 p.m.

    Acland, Rt. Hon. Sir Francis Dyke

    Janner, Barnett

    Thorne, William James

    Banfield, John William

    Llewellyn-Jones, Frederick

    Wedgwood, Rt. Hon. Josiah

    Buchanan, George

    McEntee, Valentine L.

    White, Henry Graham

    Cocks, Frederick Seymour

    Mallalieu, Edward Lanceiot

    Wilmot, John

    Evans, David Owen (Cardigan)

    Mason, David M. (Edinburgh, E.)

    Young, Ernest J. (Middlesbrough, E.)

    Foot, Dingle (Dundee)

    Milner, Major James

    Gardner, Benjamin Walter

    Owen, Major Goronwy

    TELLERS FOR THE AYES.—

    George, Megan A. Lloyd (Anglesea)

    Salter, Dr. Alfred

    Mr. Walter Rea and Sir Robert Hamilton.

    Griffith, F. Kingsley (Middlesbro', W.)

    Sinclair, Maj. Rt. Hn. Sir A. (C'thness)

    Harris, Sir Percy

    Strickland, Captain W. F.

    NOES.

    Acland-Troyte, Lieut.-Colonel

    Bowater, Col. Sir T. Vansittart

    Carver, Major William H.

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

    Bowyer, Capt. Sir George E. W.

    Cazalet, Thelma (Islington, E.)

    Albery, Irving James

    Braithwaite, J. G. (Hillsborough)

    Chamberlain, Rt. Hon. N. (Edgbaston)

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

    Brass, Captain Sir William

    Clarry, Reginald George

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

    Broadbent, Colonel John

    Cobb, Sir Cyril

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

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

    Cochrane, Commander Hon. A. D.

    Aske, Sir Robert William

    Brown, Col. D. C. (N'th't'd, Hexham)

    Colfox, Major William Philip

    Baldwin, Rt. Hon. Stanley

    Brown, Ernest (Leith)

    Cook, Thomas A.

    Balfour, Capt. Harold (I. of Thanet)

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

    Cooper, A. Duff

    Banks, Sir Reginald Mitchell

    Browne, Captain A. C.

    Copeland, Ida

    Barclay-Harvey, C. M.

    Buchan-Hepburn, P. G. T

    Courtauld, Major John Sewell

    Barrie, Sir Charles Coupar

    Burghley, Lord

    Courthope, Colonel Sir George L.

    Barton, Capt. Basil Kelsey

    Burnett, John George

    Cranborne, Viscount

    Batey, Joseph

    Campbell, Sir Edward Taswell (Brmly)

    Craven-Ellis, William

    Blinded, James

    Campbell-Johnston, Malcolm

    Croft, Brigadier-General Sir H.

    Boulton, W. W.

    Caporn, Arthur Cecil

    Crooke, J. Smedley

    Crookshank, Col. C. de Windt (Bootle)

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

    Rickards, George William

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

    Leckie, J. A.

    Robinson, John Roland

    Croom-Johnson, R. P.

    Leech, Dr. J. W.

    Rosbotham, Sir Thomas

    Cruddas, Lieut.-Colonel Bernard

    Lennox-Boyd, A. T.

    Ross Taylor, Waiter (Woodbridge)

    Daggar, George

    Lewis, Oswald

    Runge, Norah Cecil

    Davies, David L. (Pontypridd)

    Lindsay, Noel Ker

    Russell, R. J. (Eddisbury)

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

    Lister, Rt. Hon. Sir Philip Cunliffe-

    Rutherford, Sir John Hugo (Liverp'l)

    Denman, Hon. R D.

    Llewellin, Major John J.

    Salt, Edward W.

    Dixon, Rt. Hon. Herbert

    Loder, Captain J. de Vere

    Sandeman, Sir A. N. Stewart

    Dobbie, William

    Loftus, Pierce C.

    Sanderson, Sir Frank Barnard

    Drewe, Cedric

    Logan, David Gilbert

    Savery, Samuel Servington

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

    Lovat-Fraser, James Alexander

    Selley, Harry R.

    Dunglass, Lord

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

    Shaw, Helen B. (Lanark, Bothwell)

    Edmondson, Major Sir James

    MacAndrew, Capt. J. O. (Ayr)

    Simmonds, Oliver Edwin

    Edwards, Charles

    MacDonald, Malcolm (Bassetlaw)

    Smiles, Lieut.-Col. Sir Walter D.

    Eimley, Viscount

    McKie, John Hamilton

    Smith, Bracewell (Dulwich)

    Emrys-Evans, P. V.

    McLean, Major Sir Alan

    Smith, Sir J. Walker- (Barrow-in-F.)

    Essenhigh, Reginald Clare

    McLean, Dr. W. H. (Tradeston)

    Smithers, Sir Waldron

    Everard, W. Lindsay

    Maitland, Adam

    Somervell, Sir Donald

    Fleming, Edward Lascelles

    Makins, Brigadier-General Ernest

    Somerville, Annesley A. (Windsor)

    Fremantle, Sir Francis

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

    Somerville, D. G. (Willesden, East)

    Fuller, Captain A. G.

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

    Southby, Commander Archibald R. J.

    Gillett, Sir George Masterman

    Mason, Col. Glyn K. (Croydon, N.)

    Spencer, Captain Richard A.

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

    Mayhew, Lieut.-Colonel John

    Spens, William Patrick

    Gluckstein, Louis Halle

    Mitchell, Harold P. (Br'tf'd & Chisw'k)

    Stanley, Rt. Hon. Lord (Fylde)

    Goff, Sir Park

    Mitchell, Sir W. Lane (Streatham)

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

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

    Molson, A. Hugh Elsdale

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

    Grenfell, Edward C. (City of London)

    Monsell, Rt. Hon. Sir B. Eyres

    Stones, James

    Grimston, R. V.

    Morris, Owen Temple (Cardin, E.)

    Strauss, Edward A.

    Groves, Thomas E.

    Morrison, G. A. (Scottish Univer'ties)

    Sugden, Sir Wilfrid Hart

    Guinness, Thomas L. E. B.

    Moss, Captain H. J.

    Sutcliffe, Harold

    Gunston, Captain D. W.

    Muirhead, Lieut.-Colonel A. J.

    Tate, Mavis Constance

    Hannon, Patrick Joseph Henry

    Munro, Patrick

    Thomson, Sir Frederick Charles

    Haslam, Henry (Horncastle)

    Nail, Sir Joseph

    Thorp, Linton Theodore

    Haslam, Sir John (Bolton)

    Nation, Brigadier-General J. J. H.

    Tinker, John Joseph

    Headlam, Lieut.-Col. Cuthbert M.

    Nicholson, Godfrey (Morpeth)

    Touche, Gordon Cosmo

    Hellgers, Captain F. F. A.

    O'Donovan, Dr. William James

    Train, John

    Hepworth, Joseph

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

    Tufnell, Lieut.-Commander R. L.

    Hopkinson, Austin

    Pearson, William G.

    Wallace, John (Dunfermline)

    Hore-Belisha, Leslie

    Peat, Charles U.

    Warrender, Sir Victor A. G.

    Hornby, Frank

    Penny, Sir George

    Wayland, Sir William A.

    Horsbrugh, Florence

    Petherick, M.

    Wedderburn, Henry James Scrymgeour-

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

    Potter, John

    Whyte, Jardine Bell

    Hume, Sir George Hopwood

    Powell, Lieut.-Col. Evelyn G. H.

    Williams, David (Swansea, East)

    Hunter, Capt. M. J. (Brigg)

    Procter, Major Henry Adam

    Williams, Edward John (Ogmore)

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

    Pybus, Sir Percy John

    Williams, Herbert G. (Croydon, S.)

    James, Wing-Com. A. W. H.

    Raikes, Henry V. A. M.

    Williams, Dr. John H. (Llanelly)

    Jenkins, Sir William

    Ramsay, T. B. W. (Western Isles)

    Windsor-Clive, Lieut.-Colonel George

    Joel, Dudley J. Barnato

    Ramsden, Sir Eugene

    Winterton, Rt. Hon. Earl

    John, William

    Rankin, Robert

    Withers, Sir John James

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

    Rawson, Sir Cooper

    Worthington, Dr. John V.

    Ker, J. Campbell

    Reed, Arthur C. (Exeter)

    Kerr, Hamilton W.

    Reid, David D. (County Down)

    TELLERS FOR THE NOES.—

    Lamb, Sir Joseph Quinton

    Reid, William Allan (Derby)

    Lieut.-Colonel Sir A. Lambert

    Latham, Sir Herbert Paul

    Remer, John R.

    Ward and Dr. Morris-Jones.

    Law, Sir Alfred

    Renwick, Major Gustav A.

    NEW CLAUSE.—(As to estate duty payable in respect of agricultural property.)
    Where an estate in respect of which estate duty is payable on the death of a person dying after the commencement of this Act comprises or consists of agricultural property, the amount of estate duty payable in respect of the agricultural property shall be the amount ascertained under section twenty-three (Estate duty payable in respect of agricultural property to be charged in part on agricultural value at rate under Finance Act, 1919) of the Finance Act, 1925, less a deduction equal to thirty-three and one-third per centum thereof.—[Lieut.-Colonel Acland-Troyte.]
    Brought up, and read the First time.
    8.38 p.m.
    Lieut.-Colonel ACLAND-TROYTE: I beg to move, "That the Clause be now read a Second time."
    118
    Whatever we may think about Death Duties as a means of raising taxation it must be agreed that these duties bear very much more heavily upon the owners of agricultural land than upon the owners of other forms of property. This fact has been recognised by previous Chancellors of the Exchequer. The Chancellor of the Exchequer in the last Conservative Government and the Chancellor of the Exchequer in the last Socialist Government gave some relief. We were very glad for the relief given but we do not think that it is enough, and the time has come when further relief might and should be given. In the case of other industries, when stocks and shares are sold the industry itself is not directly affected, but in the case of agricultural land where the land

    119
    may have to be sold in order to pay the duties, money has to be found directly out of the industry itself.
    There are three ways in which the money can be raised. The first way is by the reduction of the amount of repairs which the landowner does to his property. He may be able to raise a certain amount towards paying the Death Duties in that way, but not the whole amount. Moreover, that is very bad for the industry of agriculture. It means that the farms go out of repair. The second way of raising money is by means of a mortgage. That is a permanent charge on the land, and there is less money available to be spent on repairs and also less money for employing labour. Also, the number of mortgages that can be raised on any property is necessarily limited. The third way of raising money is by the sale of the whole or part of the property. That is bound to have very bad and very serious results on the industry. It upsets the whole economic life of the village and the countryside. It means that the tenant has either to clear out of his farm or to buy it. In order to buy it, he has to borrow money or use his own capital, which would be very much better employed at the present time in his agricultural operations. It means, also, that men employed on the estate are thrown out of work—carpenters, masons, woodmen who have been employed for 10, 20 or 30 years, with every hope of continuing to be so employed for the rest of their lives. These men are thrown out of work, with little chance of getting employment in their own or other occupations.
    This state of things affects occupying-owners as well as large owners. When an occupying-owner dies, Death Duties have to be paid, perhaps only on a small amount, and in order to raise the money one or two fields may have to be sold, and that may completely upset the whole economic unity of the holding. Therefore, the occupying-owner is affected in the same way as the larger owner. Another way in which Death Duties are unfair as regards agricultural land compared with money invested in stocks and shares is the method of assessment. In the method of assessment for agricultural land, the actual valuation bears very little relation to the amount which the man may expect to receive from that
    120
    land, but that is not so in regard to stocks and shares. Another and less important way in which agricultural land suffers is in the cost of realisation. It costs a great deal more to realise agricultural land than to realise stocks and shares. You can sell stocks and shares for something like one-half per cent. commission but if you wish to sell agricultural land it may cost anything from 6¼ per cent. for a small property down to 3 per cent. for a larger property.
    These facts emphasise the unfairness of Death Duties in their bearing upon agricultural land. Death Duties form a continual drain on the money invested in agriculture, and it is of the greatest importance that that drain should be stopped as soon as possible. The Government are bringing forward many proposals to help agriculture, but those proposals cannot come to fruition unless there is sufficient capital invested to carry them on. Take the question of milk. We all want to see a better supply of milk, produced under improved conditions. If the capital is taken away from agriculture it is impossible to spend the money necessary to improve the places where the milk is produced. That is only one single instance which may affect the Government's milk scheme. Some hon. Members may have read the census of production of agricultural produce. If so, they will have noticed that between the years 1925 and 1931 there has been a reduction of the capital value of agricultural land in this country by 21 per cent., and there has been a reduction of £250,000,000 in the capital employed in agriculture between those two dates. There can be no doubt that the decrease has continued since 1931, when the census was taken. I do not say that this decrease has been caused by Death Duties, but no doubt it has been hastened by Death Duties.
    Death Duties do a great deal to cause the break up of agricultural estates. Some people may think that is a good thing. Many people thought that years ago, but they have changed their minds and now think that it is a pity that agricultural estates have been broken up. Certainly, the farmers who have been forced to buy their farms think so and most of them would be only too glad to get back under the landowners, who have always been prepared to supply the necessary capital at a very low rate of

    121
    interest. No substitute has yet been found for the landowner as a supplier of cheap capital. Something like two-thirds of the capital employed in agriculture at the present time in this country is supplied by the owners of the land. Whether or not we like the system of land tenure which exists at the present time, we all want to make the best of it. Hon. Members opposite wish to change it to a system of land nationalisation, but surely they wish to have an efficient national system. They do not want to take over the land when the farm buildings are falling down, when the fences are all broken down and the land is going back to prairie. They want to see agriculture efficient, but the efficiency of the agricultural industry is undoubtedly handicapped by the heavy Death Duties that have to be paid.
    If this Amendment could be accepted it would be of great benefit to the agricultural industry and the country as a whole. A very strong case can be made out for the entire abolition of Death Duties on agricultural land, but we do not ask for that. All that we are asking for is for a reduction of one-third in the Death Duties. Thirty-three per cent. of the receipts from agricultural land is about the average amount spent by the landowners on the maintenance of their farms. Surely, it is fair that the capitalised value of the money spent in the upkeep of the farm should be allowed to be deducted before land is valued for Death Duties. The second reason is that the 33⅓ per cent. is about £700,000, and as the Chancellor of the Exchequer has a nice little surplus of about £800,000 he could find no better way of using that surplus than by reducing the amount of Death Duties upon agricultural land. Replying to a discussion on this subject last year the Chancellor of the Exchequer said:
    "If it were possible to give relief, and if the Government of the day thought it desirable to give relief, that could be done very simply by a percentage reduction in the capital value of agricultural estates.… If it were desired to do anything it would be quite a simple matter to do it."—[OFFICIAL REPORT, 1st June, 1933; col. 2122, Vol. 278.]
    I hope he will consider that it is both possible and desirable to give relief at the present time. It would be a great advantage to agriculture and to the nation; and I hope he will see his way to grant the concession.
    8.47 p.m.
    Brigadier-General CLIFTON BROWN: I am sorry that the Chancellor of the Exchequer is not at the moment present; it may be that he does not want to be reminded too much of what he said last year. In his Budget Speech, as my hon. and gallant Friend has pointed out, he said:
    "If it were possible to give relief, and if the Government of the day thought it desirable to give relief, that could be done very simply by a percentage reduction in the capital value of agricultural estates."
    That is the reason we have put down the new Clause. Later on the Chancellor of the Exchequer said:
    "All the facts are known. All you have to decide is, first, is it desirable to give relief by way of a reduction of Death Duties upon agricultural land; and, secondly, how much are you prepared to give? "—[OFFICIAL, REPORT, 1st June, 1933; col. 2122, Vol. 278.]
    My hon. and gallant Friend has enumerated many points in answer to the question of the Chancellor of the Exchequer showing how desirable it is to give relief by way of a reduction of Death Duties upon agricultural land. There is one other point which I think should be considered, and that is that all professional bodies interested in land are at one with those who own land in saying that Death Duties do more harm to the business of agriculture than any other single item. That opinion comes not only from the Chambers of Agriculture but also from the Surveyors' Institution, the Land Agents Society, and the Law Society, all of them professional bodies; and you could not have a better answer to the Chancellor's question, as to why agricultural land should have this relief, than the opinion of these professional men who are dealing with questions affecting land every day. My hon. and gallant Friend referred to the cheapness of capital, to which agriculture is accustomed. When these estates are broken up, as they are being, owing to Death Duties, what happens? The tenant has either to go and find something else to do, as well as his labourers and his family, or else he has to buy his land. If he has to buy his land, he cannot an ylonger borrow capital at 2½ per cent., which is all that an agricultural land-owner gets; he is very lucky if he gets more. The tenant has to go and borrow money at 4 or 5 per cent. from a bank. That means that he

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    has not enough working capital left to run his farm, and the farm and land deteriorates. That is a very important point.
    I think that the Chancellor of the Exchequer has been given good reasons why there should be some reduction in the Death Duties upon land. They press far more heavily on agricultural land than on any other single industry. If the right hon. Gentleman will look at the pamphlet which my hon. and gallant Friend quoted, and which I quoted the other day when asking for another form of relief which was refused—I hope we shall have better luck with this one—he will see that the amount of capital taken from the agricultural industry in the last five years is £250,000,000. If that is not worse than the conditions which apply in any other industry it is nevertheless fatal to the agricultural industry. It means in addition a reduction in rents of 20 per cent., which is much to be deplored, and also a reduction of £85,000,000 in the capital of the tenants; and on the top of that you have this system of capital robbery by Death Duties. It has been said that after all other industries have lost capital in the same way as agriculture during the last five years. That is true, but other industries while they have lost capital have also had a capital appreciation by means of the Conversion Loan, and this capital appreciation has affected nearly all businesses and industries in the last two years to a far greater extent than agriculture. While income has gone down the capital depreciation has continued as well in the case of agriculture. While all industries may have suffered they have not suffered in the same way as agriculture in a reduction of capital values.
    8.52 p.m.
    Viscount WOLMER: I am glad that my hon. Friends have raised this matter, but like them I am sorry that the Chancellor of the Exchequer is not at the moment present. No doubt it is due to the time at which the Debate has come on. I am sorry also that there is no Minister on the Treasury Bench representing agriculture, and, if the Financial Secretary will allow me to say without any offence, no Member who knows anything about agriculture except the First Lord of the Admiralty who is sitting in the corner, and who I am sure sympathises with us in this matter. I make
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    that comment because I think it is almost impossible for anyone who has not a practical experience of agriculture to realise what a devastating blight Death Duties form on the whole agricultural industry. The fundamental reason is a little bit complex and difficult for people not connected with the land to understand. It is simply this, that land has an amenity value which is altogether distinct from its agricultural value.
    We who represent the agricultural industry are making this claim on behalf of agriculture. When an agricultural estate passes at death, the land is valued by a valuer at a price which it is assumed it would fetch if it was put up in the market and there was a purchaser ready to buy it. People will pay for land prices greatly in excess of its agricultural value. They will buy land possibly as a building speculation, but generally they buy it mainly because of the beautiful trees upon it; it is a good sporting estate; it is in a known part of the country, and there are beautiful views. But the owner of the land who is trying to run that property as an agricultural estate is forced to pay Death Duties on an amenity value which he does not in the least want to realise and which it is greatly to the interest of the country, and especially of the countryside, that he should not realise.
    What happens when he is forced to sell under the burden of Death Duties or any other cause? A speculator will buy the land and the old tenants are all liable to be turned out. The estate may be broken up. All the traditions are thrown away and the new purchaser, especially in these times, as often as not has simply bought the land for what he can make out of it from an amenity or building point of view. This process is going on all over the countryside at the present time. It is causing no benefit to the farmers and none to the farm-workers; in fact, very much to the contrary, because what happens is either one of two things: Either the old landowning family is hanging on to its property and is finding its capital taken away by every death to such an extent that it is no longer able to keep the estate in proper repair, no longer able to give the farmers, the tenants, that financial support which has carried them through many a crisis in the past; or else the estate is put into the market, is bought

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    by a land speculator and the old tenants are given notice, and even agricultural labourers are turned out of their houses for week-enders who wish to buy the property; and all the amenities of the place are disturbed.
    People who buy property in that condition are not the old friends who are going to stand by the tenants in their hour of difficulty. Hon. Members of the Labour party really do not in the least appreciate how much the agricultural landlords have done for the farmers and the farm workers in the past. With all respect, I say to them that that is one of the reasons why they have failed to convince the agricultural districts that the Labour party is a wise party to vote for. Hon. Members come down to our villages and they blackguard the landlords as if they were talking about urban landlords, and then they are very much surprised when they find that they are blackguarding someone who is known to have been only the friend of the farmer and the farm worker in the past.
    It is because these excessive Death Duties, based on figures out of all relation to the agricultural value of the land, are driving the old landowners out of the country or driving them into such a position that they are no longer able to fulfil their old functions, that they are doing such immense injury to agriculture. We had a classic case mentioned two or three years ago by Lord Lothian, who cannot possibly be described as a die-hard Tory or one who is unable to accommodate his mind to new situations and new facts. Lord Lothian wrote to the "Times" and gave the figures relating to an estate which he had just inherited. On an agricultural estate which brought in on an average less than £1,000 a year Lord Lothian had to pay £200,000 in Death Duties. He pointed out that it was absolutely impossible to pay those Death Duties without either drawing on other funds which had nothing to do with the estate, or else putting that property into the market. He followed both those courses; he sold a great deal of the property, and no doubt had to draw upon other funds in order to pay the money demanded. But in either case that great agricultural estate has been injured; it has been deprived of its working capital to a far greater extent than it could possibly bear.
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    As my hon. Friend has pointed out, this is not true of industry. A man who owns a colliery or factory worth so much dies, and the property is valued at what it economically returns or brings in. His heirs have to pay Death Duties which bear an accurate relation to what that property earns. The whole burden of the case with regard to agriculture is that the successors have to pay Death Duties at a figure which bears no relation to the economic return, but is merely caused by this so-called amenity value. There are many ways of dealing with the question, and the way proposed in this Clause is only one of them. I understand it was the way suggested by the Chancellor of the Exchequer himself last year. It is not a logical solution. It is one of those rough-and-ready practical methods which afford a great deal of relief. I think it does not go far enough. It does not do complete justice, but it would certainly ease the situation very much, and, as the Chancellor himself suggested it, I hope that the Government will be able to agree to it now.
    There is another point I would mention to hon. Members opposite. Although this form of taxation is doing so much injury to the countryside, it brings in a very small sum of money to the Exchequer compared with the gigantic figures of our national Budget. That is because it is taken from such a limited class. It is taken from, comparatively, a very small number of men. Although these men and these estates are crippled, and all who are dependent on these estates are injured—that includes by far the greater part of our agriculture—I think I am correct in saying that the total amount brought in by agricultural Death Duties is a comparatively small part of what accrues to the National Exchequer. Therefore, I think it is true to say that pound for pound what the Government collects by these duties does more injury probably than any other tax on the Statute Book. Having regard to the value received by the Exchequer, more injury is caused by this tax than by any other.
    It would be out of order to discuss the subject on this occasion, but I believe that Death Duties as a whole are doing great injury to all our trade, because we as a nation are living on our capital. But it is only in the case of agriculture

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    that the assessment of that capital value is carried out on a basis which bears no relation to its economic return. Therefore, I hope that the Government will be able to do something to meet us. Those who know the countryside, those who see our farms deprived of capital, those who realise the greatly increased number of men who could be employed if there were more money to spend on the land, if the land were kept properly drained, and the fences kept properly up, if the farm buildings were brought up to date, if money could be advanced for the installation of new machinery and improvements—those who realise what all that would mean to the countryside, join with me in beseeching the Government to have sympathy with agriculture in this respect.
    I do not think that any Government, or any Minister, has done more to help farming than the present Government and the present Minister of Agriculture, but his position in this respect is rather like that of a man pouring water into a barrel which has a hole in the bottom. You cannot put agriculture on a satisfactory basis, if the capital—the very cheap capital about which we have been hearing—is being continually taken away from the industry. All your marketing schemes, all your rationalisation, all your quota schemes and your wheat schemes, excellent and splendid as they are, will not succeed in their object of restoring agricultural prosperity until this running sore has been healed. It is impossible to carry on farming, or any other industry, if great chunks of capital are to be taken away from it, every time a property passes, to the extent of preventing farms and machinery being kept in working order. This is a matter of great importance to the whole of agriculture. I fear that many people from the towns do not realise its importance but I am sure that no one single act which the Government could do, would be more effective as a step towards putting agriculture on a sound basis, than to provide in whatever way they like, that the Death Duties paid on agricultural property should not be greater than the agricultural return coming from that property.
    9.7 p.m.
    Mr. CHARLES BROWN: Not for the first time to-day have we heard the voices of those who represent agricultural
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    constituencies, and I confess that I grow more and more surprised with each successive intervention from that quarter in these Debates. I am forced to the conclusion from the speeches of hon. Members opposite that they have little if any faith in the Government's agricultural policy. Had they any faith in that policy, I do not think we should be hearing the pleas which they have made to-day. Earlier in these discussions in connection with the new Clauses dealing with the Irish Free State Special Duties and the question of food taxes, agricultural representatives opposed the views put forward from this side. Incidentally, in the course of those arguments, some hon. Members contended—and I am not going to deny it—that agriculture was just as much entitled to protection as any other industry. It was sought by arguments of that kind to justify the policy of the Government in connection with agriculture. That policy has now been followed for two years or more. Yet each agricultural Member who rises to speak in this House paints a gloomier picture of agriculture than his predecessor. We still hear stories of decay and decline and ruin. We are now told that agricultural estates cannot afford to pay Death Duties at a certain rate, and here we have a new Clause proposing that lower Death Duties should be payable on agricultural estates.
    To me this is a curious revelation of the attitide of mind of agricultural representatives opposite. Surely, if the Government's agricultural policy is going to have the results which many of them have prophesied for it, agriculture will soon be prosperous, and will have no difficulty in meeting its liabilities. Surely, agricultural estates will be able to pay these Death Duties, if the Government policy is going to suceed. Hon. Members cannot have it both ways. Either they have faith in the Government's policy or, alternatively, they are looking to a future in which, despite all the Government can do, agriculture will go from bad to worse, and will be unable to meet the obligations which now rest upon it.
    I do not know what will be the reply of the Financial Secretary to those who have brought forward this new Clause. I suppose that, in accordance with the principle which the Chancellor of the Exchequer has laid down in regard to

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    the disposal of any Budget surplus, the Financial Secretary will turn down this proposal. If I were in his place I should turn to hon. Members opposite and tell them, "The Government are doing everything they possibly can for agriculture; agriculture is going to have a period of abounding prosperity in the future; agricultural estates will jump up in value, and there will not be the slightest difficulty in finding this money.' But I think that hon. Members opposite would rather see the national revenue provided from other sources. That was clearly revealed by their attitude towards the new Clause dissenting from the imposition of further food taxes. They would rather see the revenue was obtained from taxes on the food of the people than continnue paying these duties at the level at which they now stand. May I give them a word of encouragement? I say to them: "Trust your Government and have faith in their policy; agricultural prosperity lies just round the corner, and your difficulties will disappear in the twinkling of an eye once the Government's policy has been brought to full fruition."
    9.13 p.m.
    Mr. SCRYMGEOUR-WEDDERBURN: My hon. Friend the Financial Secretary to the Treasury has been reminded that this proposed new Clause proceeds from a suggestion which was made by the Chancellor of the Exchequer himself in reply to the arguments which we laid before him last year. In fairness to my hon. Friend, it ought to be recalled that the Chancellor of the Exchequer, having made that suggestion, proceeded to add:
    "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.—[OFFICIAL REPORT, 1st June, 1933; col. 2122, Vol. 278.]
    But the Chancellor of the Exchequer concluded by describing this as a live question, and I hope we may be forgiven for reminding the House that it is not yet moribund. It ought to be made plain, and I think it has been made plain by my hon. Friends who have spoken, that we are not now discussing the merits of Death Duties in general. It may be argued that Estate Duty is a bad tax, which drains away the capital of the country, or it may be argued that it is
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    a good tax which serves to correct the inequalities of wealth. We are not now discussing that question. We are simply considering whether agricultural land, which has already enjoyed, since 1925, some preference in comparison with other classes of property, should be accorded the further advantage proposed by this new Clause.
    There would be no time to discuss the principle, which was always recognised by Parliament until Sir William Harcourt's Budget of 1894, that real property should be taxed on a different basis from personalty, but I think that the practical difference between the effects of Death Duties on agricultural land and the effects of Death Duties on other kinds of property are sufficiently obvious. If a man inherits an estate which is invested in stocks and shares, in house property, in coal mines, in shipping, or any other kind of property you care to imagine, its capital value, that is to say, the selling value upon which Death Duties are assessed is normally governed by the amount of revenue yielded by that property. If the annual yield is £l,000, if the money is invested in a first class gilt-edged security, and if the current rate of interest on that class of investment is 3⅓ per cent., the capital value will be £30,000. If it is in some less secure investment upon which the current yield is 5 per cent., the capital value will be £20,000 and so on.
    But in the case of agricultural property, the realisable value, or the estimated selling value, is not solely governed—it may indeed in some cases hardly be governed at all—by the net annual income which is derived from it. It so happens—perhaps it may be an unfortunate thing—that the ownership of agricultural land is not simply regarded as an income-producing asset. The Noble Lord the Member for Aldershot (Viscount Wolmer) spoke of amenity value, but he might have gone a good deal further. The ownership of land is regarded as a social responsibility which many people desire to assume for reasons other than financial reasons. If the heir to an agricultural property chooses to sell it, and succeeds in selling it, I do not see any reason why he should not pay Death Duties at the same rate as anybody else, and indeed, if the principle of this Clause were accepted by the Chancellor

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    of the Exchequer, I think it would probably be necessary to insert some further provision to the effect that if an owner, having paid Death Duties upon this lower basis, were within some prescribed period of time to change his mind and sell his land, he should then pay to the Treasury the difference between the sum which he had already paid and that which he would have paid if he had immediately realised the price which he received.
    If the owner, however, decides that the good management of his property will be permanently destroyed by its being broken up, or if, as may sometimes be the case, he is legally prohibited from selling it by an entail, or if no purchaser is forthcoming, or if for any other reason he does his best to hold his property together, the burden of discharging these Death Duties year after year—and I am not only speaking of large estates, on which the rate of duty is very high, but of small estates, on which the rate of duty is moderate—deprives him not only of the money which he ought to be spending on improvements, but of the means of maintaining his property in a reasonable state of repair.
    Just as the actual effect of Death Duties prevents an owner from undertaking improvements on his estate, so the prospect of Death Duties may, and does, deter him from doing it. I do not think it has ever been seriously questioned that this tax has exercised the most deplorable effects by holding back the improvement of British agriculture and its adaptation to modern requirements. That is the justification for this Clause; that the ownership of agricultural land is not merely regarded as a pecuniary asset and nothing more. If it had been so regarded, I think it is probable that the greater part of England and Scotland, except in some particularly favoured localities, would within the last two or three generations have become prairie land. In many parts of the country arable farming has only been able to be continued because estates which have been forced into the market have been purchased by wealthy persons who have been able, and willing, to subsidise the agricultural property which they have acquired from the alternative sources of wealth which they already possess. I think that is an unhealthy state of affairs. I think that agriculture ought to be able to stand on its own legs
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    and to bear its own burdens. We have put down this new Clause because we believe these burdens are altogether excessive and that this particular tax operates on the agricultural industry with peculiar unfairness.
    9.20 p.m.
    Sir J. LAMB: May I say, in supporting this new Clause, that I listened with very great care to what fell from the hon. Member for Mansfield (Mr. C. Brown), and I think he made a very great mistake in trying to confuse, in the minds of hon. Members present, the question of an agricultural policy for those who are producers as producers with the question of an agricultural policy for those who are owners as owners; and it is not quite fair to confuse the two issues. I understood from him that his policy was that it was unfair to ask for justice to the producer while he lived because, at the time of his death, something else might happen. That is hardly a conclusive argument. What happens at the death of an owner of an estate has, it is true, a great effect upon the producer, as confined to those who follow after, and not the actual man, who, of course, has held the estate during his lifetime.
    The case has been put so forcibly and convincingly by those who have spoken from this side, and by the hon. Member for Western Renfrew (Mr. Scrymgeour-Wedderburn), who are, I believe, all of them large landowners, that it is unnecessary, and perhaps would be presumption, for me to attempt to add anything to it from that standpoint, but this is not a question which affects the large landowner only. It affects the industry as a whole, and particularly the tenant farmer, who, because of its effect on the large landowner, finds himself put in this very unhappy position: The large landowner, because of the lack of fluidity of the assets of the estate, finds that a part of the estate probably, if not the whole of it, is put up to auction, and unwillingly, but on purpose to protect his home and livelihood, he has to go into the market and to compete against others to become the owner of that of which he was previously the tenant. In all cases that means that a greater burden is placed upon the tenant than previously, because he would have been able to obtain the ownership capital, the capital value of the farm, at a very much lower

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    rate of interest from the previous owner than he could possibly do from anybody who took up a mortgage on the property.
    During his lifetime there is a great deal of extra burden placed upon him as a producer, but as an occupying owner he finds himself in a very much worse position at the time of his death, because his estate then comes under a very great difficulty with regard to Death Duties. If the new occupying owner cannot find the capital, he has to sell perhaps a few fields from his farm and what is the effect of that? By selling a few fields, he decreases the amenities of the farm and the possibility of its fulfilling the object of the farm as a unit. He does that, and in doing so he reduces the value of the buildings on the farm, because a certain amount of their raw material, the land, has been taken away from them. So there is an injury to him. He sells a portion of the farm, reducing the value of the buildings which remain.
    On the other hand, what happens? He is selling that land without the amenities; consequently, the value of the land is very much less than if it remained in his own hands. There you get double reduction, with the owner unfortunately penalised in having to sell a portion. If he does not sell, you know the difficulty a farmer has of trying to do it out of capital. It does not rest here. The effect of this heavy charge does not finish with the tenant or the owner occupier; it extends to the actual worker. We know that a man prefers to retain labour on a farm, for it is necessary for efficient working, but as one of the first economies he must do with one man less. That man suffers, for he may be in a position where he cannot transfer to somebody else and may have difficulty in finding employment.
    There is another class of worker employed by the large landowner, the servant who has been employed on the estate. I have in mind a particular estate which recently suffered from the same thing. I go through that estate pretty regularly and the landowner has suffered to an extent, but not nearly so much as those who were dependent on him. He is living in a few rooms with only a housekeeper, a few indoor servants and one chauffeur. The large staff of servants he had before have now to go out in competition with others in the labour market. Almost every cottage is
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    now occupied by somebody who has come out of town. It is true that they are paying rent.
    In supporting this Clause, I would like it to be understood that it is not a large landowner's question only. Undoubtedly it affects him and affects him seriously, but it does not fall on him largely as an individual, but on those dependent on him—not in an objectionable way—for occupation, those formerly tenants now owner occupiers, and the present owner occupier who happens to be a small man. I deplore very much that this new Clause has come forward with the House sparsely occupied. The number of those in the House does not indicate in any degree the gravity of the subject under discussion. I hope that the Financial Secretary, when replying, will give us something. He will not at any rate gauge the gravity of this subject from the agricultural industry point of view by the number present.
    9.29 p.m.
    Mr. HORE-BELISHA: I do not propose to examine in any detail the effects of Death Duties on agricultural estates. The subject was a matter of examination before the Colwyn Committee on National Taxation. They took evidence from all quarters, including the Central Landowners Association, and that is what they say in their report—I am not sure that the House will differ seriously:
    "In general, we are opposed to tax relief provisions in favour of a particular class of individuals. The case put to us for the relief of agricultural landowners rests largely on the general condition of agriculture, a remedy for which, it is to foe hoped, may be found in other ways than by the undesirable expedient of tax remission. While we recognise that Estate Duties under present conditions do weigh very heavily on the purely agricultural estates, we have reluctantly come to the conclusion that special relief from the duty,—in which we include the existing relief—is unjustifiable."
    That was the recommendation, not unsympathetic, of the Colwyn Committee, having regard to agriculture as a whole. They actually recommended the abandonment of the existing special relief. I would remind the House that, although the rates of Estate Duty as a whole have twice been raised, in 1925 and again in 1930, for agricultural estates, so far as the agricultural value is concerned, the 1919 level of rates has remained in the case

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    of estates of £12,500 and upwards. It is important that the House should observe that the duty on the agricultural value of estates is paid on the 1919 level, whereas for other estates it has twice been raised. Therefore, it cannot be contended that the legislature refrained from recognising such very weighty arguments as have been addressed to us this evening. If the value of relief is assessed in terms of particular estates, it will be found to be quite considerable. It is only flair to remind the House of that special position in which agriculture is placed by favour of the legislature.
    Sir J. LAMB: Does the hon. Gentleman appreciate that the Value of other property has increased more than agricultural property?
    Mr. HORE-BELISHA: It is impossible to say without reference to particular estates how far that may be true. I do not want to destroy any of the arguments put before us this evening. They will be for the Chancellor of the Exchequer to review when he finds himself in a position to re-examine afresh the incidence of this duty. He has already uttered remarks not unsympathetic. In reading a quotation from the Chancellor of the Exchequer one hon. Member did not read the whole passage. I must thank the hon. Member for West Renfrew (Mr. Scrymgeour-Wedderburn) who complemented the quotation and disclosed thereby that the statement was not quite in the terms which the House had been led to expect. As regards this year, my right hon. Friend has made it plain, and obtained the concurrence of the whole House, that any money he has at his disposal has first of all to go to those who made sacrifices in 1931. He must observe, so far as this year is concerned, that principle.
    The concession which has already been made to agriculture, to which I have referred, costs the State £600,000 a year on an average. The proposed Clause invites us to incur for the benefit of agriculture a loss of another £700,000 a year. Plainly, whatever one's views might be upon the merits of this proposal, it offends the principle which my right hon. Friend has laid down. I feel closely in agreement with my Noble Friend when he deplores the
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    absence of the Chancellor of the Exchequer. Unfortunately, he cannot be here all the time. I would have much preferred that my right hon. Friend had heard the arguments himself. The fact that he did not hear them does not mean that he will not read them, and I can assure my Noble Friend and my hon. Friends behind me who have spoken so sincerely and in many respects convincingly, that, even if my right hon. Friend had been here, he could not, within the limits of the propositions that he himself has laid down for the distribution of the surplus, have accepted the Clause this year, and in no event could he have accepted it in its present form for the reasons among others which were so well explained by my hon. Friend the Member for West Renfrew.
    Question, "That the Clause be read a Second time," put, and negatived.

    NEW CLAUSE.—(Amendment of s. 8 of 17 and 18 Geo. V., c. 10.)
    As from the thirty-first day of May, nineteen hundred and thirty-four, there shall, in lieu of the duties of excise charged on matches under Section eight of the Finance Act, 1927, be charged the duties of excise at the rates specified in the Schedule (Matches, Excise Duties) to this Act.—[Mr. H. Williams.]
    Brought up, and read the First time.
    9.39 p.m.
    Mr. H. WILLIAMS: I beg to move, "That the Clause be read a Second time."
    If hon. Members will look at the Schedule which appears later on the Order Paper, they will see the rates set forth. They do not convey very much unless hon. Members have before them the existing rates. They represent substantially a reduction in the duty by one-twelfth. I do not imagine for one moment that my hon. Friend the Financial Secretary will accept the new Clause, because it would involve him in a loss of revenue of about £400,000. It is not moved in the hope that he will accept it this year. It is moved in the hope of stimulating him into a suitable activity next year. Some of us who are convinced Protectionists have always regretted the fact that the Import Duties Act applied Protection only to those goods which were not dutiable under any other enactment, and, as a result, there are a num-

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    ber of gaps, rightly or wrongly, in our protective system. Year by year we have tabled new Clauses to deal with these gaps, and some have been selected for discussion and some have not. This year the one which has been selected on the Report stage is the one which deals with matches, which I am now moving. I am told a match duty once wrecked the Chancellor of the Exchequer, but a more callous Chancellor imposed a match duty a good number of years ago, and that duty brings in £4,000,000 a year. It is, therefore, a very important item, of revenue.
    Taking the main rate of duty, that is, the duty which applies to boxes of matches of between 20 and 50, or normally the kind which the ordinary Member uses containing 50 safety matches, the difference between the Excise Duty and the Customs Duty up to last year was 2d. for each 144 boxes. That was not a protective 2d. It represented the allowance to British manufacturers of the costs in which he was involved in his factory through the administration of the Excise Duty. Therefore, in fact, there was no protection at all. Last year the Chancellor decided that this duty ought to have a modicum of protection, and in respect of the main rate of duty he raised it from 4s. 4d. for 144 boxes to 4s. 9d. That was not a very large increase. It was, roughly speaking, a 10 per cent. protection calculated on the value of the Revenue Duty. It must be borne in mind that matches are made to a substantial extent from imported raw materials. The wood, in particular, is imported. I understand that most matches are made from aspen, which up to now has not been grown in substantial quantities in this country or in any Empire country. Accordingly, we have imposed a duty of 10 per cent. on the raw material of this industry, and there is no tax-free supply competing. In those conditions, as every Protectionist knows, the duty tends to fall upon the consumer. It is an entirely different case from where there is a tax-free competition. The match manufacturers therefore are paying a duty of 10 per cent. on part of their raw materials, and that represents, I imagine, about 40 per cent., perhaps more, of the finished value, so that in fact they are suffering from a duty of about 4 per cent. of what I call negative protection. It was in order to
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    meet that, I understand, that the Chancellor gave them that modicum of protection, to which I have referred, of 5d. per 144 boxes.
    If anyone will consult the Financial Statement of last year, he will see that the Chancellor estimated that a sum of £350,000 of revenue that would have been received under the heading of Customs was likely to be received under the heading of Excise in the case of matches, because he expected that, as a result of this small degree of protection, there would be a substantial cut in the imports and a marked increase of production in this country. I regret to say that the Chancellor was woefully disappointed. In his Budget estimate a year ago he expected to receive from Customs Duties on matches, £1,415,000. He actually received £1,921,000. In other words, he received one-third more by way of Customs Duty. On the other hand, the Excise Duty, instead of being £2,755,000, was £2,114,000. Actually, therefore, there was no increase in the home production, but, as far as I can find out, there was an actual fall in the production of matches in this country and an increase in the importation. Matches are made in a great many countries, and one of the sad things is that half the people who sell matches in the street as the only way of earning a bit of a living while they are unemployed are the victims of these foreign matches. I have a box in my hand which I bought from an unemployed man in the street, and it was made in Finland.
    About half the matches in the country are foreign, and I am told that about half are bought in individual boxes across the counter at 1d. per box. You can play about with the duty to an enormous extent without having the slightest effect on the retail price to those people who consume half the matches. It is true that where the housewife buys a packet of a dozen the rate of duty may have some effect on the price, but it is obvious that the retail price cannot be materially affected even by a considerable alteration in the rate of duty. The only effect, if you make the Customs duty too low, is not that the consumers benefit but that the importing merchants and retailers benefit unduly. I think it is absurd that we should import a universal commodity the whole supply of which can be made in this country with great efficiency and

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    under conditions of employment which the Leader of the Opposition would justify if he were with us. I refer to the right hon. Member for Bow and Bromley (Mr. Lansbury), because I know he holds the highest view of the conditions of employment in the great factory in his constituency, though, of course, that is not the only match factory in this country.
    The conditions of employment in the British match industry are far higher than those which prevail in the countries from which the bulk of the matches come. Belgium used to be the main source of our supply, though it does not furnish us with the same proportion to-day, and conditions and wages there are far lower than in this country. Finland, also, is a low-wage country compared with ours. I believe the Swedish supplies are much less than they used to be. There are very large supplies from Russia, where wage conditions, whatever else we may think of the situation, are not as good as ours. I think it is tragic that we should import quite unnecessarily £500,000 worth of matches—that is the value before duty has been paid. One can say that £300,000 of that represents a value that could be created in this country—because I recognise that we have to import the timber. There is certain employment there for our own people, and without prejudice to the consumers. I realise that my proposal is not a satisfactory one, because as a private Member I am debarred from putting forward the right proposal, which would be a substantial increase in the Customs duty. I have no hesitation whatever in saying that if the Chancellor were to go to the match manufacturers and say, "We are anxious effectively to protect you, so that practically no matches should come in, and we want a gentlemen's agreement in regard to the wholesale price," that he would get that guarantee. No industry ever approached by the Chancellor of the Exchequer for that kind of guarantee has ever failed him.
    At present there is a high rate of duty. Anyone who pays a penny for a box of matches pays two-fifths of that penny as tax, a substantial portion of the penny represents the cost of distribution, and I imagine that the tax is more than the factory value. We could easily get the Customs duty at such a level that there
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    would be no imports at all, and with the absolute assurance that the retail price per box could not be altered, the maximum risk would be some small increase' in the price per dozen boxes. If these are the circumstances I do not know why the Chancellor of the Exchequer has not acted. Last year he made a tentative start, but it is obvious that the hoped for results have not been realised. If hon. Members will consult the trade returns they will see that this meagre attempt at Protection was introduced at a time when something far more drastic was wanted. The case for doing something more is overwhelming. I realise that my proposal, which would inflict a loss of revenue of £400,000, is not an acceptable one, but it is the only proposal I should be in order in moving, and I am only doing it in the hope that the Financial Secretary will take careful note of the situation. We are a Protectionist country, and, apart from that, here is a case where we could get Protection with the certainty of no prejudice to the consumer, and if we can do that surely we ought to make sure that this £500,000 worth of trade, which at the moment is going abroad, is reserved for our own people.
    9.50 p.m.
    Mr. RAIKES: I beg to second the Motion.
    After the eloquent and exhaustive speech of my hon. Friend there is very little for me to say on this question of matches. We realise that the Government are anxious to give a fair deal to British matches, otherwise they would not have tackled the problem in the way they did last year, but the fact remains that that effort has not proved effective. The Government's own prediction as to the result of the increased Customs Duty last year has been falsified by events, very largely due to the effect of the 10 per cent. duty on the imported raw materials. Therefore, we ask them very humbly to make just another little effort to assist the industry. There has been a slight decrease in the production of British matches during the past year, and a steady increase of importations. There are matches coming from Japan and from Russia, particularly from Japan, and not only are they cheaper than we can produce them but, also, they are matches that will strike, unlike the matches which

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    used to come from foreign countries in the past. Unless something is done we shall get a steady increase in the supplies of foreign matches month in and month out, to the dislocation of the British match industry. I appeal to the Government to take steps to assist the industry such as will enable wages and employment to be kept up at a decent level.
    9.52 p.m.
    Mr. HORE-BELISHA: The margin between the Customs and Excise duties on matches was, as my hon. Friend the Member for South Croydon (Mr. H. Williams) said, widened last year from 2d. to 7d., and the first question which he raises is this: Does the margin of 5d. compensate for the tax which the match makers have to pay upon their raw materials such as aspen wood? I am advised that all the information goes to show that the 10 per cent. on the wood, plus the tax on the chemicals, does not represent more than 2d. or 3d. a gross, and, indeed, may be only 1d. or 2d. I am sure my hon. Friend will accept that answer under that head. The second question he raises is this: Has the duty produced the results which were anticipated? In other words, has there been the increase in home production which was desired? On that question the answer frankly is, "Up to the present, no." But, after all, the duty has only been on one year, and I think my hon. Friend agrees that it would not be advisable to change it again this year.
    Mr. H. WILLIAMS: No, I merely said that I was not free to do it.
    Mr. HORE-BELISHA: I understood my hon. Friend to say that. He opened his remarks by saying that he was staking out a claim for next year, though in view of the subject we are now discussing he might, perhaps, have used the phrase, "blazing a trail" for next year. I am entirely in agreement with him. These matters must be closely watched. It may be that the explanation of the figures he gave is that the imports showed an abnormally heavy decline in 1932/1933. The fact, on the other hand, that the duty is not having the intended effect will be kept under review. That is the request my hon. Friend made to me, and obviously if a duty put on for a certain purpose does not achieve that purpose the Gov-
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    ernment would be very foolish indeed if it did not take all the facts into account.
    9.55 p.m.
    Mr. H. STEWART: The hon. Member who moved this Amendment really raises a much bigger issue than that of a penny box of matches. He asks us to accept the full Protectionist policy. I claim for agriculture certain advantages, in view of the special circumstances of the time, but I am glad to take this opportunity of making it perfectly clear that the outlook which sees nothing but the home market is one with which I cannot at any time agree. We are dealing with a product which is part of our considerable and increasing trade with Finland and Sweden, with which two countries we have recently made trade agreements. The object of the hon. Member is apparently to go behind the whole purpose of those agreements. He apparently sees no export trade, and the same appears to be true of the hon. Members who said "Hear, hear" during his speech. It amazes me that hon. Gentlemen should be so blinded by their Protectionist ideas as to wish to kill the already restricted export trade of this country. I will never be a party to a policy which seeks without good national reasons, still further to reduce the international trade of this country. [HON. MEMBERS: "Hear, hear."] I am very glad to have the support of the Liberal party, and I hope that I shall be supported by all parties, in seeking to prevent any further decline of our export trade. For that reason, I oppose the proposed new Clause not only in detail but in principle.
    9.56 p.m.
    Brigadier-General Sir HENRY CROFT: I must congratulate the hon. Member for East Fife (Mr. H. Stewart) on the truly magnificent way he has performed the circus operation of riding two horses at a time. I hope that his constituents of all shades of opinion will be satisfied with his attitude. He advances the argument that you must not safeguard the match industry of this country because there is a question of exports. If we try to work that out on the lines of Adam Smith, who was spoken about earlier in the afternoon, we shall find that it is a little difficult. The Financial Secretary to the Treasury has impressed upon us that we must not be in too much of a hurry and

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    that the change of duty has only been in operation for one year. I make a plea of him and of His Majesty's Government that, whereas there is clear evidence that the change of duty has not been sufficient and is not accomplishing the aim that it was sought to achieve this time last year, we shall not have long periods of waiting before action is taken. In many directions we see evidence at the present moment of failure in certain branches of the tariff. If that be admitted, I suggest that the Government should see whether something cannot be done at an early stage to put the matter right, because £300,000 worth of trade is £300,000 worth of trade. If it is going to put thousands of British workmen into employment for which they are well fitted, at no increased cost to the consumer, I urge the Government to act with vigour and not to wait for another year.
    Mr. H. WILLIAMS: The hon. Member for East Fife (Mr. H. Stewart), in a very strange speech, seemed to overlook the fact that no manufactured article for home consumption is supplied to such a high proportion from abroad as matches. I beg to ask leave to withdraw the Clause.
    Motion and Clause, by leave, withdrawn.

    NEW CLAUSE.—(Additional deduction in respect of wear and tear 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 word "one-fifth" were substituted for the word "one-tenth."—[Mr. Dingle Foot.]
    Brought up, and read the First time.
    10.0 p.m.
    Mr. DINGLE FOOT: I beg to move, "That the Clause be read a Second time."
    Hon. Members will see from the rather unusual juxtaposition of names that this is not a party question. It has received the support of Members in widely different parts of the House. I put down a similar Clause for discussion last year, but the Chancellor of the Exchequer was not able to give any concession. He expressed a good deal of sympathy with the aims of the Clause, and said that if he could see an opportunity of furthering the object which it had in view he would
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    be very glad to give the matter consideration. It is a little disappointing that in the easier financial circumstances of this year the right hon. Gentleman has not made a move in this direction. It may be that the subject of wear and tear and obsolescence allowances do not come within the principle of this year's Budget. If that be the case, I hope that the right hon. Gentleman will take an early opportunity of increasing the wear and tear allowances, and of overhauling the system of obsolescence allowances available for British industry.
    There is always a difference of opinion as to the effect of Income Tax upon industry. The view generally taken by Members of the Conservative party is that the whole tax is a burden upon industry and that the remission on the flat rate of Income Tax is likely to be immediately reflected in increased industrial activity. The other view, which I believe was taken by the Colwyn Committee, is that Income Tax is a tax upon profits generally speaking, and that it is not necessarily a burden upon industry. Whichever view one supports as regards the tax as a whole, there can be no question that that part of the tax which is imposed on money spent in acquiring new plant and machinery must inevitably be a burden upon industry.
    A year ago I quoted certain figures to the House showing the difference between wear and tear allowances in this country and those in some other European countries. As it is improbable in the highest degree that any Member of the House should recall anything I said 12 months ago, I venture to use those figures again. They were compiled by Mr. George Bonar, one of the leading manufacturers in my constituency, who has taken the trouble to cerrespond with various manufacturers in the same line of business in different European countries in order to get strictly comparable figures. These were the figures which he obtained: In this country up to 1932. the general allowances for wear and tear in most industries was 7½ per cent. on the declining value. In 1932, an extra 10 per cent. was added, raising it to 8¼ per cent. In the majority of industries the exact amount allowed is generally a matter for bargaining between the Inland Revenue authorities and the industries concerned, but I think I am right

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    in saying that the average is 8¼ per cent. of the declining value. In France, Belgium and Italy, the allowance is 10 per cent. upon the original value; in Germany it is 20 per cent. in the first year, and 8 per cent. of the declining value thereafter. It must be obvious that there is a very big difference between the allowances made in this country, and in the countries to which I have referred, and that in this respect British manufacturers competing in foreign and neutral markets must be under a very considerable handicap.
    Of course it is open to the right hon. Gentleman or the Financial Secretary to point out that the wear and tear allowances are not the whole story, and that there are also the obsolescence allowances to be taken into account. It is true that after a certain number of years, during which the wear and tear allowance has been made each year, when the machinery is finally disposed of, the obsolescence allowance will come into operation. But the obsolescence allowance only becomes effective if expenditure is actually incurred in replacing plant or machinery; if there is no replacement, there will be no allowance. I would ask the House to compare that with the system which prevails in, to take one example, the Commonwealth of Australia. In Australia, 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 whether he simply sells the machinery and leaves it at that. I think I am right in saying that within the past 12 months a very similar system to that which prevails in Australia has been adopted in Germany. Obviously in that respect manufacturers in certain other countries, at any rate, have a considerable advantage over our manufacturers.
    Since this matter was raised on the Finance Bill last year, the importance of the question of wear and tear and obsolescence has become even more obvious, because a great deal has been said both inside and outside this House on the question of Japanese competition. There are several factors which make Japanese competition a very serious matter from our point of view, but I do not think anyone would deny that one of the principal factors is the efficiency of the Japanese, and the fact that their machinery and
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    equipment are the most modern and up-to-date that they can possibly acquire, and it is obvious that there will have to be considerable replacements if British industry is to compete with them in the future.
    In this connection I would like to quote the following passage from a speech delivered at Glasgow on the 14th of this month by Mr. J. O. M. Clarke, the Chairman of Messrs. J. and P. Coats, Limited, in which he dealt with this question of Japanese competition:
    "He said that there had been a good deal of loose thinking, and still more loose talking, about this matter. He did not wish to appear dogmatic, but, as shareholders in one of the leading textile concerns in Japan, and as British manufacturers who met with Japanese competition in various part of the world, they were at least in a position to see both sides of the question. He was of the opinion that the competitive power of Japan was largely due to the efficiency with which her industries were conducted. It was all very well, he said, for textile manufacturers in this country to protest against competition from abroad, but one, and perhaps the chief, reason why this competition was now felt so severely was that there had been a reluctance on the part of many of our manufacturers, whether owing to shortage of capital or for other reasons, to bring their equipment up to date, and consequently British machinery makers had had to look elsewhere for their markets, and had vied with each other in supplying Japan and other manufacturers with the most modern machinery. There had, he said, been comparatively few radical changes in spinning machinery for the last 50 years, but, with so many newcomers in the field, he was confident that this state of affairs was not likely to continue, and anyone who wished to keep up in the race would require to set aside much larger sums for obsolescence in the future than had been done hitherto."
    That, at any rate, is an authoritative opinion, and I think all Members of the House will agree that, if our manufacturers are to meet competition from Japan and some other countries in neutral markets in the future, very large sums will have to be spent in the next few years on replacement of plant and machinery; and, if that is to happen, I hope that the Government, by increasing, if possible, the wear and tear allowances, and by overhauling our system of obsolescence allowances, will make that process as easy as possible for British manufacturers. I hope that the right hon. Gentleman will be able to accept this Clause as an earnest of what is to come, and in any event I hope that whoever replies for the

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    Government will be able to make some statement as to the future intentions, or at any rate as to the future hopes, of the Government on this highly important issue.
    10.12 p.m.
    Mr. H. WILLIAMS: I beg to second the Motion.
    This is one of the few occasions upon which I find myself in agreement with my Free Trade Friend the hon. Member for Dundee (Mr. Dingle Foot). I have always thought that it was in the interests of good trade and employment in this country that depreciation allowances should be as generous as possible. After all, in the long run, you can only depreciate 100 per cent. of the value of anything, and, except for certain risks of fraud, there would be a good deal to be said for every manufacturer fixing his own rate of depreciation. Of course, however, there are certain devices by which it would be possible to get round such a system, and therefore we have to fix these allowances partly by Statute and partly by those friendly negotiations between the representatives of various trades and the Somerset House officials. Everyone will agree that those officials are competent and considerate, but nevertheless the limits within which they can act are rather narrow.
    The right hon. Member for Hillhead (Sir R. Horne) has frequently drawn attention to the severe disability suffered by British industry through heavy taxation on the reserves of companies. In so far as profits are fictitious and not real—that is to say, in cases where the depreciation allowances are inadequate, and firms are compelled to declare for Income Tax purposes profits greater than their economic profits—a larger area of reserves is exposed to the burden of Income Tax. The Chancellor of the Exchequer has reduced that burden by one-tenth as a result of his wise administration and of his happy Budget, and to that extent the case is diminished, because the Income Tax is now 4s. 6d. in the pound instead of 5s. Nevertheless, anyone who discusses this matter with industrialists will see that the depreciation allowances are inadequate in many cases. It is sometimes argued that, if a machine has to be thrown out, an obsolescence allowance equal to what is left of the value that
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    cannot be obtained by the sale is credited, but that is not the same thing as having a uniform year-by-year depreciation allowance which is adequate. An obsolescence allowance may provide a large relief in a particular year, but that is not the same in its effect on costs of production as an adequate depreciation allowance throughout the years, and such adequate depreciation allowances are more likely to stimulate manufacturers to throw out obsolete plant and put in new plant promptly, and thereby raise the standard of living than anything else.
    I am not so optimistic as my hon. Friend the Member for Dundee, because, as this proposal would cost from £2,000,000 to £3,000,000, I cannot imagine the Financial Secretary saying "Yes" to-night, but I hope that the arguments will impress his mind and that of the Chancellor of the Exchequer. My right hon. Friend has had practical experience in the past of trying to get his own depreciation allowances increased, and I hope he still retains his sympathy for those who are still in that industry from which he has happily departed
    10.15 p.m.
    Mr. CURRY: I do not speak as an industrialist in this matter but as one whom industrialists sometimes—all too seldom—trust to negotiate these allowances. It is generally agreed among people who have first-hand knowledge that the depreciation allowances on the whole are not adequate to meet the situation. Indeed, I hope I shall have the Financial Secretary's agreement to this, that it is because the depreciation allowances proved to be inadequate that obsolescence allowances were introduced, and, indeed, it is obvious that, if wear and tear were allowed at an adequate rate, an obsolescence allowance would not come into the question at all. I only want to add my word in support of the Clause in order to bring this question before the Financial Secretary, that if and when this matter is being gone into we might with advantage consider the advisability of making these wear and tear allowances always upon the original cost of the plant and not upon the written-down value, because, as the wear and tear written off in the accounts is in excess generally of the wear and tear allowed in the computation, you get an increasing disparity between the accounts and the assess-

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    ments, and you get a disproportionate burden placed upon industry by these inadequate allowances.
    Another point that I would like to suggest for consideration is that we are now looking forward to, and indeed doing our utmost to encourage, the development on a large scale of the lighter industries of the country. That will mean the introduction more and more of lighter machinery, which depreciates faster, and it is obvious that, if we are going to use on any large scale machinery the life of which is shorter than was the life of machinery when these allowances were first fixed, we are going to get great obsolescence allowances with a greater disparity between assessments and profits, and, what is more, and what I think is bad for taxation, an unequal burden from year to year on the taxation borne by a particular industry.
    10.18 p.m.
    Mr. HORE-BELISHA: I wish that the hon. Member who moved the Clause had put the matter in perspective. When the rate of Income Tax was increased from 4s. 6d. to 5s. in 1931, in order to afford some compensation the Chancellor of the Exchequer proposed to increase by 10 per cent. the wear and tear allowance. This year the Income Tax is being reduced and, therefore, normally this concession, which was a compensatory one, should be withdrawn altogether. The hon. Member chooses this moment, not to thank the Government for not having withdrawn it, but to ask them to double it. The wear and tear allowance is calculated to write off the prime cost of machinery and plant by the end of its physical life. Therefore, by the end of the physical life of any plant or machinery the trader has been allowed the whole of the cost and, if he desires to make away with the plant in the meantime and renew it, he will get the obsolescence allowance.
    Mr. DINGLE FOOT: Only if he replaces it.
    Mr. HORE-BELISHA: Certainly. What else would the hon. Member expect? He has the wear and tear allowance while the machinery is depreciating and he gets back the whole of the cost that way. If he scraps it, he gets obsolescence allowance if he replaces it. The whole of the physical life of the machinery and its capital value are thus secured. Some
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    complaint has been made about the rate of allowance in this country as compared with other countries. I would, however, point out to the hon. Gentleman that the rate is subject to appeal. In practice the rate is commonly fixed with industry, and if an individual is aggrieved he has an appeal to the Income Tax Commissioners. If, on the other hand, a whole class of traders are aggrieved, they have an appeal to the Board of Referees. Whatever the merits of this proposal may be—and I am sure the whole House will agree that the proposal would not have the decisive effect contemplated by the hon. Gentleman in his speech—the cost of conceding this Clause would be £2,000,000. That, of course, is quite out of the question at the present time. Therefore, on financial grounds, as well as to some extent upon grounds of merit, so far as the merit must be related to the arguments put forward by the hon. Gentleman, I must ask the House to reject this proposal.
    Question, "That the Clause be read a Second time," put, and negatived.

    CLAUSE 1.—(Alteration of customs duties on colonial sugar, molasses, &c.)
    10.21 p.m.
    The SECRETARY of STATE for the COLONIES (Sir Philip Cunliffe-Lister): I beg to move, in page 2, line 33, to leave out "and," and to insert:
    "exceed three hundred and seventy-five thousand tons and shah not in any."
    The effect of this Amendment would be to increase during the current year—and during the current year only—the number of sugar certificates by 15,000, and the reason for the Amendment is to meet the particular case of Mauritius, which would otherwise actually suffer a loss under the change-over in the two systems. I can put the point very briefly. The House will remember that when the Chancellor of the Exchequer explained the proposal to the House, the object of the changeover system was to give to each Colony exactly the same financial benefit as it would have enjoyed if the original system of both the flat rate of preference and the certificate had existed, but he and I found, on going into the case of all the different colonies in detail, that a change over on that basis would actually inflict injustice in the case of Mauritius, and that Mauritius would

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    get less than she would have got if the original system had remained in force. That is so for two reasons. In the first place Mauritius happens to have had exceptionally small sugar imports into the United Kingdom in the last two years, and in the second place, there is an abnormally large carry-over in Mauritius. She has retained in Mauritius a larger amount than the ordinary carry over in an ordinary year. That she would naturally do in anticipation that the five-year plan, if I may so put it, would have run for the whole five years. Applying both those tests you get, as a matter of fact, roughly the same result that she is deprived, or would be deprived if the Clause went through in its original form, of getting £l a ton on about 45,000 tons. By putting in this special provision for this one year only she will be able to recoup that by having 15,000 certificates, and therefore will come out level on the deal which was the object the House had in view in making the change.
    Amendment agreed to.
    Further Amendment made: In page 2, line 33, leave out "years," and insert "year."—[Sir P. Cunliffe-Lister.]

    CLAUSE 25.—(Power of Treasury to guarantee loans issued to redeem existing guaranteed loans.)
    10.26 p.m.
    Mr. SPENS: I beg to move, in page 15, line 32, to leave out from the beginning, to the end of line 35, and to insert:
    "Provided that—

    (a) a conversion loan shall not be guaranteed under this Section unless—

    (i) the amount required in each year to pay the interest on the conversion loan is less than the amount which would have been required in the year beginning at the date of the issue of that loan to pay the interest on the loan to be redeemed; and

    (ii) the Treasury are satisfied that the substitution of the guarantee of the conversion loan for the guarantee of the loan to be redeemed will benefit the Exchequer; and

    (b) where a conversion loan has been guaranteed under this Section the Treasury Shall not guarantee another conversion loan issued for the purpose of providing for the redemption of the first-mentioned conversion loan."

    The new proviso which we desire to insert has been drafted with the object of covering a point which we raised in Com-
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    mittee, namely, that where guarantee to a conversion loan is given, the result shall not be that a potential charge on the Exchequer for the sum required to pay the service of the loan shall be increased without reference to this House and that it shall not be possible without reference to this House for a guaranteed loan to go on being converted and converted and a new guarantee given for each conversion without reference to this House. The acceptance of the Amendment would meet two of the objections which we took to the Clause in Committee.
    10.27 p.m.
    Mr. ALBERY: I beg to second the Amendment.
    The Clause covers only part of those things which I desire to see covered, and I very much hope that it may be accepted by the Chancellor of the Exchequer or the Financial Secretary to the Treasury, whoever replies. If that be so, it would be ungracious not to be grateful for small mercies, but I cannot forbear to mention once more that it seems to me entirely undesirable that the Treasury should in any circumstances be given the power, without confirmation from this House, of guaranteeing a loan; in other words, of pledging the credit of this country. In the ordinary way, when money is needed for the purposes of our own country, it is customary to come to the House and get confirmation and sanction. Therefore, it seems to me to be more necessary and more important that when & guarantee is needed for some other country—it may be a Dominion or it may be a foreign country—such sanction should be in the power of the Treasury without the necessity to come to the House for confirmation. When it comes to a question of guaranteeing a conversion loan for a Dominion, I can conceive circumstances in which it might, perhaps, be somewhat difficult to arrange the exact terms in reference to the money market and to have the matter hanging over while it was confirmed by the House. There may be some excuse in the case of a Dominion, but I can see none in the case of a foreign country. I very much regret that the Chancellor of the Exchequer has not seen his way to say that, before the guarantee of this country is given to a conversion loan made on behalf of a foreign country, it should first receive the sanction of this House.
    10.29 p.m.
    Mr. CHAMBERLAIN: I have had an opportunity of discussing with my hon. Friends the best way of meeting the points which they desire to meet in their Amendment, and I have to say that I feel able to accept the Amendment. In regard to the other observations of my hon. Friend who has just spoken, I should like to remind the House that the whole matter is governed by the proviso:
    "Provided that no guarantee shall be given under this section unless the Treasury are satisfied that the substitution of that guarantee for the guarantee of the loan to be redeemed will benefit the Exchequer."
    That is the governing part of the Clause. Although I have not been able to meet all the points put forward by my hon. Friends I hope they will be satisfied that I have gone some way to meet them.
    Amendment agreed to.

    CLAUSE 27.—(Repeal of land value tax.)
    10.30 p.m.
    Sir R. HAMILTON: I beg to move, in page 16, line 32, to leave out "section twenty-eight," and to insert:
    "sections eleven to fifteen, inclusive, twenty-seven to twenty-nine, inclusive, and thirty-one to thirty-five, inclusive."
    The object of this Amendment is to retain not only Section 28 but the other Sections relating thereto; the whole of the Sections of the Finance Act of 1931 which provide for a valuation of land to be made on which land tax is to be based. It will be observed that the Amendment refers only to the retention of the valuation sections. There has been a certain amount of discussion on this matter already and I do not intend to detain the House at any length. What we are asking the House to agree to is the retention of the Sections which deal particularly with and provide for the valuation of land. When the matter was before the House on a previous occasion no real explanation was offered as to why these Sections were swept away. A certain amount of ridicule was poured upon them and there was a suggestion that it was quite impossible for a valuation to be made on the system proposed, that it was ridiculous to suppose that anyone could arrive at the value of the site of the Savoy Hotel without the Savoy Hotel being there. It is quite easy to make amusing suggestions of this kind but it must be remembered that these valuation Sections were constructed with the best
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    advice at the disposal of the Government and it must be assumed that the advisers of the Government would not allow a system to be put into an Act of Parliament which was clearly and absolutely unworkable. Therefore, the House has a right to know the definite grounds upon which the Chancellor of the Exchequer says that these Sections are impossible and unworkable.
    I am not going into the question as to why these Sections were originally retained and are now swept away. That is another matter altogether. What I am concerned with is to ask the Chancellor to let the House know clearly why these Clauses are unless for the purpose of any valuation. The right hon. Gentleman says that Clause 28 is quite sufficient for his purpose. That Clause merely allows the Commissioners to see the records of land transactions. Undoubtedly that is a useful factor in arriving at a valuation, but it is a very small factor in the whole problem which has to be considered by any valuer in attempting to arrive at the valuation of a particular site. It was with the object of enabling the valuer to arrive at that value on a basis that was clearly set out that these valuation Clauses were included. They are now to be swept away. I hope the Chancellor will let the House clearly understand, apart from all political considerations—I am not touching on those at all—why it is that a valuation system built up as this was, is unsuitable for retention for the purpose of valuing the land of the country.
    10.34 p.m.
    Sir P. HARRIS: I beg to second the Amendment.
    Even at this eleventh hour I hope the Government will be able to give us, if not some assurance that this valuation should be kept in being for future use, some promise that the Chancellor has in mind the provision of a form of valuation of the land separate from its improvements. The Liberal party throughout the country has for years been unanimous on the matter. I challenge any Liberal Member, whether he belongs to the Government or is a supporter on the opposite side, to get up and say that the Liberal party in his constituency is not in favour of valuation and the principle of land taxation. It has been a cardinal principle of the Liberal party for the last 30 years. It is something that we have

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    worked for and believed in, and to which we attach the greatest importance. It is rather mean for the Government to take advantage of these special circumstances in order to repeal something to which we attach such great importance, and to do so after the statement last year of the Lord President of the Council, leader of the Conservative party, that he would not take advantage of a majority obtained through a national appeal in order to repeal the tax, much less the valuation.
    This is the second time we have been let down badly on the excuse of a Coalition Government. We claim that it is in the national interest, quite apart from the form of tax, that there should be a Doomsday Book in which is recorded the valuation of the land of the country. Great play has been made by various interests with the argument as to the difficulty of making a valuation of the unimproved value of land, but such a principle has been in practice for years in almost every part of the British Dominions. In New Zealand and Australia, particularly in Sydney, they have been able to devise schemes which have worked effectively, have caused no injustice and have presented no exceptional difficulties. It is interesting to find Tory after Tory in favour of some form of land taxation in theory, but always opposed to any kind of land taxation in practice. We had a remarkable and impressive speech on this subject from the Noble Lord the Member for Hastings (Lord E. Percy), who has had considerable experience of the management of large estates and is conscious of the difficulties. He put in a strong plea that the Government should do something to deal with this problem of land taxation. Speaking on 5th June, he said:
    "In spite of this unpopularity it is the business of a National Government I believe to produce a constructive reform of the whole system of land taxation, which shall ensure that land shall pay its fair share, shall ensure especially that the fortunate landlord who earns—put the emphasis on 'earns'…"—["OFFICIAL REPORT, 5th June, 1934; col. 861, Vol. 290.]
    Mr. SPEAKER: I must point out to the hon. Baronet that the question of the taxation of land values is not involved in this Amendment.
    Sir P. HARRIS: I quite realise that, Sir, and I was going to point out that the Noble Lord pressed on the Government the importance of having a policy for land taxation, and that the first step towards any form of land taxation in the future must be land valuation. Land taxation without valuation is not a practicable proposition. You cannot value land apart from buildings, for either taxation or assessment purposes, unless by a long and arduous process of valuation. Time is the essence of the matter in connection with any form of valuation, and the first step to enable any future Government next year or the year after to tackle this problem is to put in operation without delay some form of valuation. Time is vital. While we wait, values of land are constantly rising, especially in great centres like London. In London during the last 10 years there has been an increase of over 1,000,000 in the population which has enormously added to the value of land and turned ordinary agricultural land into valuable urban properties, making great fortunes for the owners.
    Take the great arterial roads stretching out north, south, east and west. Let any hon. Member take his car along the Great West Road, the Kingston by-pass or the Great North Road, and he will see values created by the expenditure of public money, particularly through the Ministry of Transport with the assistance of local authorities. As the Noble Lord pointed out, these great improvements are causing enhanced values in which the State, the community, has a right to share. But in the absence of any form of valuation it is impossible, either from the point of view of rating or from the point of view of taxation, for the State and the community to have that share.
    I suggest that in these difficult times, with so many economic problems to solve, at any rate the machinery of valuation should be set up. It is, after all, a machinery Clause which we are anxious to retain; it is the Clause which provided the organisation to value the land, so that if any Government or local authority wanted to deal with the value created, there should be the machinery in existence to deal with it. The plea put forward, with some reason, two years ago was that valuation was a costly business and that in the state of the national finances economy was vital, and to secure that economy it was wise to

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    suspend the operation of this expensive machinery. That excuse no longer holds good, and I suggest that the Government have a responsibility to face up to this question. The local authorities are clamouring for something to be done in this direction, because this value is required not merely for the purpose of the State and taxation, but is asked for by local authorities who desire to see a fairer distribution of the rate burden.
    Only in 1930 the Middlesex County Council, by no means a very progressive body—I think it is fair to say that it is generally Conservative in character—passed, by a majority of 39 to 20, a resolution that in its essence required some form of valuation of the land apart from the improvements. It is pointed out that during the previous 10 years no less a sum than £6,000,000 had been spent on creating some 70 miles of roadway, that the owners of the land who had frontages gained the free gift of £1,750,000 by being saved the cost of road making, and at the same time it was estimated, by a careful calculation, that these 70 miles of roadway had added some £13,500,000 to the value of the owners' property jutting on these new roads. Does it not seem reasonable that something should be done to value this land, so that the community should know how much—[Interruption.] My hon. Friend opposite does not want to hear this, because his record has been so variable on almost every problem that he does not like to be reminded of it.
    Mr. H. STEWART: My position with regard to this tax is perfectly clear. I am with the hon. Member with regard to valuation, but my complaint has been with regard to this method of taxing land values, which I contend is not and never has been a Liberal policy.
    Sir P. HARRIS: Then I have no doubt that my hon. Friend will vote for us in the Division Lobby and express his approval of the course that we are pressing on the Government, and no doubt he will add his great and undoubted eloquence to our plea to the Government to reconsider this question. The county of Middlesex is typical of other counties. They see these enormous values being created, due to the new and great development of the country by the development of motor transport, by the immense expenditure, rightly or wrongly, on roads, by the development of land hitherto of a wholly agricultural value
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    into important urban sites, bringing immense accretions of fortune to their fortunate owners. In the county of Middlesex on the sites referred to, it was pointed out that land had jumped up in four or five years from £50 an acre to £300, £400, £500, and even £600 an acre. Does it not seem right that the Chancellor of the Exchequer above all people, as custodian of the national wealth, should see that there is some proper machinery in existence dealing with these enormous values created by the activity of the community, and that it should be available for rating purposes. I know the Chancellor of the Exchequer takes shelter behind the plea that it is not in the Government's mandate. It is not in the Government's mandate to repeal this legislation. An hon. Member says that the Government had a doctor's mandate, and that it includes everything. Then it ought to include the right of the Government to face up to this problem. The right hon. Gentleman had no mandate to take out of the pigeon-holes of the Tariff Reform League of the Tory party a fullblown ready-made tariff policy.
    It is sheer hypocrisy to take cover behind the plea that the Government had no mandate. We are not asking anything unreasonable. All we ask is that the law should be left unchanged, that this should be left on the Statute Book in a state if necessary of suspended animation. It is creating no great controversy, and there is no issue of the taxation of land values arising. All we ask is that the valuation of land values should remain intact so that if opportunity arises a Government should be able to make use of its provisions and set the machine in operation, so that some of these undoubted scandals, the result of a faulty land system, can be dealt with. This is something asked for by over 100 local authorities. I do beg the Chancellor of the Exchequer at any rate to give us some promise that he realises the importance of this issue and that he is prepared to bring forward some other policy next year for dealing with this matter.
    10.50 p.m.
    Mr. CHAMBERLAIN: The speech which the hon. Baronet has addressed to us has completely ignored the real policy and meaning of the land taxation to which the valuation Clauses, which it is now sought to repeal, are appropriate.

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    The most remarkable thing is that the Liberal party has put down an Amendment maintaining the present system of valuation, but leaving in complete doubt what system of taxation was to be imposed on that system of valuation. You cannot separate the system of valuation from the precise form of taxation you intend to found upon it. I need hardly remind the House, for example, that the valuation scheme of the right hon. Member for Carnarvon Boroughs. (Mr. Lloyd George) introduced in 1910 was not the same as that proposed by Lord Snowden for an entirely different form of taxation. The hon. Baronet has not been arguing in favour of the tax proposed by Lord Snowden. He has been arguing in favour of the increment tax. His whole illustration—the arterial roads that radiated out north, south, east and west—
    Sir P. HARRIS: On a point of Order. I accepted the Ruling of the Chair and did not argue about the tax, but only about the valuation. I was limited by that Ruling, and I suggest that the right hon. Gentleman should be equally limited.
    Mr. CHAMBERLAIN: I shall be called to order when I transgress the Rules. I am commenting on the argument of the hon. Baronet, who spoke of arterial roads that radiated out north, south, east and west and raised the value of the land adjacent, and said that it was a monstrous thing that we were not introducing some system of valuation in order that a contribution might be levied upon the increased value of the land brought about by the construction of these arterial roads. That was his argument. Let me point out to him, although it may be unnecessary to the rest of the House, that in order to impose an increment value tax we want a different kind of valuation from the one we are considering. We must have some sort of datum line: a valuation at a particular date and another valuation at a subsequent date, and the difference between the two would give us the amount of appreciation upon which the increment value tax would be levied. That is not the system of valuation we have here at all. The reason why it is useless to retain these Clauses dealing with a particular system of valuation is that even the hon. Baronet himself does not want to per-0
    160
    petuate the form of the tax which is proposed, and obviously, therefore, if we are not going to deal with the tax we had better leave the valuation as well as the tax for those who are going to impose the tax, and who will know what kind of valuation they want in order to found their tax upon it.
    The whole question is really one of common sense. I am not going to argue the merits of a particular tax or a particular system of valuation. The two things go together, What I do say is that nobody has any doubt that there is not the slightest prospect of imposing the tax during the lifetime of the present Government, and that therefore whether we leave the Clause in its present form under which it is for Parliament to name a time when it comes into operation, or whether we repeal it, makes no practical difference except that so long as these Clauses are on the Statute Book they constitute a certain hindrance to the flow of credit into the agricultural system, and that it is desirable, if we are not going to make use of them, that we should remove this hindrance to the proper development of land and allow credit to flow freely into it if it is desired. I am not proposing to deal with the merits of the case at all. That is not really in question. It is only a question whether it is desirable to remove this encumbrance from the Statute Book, but it leaves the situation open to any future Government to bring in any form of land taxation that they may think proper together with an appropriate system of land valuation.
    10.59 p.m.
    Sir S. CRIPPS: I really must protest against the attitude taken by the hon. Baronet the Member for South-West Bethnal Green (Sir P. Harris). He and his friends were the people partly responsible for this National Government, and for him now to turn round and complain about what was quite obvious when he took part in getting them there that the Government would do, really does not seem quite right. He supported the doctor's mandate, and I suppose he understood what it meant when he supported it at the last election, and I really cannot believe that even the Liberal party were so simple as to think that if, with their assistance, a vast Tory majority came into this House, they would not wipe out the land valua-

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    tion Clauses as well as the Clauses for the taxation of land values. I do not on this occasion wish to waste the time of the House, and have only two observations to make. First of all, I do not agree with the right hon. Gentleman as regards the connection between valuation and taxation. If the valuation is a proper one it can have no connection with the sort of tax that is going to be imposed. I cannot believe the right hon. Gentleman thinks that any Government would "wangle" the valuation to suit the type of taxation it wants.
    There is only one true and proper basis for valuation, irrespective of what is the tax to be afterwards imposed. The basic value of the site must be arrived at by the best means available, and that is only a question of threshing out what are the proper matters to be taken into account, as was threshed out in this House three years ago. I quite appreciate that it was a basis which the right hon. Gentleman and his friends did not in the least agree with, but it was not because of the form of taxation that they did not agree with it. They did not agree with it as a means of valuation, and there really is no connection between the question of taxation and valuation in that sense. If I may say so with great respect to the right hon. Gentleman, it is a very poor argument to say that the valuation is being dropped because some other method of taxation may be adopted in the future. The valuation is being dropped because the Conservative party do not like it. They made it quite clear, when it was going through the House, that at the earliest opportunity they would repeal it—they said so—and this is their earliest opportunity. That is the truth of the whole matter. The only surprising thing about it is that the right hon. Gentleman the Prime Minister, having been challenged to be present, has on every occasion when this matter has been discussed, thought that discretion is the better part of valour.
    11.3 p.m.
    Mr. CURRY: I am rather surprised, after the speech of the Chancellor of the Exchequer, that he did not accept the suggestion contained in the Amendment, because I was struck by the points of agreement between him and my hon. Friends who moved the Amendment. The
    162
    points of agreement are far more numerous than they used to be. The Chancellor indicated as his overriding objection, as the real necessity for doing away with this valuation Clause, the fact that it was a deterrent to the introduction of capital into the agricultural industry. I understood that this valuation Clause did not apply to agricultural land where the agricultural value was the higher, so if that is the overriding objection to the maintenance of this Clause surely it cannot be a valid objection to meeting the request of the Amendment. What made me say the points of agreement are far more numerous now than they used to be is the fact that one of the first Acts passed by this Parliament was a land tax Act. The Town and Country Planning Act, 1932, for the first time placed a very heavy increment duty upon the owners of land which had been improved by developments carried out by a public authority. No less than 75 per cent. of the betterment created by the activities of a local authority is taken by the State to-day under an Act passed in this Parliament. After that, how can it be said that there is any real difference of opinion in any section of the House as to the principle of land valuation and taxation?
    If this Parliament has said that 75 per cent. of the betterment must be taken, how can you determine how the 75 per cent. is to be calculated if the machinery of valuation is taken away? The reason why this valuation Clause is being deleted from our laws is that the Conservative party have become dominant in the National Government and are determined to entrench the landed interests behind them. Otherwise, what is the reason for the abolition of this valuation? The Chancellor of the Exchequer said that the real reason is that the Clause is acting as a deterrent to the introduction of capital into the agricultural industry, but, as I understand it, the valuation Clauses do not apply to agricultural land, where the valuation is higher. How can it be said that it is a deterrent to the introduction of capital into agriculture? What other reason is there, if that reason is not valid, except that the Conservative party has become paramount within the National Government, and that we are no longer faced with a National Government but with one that is determined to protect the landed interests?

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    It is against that attitude that we raise our protest at this eleventh hour—and just after. After the reply of the Chancellor of the Exchequer I feel that to go on any further is to waste the time of the House. [HON. MEMBERS: "Hear, hear!"] The cheers and the jeers of hon. Members will not remove from my mind the conviction that the Conservative party will be forced within our lifetime, despite its regard for tariffs as a revenue-producing instrument, to have regard to the taxable capacity of the land.
    11.7 p.m.
    Mr. COCKS: I would like to say a word in defence of the Prime Minister, and I am very sorry that he is not here to hear it. When the Debate took place before on this matter, the Prime Minister had to go away to listen to Herr Kreisler. I do not know what artist has taken him away to-night to prevent him facing the music in this House. There is a good deal to say for him. I feel that in assenting to this proposal he has been actuated by the highest sense of duty. It is true that:
    "Not once or twice in our rough island story,
    "The path of duty was the way to glory,"
    but I am sure that that consideration had no weight with him, but that he was moved by considerations of pure duty, and not by personal reasons. I am sure for personal reasons he would rather that the original proposition should remain on the Statute Book.
    There are two personal reasons why I am sure the Prime Minister would want to keep the original tax. First of all it is the one solitary constructive achievement of the Prime Minister's greatest friend, the late Lord Snowden—[Laughter]—not late but gone before. The life-long friendship which has existed between those two statesmen has long been the wonder and admiration of everybody who has been able to see it. We know that for years they wandered hand-in-hand in opposition and in obscurity. Hand-in-hand they have risen to power and position. Hand-in-hand they entered Downing Street and set up house there side by side. Nobody can say that any envy or jealousy ever marred that perfect association for mutual self-admiration. Shades of Damon and
    164
    Pythias, and David and Jonathan! They were not in it with the Prime Minister and the Noble Lord. And yet, because of his great sense of duty, the Prime Minister, like some Spartan father, has had to deal two hurtful blows at his ancient crony. In the first place, there was the painful business of the British Broadcasting Corporation, when, for reasons which we all appreciate, a member of the Noble Lord's household had to give place to the biographer of the Prime Minister; and now there is the question of these taxes. Never since the time when Shy-lock had to give up both his ducats and his daughter has such a double loss fallen on an eminent, if over-rated, financier.
    The second reason which would have made the Prime Minister very much want to keep these taxes on the Statute Book is that they are so typical of his policy. They meant nothing; they have brought in nothing; and, in my opinion, they were never intended to bring in anything; and being, as the Chancellor of the Exchequer said, absolutely useless and empty, they are naturally very dear to the Prime Minister's heart. I believe that when these duties were brought in in 1931 they were brought in for a special purpose. I do not think they were ever intended to be actually operated. It was stated at the time that it would be two years before they could become operative, and nobody ever thought in 1931 that that Labour Government would still be in office in 1933. If Lord Snowden had intended them to operate, he would have brought them in in 1930, when there might have been some chance, however slender, of their being put into force in 1932. But no; they were brought in merely as a smoke-screen to disguise what was going on behind the scenes—all the plotting and planning and conspiring to create a bogus national crisis and a bogus National Government. All the dust and controversy which accompanied their passage through this House simply hid all those things which were going on. All those little dinners which took place, whose hosts have since been rewarded with peerages, might have attracted far more attention and suspicion if it had not been for this controversy about the land taxes. Now, having done their work, the Government lets them go. The Financial Secretary the other day described these duties as museum pieces; but no museum

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    would ever want to preserve the robe of Judas or the tinsel coronet of Snowden. The Chancellor of the Exchequer himself does not want to preserve them on the Statute Book, even as a memorial and proof that there once existed in this country a worse Chancellor of the Exchequer than even himself. So let them go, down the hurrying stream of
    Time, which will bear away to merciful oblivion, both the memory of these Clauses and of the two renegades who begot them.
    Question put, "That the words proposed to be left out stand part of the Bill."
    The House divided: Ayes, 222; Noes, 48.

    Division No. 293.]

    AYES.

    [11.15 p.m.

    Acland-Troyte, Lieut.-Colonel

    Edmondson, Major Sir James

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

    Agnew, Lieut.-Com. P. G.

    Eillston, Captain George Sampson

    McKie, John Hamilton

    Albery, Irving James

    Elmley, Viscount

    McLean, Major Sir Alan

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

    Emrys-Evans, P. V.

    Makins, Brigadier-General Ernest

    Allen, William (Stoke-on-Trent)

    Essenhigh, Reginald Clare

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

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

    Evans, Capt. Arthur (Cardiff, S.)

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

    Anstruther-Gray, W. J.

    Everard, W. Lindsay

    Marsden, Commander Arthur

    Atholl, Duchess of

    Fleming, Edward Lascelles

    Mason, Col. Glyn K. (Croydon, N.)

    Balley, Eric Alfred George

    Fraser, Captain Sir Ian

    Mayhew, Lieut.-Colonel John

    Baldwin, Rt. Hon. Stanley

    Fremantle, Sir Francis

    Milne, Charles

    Balfour, Capt. Harold (I. of Thanet)

    Fuller, Captain A. G.

    Mitcheson, G. G.

    Banks, Sir Reginald Mitchell

    Ganzoni, Sir John

    Molson, A. Hugh Elsdale

    Barclay-Harvey, C. M.

    Gillett, Sir George Masterman

    Morris, Owen Temple (Cardiff, E.)

    Barrie, Sir Charles Coupar

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

    Muirhead, Lieut.-Colonel A. J.

    Barton, Capt. Basil Kelsey

    Gluckstein, Louis Halle

    Munro, Patrick

    Bateman, A. L.

    Glyn, Major Sir Ralph G. C.

    Nation, Brigadier-General J. J. H.

    Beauchamp, Sir Brograve Campbell

    Goff, Sir Park

    Nicholson, Godfrey (Morpeth)

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

    Goldie, Noel B.

    O'Connor, Terence James

    Belt, Sir Alfred L.

    Gower, Sir Robert

    O'Donovan, Dr. William James

    Blindell, James

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

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

    Boulton, W. W.

    Grenfell, E. C. (City of London)

    Patrick, Colin M.

    Bower, Lieut.-Com. Robert Tatton

    Grimston, R. V.

    Pearson, William G.

    Bowyer, Capt. Sir George E. W.

    Guinness, Thomas L. E. B.

    Peat, Charles U.

    Braithwaite, J. G. (Hillsborough)

    Gunston, Captain D. W.

    Penny, Sir George

    Brass, Captain Sir William

    Hacking, Rt. Hon. Douglas H.

    Petherick, M.

    Broadbent, Colonel John

    Hales, Harold K.

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

    Brocklebank, C. E. R.

    Hanley, Dennis A.

    Potter, John

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

    Hannon, Patrick Joseph Henry

    Procter, Major Henry Adam

    Brown, Ernest (Leith)

    Harvey, George (Lambeth, Kenningt'n)

    Raikes, Henry V. A. M.

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

    Haslam, Henry (Horncasfle)

    Ramsay, T. B. W. (Western Isles)

    Browne, Captain A. C.

    Haslam, Sir John (Bolton)

    Ramsden, Sir Eugens

    Buchan-Hepburn, P. G. T.

    Headlam, Lieut.-Col. Cuthbert M.

    Rankin, Robert

    Burghley, Lord

    Hellgers, Captain F. F. A.

    Reed, Arthur C. (Exeter)

    Burnett, John George

    Henderson, Sir Vivian L. (Chelmsf'd)

    Reid, Capt. A. Cunningham-

    Butt, Sir Alfred

    Hopkinson, Austin

    Reid, David D. (County Down)

    Campbell, Sir Edward Taswell (Brmly)

    Hore-Belisha, Leslie

    Reid, William Allan (Derby)

    Campbell-Johnston, Malcolm

    Hornby, Frank

    Remer, John R.

    Caporn, Arthur Cecil

    Horsbrugh, Florence

    Renwick, Major Gustav A.

    Carver, Major William H.

    Howitt, Dr. Alfred B.

    Rhys, Hon. Charles Arthur U.

    Gazalet, Thelma (Islington, E.)

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

    Rickards, George William

    Chamberlain, Rt. Hon. N. (Edgbaston)

    Hudson, Robert Spear (Southport)

    Robinson, John Roland

    Cochrane, Commander Hon. A. D.

    Hume, Sir George Hopwood

    Rosbotham, Sir Thomas

    Colfox, Major William Philip

    Hunter, Capt. M. J. (Brigg)

    Ross Taylor, Walter (Woodbridge)

    Colman, N. C. D.

    Hunter-Weston, Lt.-Gen. Sir Aylmer

    Runge, Norah Cecil

    Colville, Lieut.-Colonel J.

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

    Russell, Alexander West (Tynemouth)

    Cook, Thomas A.

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

    Russell, Hamer Field (Sheffield, B'tside)

    Cooper, A. Duff

    James, Wing.-Com. A. W. H.

    Rutherford, Sir John Hugo (Liverp'l)

    Copeland, Ida

    Joel, Dudley J. Barnato

    Salmon, Sir Isidore

    Courtauld, Major John Sewell

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

    Salt, Edward W.

    Courthope, Colonel Sir George L.

    Jones, Lewis (Swansea, West)

    Sandeman, Sir A. N. Stewart

    Cranborne, Viscount

    Ker, J. Campbell

    Sanderson, Sir Frank Barnard

    Craven-Ellis, William

    Lamb, Sir Joseph Quinton

    Selley, Harry R.

    Crooke, J. Smedley

    Latham, Sir Herbert Paul

    Shepperson, Sir Ernest W.

    Crookshank, Col. C. de Windt (Bootle)

    Law Sir Alfred

    Simmonds, Oliver Edwin

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

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

    Smiles, Lieut.-Col. Sir Walter D.

    Croom-Johnson, R. P.

    Leech. Dr. J. W.

    Smith, Bracewell (Dulwich)

    Cruddas, Lieut.-Colonel Bernard

    Leighton, Major B. E. P.

    Smith, Sir J. Walker- (Barrow-in-F.)

    Culverwell, Cyril Tom

    Lennox-Boyd, A. T.

    Smith, Sir Robert (Ab'd'n & K'dine, C.)

    Dalkeith, Earl of

    Lindsay, Noel Ker

    Somervell, Sir Donald

    Davies, Edward C. (Montgomery)

    Lister, Rt. Hon. Sir Philip Cunliffe-

    Somerville, D. G. (Willesden, East)

    Denman, Hon. R. D.

    Llewellin, Major John J.

    Spencer, Captain Richard A.

    Dickie, John p.

    Lloyd, Geoffrey

    Spens, William Patrick

    Dixey, Arthur C. N.

    Locker-Lampson, Com. O. (H'ndsw'th)

    Stanley, Rt. Hon. Lord (Fylde)

    Dixon, Rt. Hon. Herbert

    Loder, Captain J. de Vere

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

    Drewe, Cedric

    Loftus, Pierce C.

    Stones, James

    Duckworth, George A. V.

    Lovat-Fraser, James Alexander

    Storey, Samuel

    Duggan, Hubert John

    Lyons, Abraham Montagu

    Stourton, Hon. John J.

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

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

    Strauss, Edward A.

    Strickland, Captain W. F.

    Turton, Robert Hugh

    Wills, Wilfrid D.

    Sugden, Sir Wilfrid Hart

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

    Windsor-Clive, Lieut.-Colonel George

    Sutcliffe, Harold

    Warrender, Sir Victor A. G.

    Womersley, Sir Walter

    Thompson, Sir Luke

    Wayland, Sir William A.

    Worthington, Dr. John V.

    Thomson, Sir Frederick Charles

    Wedderburn, Henry James Scrymgeour

    Train, John

    Whyte, Jardine Bell

    TELLERS FOR THE AYES.—

    Tufnell, Lieut.-Commander R. L.

    Williams, Herbert G. (Croydon, S.)

    Major George Davies and Dr.

    Morris-Jones.

    NOES.

    Acland, Rt. Hon. Sir Francis Dyke

    George, Major G. Lloyd (Pembroke)

    McEntee, Valentine L.

    Attlee, Clement Richard

    George, Megan A. Lloyd (Anglesea)

    Maclean, Nell (Glasgow, Govan)

    Banfield, John William

    Greenwood, Rt. Hon. Arthur

    Mainwaring, William Henry

    Batey, Joseph

    Grenfell, David Rees (Glamorgan)

    Mallalieu, Edward Lancelot

    Bernays, Robert

    Griffith, F. Kingsley (Middlesbro', W.)

    Mander, Geoffrey le M.

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

    Groves, Thomas E.

    Milner, Major James

    Buchanan, George

    Hall, George H. (Merthyr Tydvil)

    Owen, Major Goronwy

    Cape, Thomas

    Harris, Sir Percy

    Rothschild, James A. de

    Cripps, Sir Stafford

    Holdsworth, Herbert

    Salter, Dr. Alfred

    Curry, A. C.

    Janner, Barnett

    Sinclair, Maj. Rt. Hn. Sir A. (C'thness)

    Daggar, George

    Jenkins, Sir William

    Inker, John Joseph

    Davies, David L. (Pontypridd)

    John, William

    White, Henry Graham

    Dobbie, William

    Jones, Henry Haydn (Merioneth)

    Williams, Edward John (Ogmore)

    Edwards, Charles

    Jones, Morgan (Caerphilly)

    Wilmot, John

    Evans, David Owen (Cardigan)

    Leonard, William

    Foot, Dingle (Dundee)

    Llewellyn-Jones, Frederick

    TELLERS FOR THE NOES.—

    Gardner, Benjamin Walter

    Logan, David Gilbert

    Sir Robert Hamilton and Mr. Walter Rea.

    Lords Amendments considered accordingly and agreed to.

    CLAUSE 28.—(Estate duty in respect of annuities and other interests.)
    11.23 p.m.
    The SOLICITOR - GENERAL (Sir Donald Somervell): I beg to move, in page 17, line 1, to leave out "expectant interest," and to insert "interest in expectancy."
    It would, I think, be for the convenience of the House if I dealt briefly with this and the three following Amendments, which are very little more than drafting Amendments. When the Clause was before the Committee two or three Amendments were put down by my hon. and learned Friend the Member for Ashford (Mr. Spens). There was no conflict of intention between us, and the Amendments were really designed to make more clear the intention of the Government. I could not at the time accept them in the form in which they appeared, and my hon. and learned Friend has been good enough to discuss the matter with me since. The Amendments now on the Paper meet with the approval of the Government and meet the points which my hon. and learned Friend raised. The words in the Clause were certainly ambiguous, and the Clause, as amended, we are satisfied, carries out our original intention as explained to the House, and I hope that the Amendments will meet with the approval of my hon. and learned Friend.
    11.25 p.m.
    Mr. SPENS: May I express my thanks to my hon. and learned Friend for the
    168
    assistance he has given me in this matter? We are now absolutely agreed.
    Sir S. CRIPPS: I am sure we all thank my hon. and learned Friend for Ashford (Mr. Spens) for giving the Law Officers of the Crown a little lesson in Chancery Law.
    Amendment agreed to.
    Further Amendments made:
    In page 17, line 6, leave out from "which," to "produced," in line 7.
    In page 17, line 8, leave out "his lifetime," and insert "the lifetime of the deceased."
    In page 17, line 10, leave out paragraph (a).—[The Solicitor-General.]
    Bill to be read the Third time To-morrow, and to be printed. [Bill 144.]

  WORKMEN'S COMPENSATION (COAL MINES) BILL.
  Order read for Consideration of Lords Amendments.
  11.27 p.m.
  Mr. GODFREY NICHOLSON: I beg to move, "That the Lords Amendments be now considered."
  These Amendments were inserted in the other place at my instigation. In spite of their formidable appearance, 90 per cent. of them are of a purely drafting or secondary character and the remaining 10 per cent. are, I think I may say with truth, agreed upon by both sides

  169
  in the industry. I hope the House will agree to the Amendments to-night, so that the Bill can receive the Royal Assent on Friday. I am anxious for that, because it will give the industry six clear months in which to prepare for the coming into operation of the Act.
  11.28 p.m.
  Mr. JOHN: It is not our intention to object to the Lords Amendments. The larger number of them are drafting, and some of them have been put in to make the Bill clearer than it was when we discussed it in this House.
  The remaining Orders were read, and postponed.

  WORKMEN'S COMPENSATION (COAL MINES) BILL.

    ADJOURNMENT.
    Resolved, "That this House do now adjourn."—[Captain Margesson.]
    Adjourned accordingly at Twenty-nine Minutes after Eleven o'Clock.