FINANCE BILL.

HC Deb 22 June 1934 vol 291 cc726-66

Question again proposed, "That the word 'now' stand part of the Question."

1.14 p.m.

Captain CAZALET

Before the proceedings were interrupted I was making some observations regarding the settlement of our debt to the United States. I will conclude by making a suggestion to the Government. In answer to a question which I put to the Treasury a few days ago, as to what would be the amount which this country would pay America if our debt from the onset had been settled on the same basis as the Italian debt settlement, the answer was that we would have to make no further payment until the year 1955. I suggest that we should say to America, "We are prepared to accept a settlement on the same basis as that which you made with the Italian nation, or if you cannot accept that we are prepared to offer you a definite sum in full settlement of our obligations." The figure which has been suggested is in the neighbourhood of a billion dollars, which would work out in amount almost the same as the settlement on the Italian basis, and we should pay £5,000,000 to £7,000,000 a year for 30 years. We should offer that on our own responsibility and endeavour to get some portion of it back from our European debtors.

I should like the Government to make that definite offer to the United States, and allow them to find the best means of "putting it over" in Congress, which is certainly something that we could not do from this side of the Atlantic. I should like to know, but I presume we shall not be told, the figure which the Government's advisers suggested to the United States Treasury when they went there a few months ago, and the figure which the United States Government suggested to us. Of course, if the United States refuse to accept either of these offers, there is nothing further to be done in the matter. We must allow time, that great solvent of all problems, which has so successfully solved the problem of the debts of the individual states in America to this country, to solve also the problem of our debt to the United States.

It was said by one hon. Member that the recovery in the trade of this country, has been due largely to "taking in our own washing," that it has been internal improvement rather than improvement in export trade. That is obviously true. How long that improvement can continue without a general improvement in world conditions, is a matter for argument and perhaps for calculation. On the other hand, I would say there is still room for a further increase of trade within our own shores. The 2,000,000 unemployed constitute the greatest market for the consumption of goods that we could find anywhere in the world. To get them back into industry, would be to find a market such as we could discover nowhere else in the world. We have also in the Empire a market which could well continue to increase, and increase rapidly, in the next few years. Moreover, in spite of world conditions, the trade agreements which this country has made with foreign nations—

Mr. DEPUTY-SPEAKER (Captain Bourne)

I do not see anything in the Bill which deals with that subject.

Captain CAZALET

There were several speeches by hon. Members dealing with matters far less cognate with the financial situation of the country, than the subject of the few remarks which I am making. Naturally, I bow to your ruling, Mr. Deputy-Speaker, but perhaps you will allow me to say that there is still a prospect of increased export trade by this country, as a result of the trade agreements which the Government have been able to make and that those agreements would never have been effected had it not been for our tariff policy. That is the point which I wished to make. Therefore I look with considerable hope to the continuation of that measure of prosperity which has come about in this country during the last couple of years.

If I had any doubts or misgivings one thing which would dispel them, and encourage me to hope, is the speech with which the Chancellor of the Exchequer introduced the Budget. No one would call the right hon. Gentleman an incorrigible optimist, but in introducing the Budget he sang—or perhaps that is a un-Parliamentary word and I ought to say he spoke in almost lyrical terms—of the good things that we are to receive in the near future. I cannot believe that such words would come from him unless he had sure and certain knowledge of what was in store. One thing, at any rate, is certain if this country were to go bankrupt if our Budget were unbalanced, then indeed, there would be no hope for world recovery. I maintain that the prosperity of this country and the Empire, represents the corner-stone upon which world recovery must be built. I believe that in the last few years the National Government have laid that corner-stone well and truly, and that they deserve well of the country for having done so.

1.21 p.m.

Mr. KIRKWOOD

The hon. and gallant Member for Chippenham (Captain Cazalet) started his speech by telling us what I believe to be perfectly true, namely that we have to go abroad to hear the praises of this present Government. At the same time, we have not had to go abroad to-day to hear those praises, because the hon. and gallant Member for Chippenham has sung them. He has praised the Government in some respects but in other respects he has not been so laudatory. He mentioned the part they had played in reference to our debt to America. I do not wish to dwell upon that subject but it has been raised in this House time and again, and the proposal that we should meet that debt by paying it in goods has been received with favour in high quarters. I do not object to that proposal at all, but if it is good enough for America that we should pay their debt in goods, then it ought to be equally fair to ask our own fellow-countrymen and women to take payment in goods instead of cash for the debt which is owing to them, incurred for the purpose of carrying on the War. If it is good for America, it is good for our own fellow citizens.

We ought to drop all this hypocrisy. We have no right to ask America to accept payment in goods if we are not prepared, at the same time, to ask our own folk to accept payment in goods. So that hon. Members will see that they are on delicate ground in making that proposal. They are coming very near to my idea of the repudiation of the National Debt. I am not saying that on behalf of the Labour party. They may not support me in that idea, but I have always, as a Socialist, stood for that idea and I still stand for it. Another supporter of the Government, the hon. Member for Aberdeen and Kincardine (Mr. Boothby) began his speech by saying that this Budget was the admiration of the world. I was astonished to find him such a great admirer of the Government, because I have heard him give the Government some dull thuds on various occasions. In saying that this Budget was the admiration of the world, I suppose he meant the part of the world outside our own country, and he went on from that to say that all Governments since 1922 were responsible for the mess which this country had got into as regards unemployment. I agree with him about that.

He also said that the Protectionist policy of the Government has brought industry to this country, that through pro- tecting certain industries individuals have come from foreign countries and established their works here. I happen to have a letter here from my union, the Amalgamated Society of Engineers. It is from Manchester, and it refers to a highly skilled engineer, who goes to one of these new firms that the Financial Secretary to the Treasury has made great play with across the Floor of the House when he has talked about the wonderful industries that the Government have been able to bring to this country from abroad. They formerly manufactured goods in their own country and exported them here, but the Government have put a stop to all that nonsense, and now we have the works here where our own people are being employed. Well, here is the employment. This is the letter, from a German firm, to a highly skilled engineer, the very highest type of engineer, a tool maker, who goes to a labour exchange in Manchester and is handed this letter: What we want is a man who is an experienced master in his line, in tool and die-making for pressings, stampings and drawings of every kind. He has to be able to draw, to be a designer— To such a man we could offer a lasting position, providing he gives a proof of his capabilities. The man we want must push himself. He is to create himself the position of master of our tool and die-making department. We would suggest, first, three months with a weekly salary of £2 10s. a week, to be increased as soon as we see that you are the right man for us. You will realise that we cannot appoint you only on your written application. We first must have an occasion to see you and talk matters over with you. We must have three months' trial. This is the kind of employment that is going to be handed out to us by these firms that the Financial Secretary to the Treasury told us this Government have been responsible for introducing into this country. This is what they are introducing. This is to lower the standard of the workers of this country in a manner never before approached. This letter has just come from our society, this morning, and I have raised the matter with the Minister of Labour.

The hon. Member for East Aberdeen said that we on these benches make the great mistake of always demanding, first and foremost, increased consumption, an increase in the purchasing power of the people. The hon. Member disagreed with all that and said that we ought to go in for increasing investment capital. That was the way out. That is his point of view, the capitalist point of view, and that is where there are two phases of thought that conflict in this House, consciously or unconsciously. There is the Socialist point of view, which I stand for, and there is the capitalist point of view, which supports the present Government. We believe that the way out is by increasing the purchasing power of the people in the mass, but that would mean taking it from those who have it. The right hon. and gallant Member for New-castle-under-Lyme (Colonel Wedgewood) said this morning that the reason why the Labour party did not support him was that in the Labour party there was a great number of landowners. I do not think there are very many. I wish the right hon. and gallant Gentleman had been in his place now, as I would like to have said something to him, but I will not, seeing that he is not here.

The fact of the matter is that it is in budgeting that the power lies, and that is the power that the Chancellor of the Exchequer has. He has the power in this Bill if he would exercise it. From a Socialist point of view, we have never yet produced a Chancellor other than a Conservative Chancellor, and we shall have to do the best we can until he arrives on the scene. I never heard anyone in this House make a speech so confident as that of the Financial Secretary to the Treasury in moving the Third Reading of this Bill this morning. I have never seen anyone so satisfied with him-self. He seems to forget that there are great parts of our native land to-day that are right up against it, so much so that even his own Government have appointed four responsible men to go into those different areas, to see what can be done and to find out the truth. We on these benches have been telling this House and telling every Government that has been in control since 1922 about the hellish conditions that prevail in those parts of the country, in the most valuable parts of the country, parts that have always rendered to our country the most human service. There are whole tracts of Britain which are recognised as derelict. There is South Wales. Think of the contribution of that part of Britain to make the British Empire possible. I ask any hon. Member to go down to South Wales, even in good weather such as we are having now, not When chill November's surly blast Made fields and forests bare. Let them go now, and see the valleys that at one time teemed with people who were happy and contented and, comparatively speaking, comfortable. Today you would think a blight was abroad in the land. Starvation is rampant, thousands of the finest youths that the country has ever seen are roaming the streets with no aim in life and nothing to do. There is no room in the inn for them. If it were only South Wales it would not be so bad, but the same is true all over our great industrial areas. Go to any of our big industrial centres, go to the city from which the letter came which I have just quoted, Manchester. What will you see? The youth of Manchester standing at the street corners. Go to Newcastle, to Liverpool, to Glasgow. And yet responsible men and women, representatives of these people, come to this House and talk about the glorious and wonderful achievements of the Government. There is not a Member in the House but knows what I am speaking is God's truth and irrefutable.

The Government had such an opportunity to do something. I have never questioned their ability or the ability of any Government since I came into the House twelve years ago, but I have always challenged their courage to face up to the situation and to do what they said they would do when they were asking the people to entrust them with the government of the country. If ever there were a Government which was trusted by the country and given a blank cheque, it is the present Government. A combination of the outstanding personalities of Britain arrived on the scene and the people gave them implicit trust and the most powerful majority that any Government ever had.

Mr. DEPUTY-SPEAKER

Perhaps the hon. Member will connect his argument with the Bill now before the House.

Mr. KIRKWOOD

I think, with all due respect, that this has everything to do with the Finance Bill. I am stating the actual conditions of our country, and there is no way of changing those conditions except through finance, and the only Minister who has control of finance is the Chancellor of the Exchequer. When I appeal to the Minister of Labour he tells me that his position in the Government is simply to administrate and that he has no power to create work. I have pressed Ministers for years, and as a result of putting questions by the hundred I at last arrived at the conclusion that the individual who can supply work so far as the Government is concerned is the President of the Board of Trade. I have applied myself to him, but he replies that he cannot do anything without the assistance of the Chancellor of the Exchequer. Therefore, I am driven to attack the Chancellor, and, to use my own phraseology, to harass him. I am going to do it as far as lies within my power and as far as I am allowed by the Chair.

Mr. DENVILLE

Go on, David.

Mr. KIRKWOOD

I will. The laughter of the hon. and gallant Member for Bournemouth (Sir H. Croft) will not affect me in the least. I know where his interest lies. My interest lies in my native land, not across the sea in Palestine or anywhere else. I will fight for my native land. I am sent here to do it. I am not sent here to make friends with the Government and dine and wine with the rich of this House, but to stand up for the rights of my class, and I will do it. There is far too much pandering to the Government. There will be no pandering from me. While the finance of the country has been under review, I have systematically sat here, taking very little part in the debates, but weighing up to the best of my ability everything that has passed. The one thing that has struck me forcibly is that the Chancellor had a great opportunity in the Budget to fulfil pledges—not simply the pledges of an individual. It is difficult for us to tie down an individual. Several of my colleagues have challenged Members on the Front Bench about not keeping their pledges. The Government ask "Who made the pledges?" and "What was the pledge?" It is difficult to tie them down to an individual pledge, but the fact remains that, undeniably, they created in the land the spirit which I have described, although I was told then from the Chair that I was going outside the scope of the Bill. I have always stood for—I put it in my election address—5s. a week for each child of an unemployed man.

Mr. DEPUTY-SPEAKER

The hon. Member cannot review that subject on the Third Reading of the Finance Bill.

Mr. KIRKWOOD

It is in the Bill here. Thirty Tory Members went into the Lobby in support of 3s. a week, but the Chancellor resisted that Amendment, and the allowance is 2s. a week. My point is this, that here is this nice, great, wonderful Government, which all the world admires, taking the view that 2s. a week is enough for an unemployed man's child.

Mr. DEPUTY-SPEAKER

The hon. Member will not find that in this Bill. That is in the Unemployment Bill, and not this one.

Mr. KIRKWOOD

I must be guided by you—but it is all in the Finance Bill. This Bill empowers the Chancellor to disburse a certain amount of money. My contention is that he has not provided enough. He has only assessed here for 2s. a week for an unemployed man's child, although 30 Members of his own Party supported 3s. a week. I saw the Whips running after them and giving them a "telling off" for daring to vote against the Government. That is what happens in such cases. I contend that the Chancellor has neglected his duty. He has let down his colleagues. I am asked to be practical and not to be theoretical, to keep my head out of the clouds, and to keep my feet on the earth. My feet are always on the earth, and the trembling earth resounds the tread. My contention is that he has failed to keep faith even with his own colleagues, by not assessing high enough those who are able to pay. I told Philip Snowden, when he was Chancellor of the Exchequer in the Labour Government, that there was only one place where he could get the "bawbees" with which to do the job, and that he should take the money from those who have it. This Finance Bill is the legal way of doing it. You can call it by all the fancy names you like, but taxation is just a form of confiscation. People do not like that word, but taxation is just a form of confiscation. My only complaint is that they do not confiscate enough. I do not object to the confiscation.

We shall never get round our troubles as long as we allow individuals to have incomes of £10,000 or £5,000 a year. To me it is all hypocrisy when I hear individuals talking about raising the status of the working-class, and giving every one in this country a comfortable life, and at the same time supporting a system that gives individuals an income of £5,000, £6,000, £10,000 and even £100,000 a year. It cannot be done, and it is all wrong, because there is nobody in this House or elsewhere whose value is £10,000 a year. And they have no use for it. Why should the Chancellor of the Exchequer be afraid? The hon. Member for Farnham (Sir A. M. Samuel), in his last speech, put up la plea—just fancy; and in my hearing in this House—for the Super-Tax payer. I was staggered to find that there are still men in this country—and well-meaning men—

Sir A. M. SAMUEL

Thank you.

Mr. KIRKWOOD

—and goodly to look upon, who can stand up here quite calmly and put up a plea for individuals who are paying Super-tax, declaring that it is a sin against the Almighty, so to speak, to tax those men so heavily. The majority of my colleagues, and the majority of my supporters in the country, thought that his appeal would fall on deaf ears, but I want to take this opportunity, because the House of Commons is the best sounding board in the world, to say that it did not fall on deaf ears, because the Chancellor resisted all our appeals, except the one which I myself took the opportunity to pay tribute to, and that was regarding the unemployed. What we Socialists have stood for is £l a week for the unemployed—again I put that in my election address—and 10s. a week for the unemployed man's wife and 5s. a week for each child.

Mr. DEPUTY-SPEAKER

I must remind the hon. Member that this is the Third Reading of the Bill, and we cannot go into a full discussion of it, as we could on the Second Reading.

Mr. KIRKWOOD

Thank you for your advice, Sir. I am trying to draw the attention of the House to the fact that even though pressure was brought to bear upon the Chancellor of the Exchequer by the united front of the whole working class of this country, irrespective of political or religious opinion, in defence of the unemployed, all that the Chancellor conceded was 1s. 3d. per week, to those who are right up against it. That sum brought their handsome salary—I must use the phraseology; I got it from that letter—to 17s. per week. Active men, with all their faculties, have to maintain themselves on 17s. a week. The hon. Member for Farnham and his class, the £10,000 a year men—what did the Chancellor give them? He gave them £4 8s. 0d. a week. That was not a bad increase for those who pay Super-tax.

That illustrates the methods of this Government in attempting to solve the problems with which they were faced when they took over the reins of government. They have given practically nothing to the working-class, although all the wealth of the country is produced by the working-class and by nobody else. When I speak about the working-class, I mean every one who renders useful service to society and not the usual phrase that is used, "whether by hand or brain"; I think that is the greatest lot of nonsense that I ever heard uttered, because it gives the idea that the ordinary workman does not use his brain. Nobody works without having to work by both hand and brain. The working-class produce all the wealth of the country, defend the country against all comers whether by foreign invasion or in industrial and economic war, and bear the brunt, and it is in defence of that section that the Chancellor ought to legislate; but he has done nothing of the kind.

Ranging, as I do, from one end of the country to the other, I say that the country is a standing disgrace to our day and generation. The unemployed, who are, to use the capitalist phrase "unexploited," are the finest raw material in the world, but they are roaming the streets with nothing to do and with no aim in life. A concession was givenby the Chancellor of the Exchequer to the Minister of Labour and to the Secretary of State for Scotland. It is, by the way, a standing disgrace to Scotland that while a Bill of such importance as this is being discussed, no representative of the Scottish Office has been on the Government Front Bench during the whole day. The hon. Member for East Aberdeen complains that nothing is being done for Scotland, not even the completing of the Forth road Bridge. Is it any wonder that there is a move on for Home Rule for Scotland? If this is not giving that movement a peg to hang their coat on, I do not know what is. There is no representative of the Scottish Office here to hear what is going on.

The Chancellor of the Exchequer is empowering the Minister of Labour and also the Secretary of State for Scotland to do something with the problem of our youth, who are the most valuable asset to the country. They are a valiant youth. The Chancellor of the Exchequer is giving a contribution for the setting up of training centres through the Ministry of Labour in England, Wales and Northern Ireland, and to set up similar training centres in Scotland under the Poor Law Bill, which we are now considering before the Scottish Grand Committee. The Government are being forced to realise that for tens of thousands of the youth of Britain there is no place in industry, and everyone is appealing to the Chancellor of the Exchequer to find the means of providing them with work. The Prime Minister set up what he called an economic committee to try and change the situation, as far as unemployment was concerned. Last week we elicited from the Lord President of the Council the fact that the Chancellor of the Exchequer had spent, up to date, £5,000 on that economic committee. I asked the Lord President of the Council what work had emanated from that committee.

Mr. DEPUTY-SPEAKER

I cannot really see that this is relevant to the Third Reading of the Finance Bill.

Mr. KIRKWOOD

I have no desire to prolong my speech, because I know that there are a number of others on all sides of the House who wish to speak, but the House ought to be made aware of the terrible plight, not of tens of thousands, but of hundreds of thousands, of men, women and children, who are as good as we are and as good as ours are in every way, mentally physcally and morally. They are our kith and kin. On the other hand we spend money in Palestine and on China.

Last year, the Arabs in Palestine got from the Chancellor of the Exchequer a grant of a couple of millions, but when we make an appeal for the working class, not away abroad across the sea, but in our native land, we are told that it cannot be done. Until the Government face the situation along those lines, it is no use their going into the country and tell- ing their supporters that they are the most wonderful Government that ever held sway in the annals of British history, when those very supporters know perfectly well that, at every by-election which is being fought at the moment, the supporters of the Government have been, metaphorically speaking, chased for their lives.

I do not care what Government comes in; they can call themselves by any name they like; but, unless they face this unemployment problem definitely along Socialist lines, the unemployment problem will tumble that Government. The Chancellor of the Exchequer has the power; he has control of the money-bags of this country; he can ease the situation, not by sending these young men away to work centres to teach them to be handymen, but by creating a system of education, because education to-day, in my opinion, is the birthright of the entire working class. For the first time in the history of our country, it is possible for that to be achieved, and it can only be achieved by this Bill—by the Chancellor of the Exchequer allocating enough money. Up to the present time, the higher forms of education in this country have been the preserve of the rich; but now, owing to economic development, owing to man's ingenuity in tapping the resources of Nature and making Nature do man's work, we are all the heirs of this glorious inheritance, which if properly handled, would enable us to give to all our young men and young women who are capable and willing a higher standard of education than has been given to the common people, either in this or any other country, in the history of the world.

2.8 p.m.

Sir H. CROFT

I am sure the House has been much interested by the remarkable speech of the hon. Member for Dumbarton Burghs (Mr. Kirkwood), and I think that the Chancellor of the Exchequer, had he been present, would have been glad to find that the hon. Gentleman, with all his eloquence and all his penetrating power of examination, was yet unable to find one single point in the Finance Bill on its Third Reading which he could seriously attack, and, therefore, was constrained to bring in his allies, that is to say, his references to other matters which I know are very near to his heart. The earlier speeches in the Debate must have been very satisfactory to my right hon. Friend. The hon. Member for Cardigan (Mr. D. Evans), speaking for the Liberal party, pointed out that even in regard to the Land Value Tax he did not want that skeleton once more unburied, and I think his only criticism was in regard to the question of obsolescence of machinery, a subject which I think the Liberal party ought thoroughly to understand. The right hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood), generally speaking, had nothing to say against the Finance Bill; all that he had to say was what a pity it was that his favourite theories were not included therein.

Had the Chancellor been here, I should have liked to add my small testimony to the great work which he has done in restoring the financial and economic position of this country. I think he can take it as a fact, that he has the confidence, not only of the City of London—although on one or two occasions he has had to stand up against them with considerable firmness—but also of all the industrial productive elements in this country; and no one, I think, will deny that he can claim that, since ho has been in charge of the finances of this country, there has been a most wonderful change from dis-pondency and gloom to hope in most directions. Even after the moving description of the depressed areas given by the hon. Member for Dumbarton Burghs, whose sincerity everyone recognises, I think we must all rejoice that, even in those depressed areas, we have seen an improvement in the position during the last two years.

There is one thing that I should like to urge upon the Government, and that is that they would do well, in spite of the fact that they are going through strenuous times and have many problems to consider, to look ahead for six months, or a year, or even two years, with regard to the drift of our trade and our trade balance. I make no apology for raising this question. I believe I am right in saying that I was the only Member of the House who referred to the probable coming adverse balance of trade during the two years prior to 1931. Before the Socialist Government took office, there were grave indications that the balance of trade was going to swing seriously against us. Up to that time very few of us had taken much trouble about the matter, because we always used to say that imports were paid for by exports. We remember the gramophonic observations of the hon. Member for East Edinburgh (Mr. D. Mason) to that effect. Nobody worried very much until we found that the trade balance had gone very seriously against us.

Last year, the adverse balance of trade reached a much more satisfactory position, thanks to the efforts of His Majesty's Government. I think that last year it was only something like £4,000,000. For the first five months of this year, however, the adverse balance of trade is something over £18,000,000—that figure was agreed to by the Prime Minister yesterday—and there is every indication that it may go considerably further against us, and may be somewhere near £50,000,000 before the end of the year. We cannot ignore the danger of that situation, and I hope the Chancellor will realise that, in raising this point, I do so in no unfriendly way. After all, I think he will agree that, on the occasions when his many friends in the Empire Industries Association in this House have met together, which has been very rarely, in order to call attention to dangers, they have been proved to be right, and the Government, perhaps after a month, or two months, or even a year or a little longer, have shown by their actual policy that the indications we endeavoured to put before them on those occasions were correct.

It is a fact that we are importing at this moment something like £150,000,000 worth of manufactured goods per annum. Is it not that a realm in which the Chancellor of the Exchequer may be able to find a solution of this increasing tendency towards an adverse trade balance? Are we not a little too much inclined to consider the revenue which we are getting from our Customs tariff, instead of making the question of the employment of our people our first concern? I differ from the hon. Gentleman who interrupting an earlier speech, said that the tariff had not given the Chancellor his Budget balance. I do not suppose you could say that this or that revenue has accounted for the balanced Budget, but under the Customs duties we have raised something like £34,000,000, and by the increased employment of people we have saved to the Exchequer in one way and another up to £40,000,000 or £50,000,000. The fact remains, however, that there is a danger in encouraging ourselves too much by the increased Customs revenue, because that very likely means, and, in fact, does mean, that in certain commodities foreign countries are getting over tariff barriers.

I do not want to detain the House by giving a list of the industries which have shown an alarming increase. Figures were given not long ago showing the increased imports of manufactures for the first three months of this year, and I think that last month, in some of the industries, the figures went to a considerably higher level, although one has only been able to get out an analysis in the last few days. There is still £150,000,000 worth of manufactured goods coming into this country, and, even on a very conservative estimate, I submit that, without doing any harm to any industry which is dependent on other industries, at least £80,000,000 worth of those manufactures could be manufactured in this country to-day. If the employment absorption is going to cease, or even go back a little, there is nothing so bad for the confidence of the people of this country. On the other hand, the manufactures which are now coming in and might be produced at home, in my honest belief could provide employment for another 300,000 people.

If that be true, may we not urge the Government really to make this their chief concern in the coming months? After all, their policy has been surprisingly vindicated. Even those who, like the hon. Member, do not agree about fiscal measures, have admitted that the policy has been successfully introduced. If that be true, why are the Government afraid of their own shadows? They have done wonderful work, and why should they not have the courage to go forward, even although it may require drastic and speedy action in order to see that this country is not endangered by a further increase of the adverse balance of trade which has been displayed so alarmingly in the last four or five months? The hon. Member for East Aberdeen (Mr. Boothby) referred to national planning. May I ask the Government to consider, along with that question, the whole question of Empire planning? Reference has been made to our loans to Germany and other countries since the War amounting to some £200,000,000. If half that sum had been invested in great development schemes overseas, there would have been no default; ample security would have been found, and a great thing would have been done for our own people in the development of our Empire overseas.

I do beg the Government to realise this. They have done a great work in achieving the two great objects for which they were returned by the people of this country to carry out. They have balanced the Budget, and they have balanced our trade, although it still wants very careful watching. I think that the country will now look for a long-distance policy, because I do not believe that any Member in any part of the House now believes that you are ever going to solve this unemployment question on our own resources. Even with the most successful policy which His Majesty's Government could possibly adopt under what is known as the capitalist system or under a Socialist system, I doubt if you are going to get unemployment down below 1,000,000 or 1,250,000. I do not think anyone will deny that we are overcrowded in this country, and therefore in order to relieve the congested areas of this country, we have to look to the vacant spaces of the Empire overseas; and I believe that with good will, courage and vision it is possible for an extra 500,000 people to find employment in the Dominions overseas.

2.22 p.m.

Mr. McENTEE

I think that the outstanding feature of the Debates on the Budget—I have been present through all its stages—has been the truth of the doctrine of economic determinism. The lyrical phrases, as an hon. Member described them, applied to the Chancellor from all those people who have benefited by the Budget have been very remarkable. The Budget, like all other Conservative Budgets of which I have had any experience, has kept pretty vividly in my mind a statement that I once read, which, I think, was made by the late Lord Salisbury, that it is the duty of a Conservative Government to look after its friends. This Conservative Government like all others I have known, has definitely looked after its friends, and, personally, I am not blaming it for that, because I should hope that when the opportunity comes to a Socialist Government in this country, it, too, will look after its friends. The difference that I see is that the friends of the Conservative Government are those people who are doing extremely well in life, who are benefiting by the system which bas been built up by a succession of Conservative Governments, and who look to every succeeding Conservative Budget to give them fresh privileges.

If I am going to vote against any Bill I like, at any rate, to be able to give some reasons why I am voting against it, and I am voting against this Bill to-day because of my belief in my friends, and because I believe that this Budget has been definitely framed with the object of taking more from my friends and giving more to the Chancellor's friends. In other words, it is a rich man's Budget. I have nothing against the Income Taxpayer. I am one myself in a small way, and I certainly have no objection to any reasonable reduction in Income Tax; but while large sums are being used out of the surplus to reduce the Income Tax, I cannot help have the feeling that, after all, I, and other payers of Income Tax, are not really so hard hit that we could not have survived on a decent standard of life if that reduction had not been made. We would not have suffered, for instance, the loss of a meal, or any serious loss in the number of amenities of life that we are able to enjoy.

On the other side, a much smaller sum—it has been estimated at from £3,500,000 to £4,000,000—is to be given to a comparatively large number of people who are drawing relief from the State. They do not like the word benefit now. It has been called transitional benefit, but in future it is not even to be called benefit. They have no right to benefit from the State, but they have a right to relief from the State. That is the new word that the Government has coined. How are these men who are to be relieved by the State in future to be treated? I received a letter last week from a constituent who has a wife and five children and pays 25s. for his house. He is on transitional payment. He served right through the War and draws no pension. I am now dealing with that part of the Budget which refers to the payment that will be made to people on transitional relief.

Mr. DEPUTY-SPEAKER

That does not arise on the Third Reading of the Finance Bill.

Mr. McENTEE

It has been discussed by several Members, and is rather late in the day to keep one so closely to the Third Reading of the Bill. On the general question of transitional payment, it is true that it may amount to having half the cut restored. The Chancellor of the Exchequer, in his Budget statement, showed great self-satisfaction when he said that he proposed to restore to the unemployed the whole of the cuts, but he proposed to do no such thing. He proposed to restore to that section of the unemployed who were within the Fund the 10 per cent. but he is well aware that, in the great majority of cases in receipt of transitional payment, that 10 per cent. will not be restored. I was merely giving the experience of a man who has a wife and five children and pays 25s. a week rent out of £1 9s. 3d. I was going to ask the Chancellor whether he would, as a consequence of the implications of his Budget statement, issue an instruction to those responsible for making these transitional payments that that 10 per cent. shall be restored. We are entitled to ask that those in receipt of transitional payment shall receive in full the restoration that he said that he proposed to give them.

That is my principal objection to the Budget. My next is the proposal with regard to the debt. That is the meanest side of a mean Budget, that the debt, as it is called, which has been created, on the authority not only of the hon. Member for East Aberdeen (Mr. Boothby) but of many other Conservatives as well as Members on these benches, by the successive blundering of successive Governments since 1922, is now to be saddled on those who are to-day within unemployment insurance. They are to be saddled with the payment of £105,000,000 plus interest, approximately £200,000,000 in all, over a period of years. That is entirely wrong in principle, and one of the meanest things that has even been done by a Chancellor of the Exchequer. The benefit that those in insurance will receive in the future will be governed by the amount in the Fund, and the amount in the Fund will be governed to some extent by the payment of this debt from year to year, consequently, it cannot be guaranteed to them that the cut will be restored if the amount in the Fund does not permit of it being done. If, as a consequence of this annual payment in respect of debt, the Fund is reduced to such a point that it will not permit of the payment of the ordinary unemployment benefit plus the 10 per cent. that is supposed to be restored, that 10 per cent. will not, and cannot, be restored.

I think the whole tendency of the Budget, as of previous Budgets, is to give more to those who have and to take more from those already living in a state of hardship. Those sufficiently well off to own motor cars are to have a reduction. Those who go to the 4d. cinema get no relief. Those who are paying large sums of Income Tax are to have a reduction. Those who are paying small sums annually are to have practically no reduction at all. The higher the amount of Income Tax that is paid, in other words the richer the person, the greater the percentage of reduction he gets and, the lower the amount he is called upon to pay, the less percentage of reduction does he get. The whole Budget is framed with the object of preserving the rich in their riches and impoverishing the poor to a greater extent than they are impoverished now.

2.35 p.m.

Mr. DAVID MASON

A great deal of the discussion to-day has circled round the question whether the purpose which the Chancellor of the Exchequer has achieved has been due to industrial revival, that is to improvement in trade, or to other causes. The hon. Member for East Aberdeen (Mr. Boothby) and the hon. Gentleman the Member for Bournemouth (Sir H. Croft) attributed this surplus to the industrial revival, but I think that the Chancellor of the Exchequer would admit, as I am sure would any impartial critic, that the major part of this surplus has been derived from the enormous savings through the conversion of the National Debt. I believe that I am right in stating that the gross saving has been something like £97,500,000. Anyone desirous of being impartial would say that that was the same source of the strong financial position we are in to-day, and it is absurd entirely to attribute the surplus, and the budgeting for a further surplus, to an industrial revival. We do not deny that Protection has unquestionably benefited certain in- dustries, but we have to have regard to the fact that we still have some 2,000,000 unemployed, and that our shipping and industrial position with reference to foreign trade is in a most parlous condition. No impartial person will say that our strong financial position in due to a revival of trade and commerce; it is due in the main to the large saving secured by the conversion of the National Debt, which has been made possible through the cheapness of money, which, I think, one hon. Member stated was entirely attributed to the Chancellor of the Exchequer—a most amazing statement. Neither the Chancellor of the Exchequer nor any Government can bring about such changes. They may retard circulation, but when there is a contraction of trade all over the world, the depression, in the main, is the cause of the cheapness of money, which in turn enables a Government to take advantage of the position and convert national debt at a lower interest.

There is an enormous contraction in trade. In 1932 there was a contraction in the aggregate trade of this country, compared with 1931, of no less than £195,500,000. The improvement upon which the Chancellor of the Exchequer prides himself in respect of certain industries is trifling when it is considered that the colossal decline in our aggregate trade still exists. The Chancellor of the Exchequer in the Second Reading debate spoke complacently about recouping ourselves by trade with the Dominions. Does the right hon. Gentleman suggest to this responsible House, and to men engaged in banking and finance, and in trade and industry who are capable of taking a calm and cool view of the situation, that we can recoup ourselves in that way. It is a physical impossibility to recoup ourselves from the sparsely populated Dominions. In Canada, Australia and other great Dominions and even in India, there is no great demand for the products of manufacture. Does the right hon. Gentleman suggest that we can recoup ourselves for the loss of foreign trade?

Mr. CHAMBERLAIN

I never said so.

Mr. MASON

The right hon. Gentleman will pardon me. I am sorry that I have not the OFFICIAL REPORT here. It will be within the recollection of the House, and I will try to remember precisely what he did say. I ask him to contradict me if I misrepresent him, which is' the last thing that I would wish to do. Unquestionably he said on the Second Reading that he thought or seemed to come to the conclusion that we had reached the peak in our foreign trade. Is that not so? He does not deny that fact. He pointed to the possible development of either our local trade or trade with our Dominions to recompence or to recoup us for the loss. Does he quarrel about the word "recoup"? I cannot remember the exact words. I thought that the right hon. Gentleman was denying not only the actual words of the statement which I have made, but inferring that I was misrepresenting him.

Mr. CHAMBERLAIN

I am denying, and I am saying that the hon. Member has misrepresented me. I never stated or suggested that we could expect in the course of the next few years to find in any development of our home trade or in the development of Empire trade sufficient to recoup us for what we had lost in international trade.

Mr. KIRKWOOD

That is what the hon. Gentleman said.

Mr. MASON

My hon. Friend says that that is exactly what I stated. It will serve no useful purpose to continue bandying words with the right hon. Gentleman, but I would ask hon. Members in all fairness to look up the OFFICIAL REPORT to see whether the statement which I have made is not in accordance with the facts of the case, and that the impression which the right hon. Gentleman wished to convey to the House was that we had to look to our local trade and to our Dominions to recompense us for the loss of foreign trade. We could not look to a recovery of that great section of our trade. I should be very sorry ineed to misrepresent the right hon. Gentleman, but if the House will do me the honour of reading the statement in the speech of the right hon. Gentleman, they will find that what I have stated is in accordance with the truth. This Bill which has to provide for the finance of the year still carries on the unsound finance which, we are enjoying, if I might use the term, with regard to the depreciated state of currency and of our exchanges. I do not propose to develop that argnment, but merely wish to draw attention to the matter.

A number of speakers have referred to the great advantage that we enjoyed as a result of going off gold. What does that mean? If it be a supreme advantage to have a Finance Bill based on a continuance of such a state, if it be a good thing, why not make it continue for ever. Why trouble to restore the sound state of finance, to restore the Exchange, and secure the standardisation of currency? If hon. Members will study the problem they will admit that when we in 1931 departed from gold and went off the gold standard and we had goods on our shelves and in our warehouses, that gave a temporary advantage to the exporters. But we are importers as well as exporters, and the result has been that we penalise ourselves when we come to import. That is why we do not have a permanent paper currency and why we do not advocate it as a policy for any country. If we desire to restore our foreign trade we must face the problem of monetary reform. We must get a common denominator with other nations to settle the question of German transfer and the American debt. That is of supreme importance if we wish to restore the foreign trade by which we live.

2.46 p.m.

Mr. RHYS DAVIES

I always hesitate to address the House on any question connected with finance because it is the one subject on which I feel that I am not as competent to speak as many other hon. Members. But the more I listen to speeches on finance in this House the more I feel that I do know a little about it. I envy the hon. Member for East Edinburgh (Mr. D. Mason) his knowledge of the monetary policy of the country. I wish I knew as much about it as he does. I am not sure, however, that I should be more capable of explaining it if I knew as much about the subject as he does. I have listened to most of to-day's Debate, and I have been astonished at the observations of some hon. Members. I wish the hon. Member for East Aberdeenshire (Mr. Boothby) were in his place. He told us that he had come across some figures which had been produced by statisticians who had no political bias. I have been searching for those gentlemen for some years. Every statistician I have come across is either a Tory or a Socialist. There is, of course, an occasional Liberal statistician. All statisticians, so far as I am concerned, are just as reliable as each other.

The right hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood) made an interesting speech. I do not think that there is any hon. Member more popular or better informed than my right hon. and gallant Friend, but I rather disliked the castigation he gave to the Labour party on the question of the taxation of land values. He wanted to know where we stand. I have wondered at times where he stands on most subjects. It always appears to mo that those gentlemen who follow Henry George very closely and intimately are always very sensible and intelligent on every other conceivable subject on earth, but as soon as they touch the problem of the taxation of land values it upsets their mental apple cart at once. That is the strange thing about the taxation of land values. It always makes the people who believe in it feel that they cannot suffer the opinions of anybody else unless they happen to believe in the taxation of land values. My reply to the right hon. and gallant Member is that, although I agree with him and would go the whole way with him in regard to the taxation of land, the fact still remains that when you have taxed the value of land the land is still left in the hands of persons who can use it for any purpose, and make profit out of it. That is only tinkering with the problem of the land.

On the Third Reading of the Finance Bill we are considerably restricted in what we can say. We cannot argue as to what should be in the Bill. All that we can do is to criticise and deal with those provisions that are in the Bill. I propose to deal with two or three practical points which have not yet been mentioned. I should be glad if the right hon. Gentleman would tell us exactly the meaning of Clause 11, which gives power to the Import Duties Advisory Committee, which apparently, they had not had before. The Import Duties Advisory Committee is a very handy instrument in the hands of this Government. It is their guide, philosopher and friend. I wonder sometimes whether the Government are satisfied that those gentlemen have not too much power over the destinies of this country, especially in relation to our trading with foreign countries. The Import Duties Advisory Committee can demand certain information from any quarter, including Government Departments. I should like hon. Members to notice the change which is now taking place, and it is a very important change in the powers of the Committee under the terms of Clause 11. In future the Committee will be able to disclose to any Government department or to any person authorised by a Government department any information obtained by the Committee if and in so far as it appears to the Committee to be necessary for the purpose of obtaining further information from that department on a matter which the Committee are required or authorised to consider by any enactment for the time being in force. I am not a lawyer and I do not understand the law, but I do understand that the Import Duties Advisory Committee in future, having asked for information for the purpose of recommending the Government to impose new duties, will have secured that information from traders and manufacturers in the most confidential way. I do not think that the Committee could have secured all the confidential information that they have obtained up to now if it had been thought that the information was going to be used for any other purpose. I should like to know what is the reason for the change in regard to the securing of information by the Import Duties Advisory Committee and the transferring of it to a Government Department, and that Department being able apparently to use it for any purpose that it may think fit.

There is another provision to which I should like to draw attention There are new regulations to be made in relation to smuggling between the Free State and Northern Ireland.

When any one succeeds in smuggling any goods into this country it is the duty of the Customs officials to prove that he is a wrong-doer. That is the present law. But here, if goods are smuggled from the Irish Free State into Northern Ireland, not only are they to be confiscated, but the owner has to prove to the Crown that he is innocent. In our relations with the Irish Free State, so far as smuggling is concerned, we are going back to the French system of saying that the offender himself must prove that he is an innocent person. That is a radical change, and in my opinion it is not a good change. There is one other question that I must put to the Govt. Are we to assume that there are people in Northern Ireland who are not playing the game towards this country? Are the people in Northern Ireland in collusion with people in the Irish Free State smuggling on a colossal scale? In view of the fact that there are Irishmen north and south of the frontier, can any measures which we may set up prevent smuggling?

No doubt hon. Members have noticed that the Ottawa Agreement is mentioned more than once in the Bill. I have received, I do not know why, several letters recently from working men in Canada; the last letter I received I sent to the right hon. Gentleman in order that he may know what is happening there. The Ottawa Agreement provides that motor cars, typewriters, or patent leather, can come into this country free under Imperial Preference provided that the article has 50 per cent. content of Canadian manufacture. The complaint which working people in Canada make is that motor cars manufactured in the United States are sent into Canada and that all they do in Canada is to assemble them. In order to get the 50 per cent. content of Canadian manufacture and thus get the motor car into this country free of duty, they add, if you please, the cost of advertising the motor cars in Canada, the cost of printing information about them, and the freight for conveying them into Canada as well. Therefore, they consider they are well within the provisions of the Ottawa Agreement.

I have always had my doubts about this Agreement. I cannot conceive how the Canadian Government can possibly control this problem of the 50 per cent. content. In order to control it properly we should require to have our own Customs officers in Canada on the frontier; and there are 3,000 miles of frontier between Canada and the United States. Therefore, I think we are entitled to ask the right hon. Gentleman how far the Canadian Government comes up to standard of efficiency in enforcing the condition's under which they are supposed to be dealing with these articles. I am just as much afraid of the tricks which the United States people are playing on the frontier in relation to patent leather as I am in regard to motor cars and typewriters. The great slaughterhouses of Chicago produce the largest amount of raw material for the manufacture of leather, and it is more than likely that a great deal comes from Chicago into Canada where it is transformed into patent leather and imported ultimately into this country.

I was interested too in the speech of the hon. and gallant Member for Bournemouth (Sir H. Croft). He rather surprised me by an admission which he made. He said that he wanted employment and not customs revenue to be the primary consideration of the Government. That seems to me to be an indication, it may be slight, that the hon. and gallant Member is not quite satisfied with his own policy; that Protection in his view has not delivered all the goods which he prophesied it would. The hon. Member for East Aberdeen (Mr. Boothby) actually said that we are now witnessing an industrial revival. If hon. Members came to Lancashire they would not be able to talk like that. Lancashire, which is the greatest industrial county in the land, sends to this House about one-tenth of its representatives, and there is not a single member out of the 60 representing Lancashire who can say a single word in favour of the proposition that a great industrial revival is taking place in this country. It might be a good thing, when Governments are formed in the future, that places in the Cabinet should not turn so much on talent as on the territory they represent. If there had been two or three representatives of Lancashire in the present Cabinet I am sure that the Government would have taken more heed of the conditions which prevail in that great county. A protectionist policy may be all right for the tinsel goods of Birmingham but it is of no avail for the coal and cotton industries of Lancashire. Hon. Members must really take account not only of what is happening on the fringe of London, or in Luton and Birmingham, but the fact that within 80 miles of the City of Manchester, there are 10,000,000 people, and that there is hardly a town or village in the whole of that vast area of which it can be said that they are experiencing a great industrial revival under the present Government.

The situation is, indeed, becoming very sad in some parts of the country. I have given this illustration before, but I will give it again. In the division which I have the honour to represent, when I became a member 13 years ago there were 10,000 miners employed. To-day that total is reduced to 1,700, and the numbers are declining every year. Consequently we cannot congratulate the Government on having done anything whatever as far as Lancashire is concerned. Lancashire is the greatest exporting county in the whole Kingdom. Unless I am mistaken the greatest single item of export by this country consisted of Lancashire textile manufactured goods—greater than coal, greater than shipbuilding, greater than shipping. I am not going to say that it is because of this Government; I am not foolish enough to say that; but in any case it can be said that the claims of this Government at the beginning of its reign over this country were such that the Lancashire people had great hopes that the county would be saved by the Government; but if any person cares to study the condition of the 5,000,000 to 6,000,000 people living in Lancashire today, and the history of Governments since the last War, I am certain that the facts will prove that the conditions in Lancashire, whether because of this Government or not, have become worse since this Government came into power than they have been in the period of any previous Administration since the War. The facts would prove that. Shipping in Liverpool has gone down, the textile industry is going, the coal industry in the county is going, and as far as we in that county are concerned we are not at all satisfied with the performances of the Government.

This is the second or third Budget of the present Chancellor. Those who believe in Protection and those who argue for Free Trade will argue something like this: The Protectionist will say: "The condition of the country is better to-day than it was, and if Free Trade had been allowed to prevail the conditions would have been worse." We heard the argument of the hon. and gallant Member for Chippenham (Capt. Cazalet) on that point. We all leave out of account the climatic conditions that affect production all over the world. The hon. and gallant Member rather implied in his speech that this Government had been blessed by Providence, that the conditions in this country are not what they are because of the intelligence of the Government front bench but because of divine Providence. I am not so sure that the argument is a good one in that connection. Were it not for the restrictions that have been imposed by governments in Europe, were it not for the new frontiers created by them, and the economic nationalism which has emerged, there might still have been a slight improvement in trade. I maintain that the improvement might be very much better were those restrictions wiped away altogether. I am hoping to see the day come when the Governments of Europe will get together to co-operate and our own Government, whatever its political colour, will take the lead. We have tried these restrictions, quotas and subsidies and we should now say that we will try to find a better way of living and trading together. I am sure that that is the proper method for handling these problems—that the people of the world should trade openly and help each other by co-operative action to improve the conditions of employment in their separate countries.

3.9 p.m.

Mr. CHAMBERLAIN

I would like to begin the few observations which I desire to address to the House by acknowledging the very kindly and generous sentiments with which the hon. Member for Caerphilly (Mr. Morgan Jones) opened his speech this afternoon. I appreciated the compliments which he paid to my hon. Friend the Financial Secretary, because, although he certainly has well earned them, yet we do not always get credit given to us for our performances, even by our friends and much less by our opponents, and when we do it is only right that we should make full acknowledgment of it.

The discussion which has taken place upon the Bill has been of an unusually moderate character. A good many hon. Members tried, not with complete success, to air their views not so much upon what is in the Finance Bill as upon what they thought ought to have been in the Finance Bill. In deference to your Ruling, Mr. Speaker, I must deny myself the pleasure of entering upon a disquisition this afternoon upon subjects such as the American debt or the proper policy to be pursued in respect of housing or shipping, or whether or not I should have been justified in radically altering the Death Duties, since the Death Duties and these other matters do not figure in the Finance Bill at all. I must, therefore, confine myself to those parts of the criticisms to which I have listened which actually refer to the Clauses of the Bill.

I begin with a question which has been addressed to me by the hon. Member for Westhoughton (Mr. Rhys Davies) as to the purpose of Clause 11. I may point out to him that it is a little late in the day, on the Third Reading of the Bill, to begin to ask what is the meaning of a Clause which has been subject to discussion both in Committee and on Report and which has been—presumably in the absence of the hon. Member—the subject of Amendments by Members of his own party. It is somewhat amusing that the hon. Member should have based his criticism of Clause 11 on the ground that it gave the Import Duties Advisory Committee too much power of imparting information to various Departments of the Government. Had he been here during the earlier discussions on the Bill he would recollect that his own party found fault with this Clause, not on that ground at all but on the ground that it did not give sufficient powers of imparting information to the Departments. I think this is the second instance we have had this afternoon of profound and radical divisions of opinions in the Labour party, and I would therefore recommend them to spend the week-end in trying to compose their difficulties before they again take part in criticism of Government Measures.

I was not surprised to hear the hon. Member for Caerphilly once again express his strong objection to Clause 27 which deals with the land tax and land valuation provisions of the Finance Act of 1931. I regret very much that the hon. Member had to be absent from his place at the time when we had that extremely interesting and entertaining disquisition from the right hon. and gallant Gentleman the Member for New-castle-under-Lyme (Colonel Wedgwood). The right hon. and gallant Gentleman is, of course, a great authority upon the subject. We know that, because he has told us so. He is the only person in this House who understands the subject, and he informed us that the provisions which we are now repealing were utterly useless and meaningless and that they would be interred without a sigh. That, of course, was very much in accordance with what we ourselves have ventured, though with somewhat different ideas in our minds, to put forward on several-occasions. But once having paid my tribute to the hon. Member for Caerphilly, not only for his compliments, but for the very fair and moderate speech which he made this afternoon, I must express my strongest reprobation of his conduct about the Land Value Tax. We have done the Labour party a great service in this matter. We have removed from their way a mass of useless, meaningless, cumbrous legislation which would have been a very serious interference with any ideas that they might choose in the future to try to translate into legislation on the subject of land taxes and land valuation. Instead of expressing his gratitude for our having cleared the site of what, after what the right hon. and gallant Member for Newcastle-under-Lyme said, I must describe as insanitary buildings, he actually comes down to this House and says that he strongly resents our attitude. There is no gratitude in the hon. Member at all, and for my part I hereby renounce, once and for all, any future effort to try to make things easy for him.

The hon. Member made some complaint about the reliefs which have been afforded by the Bill, but on the whole I rather gathered, from the tone and the expressions which he used, that he was not disposed seriously to quarrel with the two principles which I laid down as governing me in the distribution of my surplus this year. He said he did not consider that the principles had been carried out, but in principle I think he agreed with them, and that is only in accordance with an observation to which I listened, I think it was on the Report stage of the Bill, from the hon. Member for Leith (Mr. Tinker), when he said that they are principles that have been accepted in every quarter of the House. I recall that on the Second Reading of the Bill there had been no such acceptance, and it is always pleasing to find that the sheer weight of the reasonableness of the efforts one has put forward has overcome the reluctance of the Opposition to accept them.

But having got the general acceptance of hon. and right hon. Gentlemen opposite for these principles, I come to the question as to whether they have been fairly carried out. There is always, I notice, a certain shyness and delicacy which come over hon. Members opposite when they get anywhere near the restoration of the cuts in unemployment benefit and transitional payment. On this occasion the hon. Member criticised the restoration of the cut in unemployment benefit on the ground that it had not cost the Exchequer anything.

Mr. MORGAN JONES

The statutory benefit.

Mr. CHAMBERLAIN

Yes, but I do not think the working man who is going to get 17s. instead of 15s. 3d. and 9s. instead of 8s. will very much mind where it comes from. What he is concerned with is how much is going to come to him, and I imagine that when the hon. Member for Caerphilly goes down and stands on the platform and calls down thunder and lightning on the head of the Government because the Exchequer has contributed nothing to the restoration of unemployment benefit, he will find that his audience will be left rather cold.

Mr. MORGAN JONES

I have not found it so.

Mr. CHAMBERLAIN

Perhaps the hon. Member does not tell them, what is nevertheless the fact, that it is the policy of the Government which has made it possible for the Unemployment Insurance Fund to find the extra money required for the restoration of the full amount of unemployment benefit. In the position in which we found the Fund, it was bankrupt and borrowing every week large sums from the Exchequer, and there was certainly no prospect of any restoration of benefit, but there was a prospect of increased contributions and lessened benefits in the future. It is the policy of the Government in that alone which has restored the balance and which has once more made the Fund not only solvent but able to have a very substantial surplus to its credit, and to put it in the happy position not only of being able to restore these benefits and to bear the cost of interest and sinking fund on the debt, but able also to contemplate that the Statutory Committee which is shortly to be set up will have in front of it a surplus which it will be able at an early date to take into consideration.

The hon. Member dealt at some length with the question of Income Tax allowances. I have always felt and I have always said that in the choice which I had to make as to the form in which I should give back that partial remission of taxation, which was all I could afford to do, there was room for a reasonable difference of opinion as to which was the wisest course to take. That difference of opinion has shown itself in the House, because Members even of the same party do not take the same view as to which was the best course. In quoting from the article from Lloyds Bank Monthly Review, the hon. Member did not quite appreciate what was the argument of the article. Incidentally, it is always satisfactory to see how much weight and influence hon. Members opposite attach to any pronouncement that comes from a bank, so long as it is conducted by private enterprise, as a source of the profoundest understanding of our problems. In quoting the particular article to which the hon. Member referred, he suggested that the writer had advocated the restoration of the Income Tax allowances rather than the reduction in the standard rate of Income Tax.

Mr. MORGAN JONES

If I gave that impression, I was wrong. My sole intention was to take that quotation as indicating that a restoration of the allowances would increase the amount of purchasing power. I used the quotation as showing the value of increasing purchasing power in that sense.

Mr. CHAMBERLAIN

I do not wish to misrepresent the hon. Gentleman and therefore, in what I am going to say, I do not want to suggest that I am criticising him. I will merely give the sense of the article, because it is of some interest as bearing on some of the observations he made. We had from my hon. Friend the Member for East Aberdeen (Mr. Boothby) an interesting disquisition on capital and consumption goods, and that was a topic touched on by the writer of this article. My hon. Friend pointed out that the American policy had been founded upon encouraging the increase in the production of consumption goods, and he expressed the view that that was a wrong policy and that we should en courage the production of capital goods. The article said that, as far as capital goods were concerned, a reduction in the standard rate was much better than an increase in Income Tax allowances. Therefore, the action I have taken is, in the opinion of this writer, calculated to further the policy which my hon. Friend the Member for Aberdeen East desires this country should follow. On the other hand, the article says: As far as consumers' goods are concerned, it is the smaller incomes which are most important. It points out that in restoring the "cuts" the Chancellor has taken a step well calculated to increase the demand for consumers' goods. Therefore, so far as I can see and judging by what is written in this article, the Chancellor has done what both the hon. Gentlemen opposite and hon. Gentlemen behind me desire, both helping to increase the consumption of consumers' goods and the production of capital goods.

The hon. Member for Cardiganshire (Mr. D. Evans) who spoke earlier in the afternoon, voiced a complaint which I have heard a good many times now, that the Budget showed a certain want of imagination. It is all very well for dashing young sprigs to criticise those who, they think, may show extra prudence. There are many ways of conducting the finances of the country, and it is quite possible that other ways would be followed by other men if they were in my place, but one may perhaps point to the fact, to which witness has been generously borne by several of my hon. Friends, that this country is not so badly off compared with other countries, and that this is some justification for the humdrum and unimaginative policy in finance which I have hitherto pursued.

What I have endeavoured to do has been to follow the general policy of the Government, the guiding motive of the Government, which was to bring back prosperity to the country. I am not one of those who believe that everything can be done by a Government to achieve that end, nor am I one of those who believe that nothing should be done by a Government to help industry to help itself. I believe the Government should all the time be keeping its eye open for ways in which it can create conditions in which individuals and companies and concerns of one kind or another can help to make themselves, and incidentally the country, more prosperous. One of those conditions, perhaps one of the most important of all, is the creation of confidence, and the creation and maintenance of confidence is inconsistent with a policy of wild dashings in various directions without thorough consideration beforehand; and whatever may be lost by an indisposition to make experiments may well be gained, and more than gained, by a firm foundation of that confidence which really must lie at the bottom of all genuine improvement in industry and the prosperity of the country. We have had a very large number of difficult problems to tackle arising out of the crisis and we have already dealt with some, and, on the whole, I think we may say that we have dealt with them not unsuccessfully. Others are more powerful or more local in their application. The hon. Member for Westhoughton will not claim that industrial revival has occurred with equal effect in ever part of the country. We have our weak spots in employment in industry, land everybody knows that those weak spots are due to special causes which cannot be tackled in a moment of time.

In the case of Lancashire, the loss of trade did not begin only in the last two or three years; it has been going on longer than the existence of the present Government. Everybody, I think, knows what the main causes of the loss of trade by Lancashire have been, and that there is no prospect of that trade ever getting back to the position which it enjoyed at one time. The Government have not sat idly by. The events of the last few weeks have shown in regard to one of the major causes, that the Government are taking active steps to remove that cause. With regard to other industries, shipping, for example, the position cannot be put down to the action of the present Government. The position of shipping is chiefly due to the shrinkage in international trade, which is a world phenomenon, and which arises, fundamentally, from want of confidence. These are matters which we have to take one by one, each in its turn, and we have to think out and to apply the appropriate remedy in each case.

I said on a previous occasion that in my view it was not likely and not reasonable to expect, that we should again, at any rate in our time, see international trade approach its former proportions. That was in a passage which was alluded to by the hon. Member for East Edinburgh (Mr. D. Mason). He and I had a little passage just now as to the meaning of what I said. I think that the difference between us is a matter of time. The hon. Member represented me as saying that we should replace international trade by a fresh expansion of home trade and of trade with the Dominions. I never said that we could do that now. What I said was that you must look to a development in those two directions to compensate us for what we have lost in foreign trade. It is perfectly obvious that when the hon. Gentleman speaks of "the sparsely peopled lands of the Dominions" he is putting his finger upon the very point that I had in my mind when speaking of the future and not of the present. Of course, you cannot, with a population of 10,000,000, expect a market to replace that which you have lost with a population five, six, or 10 times that amount. The hon. Member surely does not anticipate that the population of the Dominions will remain at its present figure for all time.

Mr. D. MASON

I would just like to read very shortly—[HON. MEMBERS: "Divide!"] The right hon. Gentleman has very courteously given way, and what I want to read is only a matter of about six lines; I hope hon. Members will do me the honour of listening. The passage to which the right hon. Gentleman referred was in the Second Heading Debate, and was as follows: In the maintenance and expansion of the home market and in the further development of those inter-Imperial agreements which were begun, and only begun, at Ottawa—I believe that this country will have to find its compensation for the loss of so much of its foreign trade, which we probably shall not be able to recover in the lifetime of many of those present.—[OFFICIAL REPORT, 16th May, 1934; col. 1837, Vol. 289.]

Mr. CHAMBERLAIN

That is exactly what I have said. I repeat that the hon. Member does not appear to appreciate the point—

Mr. MASON

What is the point?

Mr. CHAMBERLAIN

The point is that it is not to the existence of present trade with the Dominions, but to the development of that trade in the future, that we have to look for compensation for the loss of international trade. The hon. Member does not seem to appreciate that this is a long-term policy; but, on what we do now with respect to the Dominions may very well depend the development of trade relations betwen the different parts of the Empire 50 years hence. What I am anxious to see is that we should so set the trend of trade to-day that, as the population of the Dominions increases, we shall get preferential treatment in those countries. There alone, so far as I can see, is there any prospect of filling up those gaps which have been made by the shrinkage of international trade.

I do not think I have anything further to say. When we have been suffering from a very long drought, and begin to see a few drops of rain fall, everyone is interested to wonder whether it means only a brief and temporary check in the conditions, or whether it is really a turn of the barometer and means that we are going to have the refreshing moisture of which we have been in need. Similar reflections might apply to this Budget, which, for the first time since the depression, has shown a lightening of our burdens. It is very rash to prophesy, and I am not going to do so now. All that I say is this. As in the past I have felt that I could not safely, and with due regard to my responsibilities, so far anticipate events as to give relief which I did not feel certain I could implement in the future, so to-day, in giving the relief which has been afforded by this Budget, I have done so in the full confidence that the relief will not have to be withdrawn in the future; and I hope it may turn out, whether I have over-estimated or under-estimated the revenue or expenditure of this country, that this will be but the beginning of the rare and refreshing showers which everybody desires to see descend upon the country.

Question put, "That the word 'now' stand part of the Question."

The House divided: Ayes, 220; Noes, 29.

Division No. 298.]	AYES.	[3.39 p.m.
Adams, Samuel Vyvyan T. (Leeds, W.)	Fraser, Captain Sir Ian	Peake, Captain Osbert
Agnew, Lieut.-Com. P. G.	Fuller, Captain A. G.	Peat, Charles U.
Albery, Irving James	Ganzoni, Sir John	Percy, Lord Eustace
Allen, William (Stoke-on-Trent)	Gluckstein, Louis Halle	Petherick, M.
Astor, Maj. Hn. John J. (Kent, Dover)	Glyn, Major Sir Ralph G. C.	Peto, Sir Basil E. (Devon, B'nstapls)
Atholl, Duchess of	Goff, Sir Park	Peto, Geoffrey K.(W'verh'pt'n, Bilston)
Baldwin, Rt. Hon. Stanley	Goldie, Noel B.	Potter, John
Balfour, Capt. Harold (I. of Thanet)	Grattan-Doyle, Sir Nicholas	Powell, Lieut.-Col. Evelyn G. H.
Balniel, Lord	Graves, Marjorie	Pownall, Sir Assheton
Barclay-Harvey, C. M.	Grimston, R. V.	Preston, Sir Walter Rueben
Beaumont, M. W. (Bucks., Aylesbury)	Guest, Capt. Rt. Hon. F. E.	Procter, Major Henry Adam
Beaumont, Hn. R. E. B. (Portsm'th, C.)	Gunston, Captain D. W.	Pybus, Sir Percy John
Benn, Sir Arthur Shirley	Hacking, Rt. Hon. Douglas H.	Raikes, Henry V. A. M.
Bennett, Capt. Sir Ernest Nathaniel	Hales, Harold K.	Ramsay, T. B. W. (Western Isles)
Bevan, Stuart James (Holborn)	Hamilton, Sir George (Ilford)	Ramsbotham, Herwald
Blinded, James	Hannon, Patrick Joseph Henry	Rankin, Robert
Boothby, Robert John Graham	Hartland, George A.	Ratcliffe, Arthur
Bossom, A. C.	Henderson, Sir Vivian L. (Chelmsford)	Ray, Sir William
Boulton, W. W.	Herbert, Major J. A. (Monmouth)	Reid, David D. (County Down)
Bowater, Col. Sir T. Vansittart	Hore-Belisha, Leslie	Reid, James S. C. (Stirling)
Bower, Commander Robert Tatton	Howitt, Dr. Alfred B.	Renter, John R.
Bowyer, Capt. Sir George E. W.	Hudson, Capt. A. U. M. (Hackney, N.)	Rhys, Hon. Charles Arthur U.
Boyd-Carpenter, Sir Archibald	Hume, Sir George Hopwood	Ross, Ronald D.
Braithwaite, J. G. (Hillsborough)	Hunter, Dr. Joseph (Dumfries)	Ross Taylor, Walter (Woodbridge)
Broadbent, Colonel John	Hunter-Weston, Lt.-Gen. Sir Aylmer	Ruggles-Brise, Colonel E. A.
Brocklebank, C. E. R.	Hurd, Sir Percy	Runge, Norah Cecil
Brown, Ernest (Leith)	Hurst, Sir Gerald B.	Russell, Alexander West (Tynemouth)
Brown, Brig.-Gen. H.C. (Berks., Newb'y)	Hutchison, W. D. (Essex, Romford)	Russell, Hamer Field (Sheffield, B'tside)
Browne, Captain A. C.	Iveagh, Countess of	Rutherford, John (Edmonton)
Bullock, Captain Malcolm	Jackson, Sir Henry (Wandsworth, C.)	Salmon, Sir Isidore
Burghley, Lord	James, Wing-Com. A. W. H.	Samuel, Sir Arthur Michael (F'nham)
Burgin, Dr. Edward Leslie	Jesson, Major Thomas E.	Sandeman, Sir A. N. Stewart
Burnett, John George	Ker, J. Campbell	Scone, Lord
Burton, Colonel Henry Walter	Kerr, Hamilton W.	Selley, Harry R.
Cadogan, Hon. Edward	Keyes, Admiral Sir Roger	Shaw, Captain William T. (Forfar)
Campbell-Johnston, Malcolm	Lamb, Sir Joseph Quinton	Shepperson, Sir Ernest W.
Caporn, Arthur Cecil	Leckie, J. A.	Simmonds, Oliver Edwin
Carver, Major William H.	Leighton, Major B. E. P.	Slater, John
Castlereagh, Viscount	Lennox-Boyd, A. T.	Smith, Sir Robert (Ab'd'n & K'dine, C.)
Cautley, Sir Henry S.	Lister, Rt. Hon. Sir Philip Cunliffe-	Smithers, Sir Waldron
Cayzer, Sir Charles (Chester. City)	Llewellin, Major John J.	Somerville, Annesley A (Windsor)
Cazalet, Thelma (Islington, E.)	Lloyd, Geoffrey	Sotheron-Estcourt, Captain T. E.
Cazalet, Capt. V. A. (Chippenham)	Locker-Lampson, Rt. Hn. G. (Wd. G'n)	Spens, William Patrick
Chamberlain, Rt. Hon. N. (Edgbaston)	Loder, Captain J. de Vere	Stanley, Hon. O. F. G. (Westmorland)
Chapman, Sir Samuel (Edinburgh, S.)	Loftus, Pierce O.	Strickland, Captain W. F.
Christie, James Archibald	Lyons, Abraham Montagu	Sueter, Rear-Admiral Sir Murray F.
Clarry, Reginald George	MacAndrew, Lieut.-Col. C. G.(Partick)	Sugden, Sir Wilfrid Hart
Clayton, Sir Christopher	MacAndrew, Capt. J. O. (Ayr)	Summersby, Charles H.
Cochrane, Commander Hon. A. D	Macdonald, Capt. P. D. (I. of W.)	Tate, Mavis Constance
Colville, Lieut.-Colonel J.	McEwen, Captain J. H. F.	Thomas, Rt. Hon. J. H. (Derby)
Conant, R. J. E.	McLean, Major Sir Alan	Thomas, James P. L. (Hereford)
Cook, Thomas A.	Macmillan, Maurice Harold	Thomson, Sir Frederick Charles
Cooper, A. Duff	Macquisten, Frederick Alexander	Thorp, Linton Theodore
Craddock, Sir Reginald Henry	Magnay, Thomas	Touche, Gordon Cosmo
Croft, Brigadier-General Sir H.	Maitland, Adam	Tree, Ronald
Crooke, J. Smedley	Makins, Brigadier-General Ernest	Tufnell, Lieut.-Commander R. L.
Cross, R. H.	Margesson, Capt. Rt. Hon. H. D. R.	Wallace, John (Dunfermline)
Cruddas, Lieut.-Colonel Bernard	Martin, Thomas B.	Ward, Lt.-Col. Sir A. L. (Hull)
Dalkeith, Earl of	Mason, Col. Glyn K. (Croydon, N.)	Wardlaw-Milne, Sir John S.
Denman, Hon. R. D.	Meller, Sir Richard James	Warrender, Sir Victor A. G.
Denville, Alfred	Mitchell, Harold P. (Br'tf'd & Chisw'k)	Watt, Captain George Steven H.
Dickle, John P.	Mitchell, Sir W. Lane (Streatham)	Wedderburn, Henry James Scrymgeour
Dower, Captain A. V. G.	Molson, A. Hugh Elsdale	Whyte, Jardine Bell
Drewe, Cedric	Monsell, Rt. Hon. Sir B. Eyres	Williams, Herbert G. (Croydon, S.)
Drummond-Wolff, H. M. C.	Moore, Lt.-Col. Thomas C. R. (Ayr)	Willoughby de Eresby, Lord
Dugdale, Captain Thomas Lionel	Moreing, Adrian C.	Wills, Wilfrid D.
Duggan, Hubert John	Morris-Jonas, Dr. J. H. (Denbigh)	Wilson, Lt.-Col. Sir Arnold (Hertf'd)
Edmondson, Major Sir James	Morrison, G. A. (Scottish Univer'ties)	Winterton, Rt. Hon. Earl
Ellis, Sir R. Geoffrey	Morrison William Shephard	Wise, Alfred R.
Elliston, Captain George Sampson	Moss, Captain H. J.	Worthington, Dr. John V.
Emmott, Charles E. G. C.	Nation, Brigadier-General J. J. H.
Entwistle, Cyril Fullard	Nicholson, Godfrey (Morpeth)	TELLERS FOR THE AYES.—
Evans, Capt. Arthur (Cardiff, S.)	Nicholson, Rt. Hn. W. G. (Petersf'ld)	Sir George Penny and Major George.
Farmoy, Lord	O'Donovan, Dr. William James	Davies
Ford, Sir Patrick J.	Patrick, Colin M.

NOES.
Attlee, Clement Richard	Davits, David L. (Pontypridd)	Foot, Dingle (Dundee)
Banfield, John William	Davies, Rhys John (Westhoughton)	Gardner, Benjamin Walter
Cape, Thomas	Dobbie, William	Grenfell, David Rees (Glamorgan)
Cove, William G.	Edwards, Charles	Griffith, F. Kingsley (Middlesbro', W.)
Daggar, George	Evans, David Owen (Cardigan)	Hall, George H. (Merthyr Tydvil)

Janner, Barnett	Mason, David M. (Edinburgh, E.)	Williams, Thomas (York, Don Valley)
Jones, Morgan (Caerphilly)	Rea, Walter Russell	Wilmot, John
Kirkwood, David	Smith, Tom (Normanton)
Lunn, William	West, F. R.	TELLERS FOR THE NOES.—
Macdonald, Gordon (Ince)	White, Henry Graham	Mr. John and Mr. Groves.
McEntee, Valentine L.	Williams, Dr. John H. (Llanelly)

Bill read the Third time, and passed.

The remaining Orders were read, and postponed.

Whereupon Mr. SPEAKER adjourned the House, without Question put, pursuant to Standing Order No. 2.

Adjourned at Thirteen Minutes before Four o'Clock until Monday next, 25th June.