Commons Sitting of 29 April 1935

Preamble
The House—after the Adjournment on 18th April for the Easter Recess—met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.
Marlow Water Bill [Lords].
Norwich Electric Tramways Bill [Lords].
Read the Third time, and passed, with Amendments.
Rhyl Urban District Council Bill.
To be read the Third time To-morrow, at half-past Seven of the Clock.
Sharpness Docks and Gloucester and Birmingham Navigation Bill [Lords].
Read the Third time, and passed, with Amendments.
West Hampshire Water Bill.
Read the Third time, and passed.
Derwent Valley Water Board Bill.
Easington Rural District Council Bill.
As amended, considered; to be read the Third time.
Harrogate Corporation Bill.
As amended, to be considered Tomorrow.
Newcastle-upon-Tyne Corporation (Quay Extension) Bill [Lords].
As amended, considered; to be read the Third time.
Baildon Urban District Council Bill [Lords].
Bristol Tramways Bill [Lords].
Bury and District Joint Water Board Bill [Lords].
City of London (St. Paul's Cathedral Preservation) Bill [Lords].
South Suburban Gas Bill [Lords].
Read a Second time, and committed.
Glasgow Corporation Order Confirmation Bill.
Read a Second time; and ordered to be considered To-morrow.

ORAL ANSWERS TO QUESTIONS.
  INDIA.

    BRITISH ARMY OFFICERS (RETIRED PAY).
    Mr. ANNESLEY SOMERVILLEasked the Secretary of State for India whether, in view of the fact that a share of the retired pay of the British Army officers who have served in India is borne by Indian revenues, the British Government will guarantee the payment of this share in the event of any default on the part of the Indian Government under the proposed constitutional changes in India?
    The UNDER-SECRETARY of STATE for INDIA (Mr. Butler): His Majesty's Government are not prepared to discuss what might happen in certain eventualities against which they propose to provide safeguards which they are convinced will be effective, should the need for them arise.
    Mr. SOMERVILLE: Are we to take it that my hon. Friend attaches no importance to the Congress threats of repudiation?
    Mr. BUTLER: I attach to those threats the importance which they deserve.

    CINEMATOGRAPH FILM.
    Lieut.-Colonel Sir ARNOLD WILSONasked the Secretary of State for India whether his attention has been called to an American film, entitled "Lives of a Bengal Lancer," in which Muslems are sprinkled with pigs' blood and threatened with death in a pigskin by British officers; and whether, in the interests of good will between India and other countries, he has made any representations on the subject?
    Mr. BUTLER: The Government of India's attention has been drawn to this film. They have not asked for representations to be made but they have powers to deal with films which they consider objectionable in India.
    Sir A. WILSON: Have the Government of India taken any action in regard to this film in India?
    Mr. BUTLER: I am not aware that they have taken any action in this case.
    Mr. KIRKPATRICK: Will my hon. Friend get into touch with the Government of India and point out to them that this film, certainly in this country, must do the greatest harm to our Moslem fellow-subjects?
    Mr. BUTLER: I have said that the attention of the Government of India has already been drawn to this film.
    Sir A. WILSONasked the Secretary of State for India whether his attention has been called to the wearing of uniforms closely resembling the uniform of Indian cavalry regiments by the attendants at a cinema at which the film entitled "Lives of a Bengal Lancer" is now being shown; and whether he will take action in the matter under the Uniforms Act, 1894?
    Mr. BUTLER: The answer to the first part of the question is in the affirmative; to the second in the negative.
    Sir A. WILSON: Has my hon. Friend seen the uniforms; and is he aware that during the Jubilee year celebrations these
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    men, masquerading for profit in uniforms of the Indian Army, are to be seen on the route of the Royal Procession?
    Mr. BUTLER: We have made careful investigation, and, having examined the uniforms, we have come to the conclusion that while the dress in question bears a general resemblance to them, it is in fact a fancy dress which does not exactly represent the uniform of any particular regiment, and we do not think there is any danger of bringing the uniform of His Majesty's Forces into ridicule and contempt. Therefore, there is no ground for action.
    Sir A. WILSON: Is my hon. Friend aware that the Act of 1894 definitely prohibits uniforms having a general resemblance to those of the forces, and that an exact reproduction is not necessary to bring such a matter within the Act?
    Mr. BUTLER: We have taken that question into consideration. We do not think that in the circumstances this is bringing the uniform into ridicule and contempt.

  YUGOSLAVIA (CROAT POPULATION).
  Mr. RHYS DAVIESasked the Secretary of State for Foreign Affairs whether the memorandum addressed to the Council of the League of Nations by M. Krnyevitch, Deputy in the Yugoslav Parliament, and secretary-general of the Croatian peasants' party, in January, 1935, has received attention; and whether, in view of the provisions of the Treaty of St. Germain, guaranteeing that each of the three constituent populations in the State shall be governed in accordance with the principles of liberty and justice, he will request His Majesty's Minister in Belgrade to furnish him with his comments on the allegations made therein of discriminatory action against the Croat population?
  The SECRETARY of STATE for FOREIGN AFFAIRS (Sir John Simon): Although I have no reason to doubt that the Secretary-General of the League is dealing with this petition in accordance with the regulations governing procedure for dealing with minorities' petitions, it has not yet reached the stage of being

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  communicated to His Majesty's Government by the League Secretariat. The question has therefore not arisen of asking His Majesty's Minister at Belgrade for a special report on the allegations contained in the petition.

  EUROPEAN SITUATION.
  Mr. MITCHESONasked the Secretary of State for Foreign Affairs whether he has any statement to make with regard to the recent meeting of the League of Nations at Geneva?
  Mr. MANDERasked the Secretary of State for Foreign Affairs the present position with regard to the Anglo-French proposals of 3rd February; and what progress has been made as the result of the Conference at Stresa and the recent meeting of the Council of the League of Nations?
  Mr. PALINGasked the Secretary of State for Foreign Affairs whether he has any statement to make on the international situation?
  Sir J. SIMON: The Prime Minister made a statement to the House about the Stresa meeting on 17th instant. The results of the recent meeting of the Council of the League have been fully reported in the Press and will no doubt be referred to in the course of the Debate arranged for next Thursday.

  MANCHURIA (OIL INTERESTS).
  Captain PETER MACDONALDasked the Secretary of State for Foreign Affairs whether he is now in a position to make any further statement with regard to the protests which have been made to the Japanese Government with regard to the proposed oil monopoly in Manchuria; and what action the British Government proposes to take to obtain fair treatment for British interests in this connection?
  Sir J. SIMON: The point at issue in this dispute is as follows:
  A monopoly of the sales of oil has been set up in Manchuria. A company, known as the Manchurian Oil Company, has also been formed to operate a refinery in Dairen, which will supply the sales monopoly with part, and eventually with the whole, of its requirements. The
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  South Manchurian Railway Company, which is well known to be controlled by the Japanese Government, is a large shareholder in the Manchurian Oil Company.
  His Majesty's Government, who had early notice of these projects, have made repeated representations to the Japanese Government pointing out that the creation of a monopoly would be contrary to obligations contained in treaties between China and foreign Powers which are binding on the present régime in Manchuria, and were expressly recognised by the latter when it was set up; that it would also be contrary to the assurances repeatedly given by the Japanese Government and by the present régime in Manchuria that the principle of the "open door" in Manchuria would continue to be observed; and that the participation of the South Manchuria Railway in the Manchurian Oil Company involved in the circumstances a further breach of Article 3 of the Nine Power Treaty of Washington.
  The text of the Japanese reply rejecting the arguments of His Majesty's Government has now been received. It was reported in the press, and rather than attempt to summarise it I will circulate the text in the OFFICIAL REPORT. Under instructions from His Majesty's Government, His Majesty's Ambassador in Tokyo has now addressed to the Japanese Government a further note which I will also circulate in the OFFICIAL REPORT.
  Captain PETER MACDONALD: Has any other Government equally concerned with the British Government taken any action; and will my right hon. Friend consider taking joint action with such countries as America in protesting against this breach of a treaty?
  Sir J. SIMON: We have been in touch with other Governments on the subject.
  Following is the Japanese Government's aide-mémoire referred to:
  "In the Aide-Mémoire of 24th November, 1934, with regard to the petroleum system in Manchukuo the British Government expressed their opinion respecting the views of the Japanese Government which had been furnished on 5th November, 1934. The British Government stated that the new petroleum system in Manchukuo was contrary to the declarations repeatedly made by Manchukuo, and that the measures taken by the Japanese Government in connection with it were not only opposed to their past pronouncements but constituted action

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  amounting to a plain breach of treaty obligations. Steps to put a stop to this new petroleum system should accordingly be taken by the Japanese Government; if they did not devise such steps the Japanese Government would not be able to escape the obligation to make compensation for lossss suffered on that account by British interests.
  The Japanese Government are unable to discover, in the above criticisms made by the British Government, any reason for altering their former contentions. Apart from the complete disregard, shown in the British Government's contentions, of the fact, already recognised by the Japanese Government, of the independence of Manchukuo, it is difficult to discover any ground for these contentions. It must, moreover, be stated that it is a contradiction of their argument, based as it is upon a denial of the fact of the existence of Manchukuo, to cite the contents of only such of the unilateral declarations which have been made by that country as are conjectured to be in one's own interests. Although the Japanese Government have not declined the labour of every kind of mediation in order that a harmonious business settlement might be achieved between the parties involved in the petroleum question in Manchukuo they are not in a position to intervene, or concern themselves directly, in a question which as is here the case, is one of the domestic questions of that country. The Japanese Government regret that the British Government should on this occasion again wish to invite argument upon fundamental questions relating to their recognition of Manchukuo, which, as they have already made clear, is their unchangeable national policy.
  Furthermore, the Japanese Government, in view of the above-mentioned contentions made by the British Government, desire to set forth the following points:

  (1)The Manchukuo Government's scheme for the control of the petroleum industry is in fact the scheme of the Manchukuo Government, and the Japanese Government are not concerned in it. Further, according to the information possessed by the Japanese Government, the Manchuria Petroleum Company do not possess, under the Manchukuo legal system, any kind of exclusive monopolistic rights in the petroleum industry, and, with regard to the holding of shares in this company, there are, as stated, among other things, in the Japanese Government's Aide-Mémoires of 2nd August and 5th November, 1934, no discriminatory provisions according to nationality. The Japanese Government are unable to allow that any question arises either of the infringement by Japan of the provisions of existing treaties or of the contravention of pronouncements made by the Japanese Government, either in connection with investments in the Manchuria Petroleum Company, a Manchukuo juridical person, made by the South Manchuria Railway or other Japanese capitalists, or, naturally, in connection with the above Manchukuo scheme for the control of the petroleum industry.

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  (2) It is evident, according to international law, that the provisions of the treaties between China and other countries cannot be understood as being taken over uniformly and unconditionally without any sort of new arrangement consequent upon the independence from China of Manchukuo. It is believed, accordingly, that it was proper that Manchukuo, when first established as a nation, should have declared that in the treaties hitherto in force between China and other countries only 'such things as ought, in the light of international law and international usage, to be taken over' should be taken over and respected. Furthermore, although it is a fact that in the communication in which Manchukuo proposed the inauguration of her diplomatic relations with foreign countries the Open Door policy was proclaimed, yet it is evident that these foreign countries, who completely disregarded her proposal, have not the right to accept unilaterally those parts alone of her communication which happen to suit their own convenience. Moreover, even leaving out of consideration the present state of affairs in Europe and America, where the most extreme policy is being put into practice in the control of commerce and trade, the application of the necessary control, by an independent nation, to industries such as the petroleum industry, which have an important relation to her existence as a state, is the proper right of a nation, and it is inconceivable that when, in announcing her independence, Manchukuo made the above-mentioned comprehensive declaration she was abandoning her proper national rights. Thus it cannot be allowed that there is in fact involved in her present scheme for the control of the petroleum industry any contravention by Manchukuo of treaties or declarations.

  (3) In short, the Japanese Government are unable to agree, either with such a proposal as that they should bear the responsibility for the actions of Manchukuo, or with any contention whatever which has for a premise the denial of the independence of that country.

  25th March, 1935."
  Following is the text of the note addressed to the Japanese Government:
  "His Majesty's Government are unable to accept the Japanese contentions as valid, and deeply regret that the Japanese Government, so far from using their undoubted authority to ensure the fulfilment of the assurances given by themselves and by the Manchurian authorities regarding the maintenance of the principle of the 'open door' in Manchuria, and the fulfilment of treaty obligations, have attempted to justify action which involves a clear breach of these assurances and obligations. His Majesty's Government cannot but hold those responsible for the Manchukuo Oil Monopoly Law responsible also for the losses which it will entail for British interests.
  12th April, 1935."

  MEMEL.
  Lieut.-Colonel MOOREasked the Secretary of State for Foreign Affairs whether he has yet received replies to the communications he addressed recently to the signatory Powers concerning the action to be taken in Memel; if so, what is the nature of the action proposed; and whether, in view of the unsatisfactory attitude of the Lithuanian authorities towards the German minority, he will consider suggesting on behalf of the Government the appointment of a resident high commissioner to represent the signatory Powers or the League of Nations on the spot?
  Mr. MANDERasked the Secretary of State for Foreign Affairs the present position with regard to the situation in Memel; whether any representations have recently been made by the British Government alone or in association with others; and, if so, what the result has been?
  Mr. HALL-CAINEasked the Secretary of State for Foreign Affairs whether he is now in a position to make any further statement with regard to the developments which have followed the memorandum sent to the Government of Lithuania on the subject of Memel, of which Great Britain was a joint signatory?
  Sir J. SIMON: Agreement was reached with the French and Italian Governments at Stresa that a joint communication should be presented to the Lithuanian Government on behalf of the three Powers. This communication, which has now been made, while recognising that the Lithuanian Government has encountered certain difficulties, declared that the present situation in Memel is irreconcilable with the terms of the Statute, which provides as the basis of the system of government in the territory for the existence and regular functioning of the Chamber and of a Directorate possessing its confidence. The Lithuanian Government have therefore been called upon to bring this situation to an end promptly by ensuring the constitution of such a Directorate and an early meeting of the Chamber.
  Lieut.-Colonel MOORE: Will not the right hon. Gentleman reply to the second half of my question?
  Sir J. SIMON: The suggested appointment of a high commissioner would be a matter to be dealt with by the League.
  Colonel WEDGWOOD: Can the right hon. Gentleman say whether the Directorate envisaged in the Note would be a Directorate elected by the people of Memel? Would it be a Nazi body or an international body?
  Sir J. SIMON: No doubt my right hon. and gallant Friend is acquainted with the terms of the statute. The statute provides that the Directorate that is, the administrative body, should be so appointed as to enjoy the confidence of the Diet, the elected body. That, I think, is the statute.
  Colonel WEDGWOOD: Then it will not be an international body in any sense?
  Sir J. SIMON: No.
  Lieut.-Colonel MOORE: If my right hon. Friend will read the second part of my question again, he will see that I asked if he would consider suggesting on behalf of the Government the appointment of a high commissioner. My right hon. Friend said this was a matter for the League, but I asked if he would consider suggesting this appointment in the interests of the people of Memel.
  Sir J. SIMON: I think it would be better to await the answer of the Lithuanian Government.

  AGRICULTURE.

    WAGES.
    Mr. T. SMITHasked the Minister of Agriculture whether, in view of the large number of farmers still breaking the law by paying their men less than the minimum rates of wages laid down by the county agricultural wages committees, it is proposed to increase the number of inspectors?
    The MINISTER of AGRICULTURE (Mr. Elliot): The number of inspectors engaged in securing the observance of the Agricultural Wages (Regulation) Act was increased by three last year. I believe that the existing staff is adequate for the purpose.
    Mr. SMITH: Is the right hon. Gentleman aware that the Agricultural Workers' Union have plenty of evidence that in scores of cases district minimum rates are not being paid?
    Mr. ELLIOT: I shall be very glad to examine any such evidence.
    Lieut.-Colonel ACLAND-TROYTE: Does my right hon. Friend accept the statement in the first part of the question?
    Mr. ELLIOT: I do not accept anything. I simply answer the question that has been put.
    Captain P. MACDONALD: Is my right hon. Friend aware that the Agricultural Workers' Union only represents about 5 per cent. of the agricultural workers of the country?
    Lieut.-Colonel ACLAND-TROYTE: Will my right hon. Friend repudiate the statement that large numbers of farmers are breaking the law? It is quite easy for him to do that.

    CONSUMERS' INTERESTS.
    Mr. T. SMITHasked the Minister of Agriculture the number of complaints received by the committee to safeguard consumers' interests during 1934; and what action was taken?
    Mr. ELLIOT: During 1934 the consumers' committee for England received 30 complaints from consumers about the operation of the milk marketing scheme, Which they took into consideration in preparing reports upon the effect of the scheme on consumers. No other consumers' complaints relating to the administration of marketing schemes were received by this committee or by the corresponding committee for Great Britain, but the latter committee received seven complaints regarding bacon prices. For information regarding complaints received by the consumers' committee for Scotland, I would refer the hon. Member to my right hon. Friend the Secretary of State for Scotland.

  COLCHESTER OYSTER FISHERY.
  Mr. OSWALD LEWISasked the Minister of Agriculture whether, in the course of his inquiry as to the desirability of making an order for the compulsory cleansing of shell-fish before they are marketed, he will consider the propriety of exempting from the operation of such an order a fishery such as the Colchester oyster fishery, where, owing to the situation of the beds and the set of the tides, pollution of the shell-fish is not possible?
  Mr. ELLIOT: My right hon. Friend the Minister of Health, by whom regulations for the control of the sale of shellfish for human consumption are made, will no doubt be guided by the evidence of pollution or of its absence. The inquiries which we are conducting are directed to this point. If my hon. Friend will give me any evidence as to beds in which pollution is impossible, I shall be glad to examine it.

  POST OFFICE.

    FALSIFIED MONEY ORDERS.
    Mr. JOELasked the Postmaster-General the number of falsified money orders in the past year; and in how many cases the money was paid?
    The POSTMASTER-GENERAL (Sir Kingsley Wood): During the last financial year 29 money orders the amounts of which had been fraudulently altered came under notice. Of this number the correct amount was paid by the Post Office in 22 cases, the remaining seven orders not being presented.

    SILVER JUBILEE CONCESSIONS.
    Mr. ATTLEEasked the Postmaster-General, having regard to the concessions made at the time of the Diamond Jubilee of Queen Victoria, whether it is his intention to mark the occasion of the 25th anniversary of the Accession of His Majesty the King by any similar measures?
    Sir K. WOOD: I think it would be the desire of the House that precedent should be followed, and that the Post Office should be associated with the happy event of His Majesty's Silver Jubilee, as it was with the Diamond Jubilee of 1897. After consultation with my right hon. Friend the Chancellor of the Exchequer I propose to introduce certain substantial reductions and to take other progressive steps in relation to a number of Post Office services which, with the permission of the House, I will now describe briefly. Later to-day I shall issue a more detailed statement than is possible at this stage of our Parliamentary proceedings.
    In the first place, I propose to reduce the charges for telegrams which were increased during and after the War and which, unlike most of the other Post

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    Office charges, have not been modified since. Our telegraph service, though in the forefront of the world to-day in the methods of telegraph transmission, has like that of other countries suffered heavily from the competition of the telephones, and telegraph traffic has declined and is still declining. A loss, as the House knows, has been sustained on the telegraph account for many years and a reduction in charges is likely at any rate for some further period to increase that loss. I have, however, after the most careful consideration, come to the conclusion that, accompanied by all possible efforts to effect every practicable economy in the working of the telegraph service and to improve still further its efficiency, it would be in the best interests of the community that this service should be made, if possible, a still more effective and, I hope, popular method of communication in our commercial and social life, and that its charges should be reduced to a level comparable with those of other Post Office services. I propose, therefore, to introduce on 31st May a new rate of 6d. for 9 words and 1d. for each additional word.
    Another important service on which I have received considerable representations from commercial and agricultural organisations as well as from large numbers of the public is the parcel post. The agricultural community, in particular, have pointed out that the present large steps of 3 lbs. in the scale of charges have tended particularly to handicap the despatch of small parcels of agricultural produce, and it has been urged also that the present limit of 11 lbs. is inconveniently low for many commercial undertakings. I propose, therefore, to introduce on the 1st of July a new scale of 6d. for 3 lbs. with 1d. for each additional lb. up to 9 lbs., and a fiat rate of from 9 lbs. to 15 lbs. I am introducing these new rates in the belief that they may be of some assistance, not only to industry, but particularly to agriculturists at a difficult time.
    Turning to telephones, I think it will be recognised that the reductions which were introduced towards the end of last year were far-reaching in their scope and they have largely contributed to an unprecedented telephone development in this country. There is, however, I believe still considerable scope for telephone expansion in our rural areas, which would
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    also do much to assist our farmers and also others who live in remote areas of the country. We are now about to take steps which will aim at making the telephone available in rural and remote parts of the country as readily as it is in the cities and towns to-day. This must necessarily take time fully to accomplish, but as the first step I now propose to ensure, so far as practicable, that by the end of 1936 no village on the mainland of Great Britain and Northern Ireland, which has a Post Office, will be without a public telephone. This will mean over 1,000 additional public telephone call offices in these parts of the country which have hitherto been unable to possess that easy and rapid communication which our telephone system affords to-day.
    Finally, I know the House will be particularly desirous of improving still further our Empire communications, and on 15th June I propose to introduce an Imperial penny post-card rate instead of the present 1½d. charge. As a special Jubilee concession, also, the standard radio-telephone rates between ourselves and the Dominions and India will from the 6th of May until the 31st of May be reduced by one-half.
    In making these announcements which I hope the House will agree may not be unworthy of the occasion, I desire to say that they have largely been made possible by the firm foundations which have been laid by my predecessors in office and that I am much indebted to the advice and assistance I have received from my right hon. Friend the Chancellor of the Exchequer, Members of the Advisory Council and the Director General and other colleagues in the Post Office service.

  OFFICE OF WORKS (PENSIONS).
  Mr. ROBINSONasked the First Commissioner of Works how many workmen engaged in the works, engineering, and supplies departments are excluded from the pension scheme; and what would be the cost of making their employment pensionable?
  The FIRST COMMISSIONER of WORKS (Mr. Ormsby-Gore): The industrial staff of my department, as of most other departments, is non-pensionable, and I am unable to estimate the cost to the Exchequer of a pensions scheme as much would depend on its character.
  Mr. ROBINSONasked the First Commissioner of Works how many non-pensionable workmen of the works, engineering, and supplies departments regularly engaged at the Houses of Parliament have recently retired; what was the length of Government service of each; and what was the amount of gratuity awarded in each case?
  Mr. ORMSBY-GORE: Eight men of the departments mentioned have been retired during the present month; of these one had four years' service and the remainder 15 years'. Subject to the requirements of the Superannuation Act, 1887, being otherwise fulfilled, those with 15 years' service will receive a gratuity under that Act, calculated at the rate of one week's pay for each year of service.

  HOURS OF WORK (REDUCTION).
  Mr. TINKERasked the Minister of Labour whether he has any further information to give the House regarding his discussions with employers of labour on the question of a reduction of working hours?
  The PARLIAMENTARY SECRETARY to the MINISTRY of LABOUR (Mr. R. S. Hudson): My right hon. Friend is meeting the wool (textile) trade at the beginning of May, and invitations have been issued to a number of other trades suggesting an early discussion with them.
  Mr. TINKER: When these meetings take place, will the right hon. Gentleman draw the attention of the employers to the question of overtime and Sunday work and try to cut them out?
  Mr. HUDSON: The question of overtime is one of the numerous subjects that are under discussion with the various organisations concerned.

  UNEMPLOYMENT.

    AGRICULTURAL WORKERS.
    Mr. T. SMITHasked the Minister of Labour when it is proposed to introduce the Bill to extend unemployment insurance to agricultural workers?
    Mr. HUDSON: I cannot at present add anything to the previous answers on this subject.
    Mr. SMITH: Can the hon. Gentleman give the House any assurance that this Bill will be introduced this Session?
    Mr. HUDSON: I do not think I can say more than that the matter is under very active consideration at the present moment.

    SEASONAL WORKERS.
    Captain P. MACDONALDasked the Minister of Labour what progress has been made to date with the consideration by the Unemployment Insurance Statutory Committee with regard to the problems in connection with seasonal employment recently remitted to them by him?
    Mr. GRAHAM WHITEasked the Minister of Labour whether the Unemployment Insurance Statutory Committee have now completed their examination of the regulations governing seasonal workers; and whether it is his intention to publish the report of the committee?
    Mr. HUDSON: I cannot add to the reply given to the hon. Member for Colchester (Mr. Oswald Lewis) on the 11th April.
    Captain MACDONALD: As this question has been under consideration for so long, will my hon. Friend take steps to see that some reply can be given at an early date?
    Mr. HUDSON: My right hon. Friend told my hon. Friend the Member for Colchester that the statutory committee have given notice that interested parties should make their representations by the end of April, but that, in view of the number and importance of the matters before the committee, he did not anticipate that their report would be made until some time afterwards.
    Captain MACDONALD: Is my hon. Friend aware that some months ago I was told that this matter had been presented to them for consideration
    Mr. HUDSON: Yes, and that information was correct. The matter has been submitted to the statutory committee and is now under their consideration.

    UNEMPLOYMENT ASSISTANCE.
    Mr. OSWALD LEWISasked the Minister of Labour whether, before laying the revised regulations for

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    unemployment assistance before Parliament, he will issue in the form of a White Paper a statement showing in what type of cases or in which special areas the former regulations caused unexpected hardship; what were the former local standards of relief in those areas where such hardship was especially felt; and whether in such areas account had previously been taken of the income of households as a whole or any form of means test had been employed?
    Mr. HUDSON: In presenting any revised draft regulations my right hon. Friend will endeavour to supply the House with all relevant information which is conveniently available, and in that connection the suggestions made by my hon. Friend will be borne in mind.

    GOVERNMENT PROPOSALS.
    Mr. LUNNasked the Prime Minister whether the Government have considered any fresh proposals for dealing with unemployment; and, if so, when it is proposed to make a statement thereon?
    The PRIME MINISTER (Mr. Ramsay MacDonald): As has been repeatedly stated, the Government have continually under review and are applying further means for fostering the expansion of trade and employment which is now taking place. I have no new statement to make at the present time.
    Mr. LUNN: Will the Government take immediate steps to see that in Jubilee week additional assistance is given to those in receipt of unemployment benefit similar to that provided by the Unemployment Assistance Board to those in receipt of unemployment allowances?
    The PRIME MINISTER: That is only a repetition of questions that have been put to the Minister of Labour.
    Mr. LUNN: Can the right hon. Gentleman give an answer to that particular question?
    The PRIME MINISTER: I have nothing to add to what has been said on the subject.
    Mr. MORGAN JONES: When may we expect some definite action by the Commissioners in the distressed areas?
    The PRIME MINISTER: That question had better be put to the Minister of Labour.

  HIS MAJESTY'S SILVER JUBILEE (CELEBRATIONS).
  Captain ARTHUR EVANSasked the Minister of Labour whether consideration has been given to the resolution passed by the Cardiff City Council suggesting that at least a sum equivalent to one day's unemployment benefit be granted to each unemployed person in celebration of the Silver Jubilee; and whether the Unemployment Assistance Board and public assistance authorities have now come to a decision regarding this matter?
  Mr. HUDSON: So far as unemployment assistance allowances are concerned, I would refer to the answer given on the 18th April to my hon. Friend the Member for Faversham (Mr. Maitland). As regards public assistance I understand that local authorities have a general sanction which will permit them on the occasion of the Jubilee to pay extra allowances to persons in receipt of public assistance, and that a number of authorities are arranging to do so.
  Mr. LOGAN: Do I understand that unemployed persons will not be debarred from getting unemployment pay on that day on account of its being declared a Bank Holiday?
  Mr. HUDSON: I should like to see that question on the Paper.
  Mr. RHYS DAVIES(by Private Notice) asked the Secretary of State for the Home Department whether he is aware that the retail shopkeepers, while granting a holiday with pay to their employés on Bank Holiday Monday, 6th May, in accordance with custom and common law practice, propose, on the other hand, to deprive them of their statutory weekly half-holiday during that week, and if so, whether he can take any action to prevent this deprivation?
  The SECRETARY of STATE for the HOME DEPARTMENT (Sir John Gilmour): I had not previously received any representations on this matter, and it is not possible to say, without further particulars, whether or not the arrangements referred to would fall within the provisions of the Shops Acts. I have no power, in any case, to issue any instructions, but I certainly hope that shopkeepers will, so far as possible, treat the Jubilee holiday as an additional holiday

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  and avoid doing anything which would detract from its full enjoyment by their employés.

  COST OF LIVING (INDEX FIGURE).
  Mr. MITCHESONasked the Minister of Labour whether he will consider an inquiry into the cost of living of the middle classes, having regard to the fact that the fluctuations in the index number of the cost of living are based entirely on the fluctuations of the prices of commodities customarily bought by wage-earners?
  Mr. HUDSON: In view of the great practical difficulties which would be encountered in any attempt to collect information as to the standard of living of middle-class families generally, and of the heavy expenditure which would be necessary in order to obtain sufficiently representative statistics, my right hon. Friend is afraid that he cannot at present undertake to institute such an inquiry.
  Mr. GEORGE GRIFFITHSasked the Minister of Labour whether any articles of food on which the cost-of-living figures are based are of foreign origin; and, if so, what foodstuffs are concerned?
  Mr. HUDSON: The particulars of retail prices of food which are collected for the purpose of the cost-of-living figures relate to the average prices of those descriptions, of each commodity, which are usually bought by working-class families, irrespective of the origin of the article concerned, except in the case of beef and mutton, for which separate prices are obtained for home-killed and imported meat, respectively. Particulars are not collected showing the extent to which the prices quoted relate to articles imported from foreign countries.

  TRADE AND COMMERCE.

    FOREIGN TEXTILES (RE-EXPORT).
    Mr. SUTCLIFFEasked the President of the Board of Trade whether he is now able to make any definite statement as to the result of his inquiries into the re-export as British-made of foreign textile goads imported for finishing purposes; and whether the Government contemplate
    20
    any action, and, if so, of what nature to prevent such practices?
    Lieut.-Colonel COLVILLE (Secretary, Overseas Trade Department): I cannot at present add to the answer I gave on the 11th April to my hon. and gallant Friend the Member for Accrington (Major Procter).
    Mr. SUTCLIFFE: Can my hon. and gallant Friend say when he will be in a position to make a statement?
    Lieut.-Colonel COLVILLE: No. The matter is under active consideration, but I cannot name a date.

    IMPORT DUTIES (APPLICATIONS).
    Mr. LYONSasked the Financial Secretary to the Treasury whether any and what applications for increased duties have been considered by the Import Duties Advisory Committee from representatives of trade unions or operatives?
    The FINANCIAL SECRETARY to the TREASURY (Mr. Duff Cooper): It is the duty and practice of the committee under the Import Duties Act to take into consideration all representations made to them by interests in this country on matters falling within their purview. The Committee, however, do not consider that it would be practicable or desirable to publish lists of the representations made to them by particular interests.
    Mr. LYONSasked the Financial Secretary to the Treasury whether in view of the fact that representatives of workmen are able to apply to the advisory committee for increase of duty, any assistance is available by that body whereby information as to costing, charges, etc., which cannot be in the possession of employés, can be obtained by the committee for the purposes of their consideration from the employers concerned?
    Mr. COOPER: The committee have full power under the Import Duties Act to require any person to furnish them with returns or other information which they may require for the purpose of the proper discharge of their functions.

    TRADE AGREEMENTS AND NEGOTIATIONS.
    Mr. HAMMERSLEY (for Mr. CHORLTON)asked the President of the Board of Trade what negotiations for trade agreements with other countries

    21
    are proceeding at the present time or are about to be initiated?
    Lieut.-Colonel COLVILLE: Negotiaions for trade agreements are proceeding with Egypt, Peru, Spain, Turkey and Uruguay and have just been concluded with Italy.

    ANGLO-ITALIAN ARRANGEMENTS.
    Mr. CLARRY(by Private Notice) asked the President of the Board of Trade whether he can make a statement as to the recent commercial negotiations between this country and Italy?
    Lieut.-Colonel COLVILLE: Yes, Sir. As a result of the negotiations it has been agreed that the best course for the present is to continue, with certain adaptations, the provisional arrangement which was concluded on the 18th March, 1935. Either Government has the right to terminate the arrangement at the end of any month from June onwards or to propose new negotiations for a definitive agreement. The arrangements now made, which come into force on 1st May, 1935, are set out in an exchange of notes dated 27th April, 1935, the text of which will be laid before the House immediately.
    I would draw particular attention to the following point: The Italian Government will arrange that all persons in this country from whom payments are due to persons in Italy in respect of Italian goods exported to the United Kingdom on or after the 18th March, 1935, and of freights earned by Italian ships carrying goods between the two countries and due on or after 1st May, 1935, shall be authorised by the creditors in Italy to make such payments to a special sterling account at the Bank of England, into which all sums received from Italian exports to the United Kingdom and from the freights referred to above are to be paid. This special sterling account is to be used to pay creditors in the United Kingdom to whose credit lire have been deposited in Italy, in respect of United Kingdom exports to Italy and freight for the carriage of goods between the two countries in British ships. I would, therefore, specially urge all those who have payments to make to Italy, in respect of Italian goods exported on or after 18th March, 1935, and all those who, as from 1st May, 1935, owe freight for the carriage of goods between the two
    22
    countries in Italian ships, to arrange to pay the amounts due, to this special sterling account at the Bank of England. A full explanatory statement on this point will be issued shortly, and copies will be available at banks and chambers of commerce. I hope that this arrangement will be in full operation in a few days time.
    As regards the Italian system of regulating imports, certain modifications are to be made which will give the system greater elasticity in various respects, and at the same time provision is made in regard to the United Kingdom import trade in certain classes of goods, such as raw wool, which are subject to special regimes in Italy. A second exchange of notes, signed at the same time, is designed to facilitate exports of Newfoundland cod fish to Italy, this being a matter of particular concern to His Majesty's Government in the United Kingdom, in view of their special responsibility for Newfoundland at the present time.
    Mr. HAMMERSLEY: When will the White Paper giving full details be available?
    Lieut.-Colonel COLVILLE: At six o'clock to-night.
    Mr. H. WILLIAMS: Does this temporary arrangement in any way override the arrangement made by Mr. William Graham during the time of the last Labour Government, whereby Italy was to buy 1,000,000 tons more coal per annum? Will that arrangement still remain in operation?

  HOUSING.

    STATISTICS.
    Mr. MITCHESONasked the Minister of Health whether he can furnish a statement of the number of houses built in England and Wales during the six months ended 31st March, 1935?
    The MINISTER of HEALTH (Sir Hilton Young): I regret that the information desired by my hon. Friend is not yet available.

    HOUSE SALES (SPECIFICATIONS).
    Mr. THORNE (for Mr. HICKS)asked the Minister of Health whether he will institute legislation enforcing an obligation on all persons selling houses built

    23
    after an appointed date to supply a general specification of the property to all purchasers?
    Sir H. YOUNG: While I fully appreciate the object which the hon. Member has in mind, I am not satisfied that legislation on the lines suggested is necessary or desirable, or indeed that it would provide a satisfactory means of affording protection to purchasers of houses.
    Mr. THORNE: Does the right hon. Gentleman think there would be any difficulty in the surveyor of a borough being called upon to supply a certificate when the houses are sold?
    Sir H. YOUNG: Yes, I think there might very well be practical difficulties.
    Mr. MORGAN JONES: Will the right hon. Gentleman instruct the officers of his Department to consider whether they cannot suggest alternative proposals for effecting the purpose which is desired?
    Sir H. YOUNG: The hon. Member may be assured that such matters are always under review.

    BUILDING BY-LAWS.
    Mr. THORNE (for Mr. HICKS)asked the Minister of Health whether a strict injunction is now being laid on the local authorities to enforce existing by-laws whose purpose is to provide safeguards against the erection of insanitary, unhealthy, and jerry-built houses?
    Sir H. YOUNG: Local authorities have a duty to enforce their by-laws, and I have no reason to suppose that there is any neglect of this duty. I am always prepared to inquire into any cases in which it is alleged that a local authority has not taken appropriate action.

  FUMIGATION DEATHS, ALDERSHOT.
  Mr. THORNEasked the Minister of Health whether he has received a copy of the jury's recommendation in connection with the death of two children by cyanide poisoning after their home had been fumigated at Aldershot; whether he is aware that the work was done by contract; whether he will make it clear to all local authorities that such work should be carried out directly by the local authority; and whether the parents of the two deceased children have
  24
  received any compensation from the Aldershot local authority?
  Sir H. YOUNG: The answer to the first wto parts of the question is in the affirmative. I do not think that the suggestion made in the third part of the question, that the work of fumigation should be carried out directly by the local authority, would make for greater safety or efficiency. As regards the last part of the question, I understand that the question of compensation for the parents of the two deceased children is under consideration and that allowances have been paid by the Aldershot Town Council to the tenants in respect of food and lodging for the period during which they were dispossessed of their houses.

  NEWFOUNDLAND.
  Captain A. EVANSasked the Secretary of State for Dominion Affairs whether he has any news to disclose to the House in connection with the conditions obtaining in Newfoundland?
  Mr. LUNNasked the Secretary of State for Dominion Affairs whether he has any statement to make on the position of affairs in Newfoundland?
  The SECRETARY of STATE for DOMINION AFFAIRS (Mr. J. H. Thomas): On reading the distressing account of conditions in Newfoundland, which appeared in a daily newspaper on the 17th April, I immediately telegraphed a summary to the Governor, who informed me in reply that the whole account was a tissue of exaggeration and misstatement bearing little relation to the true facts of the position. The Governor added that conditions in St. John's, which have shown a continuous improvement during the last year, are distinctly better than in any recent winter, that there is no unrest, and that the statements which I made on the 5th March, in reply to the hon. Member for Rothwell (Mr. Lunn) and the hon. Member for East Birkenhead (Mr. White), still accurately define the situation.
  Mr. LUNN: Can the right hon. Gentleman tell us when he is likely to have a report—either an interim or a final report—from the Commission on what is happening in Newfoundland?
  Mr. THOMAS: I have had several interim reports. I promised to give the House the best report I could considering the short time in which the Commission has had to work, and I hope to submit such a report at an early date. It is only fair for me to say that we know the writer of this particular article; he was tried for misappropriation of funds in 1925.
  Mr. HERBERT WILLIAMS: May I ask my right hon. Friend whether the Government are considering the possibility of legislation to deal with newspapers that publish false information?
  Captain P. MACDONALD: Will the right hon. Gentleman take steps to see that publicity is given to his statement refuting the false allegations that have been made?
  Mr. THOMAS: I cannot conceive any better opportunity of repudiating such malicious statements than that afforded by a statement on the Floor of the House.
  Lieut.-Commander BOWER: Will the "Daily Herald" repudiate them?

  EDUCATION.

    SCHOOL-LEAVING AGE.
    Mr. TINKERasked the Parliamentary Secretary to the Board of Education whether the inquiry into the question of the school-leaving age has been completed by his Department; and, if so, whether it is proposed to raise the school-leaving age?
    Mr. JOELasked the Parliamentary Secretary to the Board of Education whether he can now make any definite statement as to the attitude of the Churches towards the proposed raising of the school-leaving age; and whether he is able to give any indication as to possible legislation on the subject?
    The PARLIAMENTARY SECRETARY to the BOARD of EDUCATION (Mr. Ramsbotham): My Noble Friend and myself have recently been seeing many of those who are most interested in the question of the school-leaving age, but as our examination of the question is not yet complete I am not in a position to make a statement.
    Mr. TINKER: Can the hon. Gentleman tell us when he will be likely to be in a position to make a statement?
    Mr. RAMSBOTHAM: I can assure the hon. Member that we are working very hard at these interviews, but I cannot prophesy the result.

    MILK SUPPLY SCHEME.
    Mr. McENTEEasked the Parliamentary Secretary to the Board of Education the number of children who are being supplied with milk in all schools in the county of London, and the number that are being supplied free?
    Mr. RAMSBOTHAM: Complete returns are not yet available, but it appears from the information so far received that at the end of March about 365,000 children and young persons in grant-earning schools in the county of London were being supplied with milk, of whom about 26,700 were receiving milk free of charge.

    TEACHERS' PENSIONS (ECONOMY CUT).
    Mr. GARDNERasked the Chancellor of the Exchequer whether the full restoration of the 1931 economy cuts in the pay of public servants as from 1st July next will include consideration for all retiring during the reduction period on pensions based on the salaries received during the last five years or other periods of service; and, if not, whether he will consider remedying the grievance of such pensioners, seeing that they have borne their share of the economy called for and should not be called upon to suffer financially for the rest of their lives?
    Mr. COOPER: I assume that the hon. Member is referring to the pensions of teachers who are subject to the Superannuation Act, 1925. This question is now under discussion between representatives of the teachers and the Board of Education. I am not yet in a position to make any statement on the matter.

  WORKMEN'S COMPENSATION (MINING INDUSTRY).
  Mr. GODFREY NICHOLSONasked the Home Secretary the number of miners who have been in receipt of compensation for partial disablement for five years and for 10 years, respectively?
  Sir J. GILMOUR: On the 31st December, 1933, the latest date in respect of which statistics are available, there were 6,264 workmen in the mining industry who had been in receipt of compensation for periods from five to 10 years, and 6,331 who had been in receipt of compensation for over 10 years. I regret that I have no statistics showing how many of those were cases of partial disablement as distinct from total disablement.
  Mr. NICHOLSON: In view of the great hardships caused under the Workmen's Compensation Acts, will my right hon. Friend give sympathetic consideration to a suggestion that there should be a general inquiry into the working of those Acts?
  Sir J. GILMOUR: I will always consider sympathetically any proposals.

  TRANSPORT.

    PEDESTRIAN CROSSING PLACES (ACCIDENTS).
    Mr. McENTEEasked the Home Secretary the number of accidents that have occurred at pedestrian crossing places in the Metropolitan area since the 1st January to the last available date; and whether any of the persons concerned have been prosecuted?
    Sir J. GILMOUR: I am informed by the Commissioner of Police of the Metropolis that, between 1st January and 20th April last inclusive, 585 accidents involving personal injury occurred on pedestrian crossing places in the Metropolitan Police District. It is not possible without considerable research to state in how many of these cases police proceedings were instituted, but during the same period 1,227 prosecutions were authorised against drivers of vehicles or cyclists in respect of offences connected with the use of the crossings.
    Mr. McENTEE: Can the right hon. Gentleman say whether any prosecutions of pedestrians were included?
    Sir J. GILMOUR: No.

    SPECIAL TRAFFIC SIGN (WEIGHING VEHICLES).
    Mr. H. WILLIAMSasked the Home Secretary whether it is the intention of his Department to authorise proceedings against the driver of any motor vehicle
    28
    who is requested by a person authorised by a highway authority, but who is not a police constable in uniform, to stop so that his vehicle may be weighed under the provisions of Section 27 (1) of the Road Traffic Act, but refuses to do so, having regard to the fact that under Section 20 (3) of that Act the obligation to stop is imposed only when the request is made by a police constable in uniform?
    Sir J. GILMOUR: As explained by my hon. and gallant Friend, the Parliamentary Secretary to the Ministry of Transport, in reply to a question on the 17th instant, the Minister of Transport has authorised a special traffic sign for use in this connection by persons duly authorised to discharge the duty of weighing vehicles. Proceedings for failure to conform to the indication given by such signs would be taken under section 49 of the Road Traffic Act, 1930, under which it is an offence to neglect or refuse to conform to the indication given by a traffic sign.
    Mr. WILLIAMS: Will my right hon. Friend be good enough to answer the question, namely, whether such a person is entitled to instruct the driver of a vehicle to stop as distinct from giving a driver of a vehicle at rest instructions to proceed to be weighed, having regard to the discussion which took place in Committee upstairs as to persons not in uniform being authorised to stop vehicles?
    Sir J. GILMOUR: I have no reason to believe that the practice has not worked satisfactorily.
    Mr. WILLIAMS: But what precautions is my right hon. Friend going to take against unauthorised persons using the sign and calling on people to stop with the result that unpleasant incidents may happen?
    Sir J. GILMOUR: When such cases arise, I shall have to deal with them.

    PURFLEET-DARTFORD TUNNEL SCHEME.
    Mr. McENTEEasked the Minister of Transport whether any further progress has been made towards starting the scheme for building a tunnel under the Thames from Purfleet to Dartford?
    The PARLIAMENTARY SECRETARY to the MINISTRY of TRANSPORT (Captain Austin Hudson): A conference was

    29
    recently held with representatives of the county councils of Essex and Kent, when it was agreed that, in view of the time which has elapsed since the original scheme was prepared and the additional information upon work of this character which is now available, the engineers should be asked to submit a revised report and estimate of cost. The engineers have been instructed accordingly.
    Mr. THORNE: May I ask the hon. and gallant Gentleman whether he thinks it is any use for the engineers or the people in question to present another report, in view of the fact that the Chancellor of the Exchequer has "pinched" some of the Road Fund and that there is no money?

  RIBBON DEVELOPMENT.
  Mr. LUNNasked the Prime Minister when it is proposed to introduce legislation to prevent ribbon building?
  Mr. WHITEasked the Prime Minister whether he is now in a position to announce when the Bill to deal with ribbon building will be introduced?
  The PRIME MINISTER: The Bill will be introduced in another place in the course of the next few days.

  AIR DEFENCE MEASURES (COMMITTEE).
  Mr. GARDNERasked the Home Secretary when he will be able to announce the names of the persons he is appointing to be members of the committee to be set up to inquire into the possibility of devising schemes for linked action on the part of fire brigades, together with some standard of approved efficiency, as part of the national defence against incendiary attack from the air?
  Sir J. GILMOUR: The arrangements for the constitution of this committee are being actively pursued, but I regret that I am not yet in a position to state when its constitution will be completed.

  NATIONAL FINANCE.

    UNITED STATES (BRITISH DEBT).
    Mr. G. GRIFFITHSasked the Chancellor of the Exchequer whether it is
    30
    proposed to resume negotiations on the subject of Britain's war debt to America at an early date?
    Mr. COOPER: I am not in a position to make any statement on this subject.

    PLAYING CARDS (DUTY).
    Mr. H. WILLIAMSasked the Chancellor of the Exchequer the number of packs of playing cards that were assessed to customs duty and excise duty, respectively, during the 12 months ended 31st March, 1935?
    Mr. COOPER: The approximate numbers of packs of playing cards assessed to customs duty and excise duty respectively during the 12 months ended 31st March, 1935, are as follow:

    Customs duty

    150,000

    Excise duty

    5,940,000

    EXPENDITURE.
    Mr. H. WILLIAMSasked the Chancellor of the Exchequer whether he is prepared to consider publishing a return showing on a comparative basis the total expenditure falling on rates and taxes, including the estimated expenditure for the present financial year and for each year since the establishment of the United Kingdom of Great Britain and Ireland, eliminating from such return the interest payments on war debt to the United States of America, but including as expenditure chargeable against revenue the sums raised in certain years by way of loan for the Road Fund, the Unemployment Insurance Fund, and with all other such adjustments as may be necessary, in order to show clearly the fluctuations in the burdens falling year by year on the taxpayer and ratepayer?
    Mr. COOPER: I would refer my hon. Friend to the answer which was given to the hon. Member for South-West St. Pancras (Mr. Mitcheson) on the 14th June last. I am circulating in the OFFICIAL REPORT a statement bringing up to date the figures which were supplied in response to his request on the 9th July, and showing separately the interest payments in each year on the war debt to the United States of America.
    Following is the statement:

    Year.

    National Expenditure.

    Rates collected by local authorities (c).

    Expenditure charged to revenue (a.)

    Interest payments on U.S.A. war debt included in col. 2.

    Borrowing by Unemployment Fund.

    Expenditure out of the Road Fund.

    Total of columns (2) (3) and (4).

    (1)

    (2)

    (2A)

    (3)

    (4)

    (5)

    (6)

    £000.

    £000.

    £000.

    £000.

    £000.

    £000.

    1924–25

    …

    727,287

    31,214

    —

    15,483

    742,770

    160,049

    1925–26

    …

    751,443

    28,315

    80

    16,988

    768,511

    167,201

    1926–27

    …

    758,185

    27,948

    17,400

    24,789

    800,374

    179,500

    1927–28

    …

    752,485

    27,708

    —

    31,813

    784,298

    188,394

    1928–29

    …

    741,580

    27,616

    11,430

    17,728

    770,738

    188,409

    1929–30

    …

    749,639

    27,450

    2,990

    20,569

    773,198

    175,747

    1930–31

    …

    796,006

    27,284

    36,440

    27,926

    860,372

    168,184

    1931–32

    …

    771,974

    13,555

    39,610

    29,941

    841,525

    165,190

    1932–33

    …

    777,387

    19,865

    —

    24,395

    801,782

    163,647(d)

    1933–34

    …

    692,801

    3,304

    —

    21,014

    713,815

    166,153(b)

    1934–35

    …

    708,879

    —

    —

    21,150(b)

    730,029

    171,874(b)

    1935–36

    …

    733,970 (b)

    —

    —

    26,230 (e)

    760,200

    (f)

    NOTES:

    (a) The figures for years prior to 1928–29 have been adjusted to conform to certain changes made in that year in the form of the accounts.

    (b) Estimates.

    (c) Since a large portion of local authorities' expenditure is met out of exchequer grants, which are already included in column (2), and out of rents, etc., figures of rates collected afford the simplest approximate index to the actual burden of local expenditure. Over a series of years the rates collected represent very closely the expenditure falling on rates.

    (d) Subject to final revision as regards Scottish authorities.

    (e) Total of self-balancing revenue and expenditure (H.C. 72 of 1934–35). The programme of actual expenditure from the Fund in the current year is not yet finally settled.

    (f) Not available.

  ITALY AND ABYSSINIA.
  Mr. HOLDSWORTH (for Mr. MANDER)asked the Secretary of State for Foreign Affairs whether he will state the present position with regard to the dispute between Italy and Abyssinia?
  Sir J. SIMON: Both the Italian and Ethiopian Governments have declared their intention to give effect to the conciliation procedure laid down in the Italian-Ethiopian Treaty of Friendship of 1928, which calls for the appointment of a conciliation commission of four persons, two being selected by each party to the dispute.

  WATER SUPPLIES.
  Mr. T. SMITH (for Mr. PALING)asked the Minister of Health whether he has any information to give the House as to the position of the water supplies throughout the country?
  Sir H. YOUNG: I would refer the hon. Member to the reply given to a question by the hon. Member for Wavertree (Mr. Cleary) on the 8th instant and to the Debate on the Easter Adjournment.

  BRITISH ARMY (WOOLWICH ARSENAL).
  Mr. THORNE (for Mr. HICKS)asked the Financial Secretary to the War Office whether he can now state whether it is proposed to remove the Royal Arsenal or some part of the establishment from Woolwich?
  The FINANCIAL SECRETARY to the WAR OFFICE (Mr. Douglas Hacking): I am afraid that I cannot add to the answer which I gave to my hon. Friend the Member for the Hallam Division of Sheffield (Mr. L. Smith) on the 16th instant. The question is still under active discussion, but will obviously take some time to decide.
  Mr. THORNE: In view of the fact that this matter has been under consideration for a very long time, and that there is no doubt that it is disturbing the minds of the people at Woolwich, would it not be as well to come to a decision as quickly as possible?
  Mr. HACKING: It might be a dangerous thing to decide a matter of such importance as this in any hasty way. As I have told the House on more than one occasion, plenty of notice will be given after a decision is arrived at before any definite work is commenced.
  Mr. THORNE: Is there any idea of shifting any part of Woolwich at all?

  GERMANY (SUBMARINE ORDERS).
  Captain SIDNEY HERBERT(by Private Notice) asked the Secretary of State for Foreign Affairs whether he has been informed that the German Government have issued orders for the laying down of a number of submarine vessels, and for the reopening of the submarine school at Kiel; if so, what steps he proposes to take in view of this further flagrant violation by the German Government of the Treaty of Versailles?
  Sir J. SIMON: The German Government have intimated that orders have been given for the construction of 12 250-ton submarines. The matter is now under consideration. No such official intimation has been made regarding the submarine school at Kiel.
  Sir AUSTEN CHAMBERLAIN: When was this intimation made to His Majesty's Government?
  Sir J. SIMON: I have not the actual date before me, but I think I am right in saying that it was 25th April.
  Captain HERBERT: May I ask whether His Majesty's Government propose to take immediate steps to bring to the notice of the League of Nations this further violation of the Treaty of Versailles, and whether it is proposed to go on with the arrangement already made for naval conversations to be held next month between His Majesty's Government and the German Government?
  Sir J. SIMON: I have already said that, as the gravity of the matter
  34
  obviously requires, the matter is now under consideration. I do not think my hon. and gallant Friend will press me to give a further answer to-day.
  Captain P. MACDONALD: Has the right hon. Gentleman been informed, as the Press has informed the public, that the submarine school at Kiel has been definitely opened, and ex-submarine officers have been called up for duty?
  Sir J. SIMON: If my hon. and gallant Friend will refer to the latter part of my answer, he will see that I stated that no such official intimation had been made in regard to the submarine school.
  Captain MACDONALD: Will the right hon. Gentleman make inquiries about it?
  Mr. THORNE: Does this not show that in the conversations which the right hon. Gentleman had with comrade Hitler, the right hon. Gentleman was not told the whole truth?
  Captain HERBERT: Does not the express intention of the German Government to start afresh the building of submarines constitute a proof—if indeed proof were needed—that German rearmament is principally directed against this country?
  Mr. VYVYAN ADAMS: Before it may be too late, will the right hon. Gentleman try to concert with the Stresa Powers and if possible with Russia—[HON. MEMBERS: "Why Russia?"] I repeat, if possible with Russia—measures to check this one-sided, dangerous and persistent repudiation of treaties?

  GREECE.
  Mr. LANSBURY(by Private Notice) asked the Secretary of State for Foreign Affairs whether, in view of Press reports of death sentences executed upon participants in the recent rebellion in Greece, he can say what progress is being made towards a restoration of normal conditions in that country?
  Sir J. SIMON: I welcome this opportunity of making a brief statement on this subject. On 13th March His Majesty's Minister was instructed to inform the Greek Government that His Majesty's Government in the United

  35
  Kingdom had learnt with great satisfaction that internal peace had been reestablished in Greece; and that they desired the Greek Government and nation to know that the difficulties of Greece had their sympathy, and that it was now their earnest hope that domestic peace in Greece might prevail, her wounds be healed, and progress towards prosperity resumed. On the 19th March Mr. Waterlow was further instructed to acquaint the Greek Government, in the form of friendly advice, that nothing could at that critical moment do more to enhance their prestige abroad than clemency and moderation towards the defeated rebels, and that executions could only exacerbate and perpetuate domestic strife. This advice was received in the same friendly manner as that in which it had been offered, and there appeared grounds for hoping that normal conditions would be restored without the exercise of great severity. Although, so far as I am aware, only three death sentences have been carried out, recent reports from His Majesty's Minister indicate an anxiety that they may be followed by many more. It is not for His Majesty's Government to judge the merits of individual cases, but the traditional friendship of this country for Greece entitles His Majesty's Government to express the hope that the Greek Government will see their way to exercise clemency and to limit capital sentences as far as possible, in the interests both of general appeasement and the good name of Greece abroad. This view is expressed without any regard whatever to the merits of the acts or policies of any particular parties or persons in Greece, and will, I think, commend itself to this House as a whole.

BUSINESS OF THE HOUSE.
Mr. CHURCHILL: May I ask your guidance, Mr. Speaker, for the convenience of the House, as to the scope of the Debate which I understand is to take place on Thursday on the Vote for the Foreign Office? It is evident that the disarmament question, and, consequently, the question of armaments, not in its technical details but in its general aspect, is inseparable from a consideration of the present foreign situation,
36
and I would ask, therefore, whether in their general terms the armament issues connected with the recent air armaments and submarine armaments of Germany can be referred to, and to what extent; and may I also ask if the Government have any views upon the subject? Then we are to have, I understand, a second Debate, as soon as it can be conveniently arranged, largely through the good offices of the Leader of the Opposition, upon the more technical issues connected with national defence, and, in particular, with air defence. May I ask whether the Government will have any statement to make upon these matters—I address myself now to the Prime Minister—either before the Debate on Thursday or before the second Debate; and when the Government anticipate that the second Debate will take place?
Mr. SPEAKER: As regards the first part of the right hon. Gentleman's question I am afraid I cannot give him any assistance, because, as I think he realises, the Debate on Thursday will take place in Committee of Supply, on a Supply day, and, therefore, it will be out of my hands entirely. The right hon. Gentleman should address that question to the Chairman of the Committee when he takes the Chair on Thursday. As regards the second part of the question, I gather that it was chiefly addressed to the Leader of the House.
Mr. CHURCHILL: Yes.
Mr. SPEAKER: I do not know on what occasion it is proposed that the second Debate should take place—whether it will be on a Supply day or not. I have not been informed. If I were informed that it was not to be on a Supply day, but on a day when I was in the Chair, I might perhaps assist the right hon. Gentleman.
Mr. LANSBURY: I do not know whether the right hon. Gentleman was here at the time, but our idea was that the second Debate should take place on a Supply day, the Vote for the right hon. Gentleman's salary being put down for that day in order that the whole question might be discussed. I do not know when the next Supply day will be.
The PRIME MINISTER: I agree with the Leader of the Opposition that the second Debate will be, as promised, upon

37
a Supply day. I am not in a position now to say when that day can be provided, but it will be provided within a reasonable time, and it will be announced in the usual way.
Mr. ANEURIN BEVAN: May I ask the Prime Minister whether, in view of the fact that these full-dress debates on foreign affairs are almost entirely monopolised by Privy Councillors, some further opportunity ought not to be given to back-benchers, who are kept out of these debates and have no opportunity of taking part in them? I speak merely as a back-bencher. We have had most inadequate opportunities.
Mr. CHURCHILL: May I ask the Prime Minister whether, in view of the grave urgency of this question, he will not endeavour to accelerate the second Debate? Almost every day is counting now. Will the right hon. Gentleman endeavour to secure it at any rate before the middle of next month?
The PRIME MINISTER: I can assure the right hon. Gentleman that the Government have no desire unduly to delay the matter. The business of the House is constantly under review. The announcement will be made in the usual way, and it will be made as soon as it is possible to make it.
Mr. A. BEVAN: Could we have an expression of opinion on the question to which I have referred? I am quite sure that private Members in all parts of the House feel strongly about it?
Mr. H. WILLIAMS: Is it not the case that private Members had three hours on the day on which the House adjourned for the Recess, and did not use them?
Sir A. CHAMBERLAIN: May I ask my right hon. Friend the Leader of the House what course he anticipates that the debate next Thursday will take? Will it be opened by the Prime Minister himself, or by a statement by the right hon. Gentleman the Secretary of State for Foreign Affairs; and will it deal in broad general terms with all the questions arising out of the meetings at Stresa and Geneva, including the broad issue of armaments, though not its technical details?
The PRIME MINISTER: The course which the debate will follow is only very partially under the control of the Government. If my right hon. Friend will repeat
38
his question after we have had time for consultation, I shall be able to tell him what part the Government propose to take in the debate. At the present time it is impossible to say.
Mr. LANSBURY: We, certainly, have taken it for granted that the debate will be opened by a statement from the Government, and I would like to say that, so far as we are concerned, we hope that the debate will be as broad as possible, and will cover everything that is of real importance in connection with foreign affairs and disarmament?
Sir A. CHAMBERLAIN: Before my right hon. Friend replies, may I remind him of the promise which I think he made to the House that a statement would be made on behalf of the Government?
Captain P. MACDONALD: In view of the fact that nearly every debate on Imperial Defence, or defence of any kind, is monopolised by the question of foreign policy, surely we can have an opportunity of discussing defence on these occasions?
The PRIME MINISTER: The day provided on Thursday will be a Supply day, for the purpose of debating foreign policy in any way that the Committee may choose. The fact of the matter is that I desired to consult my right hon. Friend as to what the convenience of the Committee would be likely to be before announcing what the Government would do; but, as he has made the request that the debate should be opened by the Government, that request will certainly be complied with.

ORDERS OF THE DAY.

  GOVERNMENT OF INDIA BILL.
  Considered in Committee [TWENTY-SECOND DAY—Progress, 11th April.]
  [Sir DENNIS HERBERT in the Chair.]

  GOVERNMENT OF INDIA BILL.

    NEW CLAUSE.—(Protection of public servants against prosecutions and suits.)
    (1) No Bill or amendment to abolish or restrict the protection afforded to certain servants of the Crown in India by section one hundred and ninety-seven of the Indian Code of Criminal Procedure or by sections eighty to eighty-two of the Indian Code of Civil Procedure shall be introduced or moved in either Chamber of the Federal Legislature without the previous sanction of the Governor-General in his discretion or in a Chamber of a Provincial Legislature without the previous sanction of the Governor in his discretion.
    (2) The powers conferred upon a Local Government by the said section one hundred and ninety-seven with respect to the sanctioning of prosecutions and the determination of the court before which, the person by whom and the manner in which a public servant is to be tried, shall be exercisable only—

    (a) in the case of a person employed in connection with the affairs of the Federation by the Governor-General exercising his individual judgment; and

    (b) in the case of a person employed in connection with the affairs of a Province by the Governor of that Province exercising his individual judgment:

    Provided that nothing in this sub-section shall be construed as restricting the power of the Federal or a Provincial Legislature to amend the said section by a Bill or amendment introduced or moved with such previous sanction as is mentioned in subsection (1) of this section.
    (3) Where a civil suit is instituted against a public officer, within the meaning of that expression as used in the Indian Code of Civil Procedure, in respect of any Act purporting to be done by him in his official capacity, the whole or any part of the costs incurred by him and of any damages or costs ordered to be paid by him shall, if the Governor-General exercising his individual judgment so directs in the case of a person employed in connection with the affairs of the Federation, or if the Governor exercising his individual judgment so directs in the case of a person employed in connection with the affairs of a Province, be defrayed out of and charged on the revenues of the Federation or of the Province, as the case may be.—[The Solicitor-General.]
    Brought up, and read the First time.
    3.50 p.m.
    The SOLICITOR-GENERAL (Sir Donald Somervell): I beg to move,
    46
    "That the Clause be read a Second time."
    This Clause is in fulfilment of an undertaking which was given on an Amendment to Clause 259 moved by my hon. and gallant Friend the Member for Wycombe (Sir A. Knox). The Clause deals with the position of judges, magistrates or officials against whom criminal or civil proceedings may be initiated. We think it right, as I stated in that Debate, that there should be certain provisions, to some extent carrying on the existing provisions of the law, and to some extent supplementing them, to meet the new position inserted in the Bill. The matter was dealt with at some length in the earlier Debate, and I certainly do not want to weary the Committee by going into the matter in detail at the present time. I think I can explain with what I hope will be reasonable brevity what the Clause does.
    The first Sub-section, it will be seen, provides that Bills which either abolish or restrict certain sections of the code of the criminal and civil procedure shall not be introduced without the previous sanction of the Governor-General or of the Governor acting in his respective discretion. The section of the code of criminal procedure says that no prosecutions against a judge or magistrate or official of a certain standing shall be initiated without the leave of the local Government. It also gives the local government powers to direct what court shall hear a prosecution as well as other matters with regard to procedure. That course is reserved in this sense. No Bill altering it can be introduced except with the sanction of the Governor-General or the Governor. A criminal prosecution is obviously a very serious thing for a judge, or a magistrate in particular, or indeed for any public servant, and we think that the existing safeguards, about which no complaint has been made, should be preserved.
    Sub-section (2) of the Clause provides that in exercising the power under that Clause, that is to say, in deciding whether or not a prosecution shall go forward, the Governor-General or Governor has the last word, or the final decision will be by the Governor-General or the Governor in his individual judgment. We do not anticipate that on these matters there will be a difference between him and his ministers, but it

    47
    is thought right, the matter being of such great gravity to the civil servants themselves, and in particular to Indian members of the Civil Service, that, in the last resort, the Governor-General or the Governor, if he feels that it is a case where a prosecution should not go forward, shall be able to make that decision effective. The existing statutes with regard to civil procedure are somewhat detailed. The most important of them is one which says that, in the event of civil proceedings, the official shall have two months' notice in writing before the actual legal machine starts to operate. That also we preserve in this Clause. But so far as civil proceedings are concerned, the really important thing to an official is whether, in all proper cases, his Government will stand behind him in respect of costs, and, in proper cases, of damages which he may have to pay.
    As I explained in the earlier debate, a servant of the Crown is in a different position from that of the servant, say, of a corporation or a company. If a servant of a big corporation or company, by an act of negligence, causes damage in the course of his duties, the person who suffers damage sues the master, the employer, the big corporation, because they will have the money with which to pay if he succeeds in his action, whereas, owing to the rule that the Crown, or the Government representing the Crown, cannot be sued in the case of civil wrongs, the proceedings have to be taken against the employé, the servant, and not against the master. Therefore, it is right, that being so, that the Crown as master should stand behind the servant in all proper cases. We accordingly provide, in Subsection (3) of the Clause, that so far as any costs or damages may be awarded against a public official, the question as to whether they should be defrayed out of the public purse, is a matter which, in the last resort, will rest with the Governor-General or the Governor. Here again we do not anticipate differences. We believe that Indian Ministers will be as anxious to stand behind their officials, in all proper cases, as would the Governor-General or the Governor, but we provide that, in the last resort, the Governor-General or the Governor shall decide. There might be cases in which an official acting technically in the discharge of his duty was guilty, perhaps
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    wilfully of misconduct, and it would be wrong for costs or damages to be defrayed out of the public purse. Such cases no doubt have occurred in the past and may occur in the future, but in ordinary cases, it is right that the employer should stand behind the servant. That really explains the Clause, and I hope that I am not unduly optimistic when I say that I think that the intention carried out in the Clause will satisfy hon. Members who raised this point.
    Mr. MORGAN JONES: May I take it that, even if the Clause be passed, it will still be possible for the Central Parliament or the Provincial Legislature, as the case might be, to petition for the removal of a judge on any appropriate ground? I have a case here. What powers will exist for the removal of public servants other than judges who may be deemed to be or proved to be unfit for their positions.
    The SOLICITOR-GENERAL: I do not think that that point really arises on this Clause at all. So far as High Court judges are concerned, the hon. Gentleman will remember the provisions which we have passed as to their rights, and, so far as other officials are concerned, the general principle is that no one can be removed by any authority lower than the authority appointing him. There is a hierarchy who can appoint and who also have the right to remove, but I do not think that it really arises on this Clause. I quite follow that an act by an official which might form the proper basis of a prosecution might also form the proper basis for his removal if, in point of fact, the prosecution were successful, but the question of his removal would not arise under this Clause. The Clause merely deals with the question as to the condition which has to be fulfilled before prosecutions can be started against officials. It does not in any way impede or stop representations being made with regard to officials, or, subject to the safeguards, with regard to judges. It does not in any way stop representations being made in any quarter as to the conduct of officials. It really has nothing to do with it. It simply deals with the question whether criminal proceedings shall be initiated, and it also deals with the question of costs and damages.
    4.2 p.m.
    Mr. HERBERT WILLIAMS: I approach this proposed new Clause with some diffidence, because it raises issues outside my personal experience, but I have two doubts about the terms of this new Clause. Sub-section (1) provides that no Bill or amendment of the law with regard to the protection afforded servants of the Crown in India is to be introduced
    "without the previous sanction of the Governor-General in his discretion or in a Chamber of a Provincial Legislature without the previous sanction of the Governor in his discretion."
    Of course, "the Governor in his discretion," we know, means his decision taken entirely of his own free will, without his ministers having the right to tender advice. Nevertheless, that will not prevent ministers from bringing pressure to bear upon the Governor-General or the Governor, and I can see the possibility of a long period of propaganda being directed against the Governor-General or Governor with regard to an issue of this kind, so that ultimately a weak Governor-General or Governor—and we must from time to time anticipate the possibility of either in the future—might give in to this pressure and consent to a Bill being introduced. Having regard to all the declarations that have been made in this country about the protection to be afforded to civil servants in India, and having regard to the obvious grave fears of the civil servants in India, it seems to me that no legislation affecting this protection ought to be introduced except in a Bill of this Parliament. In other words, this seems to be a matter in respect of which we should not let go control, but should retain it in our own hands. After all, this is a great experiment. It may be right or wrong. I am frankly very dubious about it. This Bill represents an enormous advance, as it is sometimes called, but you can advance both to heaven and the other place, and I never refer to these Bills as reforms or advances, but as proposals. They may be good or bad, but, in any event, in respect of those things where real fears exist—fears not only among civil servants of our own colour, but equally among civil servants who are native-born Indians—this seems to me one of the things which we might retain in our own control.
    Then in Sub-section (3) provision is made that where a civil suit is instituted of the kind contemplated against a
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    public officer in respect of any act said to be done by him in his official capacity, the expenses are to be provided out of public funds. Again, I speak without great experience. I have been fortunate enough up to now not to be engaged in any proceedings in our courts except proceedings against me because I did not drive my motor car fast enough, but, apart from that, I have not had experience of the courts. I am aware, however, that, even in this expeditious country, legal proceedings sometimes are rather long, and I think in India there is a capacity for dragging them out beyond anything we can understand. Those who have read about the case of Jarndyce and Jarndyce, which is said to have taken place in Westminster Hall and the buildings adjoining, now pulled down, may have some idea of conditions in this country, and I understand that even to-day legal proceedings are, in fact, drawn out a very long time. I have particulars of one or two cases given to me. In one case proceedings commenced in 1907, and were finally terminated by the Judicial Committee of the Privy Council in Whitehall five years afterwards. During the whole of that period the civil servant concerned was undergoing very considerable anxiety.
    I am wondering whether it is contemplated that if these cases are numerous—and I am rather inclined to think that they will be rather more numerous with the change of the general control—the civil servant will be helped financially as the case goes on, and not merely receive subsequent reimbursement. I am given to understand that legal proceedings are rather expensive, and, after all, the Indian civil servant, so far as pay is concerned, is not a Croesus. He is reasonably well paid, but he may not have capital resources, and may be out of pocket for a substantial period. Therefore it ought to be made quite clear that it is not mere reimbursement that is involved, and that the authorities will, in fact, take charge of the defence and meet the expenses as they are incurred. I am a little doubtful whether Subsection (3) provides for that. I have every reason to believe that that is what is intended, but I want to make sure what is going to be done, because if we are to have proceedings, which, in all probability, would be backed by some

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    wealthy propagandist organisation directed against an Indian civil servant, who might be, for the time being, many hundreds of pounds out of pocket before being reimbursed, I think that that ought to be avoided. I think he ought to know, as he is called upon to provide money to finance his part of the proceedings, that that money will be immediately forthcoming from official sources; otherwise the position of some of these men will be one of intolerable difficulty. It is bad enough when wealthy people may be concerned in proceedings where somebody else is ultimately going to pay, but where we are dealing with comparatively young men who cannot, except those lucky ones who have inherited money, be in possession of much financial resources, I think it ought to be made sun clear that they are to be effectively helped as proceedings go on.
    I opened by saying that I spoke with rather more diffidence on this subject than I do on most subjects, and on most subjects I do not speak with much diffidence, for the obvious reason that there is no reason to speak with diffidence on subjects you know something about; but when speaking on a subject in which I do not profess to be expert, and I call attention to certain obvious weaknesses in the matter, I am entitled to use these protective words in case I have said something which is open to very effective retort from the Front Bench.
    4.9 p.m.
    Mr. SPENS: I have in my name an Amendment on the Order Paper dealing with the provisions of Sub-section (3) as regards civil suits. Although I might be expected to know more about this subject than my hon. Friend who has just spoken, I confess I also speak with some diffidence, because in reading the proposed new Clause it does seem to me that, on the face of it, the assistance given to the official is the right to be indemnified against costs and damages after the action has been taken against him. It is just that possibility of being put to immediate expense, and the anxiety which is involved in any suit, no matter how frivolous or ill-founded, that is causing a great deal of anxiety among the officials.
    The CHAIRMAN: I am not sure whether the hon. and learned Member
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    realises that he cannot move an Amendment at this stage of the proceedings. The Question before the Committee is, "That the Clause be read a Second time." If the hon. and learned Member desires to move his Amendment, he must do it after the Clause has been read a Second time. There is no objection, of course, to his speaking on the Clause now, and afterwards moving his Amendment, if he wishes to do so. If he wishes to discuss the Clause as a whole, it might, of course, be quite convenient to him and the Committee that he should deal with the particular point raised by the Amendment.
    Mr. SPENS: I am much obliged. Perhaps I may say what I have to say now, and later move my Amendment formally. My point is that, apparently, the protection given is the right to be indemnified against costs and damages after a suit has been instituted, and the anxiety that is genuinely felt by a great number of officials is, of course, that they may have suits brought against them on purely frivolous and vexatious grounds, and may be put to a great deal of immediate expense, and certainly put to a great deal of personal anxiety and inconvenience. There is a very strong feeling in certain districts—I do not put it higher than that—where they think there is a likelihood of vexatious and frivolous suits being used as a method of harassing them, and I do venture to suggest to the Government that it is desirable to strengthen the provisions of the Clause as regards civil suits. My Amendment, which is taken from our Administration of Justice Act and the old Frivolous and Vexatious Causes Act, provides that before any action should be brought against an official in respect of any act or omission purporting to be done or made by him in his official capacity, the leave of the High Court should be obtained before the suit is actually commenced. I think that additional protection would go a very long way to satisfy the anxiety of these officials. If, in fact, their fears are ill-founded, then this sort of vexatious case will not be started. If their fears are right, then they will be started, and I do suggest that the protection is necessary for their benefit, and to prevent any sort of vexatious action on the part of political or other opponents

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    in certain parts of India. Therefore, while I feel sure that, so far as the criminal prosecution is concerned, the proposals in the new Clause appear amply satisfactory, there is, in my submission, grave doubts as to whether the present provisions as regards the civil suit are really sufficient to meet the very real anxieties which these large classes of officials in certain parts of India do, in fact, feel. I hope that the Government will consider seriously strengthening the Clause so as to meet those anxieties.
    4.14 p.m.
    Mr. THORP: I want the Committee to look at this question and this Clause from a different angle. As I understand it, both of the speakers so far have looked upon this as a Clause to protect the civil servant, but if you afford the civil servant protection, you sometimes have to do it at the expense of the general public. I want the Committee to assume, not that there is a frivolous or vexatious action against a civil servant in respect of some act or omission of his in his official capacity, but to assume that there is a legitimate and bona fide cause of action against the civil servant. In that case, I suppose, the whole Committee would agree that no impediment should be put at all in the way of the person taking his cause of complaint to the law courts, and having it decided one way or the other. I do not think the Committee should look at this Clause entirely from the point of view of preventing frivolous and vexatious actions, but, if passed in its present form, the Clause is going to have the result that any person who has a legitimate cause of complaint against a civil servant can only take proceedings in the law courts with the consent of the Governor-General in the one case—
    The SOLICITOR-GENERAL: Not in the case of civil suits. That is only in the case of criminal prosecutions.
    Mr. THORP: A person might have a legitimate cause to institute a criminal prosecution against an official who had done something in the course of his official duties which was a criminal act, and if the prevailing authority that had jurisdiction over him chose to protect him, then they could undoubtedly do so by withholding consent. I do not suggest that they would wilfully withhold consent
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    or withhold it unreasonably, but there might be very considerable pressure brought to bear upon them to withhold consent if the act happened to be one which suited the taste for the moment of the political forces in power. I do not think that this is a matter which ought to be lightly parted with by this House. If any person in this country does a criminal act he is liable to prosecution, and a private person can prosecute him for it. It might be that it would not suit the Government that a private person should prosecute a civil servant for an act which he did in his official capacity. From the point of view of the general public in India, this Clause is introducing a dangerous principle when it allows the Executive, perhaps under political pressure, to avoid legitimate and proper prosecution which ought to take place.
    4.17 p.m.
    Duchess of ATHOLL: I am sure that no one wishes to see a civil servant protected from any legitimate cause of prosecution, but we have to remember the very apprehensive note in the memorial of the Bengal and other civil servants, which speaks of India being the home of false cases. I recognise that the Clause which has been moved is an attempt to meet apprehensions on this score which have been expressed in the memorial, but it has been represented to me that the Clause does not fully meet the case. It falls short of what civil servants feel to be necessary. The prior sanction of the Governor-General or the Governor is to be required to any change in certain sections of the codes of civil and criminal procedure that now give them some protection, but prior sanction may be obtained for Bills which would limit the powers of the local Governments in this matter. In that case the protection would not be effective. The hon. Member for South Croydon (Mr. H. Williams) has spoken of the pressure that might be put on the Governor-General or the Governor. Everyone of us who has sat through these Debates must have had it borne in upon his or her mind that the Governor-General and the Governors will have many difficult situations to deal with and it may be made difficult for them to resist pressure on this and other matters which are creating difficulties between

    55
    them and Ministers. Therefore, we cannot assume that because the prior sanction of the Governor-General or the Governor is required there will never be any amendment of these sections of the codes of criminal and civil procedure.
    The reference that has been made by my hon. and learned Friend served to indicate that the protection given under the codes is not very substantial. He referred to the fact that two months' notice had to be given. Another Section gives protection from arrest, but there is nothing very substantial in these Sections. It has been represented to me that it would be very much more satisfactory if the civil servants could be protected from frivolous civil suits as well as criminal prosecutions. Though prior sanction of the local government is to be required in regard to a criminal prosecution, no such sanction is required for the institution of a civil suit. Perhaps I have not made it quite clear that if there were an amendment of the criminal or civil procedure such as is referred to under Subsection (1) then the powers of the local government to insist on their previous sanction before a case of criminal prosecution takes place, might be negatived. Therefore, it is very desirable that there should be added to this Clause a provision that the sanction of the local government shall be required both for civil suits and for a criminal prosecution. If you are willing to allow me to move an Amendment to that effect, which I have handed in in manuscript form, I should be glad to do so. I am sorry that I was not able to hand in the Amendment before. Perhaps at a later stage it may be possible to move something to that effect.
    I should like to add to what my hon. Friend the Member for South Croydon said in regard to the length of time that a civil suit may be hanging over an officer's head. He mentioned a suit instituted in 1907 which dragged on until it was finally quashed by the Priviy Council five years later. I have particulars of another case which lasted from 1908 to 1912. It was a suit against a district magistrate of Midnapore. It is also said that civil suits are now pending against an officer of the Indian Civil Service and an officer of the Indian Police for official acts taken in
    56
    connection with the civil disobedience movement more than three years ago. Of course it would be a great help if finally the expenses of such a suit could be met as proposed, but I do not think it needs any words of mine to indicate the terrible strain which a man may have been suffering during the three, four or five years that the case has been pending, with the prospects of his career being ruined and of his being dismissed the service and losing his pension if he should be found guilty.
    In the first case mentioned by the hon. Member for South Croydon, a civil suit was brought against a district magistrate in Bengal for searching a house for firearms during a riot. Surely that was a very proper and sensible thing to do. However, the Calcutta High Court tried the case and decided it against the officer in question. An appeal was made to the same High Court in its Appellate jurisdiction, but the verdict was upheld and it was only after five years that finally the case was quashed by the Privy Council, with, I understand, some strong remarks about the Calcutta High Court's verdict. That shows how a case may drag on and what a terrible strain may be caused to the officer who is the subject of a suit of that kind.
    I feel, therefore, that the Clause does not fully meet the position. It ought to protect an officer against a frivolous civil suit being instituted, and it, seems to me that if the prior sanction of the Governor-General or the Governor were required no responsible person would wish to quash a suit that seemed to show evidence of a prima facie case. No one would wish to put himself in the position of quashing a case which might be upheld. In view of what was said by the civil servants in their memorial as to India being the home of the false case, and the extent to which they feel that many officers, in Bengal particularly, have inevitably brought on themselves hostility because of the actions they have had to take in suppressing criminals and civil disobedience, there may be more occasions in the future than there have been in the past when they will require protection. I would remind the Committee of what the memorial said on this point:
    "There are few officers, European or Indian, in this Province"—

    57
    that is, the Province of Bengal—
    "who in their capacity as District Magistrates, Special Magistrates, or Commissioners of Tribunals have not been brought into direct conflict with Terrorism, with the result that they are compelled to remain under constant protection. We anticipate that with the introduction of the new Constitution and for many years thereafter, there will be a large and powerful element, both in the Legislature and outside, which will be hostile to the Services and vindictive towards individuals by every means in its power. Dangerous and arduous as has been the work of the two chief Services in Bengal in the past, it will be doubly so in the future."
    That expression of apprehension is such that it is impossible for us to ignore it. These men are doing very difficult and dangerous work. They have been chosen by the Secretary of State and by the Government of the day and we owe it to them, whether they are British officers or Indians—the Indians may be even more exposed to danger in this respect than the British—to give them all the protection we can.
    4.28 p.m.
    The SOLICITOR-GENERAL: I should certainly not wish to discourage the diffidence of my hon. Friend the Member for South Croydon (Mr. H. Williams) even if it were within my power to dismiss in a summary way the points he raised. I should like to encourage it. The first point that he raised was whether we have taken the right line in Sub-section (1) in giving this safeguard to the existing provision of the Criminal and Civil Procedure Codes. He suggested that they might be bodily put into the Bill so that they could not be altered except by an Act of this House. I do not know whether he has read them, but I think the Committee will agree that that would be an inappropriate course. It may be desirable at some future date to increase the protection. They deal with matters of procedure of a somewhat technical and detailed kind and I do not think that they ought to be petrified, so to speak, by putting them into the Bill.
    Mr. H. WILLIAMS: The Solicitor-General says that they might be used for the purpose of increasing protection. The words are, "to abolish or restrict the protection." Therefore, the point that he raises does not occur in connection with this Clause.
    The SOLICITOR-GENERAL: It is, of course, always possible to base an argument against anything on the assumption that the people concerned are going to give way to improper pressure. If we took that line no scheme would work. It might be assumed, for instance, that the Secretary of State would give way to improper pressure or perhaps Members of this House would give way to improper pressure any machinery that you set up in this or any other matter can be criticised on those lines. We believe, however, that the safeguard that we have put into Sub-section (1) is completely satisfactory. First of all, the Governor-General and the Governor have special responsibilities for the interests of the public services and it will be their prime duty and object to see that those services receive proper treatment. Further, though there might be reason to anticipate pressure of certain kinds, I do not think that there is any reason to anticipate pressure by Ministers on the Government to remove perfectly proper protection from the officials who will be carrying out the orders of the ministers themselves. Ministers are in charge of their various departments and the civil servants are carrying out their duties under the Ministers; therefore, it is hardly likely that ministers will act in the way suggested and try to get this protection removed. We believe that the matter is absolutely safe in the hands of the Governor-General or the Governor, that there is no real cause for the fears which have been expressed, and that Sub-section (1) is best left as it is.
    The hon. Member for South Croydon raised a point of obvious importance in regard to Sub-section (3). He said that a case may go on a long time—he gave an example—with costs being incurred from month to month, which the defendant may have to pay. The hon. Member asked whether he could be reimbursed before the case closed. The answer clearly is "yes," and, if my hon. Friend will look at the proposal, he will see that there is a distinction drawn between costs incurred and damages or costs ordered to be paid. Costs ordered to be paid are the costs which the defendant may have to pay on the final decision. But "costs incurred" means that if he can say that he has had to incur costs, that his solicitors have sent in a bill and he has to pay £100 or £200, in the case that has been brought against

    59
    him, he can be defrayed those costs as from the date they are incurred if the Governor-General thinks it is a proper case in which to do so. The case referred to by the Noble Lady is clearly one where some point of importance was raised as to the right of search by a police officer. That is, of course, an important question, and obviously in a case of that kind the Government would stand behind their officer, and, in fact, conduct the case and pay the costs as they were incurred.
    Vice-Admiral TAYLOR: This is not an automatic payment. The Governor-General acts in his discretion.
    The SOLICITOR-GENERAL: Yes.
    Vice-Admiral TAYLOR: It is a responsibility of the defendant to appeal to the Governor-General to go into the case and see whether it is one in which he shall be reimbursed his costs. The Governor-General may say that the case has not gone on long enough, that he has not sufficient evidence yet upon which to make up his mind. That might go on for a long time.
    The SOLICITOR-GENERAL: But some one has to make up his mind, and I do not think there is any reason for the assumption made by the hon. and gallant Member. This is not a new matter. It happens in this country and has been happening in India. A servant of the Government may be sued for damages because of negligent driving of his motor car; he may run some one down and a writ be issued. He puts the matter before the Governor and asks if the Government will stand behind him. In most cases they do so, but it must be within their judgment as to whether they do so or not. Assume a case in which a man in the course of his duty gets drunk and injures some one. That may well be a case in which the public should not be put to expense in assisting in the case. There must be a discretion, and we think it is properly provided for by saying that the last word shall be with the Governor-General or Governor as the case may be.
    Duchess of ATHOLL: May I ask whether it will be easy for the Governor-General in the event of the case I have cited in which judgment was given against the officer by the Calcutta High Court to reimburse the expenses of the officer?
    The SOLICITOR-GENERAL: I should have said quite easy. It is obvious that the case to which the Noble Lady refers raised a point of constitutional principle. The Privy Council reversed the decision of the Calcutta High Court, and it is obvious therefore that there were grounds for taking the appeal to the Privy Council. It was a doubtful case, and there were strong arguments on both sides. The officer acted bona fide in the discharge of his duty believing that he was doing something which he had power to do. I cannot see the slightest reason for the Governor-General saying that this was not a proper case in which to support the officer. The Noble Lady has given notice of an Amendment which provides that there shall be previous sanction in civil cases as well as in criminal cases. The case which she put is clearly a case where previous sanction would have had to be given. No one can say that a case in which a decision has been given by two courts of law against a defendant is a frivolous or vexatious proceeding which ought to have been struck out before it came before the court.
    Duchess of ATHOLL: But the Privy Council reversed the decision.
    The SOLICITOR-GENERAL: But no one would strike out as frivolous and vexatious a proceeding of that kind, or would say it was a frivolous proceeding when it was decided against the defendant by two courts of law. No one would say that the High Court, for example, would have decided that it was a proceeding which never should have been brought at all. That kind of case would not be covered by the suggested Amendment to the new Clause. With regard to the Amendment of the hon. and learned Member for Ashford (Mr. Spens), we feel, and I think the Committee will feel, that, as far as civil proceedings are concerned, there is an important principle on the other side to be considered and which in the interests of the officials themselves should be preserved. That is the interests of the public. Civil proceedings are generally for damages to the person or property of the indidivual who, having received injury, says that he is entitled to damages. It is wrong to suggest or to have a procedure which suggests that

    61
    officials are to be safeguarded from being liable to individuals for damage which they may have inflicted upon anyone. We think it would be wrong in the interests of the civil servants themselves to introduce for the first time the condition that before an ordinary private citizen in India can issue a writ for damages to which he thinks he is entitled he should have to go to the High Court or to the Executive for leave. The proposal of the hon. and learned Member would inflict great hardship on people. Most of these are small cases and will be brought in the first instance in the local court, but, according to the Amendment, every one who has any claim, however good or however small against an official, would have to go to the High Court in Calcutta and Bombay and brief counsel before he could start his proceedings. He would have to incur special expenses by going to the High Court to get leave. What would happen there? Having gone to the High Court, the High Court may say that there is a primâ facie case against the defendant, that is, presumably, after having heard some of the evidence on affidavit. That surely is a damaging atmosphere for the defendant himself, namely, that after a preliminary examination, the High Court thinks that there is a primâ facie case against him. In our opinion, it would be extremely onerous on the plaintiff and prejudicial to the defendant.
    The procedure in India itself provides a safeguard to this extent, that when a case is brought in a court in India the first duty of the court is to define the issues, and, in so doing, it strikes out any which are irrelevant, frivolous or vexatious. That provides a safeguard against purely frivolous or vexatious proceedings. Although we appreciate the great importance of this matter, yet on the whole we do not think it would be in the interests of civil servants in India that we should go beyond what is provided by the new Clause. In so far as vexatious cases may be brought, they will only redound to the detriment of the pockets of those who bring them. Their frivolousness will become apparent, and the plaintiff will be mulcted in costs. It will be a very unsatisfactory way of spending money. There is a possibility, of course, of such cases being started, but we think it right not to go beyond what is proposed in the new Clause, because it would be wrong to set up a procedure which would at any
    62
    rate appear to hedge round civil servants against civil liability for acts which they may commit. The hon. and learned Member for Nelson (Mr. Thorp) suggested that the procedure with regard to criminal prosecutions was something which we were introducing by this Bill. That is not so. All that the Bill is doing is to adapt an existing safeguard to the new conditions which will be established.
    4.46 p.m.
    Mr. ATTLEE: While I realise that the position of India is a special one, I think we want to be very careful about what we do in this matter. There may be such cases as injustice by Government servants and Government officials to private individuals, ordinary citizens. In this country we have always been very jealous to protect the ordinary citizen. But as far as I can see the suggestion of the Noble Lady would give almost complete immunity to the official. It seemed to me that many of her remarks with regard to the length of time and so forth, were quite uncalled for. The Noble Lady might have raised the same point over and over again on the question of the innocent persons who were brought up in the Meerut trial and were kept for years in an agony of mind. We have to be very careful not to give too much immunity to public officials. They may commit offences like anyone else. The tendency always has been that when action was taken the Government naturally stood by its officers. We have had plenty of cases, even in this country, where someone has been proceeded against and it has taken years and years before it was possible to get any redress. I think we ought not to accept any extension of this Clause.
    4.49 p.m.
    Brigadier-General Sir HENRY CROFT: My Noble Friend the Member for Perth and Kinross (Duchess of Atholl) was not complaining that possibly a case might be dragged out in point of time. She no doubt realises that that may happen in any country in the world, although we believe that it happens more frequently in India. Her point was that during the whole of this time a particular servant of the State would be suffering vexation and distress and would not know what his position was. I very much regret that the learned Solicitor-General could not indicate the Government's acceptance of her suggestion that it should be the

    63
    Governor-General or the Governor who should decide whether these cases should be proceeded with or not All of us who have been trying to study the atmosphere wherever you have had these proceedings during the last seven, eight or 10 years and even longer, must have realised that this is a subject which requires our very special attention. I have a whole list of cases here. A case is brought up against some policeman here or some official there, why? Because after some bloody riot he has entered a house in order to search for firearms, or to get evidence, as in the case at Midnapore, where a bomb was thrown Political feeling is aroused directly the officer does his duty in a disaffected area, such as Midnapore. Some Members of the Committee may remember that after what was, I think, the third murder, the Governor himself, if I remember rightly, encouraged the idea that there should be an inquiry as to any damage which might have been done in certain persons' houses when the officers were making a lightning search in order to try to get evidence with regard to that horrible tragedy.
    It is a question which requires our special attention. I had hoped that the Solicitor-General would have indicated that it was a question which he could consider along the lines suggested by the Noble Lady, which would have met the situation at any rate for a period of time. I believe that the new Clause of the Secretary of State, whose absence we all deplore, does not meet the case which has been presented by the Civil servants of Bengal. Therefore, I hope that the learned Solicitor-General will still consider the matter further.
    4.52 p.m.
    Lieut.-Colonel APPLIN: I want to ask my hon. and learned Friend the Solicitor-General whether he can explain what appears to me to be a contradiction. Sub-section (2, b) of the new Clause says:
    "Provided that nothing in this Subsection shall be construed as restricting the power of the Federal or a Provincial Legislature to amend the said Section by a Bill or Amendment introduced or moved…"
    That seems to me completely to contradict Sub-section (1), which says:
    "No Bill or Amendment to abolish or restrict the protection afforded to certain servants of the Crown in India by Section 197 … shall be introduced or moved …"
    64
    Surely that is a contradiction. If it is possible for the Federal or Provincial Legislature to amend the Indian Penal Code to that extent, they can do anything they like apparently, and all our work is wasted, unless there is some explanation.
    4.54 p.m.
    The SOLICITOR-GENERAL: Subsection (1) says that:
    "No Bill or Amendment to abolish or restrict the protection afforded…shall be introduced or moved…without the previous sanction of the Governor-General in his discretion…"
    Sub-section (2) goes on to say that the powers conferred upon a local government by the said Section 197 shall be exercised by the Governor in his individual judgment. That is merely a proviso to make it clear that Sub-section (2), which says how the powers shall be exercised, does not negative the possibility contemplated by Sub-section (1), of a Bill or Amendment being introduced, provided the Governor-General or Governor gives his sanction.
    Duchess of ATHOLL: Is it not clear in Sub-section (2) that these powers might be restricted and completely abolished? That is why I wished to make an Amendment.
    4.55 p.m.
    Mr. RAIKES: I want to put one question to the learned Solicitor-General regarding this new Clause. I see that in Clause 259 of the Bill the consent of the Governor-General or Governor is required to any civil or criminal proceedings to be brought against any official in his official capacity before this Bill passes into law. If that principle is accepted in Clause 259 surely the protection it affords becomes more important after this Bill is passed? If the protection is given in Clause 259 why is it to be swept away as soon as this Bill becomes an Act?
    The SOLICITOR-GENERAL: I should be surprised if my hon. Friend who is learned in the law has not realised that there is all the difference in the world between passing an indemnity for past acts and passing a form of indemnity relating to acts in the future. It is not unusual to have an indemnity for what has happened in the past. I do not think anyone will suggest that the principle of Clause 259 should be extended for all time.
    4.57 p.m.
    Viscount WOLMER: There is one very important point to which no reply has been given. I think we all agree that Clause 259 is necessary in regard to acts that have been done in the past, but will not some provision such as has been suggested be necessary for the future? Why is Clause 259 necessary? Because there are certain suits pending, or the likelihood of their being pending at the appointed date. Therefore the Government have put in this safeguard in regard to acts that have been done in the past. They have extended the safeguard to civil proceedings. The learned Solicitor-General has not answered the point of my hon. and gallant Friend the Member for Bournemouth (Sir H. Croft), that when you get tragic occurrences, such as that at Midnapore, where the police have to make domiciliary searches, often very hurriedly and very drastically, at a time of acute feeling in the district, officers may be exposed to a host of civil actions. In fact there has been an experience in Midnapore in regard to demage which officers were alleged to have done in the houses which they searched.
    I understand that the position under the Bill is that anything that was done at Midnapore will be covered by Clause 259, but that if anything is done in exactly similar circumstances in future none of these officers would be protected against actions which may be purely vexatious in their intention. I quite realise the force of what the learned Solicitor-General has said about the undesirability of droit administratif, which puts a civil servant in a superior position to that of the ordinary subject of the Crown, but surely there are very special circumstances such as those to which my hon. and gallant Friend the Member for Bournemouth has drawn attention which are not met sufficiently in the new Clause. I ask whether between
    now and the Report stage the Government would consider the possibility of some procedure for dealing with what I would call a local state of emergency. Where there has been a communal riot, or a riot against the authority of the Crown, where you have a great state of excitement prevailing, it may be possible to declare that a state of emergency exists, and in such circumstances the acts that the police are compelled to take in the exercise of their duty should not be subject to the sort of civil suits which we have in mind. It seems to me that there is a clear distinction in circumstance between the ordinary, everyday action of the police, which I agree ought not to be put in a special category, and action which the police may have to take in periods of great emergency, or of great local excitement. Would it be possible for the learned Solicitor-General to give us an assurance that this matter will, at any rate, be considered between now and the Report stage? Otherwise, it seems that the point made by the hon. and gallant Member for Bournemouth is not really met.
    The CHAIRMAN: Does the hon. and learned Member for Ashford (Mr. Spens) wish to move his Amendment?
    Mr. SPENS: In view of what the learned Solicitor-General has said, although I am bound to say I am not quite—
    The CHAIRMAN: Is the hon. Member rising on his Amendment? There is no question before the Committee.
    Mr. SPENS: I do not propose to move my Amendment.
    Motion made, and Question put, "That the Clause be added to the Bill."
    The Committee divided; Ayes, 188; Noes, 36.

    Division No. 155.]

    AYES.

    [5.5 p.m.

    Adams, D. M. (Poplar, South)

    Bossom, A. C.

    Campbell, Vice-Admiral G. (Burnley)

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

    Boulton, W. W.

    Campbell-Johnston, Malcolm

    Albery, Irving James

    Bower, Commander Robert Tatton

    Cautley, Sir Henry S.

    Assheton, Ralph

    Bowyer, Capt. Sir George E. W.

    Cazalet, Thelma (Islington, E.)

    Attlee, Clement Richard

    Brass, Captain Sir William

    Cazalet, Capt. V. A. (Chippenham)

    Baldwin, Rt. Hon. Stanley

    Briscoe, Capt. Richard George

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

    Balfour, Capt. Harold (I. of Thanet)

    Brocklebank, C. E. R.

    Chamberlain, Rt. Hon. N. (Edgbaston)

    Banfield, John William

    Bullock, Captain Malcolm

    Chorlton, Alan Ernest Leofric

    Barton, Capt. Basil Kelsey

    Burgin, Dr. Edward Leslie

    Cleary, J. J.

    Beauchamp, Sir Brograve Campbell

    Butler, Richard Austen

    Cooke, Douglas

    Bevan, Aneurin (Ebbw Vale)

    Cadogan, Hon. Edward

    Cooper, A. Duff

    Blindell, James

    Campbell, Sir Edward Taswell (Brmly)

    Cove, William G.

    Cranborne, Viscount

    Joel, Dudley J. Barnato

    Pickering, Ernest H.

    Crossley, A. C.

    Johnstone, Harcourt (S. Shields)

    Pickthorn, K. W. M.

    Daggar, George

    Jones, Morgan (Caerphlily)

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

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

    Lamb, Sir Joseph Quinton

    Procter, Major Henry Adam

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

    Lambert, Rt. Hon. George

    Ramsbotham, Herwald

    Davies, Rhys John (Westhoughton)

    Lansbury, Rt. Hon. George

    Ramsden, Sir Eugene

    Denville, Alfred

    Leckle, J. A.

    Reed, Arthur C. (Exeter)

    Despencer-Robertson, Major J. A. F.

    Leech, Dr. J. W.

    Reid, James S. C. (Stirling)

    Dugdale, Captain Thomas Lionel

    Leighton, Major B. E. P.

    Reid, William Allan (Derby)

    Duggan, Hubert John

    Lewis, Oswald

    Rhys, Hon. Charles Arthur U.

    Eales, John Frederick

    Liddall, Walter S.

    Rosbotham, Sir Thomas

    Edwards, Charles

    Lindsay, Noel Ker

    Rothschild, James A. de

    Ellis, Sir R. Geoffrey

    Lister, Rt. Hon. Sir Philip Cunliffe-

    Runciman, Rt. Hon. Walter

    Elmley, Viscount

    Lloyd, Geoffrey

    Runge, Norah Cecil

    Evans, R. T. (Carmarthen)

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

    Russell, Alexander West (Tynemouth)

    Fleming, Edward Lascelles

    Logan, David Gilbert

    Russell, R. J. (Eddisbury)

    Foot, Isaac (Cornwall, Bodmin)

    Lovat-Fraser, James Alexander

    Rutherford, Sir John Hugo (Liverp'l)

    Fraser, Captain Sir Ian

    Lumley, Captain Lawrence R.

    Salmon, Sir Isidore

    Fremantle, Sir Francis

    Lunn, William

    Salt, Edward W.

    Ganzoni, Sir John

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

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

    Gardner, Benjamin Walter

    MacAndrew, Capt. J. O. (Ayr)

    Sassoon, Rt. Hon. Sir Philip A. G. D.

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

    Macdonald, Gordon (Ince)

    Savery, Samuel Servington

    Goldie, Noel B.

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

    Shakespeare, Geoffrey H.

    Granville, Edgar

    MacDonald, Malcolm (Bassetlaw)

    Shaw, Captain William T. (Forfar)

    Grattan-Doyle, Sir Nicholas

    McEntee, Valentine L.

    Smith, Tom (Normanton)

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

    McKie, John Hamilton

    Smithers, Sir Waldron

    Griffiths, George A. (Yorks, W. Riding)

    Maclay, Hon. Joseph Paton

    Somervell, Sir Donald

    Groves, Thomas E.

    McLean, Major Sir Alan

    Southby, Commander Archibald R. J.

    Grundy, Thomas W.

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

    Spender-Clay, Rt. Hon. Herbert H.

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

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

    Stanley, Rt. Hon. Lord (Fylde)

    Guinness, Thomas L. E. B.

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

    Stanley, Rt. Hon. Oliver (W'morland)

    Gunston, Captain D. W.

    Mayhew, Lieut.-Colonel John

    Stewart, J. Henderson (Fife, E.)

    Hacking, Rt. Hon. Douglas H.

    Mills, Major J. D. (New Forest)

    Strauss, Edward A.

    Hamilton, Sir George (Ilford)

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

    Strickland, Captain W. F.

    Hammersley, Samuel S.

    Mitchell, Sir W. Lane (Streatham)

    Sueter, Rear-Admiral Sir Murray F.

    Harris, Sir Percy

    Molson, A. Hugh Elsdale

    Summersby, Charles H.

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

    Moreing, Adrian C.

    Sutcliffe, Harold

    Haslam, Henry (Horncastle)

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

    Thorne, William James

    Haslam, Sir John (Bolton)

    Muirhead, Lieut.-Colonel A. J.

    Tinker, John Joseph

    Henderson, Sir Vivian L. (Chelmsford)

    Munro, Patrick

    Tufnell, Lieut.-Commander R. L.

    Hepworth, Joseph

    Nation, Brigadier-General J. J. H.

    Wallace, Captain D. E. (Hornsey)

    Herbert, Major J. A. (Monmouth)

    Nicholson, Godfrey (Morpeth)

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

    Herbert, Capt. S. (Abbey Division)

    O'Donovan, Dr. William James

    Ward, Sarah Adelaide (Cannock)

    Hills, Major Rt. Hon. John Waller

    O'Neill, Rt. Hon. Sir Hugh

    Wedderburn, Henry James Scrymgeour

    Holdsworth, Herbert

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

    Wedgwood, Rt. Hon. Josiah

    Hope, Capt. Hon. A. O. J. (Aston)

    Orr Ewing, I. L.

    Whiteside, Borras Noel H.

    Horsbrugh, Florence

    Palmer, Francis Noel

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

    Howitt, Dr. Alfred B.

    Parkinson, John Allen

    Young, Rt. Hon. Sir Hilton (S'v'noaks)

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

    Patrick, Colin M.

    Hume, Sir George Hopwood

    Peat, Charles U.

    TELLERS FOR THE AYES.—

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

    Penny, Sir George

    Sir Victor Warrender and Dr.

    Jackson, Sir Henry (Wandsworth, C.)

    Percy, Lord Eustace

    Morris-Jones.

    NOES.

    Acland-Troyte, Lieut.-Colonel

    Croft, Brigadier-General Sir H.

    Nunn, William

    Allen, Lt.-Col. Sir William (Armagh)

    Emmott, Charles E. G. C.

    Remer, John R.

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

    Goodman, Colonel Albert W.

    Smiles, Lieut.-Col. Sir Walter D.

    Astbury, Lieut.-Com. Frederick Wolfe

    Gretton, Colonel Rt. Hon. John

    Somervllie, Annesley A. (Windsor)

    Atholl, Duchess of

    Hales, Harold K.

    Taylor, C. S. (Eastbourne)

    Bailey, Eric Alfred George

    Hartiand, George A.

    Taylor, Vice-Admiral E. A. (P'dd'gt'n, S.)

    Batey, Joseph

    Keyes, Admiral Sir Roger

    Thorp, Linton Theodore

    Blaker, Sir Reginald

    Knox, Sir Alfred

    Wayland, Sir William A.

    Broadbent, Colonel John

    Lennox-Boyd, A. T.

    Williams, Herbert G. (Croydon, S.)

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

    Levy, Thomas

    Wolmer, Rt. Hon. Viscount

    Cecil, Rt. Hon. Lord Hugh

    Lockwood, Capt. J. H. (Shipley)

    Churchill, Rt. Hon. Winston Spencer

    Marsden, Commander Arthur

    TELLERS FOR THE NOES.—

    Craddock, Sir Reginald Henry

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

    Mr. Wise and Mr. Raikes.

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

    NEW CLAUSE.—(Provision as to certain India office provident funds.)
    Any sums which if this Act had not been passed would have been payable, whether as of right or not, by the Secretary of State in Council out of the revenues of India to or in respect of a person who was a subscriber to the Regular Widows' Fund, the Elders Widows' Fund, or the India Office Provident Fund, shall be paid out of the revenues of the Federation and charged on those revenues.—[Mr. Butler.]
    Brought up, and read the First time.
    5.10 p.m.
    The UNDER-SECRETARY of STATE for INDIA (Mr. Butler): I beg to move, "That the Clause be read a Second time."
    These are three old funds which have long since been closed to fresh entrants, but there are certain beneficiaries still drawing benefits in the shape of pensions. All these funds are non-votable, and this new Clause continues their non-votability,

    69
    and secures their payment from the revenues of India. The Regular Widows' Fund was established in 1820 for the benefit of the widows and families of those people employed in the home service of the East India Company. The word "Regular" derives from the phrase "The regular home establishment" of the old East India Company. This establishment included, broadly speaking, the superior, or officer, class who served the old East India Company, and there are a few beneficiaries of this fund still alive. The Elders Widows' Fund was established in the same year for the benefit of the wives and families of people employed in the home service of the East India Company who were regarded as members of what was known in those old days as the extra department. The Elder, in the strict sense of the term, was an overseer of labour in the warehouses of the East India Company. The persons who subscribed to the Elders Widows' Fund included, however, extra clerks, attendants, messengers and other subordinates. Therefore, between them these two funds comprise certain beneficiaries, not very many—in fact, they are few in number—who continue to draw benefit from these ancient funds which are, as I said, now closed to new entrants.
    Payments from these two funds were made out of capital investments which were held by the Secretary of State in Council, and under the original 60 Queen Victoria, Chapter 11, the Secretary of State was charged with the payment of sums out of the revenues of India if these original capital sums were exhausted. Those original capital sums are not completely exhausted, but the contingency of their finally being exhausted must be provided for in this new Bill which we are in process of passing. The India Office Provident Fund, the third referred to in this new Clause, was instituted in 1877 to provide pensions to the widows of members of the permanent staff of the Secretary of State who were not subscribers to either of the other two funds to which I have referred. This fund was closed in 1885. The money in the fund was handed over to the Secretary of State under an order of court and the duty was laid upon him to guarantee the payment to the dependants of the original subscribers to this particular India Office Provident Fund. Therefore, the Committee will
    70
    see that in moving this new Clause we are doing something which I am sure will meet with approval on every side of the Committee, that is, to save the benefits for a few surviving dependants, probably elderly daughters, of the original subscribers to these three funds. I have attempted to give the Committee every particular about these funds and to show that in passing this new Act we do not want to check any payments which would normally be paid to beneficiaries under these funds.
    Viscount WOLMER: Can my hon. Friend tell us the number of beneficiaries affected? I do not think he mentioned that.
    Sir PERCY HARRIS: What is the amount of money involved?
    5.16 p.m.
    Mr. H. WILLIAMS: The sum cannot be very great, owing to the fact that the bulk of the people who were originally members of the fund have now passed away, but it is rather interesting that those pensions were originally based, apparently, on capital sums in the hands of the Secretary of State. I understand there are still certain sums in his possession, but that there is a possibility that the income from these funds will not be adequate to meet all these pensions. The Clause is accordingly brought forward as a safeguard to provide that if there is any deficiency in these capital sums, the requisite sums are to be provided out of the non-votable revenues of the Federation. I think we ought to know what is the present actuarial liability, that is to say, what is the capital sum estimated to be necessary to give the Secretary of State in order to meet the liabilities, in addition to what is already in his possession.
    I am glad the Clause has been tabled. It is a safeguard, if not as complete as some of us would like, with the capital sums definitely placed in the hands of the Secretary of State. But one would like to know why, when these funds were started, they gave them such curious names. The Regular Widows' Fund suggests that there must have been some other fund to which the irregular widows belonged. There is also the question of the Elders Widows' Fund, not the "elder widows," and I would like to

    71
    know what an elder was who had a widow.
    5.18 p.m.
    Mr. BUTLER: Replying first to my hon. Friend the Member for South Croydon (Mr. H. Williams), I thought he might have heard in my original statement, which I attempted to make as comprehensive as possible, the definition of an Elder. He asked me some important questions as to the exact state of these funds and the amount of money involved in these payments. In my original remarks, when I referred to the possibility of the capital sums held by the Secretary of State being exhausted and said there was provision for the money to be paid from the revenues of India, I did not imply that there was any immediate likelihood of these funds being exhausted. In fact, the sums involved for all the dependants of these funds are only a few hundreds a year, and certainly in total not over £1,000 a year.
    Viscount WOLMER: All three funds?
    Mr. BUTLER: Yes. Therefore, the liability is very small indeed, but in the unfortunate event of the funds not lasting out sufficiently to meet the money necessary for the last surviving beneficiary of these funds, we have made it certain that the money will be forthcoming from the revenues of India. The total number of beneficiaries under the first two funds is 30 between them, and under the last fund, while it is not absolutely certain, it cannot be more than approximately a dozen.
    Clause added to the Bill.

    NEW CLAUSE.—(Corporation tax.)
    (1) Corporation tax shall not be levied by the Federation in any Federated State until 10 years have elapsed from the establishment of the Federation.
    (2) Any Federal law providing for the levying of corporation tax shall contain provisions enabling the Ruler of any Federated State in which the tax would otherwise be leviable to elect that the tax shall not be levied in the State, but that in lieu thereof there shall be paid by the State to the revenues of the Federation a contribution as near as may be equivalent to the net proceeds which is estimated would result from the tax if it were levied in the State.—[Mr. Davidson.]
    Brought up, and read the First time.
    5.20 p.m.
    The CHANCELLOR of the DUCHY of LANCASTER (Mr. J. C. Davidson): I beg to move, "That the Clause be read a Second time."
    This Clause makes specific provision for the two conditions, which it has always been assumed and accepted throughout the discussions, the States would normally make when they accepted the corporation tax as a Federal subject. The reason for the Clause is that it was feared, from representations which were received from Indian States and which are embodied in the White Paper, that there was some misunderstanding about the actual implications of the Bill. It was therefore thought wise to put in as specific provisions the conditions which it was always assumed would be made by the States in regard to the inclusion of a corporation tax in the Federal Budget. In the first line of Sub-section (1) of the new Clause, I would like to add the words "by the Federation" after the words "shall not be levied" to the Clause as it appears on the Order Paper. The reason for this addition is that we wish to safeguard the position of a State which already levies a corporation tax, as in the case of Mysore. If those words were not inserted, the position might be uncertain.
    5.23 p.m.
    Viscount WOLMER: This is a most extraordinary provision to insert in a Constitution. My right hon. Friend may be telling us what is no more than the truth when he says that this represents an understanding which has been assumed throughout, but when you are drafting a Constitution you cannot proceed on understandings that have been assumed throughout, because they are liable to lead to misunderstandings, as I think the Government have already found out in their dealings with the Princes. They were certainly right to put this in the Bill, but it is a most extraordinary proposal, and it appears to me to set a most important precedent. I should like to see this precedent applied to our English Parliament. We might have an Act saying that there shall be no increase of Super-tax for the next 10 years, and that if any increase is proposed after 10 years' time, any Member of Parliament may elect to pay, not Super-tax, but some other tax instead.

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    Can my right hon. Friend point to a single precedent in any Constitution in the world for a provision of this sort, where one member of a Federation is entitled to say that he does not propose to pay such and such a tax, even though it has been imposed by the Federal Parliament?
    I take it that the position visualised by this new Clause is that the Federal Government will propose a corporation tax, which will be debated in the Federal Assemblies. The representatives of any State will have every opportunity to speak against it, to vote against it, to lobby against it, and to use all the influence they can, publicly and privately, against the proposal being carried into law. The representatives of that State may be defeated in both Chambers at every turn, but after this law has passed through all the constitutional stages, it is, under this new proposal, to be open to the Ruler of the State to take this unprecedented action. Let me call the attention of the Committee to the extraordinary wording of this Clause:
    "enabling the Ruler of any Federated State in which the tax would otherwise be leviable to elect that the tax shall not be levied in the State, but that in lieu thereof there shall be paid by the State to the revenues of the Federation a contribution as near as may be equivalent to the net proceeds which it is estimated would result from the tax if it were levied in the State."
    I should like to ask my right hon. Friend how these points are to be determined. Who will determine how much money a corporation tax would bring in, what the net proceeds of such a tax would be in any given State? The word "net" appears to be a super-extraordinary condition, because it will be open to the Ruler of any State to argue, "It will cost you so much to collect this tax, and it is really worth only half what you think it is worth." Who is to determine how much this hypothetical tax would raise in a given State? The Ruler of the State might have one view and the Finance Minister of the Federal Government another view, but under this Clause it is laid down that the Ruler is to elect that the amount that the corporation tax would bring in shall be paid by him in some other way. I take it from this wording that it will be open for the Ruler to say how much the net proceeds of the tax would be. If that be the case, I think it is an invitation to the Ruler of that State whether his representatives voted in favour of or against it,
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    to say, "Oh, I estimate that the corporation tax in my State would have been so costly to collect that it would only have brought in a very small sum, and that small sum I elect to pay in different fashion."
    I submit that there never has been a proposal of this sort in any Constitution in the history of the world, and I challenge my right hon. Friend to produce a single precedent of any importance for this proposal. Secondly, this proposal is inequitable. It is not fair that States should be members of a Federation and that they should have their share of representation in the Legislative Assemblies of the Federation, with opportunities of speaking and voting, and then, when a matter has been decided against them, that they should have power to say, "No, that law will not apply in our State." Thirdly, I maintain that it is unworkable, because no provision is made in the Clause for determining what the amount of any sum in dispute will be. I should be much obliged to my right hon. Friend if he would explain to the Committee how he proposes to work this extraordinary provision.
    5.30 p.m.
    Mr. H. WILLIAMS: I wish to raise a rather different point in connection with this new Clause, namely, one of definition. I want to know precisely what we are trying to do by this new Clause. If hon. Members refer to Clause 289 they will find that "corporation tax" is there defined as meaning—
    "any tax on so much of the income of companies as does not represent agricultural income."
    Thus, agricultural income is cut out and we are then referred back to an earlier part of the Clause which states that "agricultural income" in this connection means agricultural income as defined for the purposes of enactments relating to Indian income tax. Therefore, "corporation tax" is not something which we are defining here. We are taking a definition of "agricultural income" as defined under Indian income tax legislation and, as far as I know, that means any Act of the existing Legislature as it may be amended by the new Parliament which we are now bringing into being. There is nothing to stop the Legislature in future from so altering enactments

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    relating to Indian income tax that agricultural income will take on an entirely different meaning from that which it possesses to-day. In that way it could completely alter the definition of "corporation tax" contained in Clause 289. That seems rather absurd.
    I am not going into the points which have been so admirably stated by my Noble Friend the Member for Aldershot (Viscount Wolmer) but if, rightly or wrongly, we are going to impose this disabling provision on the Federation with regard to corporation tax over a period of years, the Clause ought to have a clear and precise meaning. Here we are referred back to a paragraph in Clause 289, which, in turn, refers us to an earlier paragraph of the same Clause, and finally we are referred to existing enactments of the Indian Legislature and there is no disabling provision to the effect that those enactments are not to be altered. Therefore, any words of definition which we have in the Bill seem perfectly meaningless. The object of the Clause may be good or bad. For the moment I am not arguing that question. I am arguing whether we are passing here something which has a permanent meaning, or something which has only a transient meaning. Unless I have wrongly interpreted the significance of the definitions in Clause 289 it would be possible, after the Federation has come into being, to drvie a coach and four through this Clause and the disablement which the Government are proposing to impose on the Federation in respect of the States, would then have no meaning whatever.
    5.35 p.m.
    Mr. ALBERY: Sub-section (1) of the proposed new Clause provides that corporation tax is not to be levied in any federated State until 10 years have elapsed, and it presumably means that no corporation tax is to be levied by the Federation in that period. I understand from the right hon. Gentleman that such tax si already levied in, at any rate, one State. Why in those circumstances is it necessary to have Sub-section (2) of the Clause? If Sub-section (1) were passed alone it would allow 10 years in which the States could adjust themselves. That seems an adequate time and surely Subsection (2) is in those circumstances unnecessary.
    5.36 p.m.
    Mr. WISE: I hope the right hon. Gentleman will introduce a novel procedure in this case by actually replying to the points raised by the Noble Lord the Member for Aldershot (Viscount Wolmer) and the hon. Member for South Croydon (Mr. H. Williams), because in this Clause there seems to be an extraordinary departure from any known principle of federal government. This is a remarkable provision unduly limiting the powers of the Federal Government. I do not think that under the constitution of any existing Federation a tax can be levied by a Federal Government on some of the component parts of the Federation but not on certain other component parts. I do not think, for example, that it would be possible for the Commonwealth of Australia to levy a tax and specifically exempt from that tax, say, Tasmania and South Australia. But if we go further into the possible results of this procedure we see that its effect will be to drive industry from British India into the native States. This corporation tax is, definitely, a tax on industry and if it can be established, as we presumably are establishing it now, that industries will be subject to extra taxation in British India to which they would not be subject if they were operating in native States, there must inevitably be a tendency for industry to leave British India and migrate to areas where it will be less heavily taxed.
    The second part of the new Clause provides that even after the 10 year period an industry in a native State may still be exempt from the tax which is levied on it in British India. A ruler has only to find some alternative system of raising the money. He can, let us say, squeeze a little more out of the ryot. It has been done before in the native States. In one way or another he can avoid this particular tax on industry and I should say it is extremely possible that a ruler who wanted to see industrial development in his State would not, whatever happened, allow this tax to be levied in his State. Therefore, I suggest that the proposal is unfair to industry in British India, and I hope that the Government will seriously consider that point. Those who speak on the same side as I do on these questions cannot be accused of any undue affection for the Indian manufacturer. Some of us regard him as the

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    source of three-fourths of our trouble. But, at least, I think he is entitled to the same consideration as the potential manufacturer in a native State. It is true that this Clause may go a long way towards conciliating some of the opposition which the Princes apparently have shown in the past towards the Federal Clauses of the Bill. It meets, I think, one of the objections which they have raised but I suggest that the objection which it is meeting is not one which we ought to consider or to tolerate and that they are claiming something to which they have no right and to which no other component part of a Federation anywhere else in the world has any claim. I trust that this matter will be given the most serious consideration, and that between now and the Report stage something will be done to balance conditions more evenly in this respect between British India and the native States.
    5.39 p.m.
    Sir WILLIAM WAYLAND: It appears to me that the new Clause, as it appears on the Paper, will probably lead to considerable friction between the Federal Government and the native States. I ask the right hon. Gentleman to consider whether he could not add words which would make clear what authority is to determine as between the one side and the other the amount of tax which ought to be paid. In case a State decided that they would pay a lump sum that would make the position clearer.
    5.40 p.m.
    Mr. DAVIDSON: I do not think that this is the time or place for entering into the broader issues of the relations of the States to the Indian Federation, but I shall do my best to answer the points raised by hon. Members.
    Viscount WOLMER: This is a Second Reading Debate on the Clause.
    Mr. DAVIDSON: I do not think my Noble Friend is quite right in suggesting that we should have a general discussion. I have moved a new Clause dealing with a specific point and questions arising on that specific point I propose to deal with as fully as possible in answer to hon. Members. But, as I said, I do not think that this is the occasion for entering into questions about other constitutions. There is no precedent, and anyone who sat on the Joint Select Committee or the
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    other bodies which have investigated this problem would not look for any precedent from any foreign constitution or any other federal constitution in connection with this new constitution for India. The hon. Member for Gravesend (Mr. Albery) asked whether it would not be possible to leave out Sub-section (2) in view of the provision in Sub-section (1) that no corporation tax was to be levied by the Federation in any State until 10 years have elapsed. To leave out Sub-section (2), however, would be failing to meet one condition which, from the very beginning, was clearly made by the States and accepted by all parties in the preliminary discussions on the Constitution. The States always made it plain that they would preserve to themselves the right, not to withhold contributions, but to decide whether contributions should be derived from direct taxation, as exists in the case of Mysore, or whether equivalent payment should be made out of the revenues of the State to that which would be leviable if it were raised by a corporation tax. On the Report stage the Government intend to move an Amendment to put into the hands of the Comptroller and Auditor-General the right and the duty of making the assessment to which reference is made at the end of Sub-section (2).
    The Noble Lord said this provision was without precedent in any constitution. I say again to the Committee that we cannot look for precedents in this matter in other constitutions. The hon. Member for Smethwick (Mr. Wise) made the same point, and I have already answered the hon. Member for Canterbury (Sir W. Wayland) by telling him that the Comptroller and Auditor-General will be the authority to make the assessment. I hope that I have also made it clear already that this new Clause was thought by the Government to be unnecessary and, therefore, there was no provision in the Bill as originally drafted. In our view all that the States wanted could be got during the negotiations previous to accession but, in view of the misunderstanding which was clearly demonstrable in their representations when we published the White Paper, it was thought better to make specific provision for what has been accepted—in spite of what hon. Members say—by the different parties to the discussions on the draft constitution as

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    inevitable and reasonable conditions which the States were entitled to make in connection with direct taxation of this kind.
    Major-General Sir ALFRED KNOX: Will the right hon. Gentleman answer the important point made by the hon. Member for Smethwick (Mr. Wise), that this power of the Indian States to refuse to pay corporation tax will tend to attract industry from British India to the States?
    Mr. DAVIDSON: The burden on the revenues of a State will be the same burden as if the corporation tax had been imposed.
    Sir A. KNOX: But from the point of view of industry it will be an advantage.
    Mr. DAVIDSON: Not necessarily. It depends on the form of taxation.
    Mr. WISE: Industry can be definitely encouraged in States by exemption from taxation, because taxation can be levied on, say, agriculture or entertainments or something of that sort. That will be a definite magnet to industry as such to go into a native State. That is why these conditions are so unfair.
    Mr. DAVIDSON: There is one observation I would have liked to make on many occasions during the passage of this Bill through Committee. A great many hon. Members have referred to the future of the Bill, but have not been conscious of the fact that the situation, as it at present exists, is precisely the same as it will be when the Bill has been passed, and that in this respect there will be no alteration in the existing conditions. If the existing conditions have not led to great alterations in the States, is it likely or reasonable to expect that any tremendous movement will take place in the future which is not taking place at the present time?
    5.47 p.m.
    Viscount WOLMER: My right hon. Friend cannot get away with the arguments as easily as that. We are setting up a constitution which is, presumably, intended by the Government to last a certain amount of time. The whole industrial movement in India is a very short-lived one; it has only just started; and if the Indian Nationalist movement has its way, as undoubtedly it will, the
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    industrial movement in India will be a big and long drawn-out affair. We are here setting channels into which the industries of India will have to fit themselves, and to a certain extent digging the channels into which they will flow. The point made by my hon. Friend the Member for Smethwick (Mr. Wise) is a sound one. I would remind hon. Members representing the Labour party—I am sorry that on a matter of this industrial importance there are only two present—that the States may have a very much lower standard of factory legislation than the rest of India. This Clause will enable a State not to have the corporation tax, but to levy a tax in some other way which, as the hon. Member for Smethwick pointed out, may be oppressive to the ryot. It may take the burden off the shoulders of the wealthy capitalist and put it on the poor under-dog. There may be an inducement in this new Clause to give industries set up in a State an unfair advantage over industries in British India or in other States. That, of course, is in addition to the gross inequity of putting a provision of this sort in a constitution, and my right hon. Friend has not in the least got rid of the argument that a proposal of this sort cannot work equitably.
    I am glad to hear that further Amendments are to be introduced so that the sum in dispute can be decided by some impartial authority. I am glad that the Government recognised that amendment is necessary, but it passes my comprehension how they think that an arrangement like this can last and be accepted by public opinion in India and by representatives of British India. It is one of those concessions which have been made on the backstairs or at a round table conference—I do not care what article of furniture my right hon. Friend has chosen to assist him in his negotiations. A proposal of this sort is incapable of standing the test of impartial examination in framing a constitution. It has not been put in as a workable or an equitable proposal. It has been put in as a bargaining counter in order to get a certain section of the Princes to come in. I do not know whether my right hon. Friend can tell the Committee which States he hopes this Clause will square, but, to my mind, it is only another example of erecting a constitution which you call a Federation, but which is not

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    really a Federation at all. It lacks many of the essential characteristics of a Federation, and must produce a state of affairs which I cannot believe public opinion in India will regard for long as equitable.
    5.52 p.m.
    Mr. ATTLEE: The Noble Lord has pointed out what most of us know already, namely, the difficult position that exists in India owing to the fact that India is a network of jurisdictions, and that this country is bound by Treaty obligations not to interfere at present in the internal affairs of Indian States. The question from the point of view of the party on these benches is how far we can get in this Federation towards levelling up conditions in British India and the Indian States. The Noble Lord refers to the question of labour legislation. I do not remember hearing him eloquently supporting the very Amendment which I put forward—
    Viscount WOLMER: I did support the hon. Gentleman but I am afraid not eloquently.
    Mr. ATTLEE: I should have thought we might have had the Noble Lord's support with his fervid eloquence. Suppose the Noble Lord is right and we did what he suggests and abandoned all ideas of federation. The difficulty is that we should be left in exactly the same position. There is now no control over the Indian States, and there would be no control except in so far as they adhere to the Geneva Conventions. There would be no control over labour legislation and no control over the question whether taxation is equitable between one kind of property and another. I really rose to ask what is the Noble Lord's solution?
    Viscount WOLMER: I am afraid that we should get on to Second Reading ground if I replied to the hon. Gentleman, but my short answer is that we are not in a position to form a Federation at the present moment, because we have not the constituents out of which a real Federation can be formed. I would much rather wait a generation until we have the constituents out of which we can form a real Federation than make myself responsible for a make-believe sham which is going to perpetuate a great many
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    scandals under the aegis and the authority of this Parliament.
    Mr. ATTLEE: I gather that the Noble Lord is not really concerned about the prosperity of industry in British India?
    Viscount WOLMER: Certainly I am.
    The CHAIRMAN: We must really get back to the new Clause.
    5.55 p.m.
    Mr. BAILEY: The right hon. Gentleman said he would deal with all the points, but I was surprised that he did not reply to the powerful speech of my hon. Friend the Member for South Croydon (Mr. H. Williams). My hon. Friend pointed out the possibility—and, I would add, the probability—of the nature of the corporation tax being entirely altered through the Federal Legislature changing the definition of agricultural income. We are anxious about that point, and it should be dealt with before the proposed Clause is allowed to pass. I shall be grateful to the right hon. Gentleman if he will say a few words on the question which was raised by my hon. Friend and say whether he agrees as to the danger which my hon. Friend envisaged, and, if he does agree, say whether the Government propose to take any steps to fix the definition of the corporation tax.
    Mr. DAVIDSON: If you are setting up a constitution and giving powers of taxation to the Government, it is impossible to fix by definition a tax which they are to levy. It is true, as the hon. Member for South Croydon (Mr. H. Williams) said, that the corporation tax has as one of its components a, land tax, And that agricultural land is excluded; but in any discussion which may take place in the Federal Assembly on what is or what is not to be the scope of a federal tax within the limits put upon it by this Bill, the States and British India will be represented, and their views will be known. I do not think it would be possible to make absolutely rigid and unchangeable any tax in a Parliament which had the powers of self-government.
    5.58 p.m.
    Mr. H. WILLIAMS: My right hon. Friend's answer does not satisfy me. This is a disabling Clause. My right hon. Friend, who is normally so genial and

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    informing says that we must not be too precise in saying what the Federation must not do, but that we must leave it to them. If that be the case, why put in the new Clause at all? If we are to say, "You shall not do a particular thing," we ought to define that thing in such a way that there is no doubt about it. It is absurd to say to the Federation of India, "You shall not do this thing, but you are left to define it." You might say, "Thou shalt not exceed the speed limit," but the motorist is defining the speed limit at the moment. With all respect to my right hon. Friend, who is not, I am satisfied, responsible for the drafting of this new Clause, which is what I am criticising at the moment, we ought to prescribe in a way that cannot be misunderstood what the corporation tax is. It is a tax on the profits of companies, but you have to take from those profits the amount they have already paid in agricultural tax. The agricultural tax might mean certain existing forms of taxation. It might mean some entirely new form of taxation. I do not know whether the profits of tea gardens are agricultural profits. I see no reason why they should not be, and why we should not indicate that agricultural income should include profits on tea gardens. I understand that is not what is contemplated. Or an agricultural tax might include the profits made from ground nuts, which are very largely produced in India, and might be crushed adjoining the land where they are produced, bringing the profits into agricultural income. There must be some clear-cut and effective definition if we are to make it certain that the Clause is not evaded.
    Clause added to the Bill.

    NEW CLAUSE.—(Eligibility for office of persons who are not British subjects.)
    (1) The Ruler or a subject of a Federated State shall be eligible to hold any civil office under the Crown in India in connection with the affairs of the Federation, and the Governor-General may declare that the Ruler or any subject of a specified Indian State which is not a Federated State, or any native of a specified tribal area, or any named native of any territory adjacent to India, shall be eligible to hold any such office, being an office specified in the declaration.
    (2) The Governor of a Province may declare that the Ruler or any subject of a specified Indian State, or any native of a specified tribal area, or any named native of any territory adjacent to India, shall be eligible to hold any civil office in connection with the affairs of the Province, being an office specified in the declaration.
    (3) Subject as aforesaid and to any other express provisions of this Act no person who is not a British subject shall be eligible to hold any office under the Crown in India:
    Provided that the Governor-General or, in relation to a Province, the Governor may authorise the temporary employment for any purpose of a person who is not a British subject.
    (4) In the discharge of his functions under this Section the Governor-General or the Governor of a Province shall exercise his individual judgment.—[Mr. Ormsby-Gore.]
    Brought up, and read the First time.
    6.2 p.m.
    The FIRST COMMISSIONER of WORKS (Mr. Ormsby-Gore): I beg to move, "That the Clause be read a Second time."
    This proposed new Clause has been drawn up to give effect to the intention expressed in several Amendments which were moved during the Committee stage, and notably one moved by the hon. and gallant Member for Chichester (Major Courtauld), to ensure that, as far as reasonable, only British subjects shall be employed in the Services of the Crown in India. I think that was the general intention, and that is expressed quite specifically in Sub-section (3) of the new Clause. It is quite obvious, however, that that provision cannot be made absolute. In the first place, the position of the Federal States has to be considered. Clearly one cannot expect States to come into a Federation if their subjects are to be deprived for ever from serving under that Federation. In addition to that, there are two other categories mentioned in the Clause—natives of a specified tribal area, and any named native of any territory adjacent to India. That really refers to Nepalese subjects. It is necessary to make these specific exceptions to enable us to continue to employ Gurkhas. We have employed Gurkhas, and shall continue to do so. There have been occasions in the past when, quite apart from the inhabitants of India, persons of non-Indian descent who were not British subjects have been employed by the Government

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    of India, and it may be that they will be so employed again, but under this Clause they will be employed under a contract. They will only be employed upon the express individual judgment of the Governor-General or, in the case of the Provinces, of the Governor, and they will be employed only temporarily. In the past they have been employed under specific contracts.
    The type of person one has in mind are specialists in some particular subject who are necessary to undertake a particular job, especially people like archaeologists, who are more or less an international body. I do not know whether, at the moment, any foreign archaeologist is being employed on excavations in India, but I do know that in British Malaya, which is under the Colonial Empire, a Dutchman who has had particular experience of excavation work in Java is being employed. In the case of specific and tropical diseases it may be desirable now and again to employ temporarily, under a contract, a particular foreign scientist. I think that is why the crude insertion of a prohibition against the employment of anybody who is not a British subject, as suggested by the hon. and gallant Member for Chichester, would not be practicable in the conditions in India, and I feel that this Clause goes as far as is reasonable towards meeting the situation.
    6.6 p.m.
    Viscount WOLMER: I should like to thank my right hon. Friend for his explanation of this Clause which, so far as I understand it, carries out quite fully the undertaking which the Secretary of State gave to my hon. and gallant Friend the Member for Chichester (Major Courtauld). There are, however, one or two points on which I should like to put questions. Sub-section (2) says that a Governor of a Province
    "may declare that the ruler or any subject of a specified Indian State or any native of a specified tribal area, or any named native of any territory adjacent to India, shall be eligible to hold any civil office in connection with the affairs of the Province."
    Can my right hon. Friend say why that Sub-section is necessary if Sub-section (1) has been added? I do not quite appreciate the difference between Subsection (1) and Sub-section (2).
    Mr. ORMSBY-GORE: Sub-section (1) deals with the Federation at the Centre
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    and appointments by the Governor-General, and Sub-section (2) with affairs in the Provinces.
    Viscount WOLMER: I beg my right hon. Friend's pardon. That is a very obvious point, which had escaped my notice. My other question is, What is the meaning of the term "temporary employment"? Who is to judge whether the employment is temporary, and what is the machinery by which such an appointment may be determined? This point is of considerable importance, because we must realise that in some quarters, at any rate, there may be a tendency, I am sorry to have to say it, to revert to anti-British sentiment and deliberately to encourage the unnecessary employment of foreigners. I agree that there may be certain cases, and we must provide for them, in which foreigners should be temporarily employed, but when we have seen what has happened in the Irish Free State where, whenever an Irishman was not available a German or a Frenchman has invariably been employed in preference to an Englishman, and when we have seen, also, what has happened in Egypt, we ought to be very careful that there is no undue employment of foreigners. I think my hon. and gallant Friend the Member for Chichester was perfectly right in raising this point. The object of this Clause is admirable, but the term "temporary employment" is rather a loose one, and I do not see that it provides for the Governor-General to decide how long such employment may continue. Is it the view of the Attorney-General that the words "temporary employment" entitle the Governor-General to say how long such a person shall be employed, and, if he considers that he has been kept in employment unduly long, to terminate his employment?
    6.10 p.m.
    Lieut.-Colonel APPLIN: They say that one can drive a, coach-and-four through any Act of Parliament, and it seems to me that one could drive an express train through this Clause. I cannot understand how it is possible to include Sub-section (2), which provides that a Governor of a Province may declare that the Ruler or any subject of a specified native State may hold office under the Federation. Already in a large number of native States there are

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    Germans, Frenchmen, Dutchmen and other foreigners who have had a sufficiently long period of residence there to claim to be subjects of that State. When we have federated India I can see nothing which would prevent any of those people getting naturalisation papers from the Ruler. If that be so, we throw open the Civil Service and, indeed, other appointments in India, to any foreigner who may choose to settle down there. I regard this as a wide and sweeping Clause in which there is no protection at all for British subjects. There is nothing to prevent any foreigner who chooses to reside there, and to become a naturalised subject of a State, from claiming a right to hold any appointment under the Federal Government. If I am wrong, perhaps the right hon. Gentleman will explain where I am wrong, and where there is protection against foreigners claiming State nationality and getting appointed to these posts.
    6.12 p.m.
    Mr. H. WILLIAMS: I agree with the hon. and gallant Member for Enfield (Lieut.-Colonel Applin) that this is a strangely-drafted Clause, because the subjects of an Indian Prince who has refused to join the Federation and who will therefore be foreigners up to a point—at least not British subjects—can hold any office whatever in the Federation. The office of Prime Minister or leader of the Government in either the Federation or a Province can be held by an outsider. That occasionally happens elsewhere, because the present Chancellor of Germany is legally an Austrian: but that is a somewhat unusual state of affairs, and one that I do not like. The Noble Lord the Member for Aldershot (Viscount Wolmer) asked about the position of persons employed temporarily. We have in this country thousands of persons who are known as temporary civil servants. I am not clear to what extent those who are known as the "P" Class and the "S" Class are still legally temporary, but ever since 1918, and even earlier, going back to 1915, when some, of the first war-disabled men received appointments, we have had large numbers of people in the Civil Service in this country on temporary engagements. They are not established and they are known as temporary employés.
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    I take it that the word "temporary" in the proviso to Sub-section (3) is temporary in that sense; at least that would be the legal interpretation. If that be the interpretation I do not like that proviso, but if by "temporary" is meant for a period of not more than 12 months, or perhaps two years, I do not object to the word "temporary." From time to time a Government may have to obtain the assistance of outsiders for some specialist task, and I have not the slightest doubt that occasionally there are people in the service of the Crown in some parts of the world who are not British subjects; but there is a tremendous difference between temporary in that sense, and temporary in the sense of having permanent employment but without the advantages which establishment confers.
    Further, I would point out that the Clause does not apply only to an Indian State but to a named native in territory adjacent to India. Elsewhere in the Bill I have found those words "territory adjacent to India," and I am not certain whether they have been defined. Siam is adjacent to India as things stand today, and as they will be after the Bill is passed—Siam is adjacent to Burma, at any rate; it has a common frontier. Then there is Tibet. I am not certain whether Tibet is a republic under the control of Soviet Russia, or part of China, or is an independent sovereign State; at any rate, it is a rather exclusive place from some points of view. The inhabitants of Tibet live in a country adjacent to India. I am not quite certain whether Nepal entirely separates Tibet from India; I think they have a common frontier for part of the distance. Therefore, any native of Tibet—even the Grand Lama, apparently—can be appointed Prime Minister of India in certain circumstances, if these words be put in. I think that Soviet Russia has no common frontier with India, because Afghanistan and Baluchistan separates them. We are safe against a Soviet citizen being able to get one of these jobs. This proposed new Clause goes rather far in its sanction for the employment of people, who would be foreigners, in any position under either the Federal Government or the Government of any Province, and I hope that the right hon. Gentleman in charge

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    of the Bill will look at the drafting of it again and consider whether it could be tidied up before the Report stage. If the Department are rather busy, I could probably find people who could set their minds to the work of drafting Amendments to the Clause which, in its present form, does not seem quite satisfactory.
    6.16 p.m.
    Mr. ORMSBY-GORE: I thought I had cleared up that point. The phrase "adjacent to India" is used in other parts of the Bill, and also in previous Statutes, and it invariably means Nepal. If my hon. Friend looks at Clause 8 he will find the same words used in connection with military establishments in India. If this phrase is not included, you cannot employ any Gurkhas in India. I do not know whether my hon. Friend would wish to debar Gurkhas from India.
    Mr. WILLIAMS: If the right hon. Gentleman's purpose is to bring in a particular lot of people, why not say so? Why is it necessary to put in words which would bring in actually one-third of the human beings on this earth?
    Mr. ORMSBY-GORE: I can assure my hon. Friend that there is no more likelihood of the Grand Lama of Tibet being appointed prime minister of India than there is of the hon. Member being appointed. I would recall to my hon. Friend's attention the effect of the proposed new Clause which is that no appointment other than of a British subject can be made except by the Governor-General, in the case of the Federation, exercising his individual judgment, or in a Province by the Governor, exercising his individual judgment. Is that clear?
    Mr. WILLIAMS: I am perfectly familiar with it.
    Mr. ORMSBY-GORE: My hon. Friend complains of the drafting. I am trying to make it clear that only in exceptional circumstances, and in the individual judgment of either the Governor-General or the Governor, can this provision take effect. The hon. Member will see from the wording of Sub-sections (1) and (2) that in each case "office" is the office specified in the declaration—an individual job and an individually named native or an individually named foreigner. The word "temporary" means, as we know, employment on contract. Employment
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    on contract varies. It has always varied according to the job and the man. I said, in moving the Clause, that, so far as I could understand, the maximum period of these contracts is usually five years. It is most undesirable to put in any particular period because, in some cases, contracts are only for one year; sometimes they are for six months. The Government may require a specialist in a particular disease, and want to get the best world expert to come and advise them. In such a case you have to enter into a contract with him to pay him so much, and you have to employ him in the service of the State to be able to pay him out of the public revenue. Therefore, it is quite impossible to define in terms of years the nature of such temporary employment. The nature of employment on that basis is quite well understood. The Noble Lord the Member for Aldershot (Viscount Wolmer) asked who was to determine that. In the case of someone working under the Government of India, the Governor-General will lay down exactly the terms and the duration of the employment. In the case of the Provinces that will be done by the Governors. In both cases they will be acting in their individual judgment.
    Lieut.-Colonel APPLIN: The right hon. Gentleman has not dealt with my question. Sub-section (2) of the proposed new Clause states:
    "The Governor of a Province may declare that the Ruler or any subject of a specified Indian State;"
    That is, any subject—not a named subject. Therefore, that throws the appointments open to every subject of the State, and not only to those subjects who are at present Europeans.
    Mr. RHYS DAVIES: I have been listening to this short discussion, and there is a point which I would like to put to the right hon. Gentleman. Foreign governments sometimes secure the services temporarily of representatives of the International Labour Organisation for the purpose of advising those governments. I know of a particular case. It is usually Eastern governments who want advice on problems connected with workmen's compensation. I would like to know whether the proposed new Clause adequately covers the lending of a servant of that type.
    Mr. ORMSBY-GORE: Yes. That is exactly the sort of case that is covered by the proposed new Clause. The hon. Member is perfectly right in saying that there are servants of the International Labour Office who have special knowledge of what is done in administration and legislation in connection with labour questions, and either the Governor-General of India or the Governor of a Province might require the services of men of that sort temporarily to carry out particular work. In reply to my hon. and gallant Friend the Member for Enfield (Lieut.-Colonel Applin) I have made inquiries, and I understand that the number of Europeans who have become subjects of Indian rulers is excessively small, and that it is very rare for that to happen. The number of people from Europe who settle in an Indian native State and become subjects of the native Ruler, and who would be the sort of people likely to be wanted in the government of India is infinitesimal.
    Clause added to the Bill.

    NEW CLAUSE.—(Saving for rights and obligations of the Crown in relation to Indian States.)
    Subject in the case of a Federated State to the provisions of the Instrument of Accession of that State, nothing in this Act affects the rights and obligations of the Crown in relation to any Indian State.—[The Attorney-General.]
    Brought up, and read the First time.
    6.24 p.m.
    The ATTORNEY-GENERAL (Sir Thomas Inskip): I beg to move, "That the Clause be read a Second time."
    This short Clause is proposed in order to make it quite plain that the provisions of the existing Section 132 of the Government of India Act are not to be regarded as in any way abrogated. That Section is the descendant of a corresponding Section which appeared in the original Act. When the powers and rights of the old East India Company were transferred to the Crown, it was necessary in the legislation to make it plain that treaties existing between States and the East India Company were equally binding as between the States and the Crown. As the legislation of 1919 was consolidating legislation, the same provisions naturally
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    appeared as were contained in Section 132. Some States may have a little apprehension lest entry into the Federation might in some way prejudice their treaty rights and the treaty obligations of the Crown. In order to make it perfectly plain that no such prejudice is possible to occur to their treaty rights when this Bill becomes law, it is proposed to put in this Clause. Whether the provisions are strictly necessary or not is not a matter that need detain the Committee. We shall put the matter beyond all controversy by including the words which I now propose.
    Clause added to the Bill.

    NEW CLAUSE.—(Property accruing by escheat or lapse or as bona vacantia.)
    Subject as hereinafter provided, any property in India accruing to His Majesty by escheat or lapse, or as bona vacantia for want of a rightful owner, shall, if it is property situate in a Province, vest in His Majesty for the purposes of the Government of that Province, and shall in any other case vest in His Majesty for the purposes of the Government of the Federation:
    Provided that any property which at the date when it accrued to His Majesty was in the possession, or under the control, of the Federal Government or the Government of a Province shall, according as the purposes for which it was then used or held were purposes of the Federation or of a Province, vest in His Majesty for the purposes of the Government of the Federation or for the purposes of the Government of that Province.—[The Solicitor-General.]
    Brought up, and read the First time.
    6.26 p.m.
    The SOLICITOR-GENERAL: I beg to move, "That the Clause be read a Second time."
    This is a rather technical subject. The Committee will remember that Clauses 168 and 169 deal with the allocation of property as between the Provinces and the Centre. Some careful eye has discovered that those provisions, detailed as they were, did not say how in future property going to the State by escheat or as bona vacantia should be allocated as between the Provinces and the Centre. There is the case of a man who dies without heirs or next-of-kin, and whose goods go as bona vacantia to the State. There is also the case of various moneys deposited which are never claimed, and which, after lapse of time, go to the State. You have to have some provision by which in future those sums are allocated as between the

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    Centre and the Provinces, and the proposed new Clause provides that property situated in a Province goes to the Province and property outside goes to the Federation. There is a proviso to deal with funds which are actually within the control of the Government, that is to say, for example, money in Court. It provides that if circumstances arise which entitle the State to claim them, either as escheated or as bona vacantia, the moneys are divided according to the purpose for which they were held at the time. The arrangements suggested by the proposed new Clause for dealing with these not very large sums are, we believe, the best in the circumstances.
    Clause added to the Bill.

    NEW CLAUSE.—(Power of His Majesty in Council to remove difficulties.)
    Whereas difficulties may arise in relation to the transition from the provisions of the Government of India Act to the provisions of this Act, and in relation to the transition from the provisions of Part XIII of this Act to the provisions of Part II of this Act:
    And whereas the nature of those difficulties, and of the provision which should be made for meeting them, cannot at the date of the passing of this Act be fully foreseen:
    Now, therefore for the purpose of facilitating each of the said transitions His Majesty may by Order in Council—

    (a) direct that this Act and any provisions of the Government of India Act still in force shall, during such limited period as may be specified in the Order, have effect subject to such adaptations and modifications as may be so specified;

    (b) make, with respect to a limited period so specified, such temporary provision as he thinks fit for ensuring that, while the transition is being effected and during the period immediately following it, there are available to all governments in India and Burma sufficient revenues to enable the business of those governments to be carried on; and

    (c) make such other temporary provisions for the purpose of removing such difficulties as aforesaid as may be specified in the Order.—[The Attorney-General.]

    Brought up, and read the First time.
    6.30 p.m.
    The ATTORNEY-GENERAL: I beg to move, "That the Clause be read a Second time."
    The new Clause which I propose now I put to the Committee as absolutely
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    essential for the purpose of ensuring that the provisions of the Bill are brought into operation by successive stages. The Committee will appreciate that the part of the Bill which deals with the establishment of Provincial Government will come into operation, and Part XIII creates certain transitional provisions with a view to reaching that which is contained in Part XI of the Bill, namely, the establishment of Federal Government. An effort was made, in Clauses 287 and 288 of the Bill as originally drafted, to deal with the difficulties that were likely to arise in connection with the essential provisions for the carrying on of the Government while those processes were taking place. Clause 287 provided for elections being held in advance of the dates fixed for the commencement of Parts II and III of the Act, and Clause 288 for temporary financial provisions which were omitted from the Bill. Those Clauses were an honest and, as far as they went, an ingenious attempt to provide for difficulties which could be foreseen, but it was realised, when we came to the Clauses, that it was beyond human power to foresee exactly the events for which provision would have to be made. [HON. MEMBERS: "Hear, hear!"] I hear some of my hon. Friends express satisfaction at that statement of mine, but I think it is an observation which must have occurred to those who have given attention to this matter.
    I can illustrate the difficulty by asking the Committee to consider the difference in the provisions which would have to be made in the case, for instance, of the whole Federal machine starting on the first day of the financial year, as compared with a day in the middle of the financial year. There would be difficulties in the one case which would not exist in the other. In order to make it quite certain that the Bill will not be ineffective because some difficulty has not been foreseen and arrangement made for it, it is proposed that, within the very limited provisions of the Clause on the Paper, there shall be a power for His Majesty, by Order in Council, to direct that there shall be certain adaptations and modifications during such limited periods as may be specified in the Order. The Committee will, of course, remember that under the Bill every Order in Council which His Majesty may be pleased to make must be laid before Parliament,

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    and will not become operative until Parliament has given its approval. I do not know whether any of my hon. Friends are lying in wait to tell me that this is a very drastic provision. Let me remind them, in the first place, how excellent the intentions of the Government are in this matter, because we have not followed the precedent contained in the Act of 1919, which provided that:
    "If any difficulty arises as to the first establishment of the Indian legislature or any legislative council after the commencement of this Act or otherwise in first giving effect to the provisions of this Act, the Secretary of State in Council or the Governor-General in Council, as occasion may require, may by Order do anything which appears to them necessary for the purpose of removing the difficulty."
    That has always seemed to me to be a most delightful Clause; if there is any difficulty let a Minister remove it. It is a Clause which appears in some of the social legislation of the 1925 Parliament. I could refer the Committee to many other Clauses which almost approach the boldness of that Clause in the Government of India Act; but most of those Clauses have been subject to some attempted safeguard in the way of Parliamentary control. For instance, some of those Clauses for adapting or modifying the provisions of a Measure to meet unforeseen difficulties have been subject to the necessity of laying a draft of the Clause on the Table of the House, and requiring that, if no affirmative approval is given for a period of, say, three months the Clause shall cease to be operative. Other safeguards have simply been that the Clause shall lie on the Table of the House, it being left to Parliament to take such steps as any Member might initiate to get rid of the objectionable Order in Council or Regulations.
    But the high watermark of safeguards is that which is adopted in the Clause which I now propose, namely, that the Order in Council or Regulations shall not be operative at all unless Parliament has considered and actually given its approval to the provisions; and the Committee will mark that both Houses of Parliament will have an opportunity of considering whether or not the adaptations or modifications of the Bill should be approved. There is no question, therefore; of a dictatorial power on the part of the Minister, or of his abrogating
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    to himself the powers of Parliament. It is a provision that, with a view to making effective the wishes of Parliament, Parliament shall have it in its power, by appropriate machinery, to consider what adaptation of the Act shall be made for a temporary purpose. It is a power that will last merely while the transition from the existing Government to Provincial Government, and from Provincial Government to Federal Government is taking place.
    I conclude by reminding the Committee that this class of Clause was the subject of consideration by the Donoughmore Committee, as it was called, and that Committee recognised that there are perfectly proper cases in which a Clause of this sort should be used. Indeed, the Committee recognised that in some cases the essential machinery of legislation could not be carried on unless a Clause of this sort was included. But they said that it should be made subject to proper safeguards, and that, when used, it should only be used for a very definite purpose. Those two conditions are satisfied in the Clause which I propose. These powers are to be used for a very definite purpose for a limited time, and they are only to be used subject to the supreme safeguard that Parliament will always retain control.
    6.39 p.m.
    Sir H. CROFT: The Committee will have listened with interest to the remarks of the Attorney-General, but I think that everyone who listened to the previous discussions must be still more alarmed at the recurrence of the words, which have been used in recent Debates on this Bill, with regard to successive stages and temporary measures, with regard to government in the Provinces, and so on. From the very commencement it has been emphatically laid down from the Front Government Bench that it is impossible to conceive that you can go forward with Provincial self-government without, practically speaking, almost simultaneously, bringing Federal Government into being. In fact, we have heard most eloquent speeches from some of the highest authorities in the Joint Select Committee and elsewhere telling us that they personally would not be prepared to consider going on with the Bill at all unless they were convinced that the Federal scheme was coming into being. I think the Attorney-General will agree

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    that I am not interpreting his remarks wrongly when I say that the provision which it is now proposed to set up is one under which Provincial self-government can go forward in the event of Federal Government being held up, and I think the Committee is entitled to know for how long that would be. What is a temporary period? Can the Attorney-General tell us whether it is six months, six years, 10 years, or more? As far as we know, the principal partners in Federation outside British India, namely, the Princes, have not yet consented to come in, and, therefore, we are going straight ahead doing the very thing that the Government have assured us must not be done, that is to say, establishing Provincial Home Rule. Are we not entitled to something more definite than we have yet had?
    The position in India, since the House rose for the Easter Recess, has changed again to this extent, that the only remaining organised authority in India which had not previously expressed its opinion on the Bill, namely, the organised Labour movement, has now declared that it will have nothing to do with it, and the great central body of opinion as represented by the National Liberal Federation has also met and has again passed a very strong resolution. Consequently, we see the greatest uncertainty. Are we right in this Committee in taking steps to make a move forward when we are quite unable to say at this stage whether Federal Government is coming into being? I see that the Solicitor-General is looking querulous. Perhaps I have misinterpreted what the Attorney-General said. But he did not correct me, and I think I am right in saying that this is really setting up machinery by which one step can be taken when hitherto we have always been told that Provincial Government and Federal Government are one and indivisible. I should like to hear whether I am right in this suggestion.
    6.43 p.m.
    Mr. H. WILLIAMS: It will be noticed that this Clause has a Preamble, and it is, as far as I know, the first Clause to have a Preamble all to itself. It is a very frank Preamble. It says:
    "Whereas difficulties may arise in relation to the transition from the provisions of the Government of India Act to the provisions of this Act …
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    And whereas the nature of those difficulties, and of the provision which should be made for meeting them, cannot at the date of the passing of this Act be fully foreseen:"
    That is the frankest little bit that we have had yet, and I congratulate the draftsmen upon it. I do not know why they gave the Clause a Preamble—there does not seem to be any necessity for it—unless they were rather ashamed of it, and thought that they would not get any acceptance of it at all without a Preamble. The Attorney-General has explained to us, that, after all, much more care is being taken over this Bill than was taken over the Government of India Bill in 1919, because in that Measure a very drastic power was given to the Government of the day to do certain things without any check from Parliament, whereas, under the provisions of Clause 286 of this Bill, any Order in Council must receive the approval of affirmative resolutions in both Houses of Parliament. I should like, however, to draw the attention to the proviso, which will be found on page 170 of the Bill as amended in Committee. It says:
    "Provided that, if at any time when Parliament is dissolved or prorogued, or when both Houses of Parliament are adjourned for more than fourteen days, the Secretary of State is of opinion that on account of urgency an Order in Council should be made under this Act forthwith, it shall not be necessary for a draft of the Order to be laid before Parliament, but the Order shall cease to have effect at the expiration of twenty-eight days from the date on which the Commons House first sits after the making of the Order"—
    and so on. Let us take the circumstances that arise at the end of our Summer Session. In these days we usually adjourn before 1st August. We resume towards the end of October. Under this Proviso an Order can be made on 1st August, and Parliament would not meet for approximately three months. If Parliament did meet, the Order would still have another 28 days to run before it lapsed, so that in fact you might have an emergency Order running for four months without the possibility of Parliament challenging it. Nearly everything you intended to do under such an Order could effectively be done beyond the power of revocation before, in fact, Parliament had a chance of saying anything. In this country we do not in general do things that are sharp practice. We do not expect it. Our Government have a high

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    standard and do not try to do funny tricks. But here is a Bill about which many of us are very anxious, and in connection with which we have seen a few funny tricks. There has never been a Bill about which those opposing it have been more suspicious than they are about this Bill. I do not like the way it has been handled, and the character of many of the negotiations. We think that they have been rather too cunning, and, therefore, those of us who are against this Bill are much more suspicious than we have been in regard to any other Bill, especially when we find that it is possible that these transitional provisions can be made by Order-in-Council and for four months can operate without challenge. Paragraph (a) says:
    "direct that this Act and any provisions of the Government of India Act still in force shall, during such limited period as may be specified in the Order, have effect subject to such adaptations and modifications as may be so specified."
    That is, for a temporary period, a complete power of legislation by Order in Council. The Attorney-General draws our attention to the fact that the great safeguard is contained in Clause 286, but he did not make any reference to the Proviso. I hope that when he replies he will deal with the Proviso, as it seems to whittle away a very great deal of the security which apparently Clause 286 offers to us. I agree that when you introduce a Bill of this magnitude, the difficulties that are foreseen are great enough, but this Clause deals with difficulties which the Government up to now have not foreseen. As a matter of fact, many of us have foreseen them, but it is only now that the Government have foreseen them and are putting in a Clause to enable them to do things which they would have put into the Bill if they had been more far-seeing. I agree that a provision of this kind is necessary, but I really doubt whether it is quite satisfactory that important acts of transition can be done in such circumstances that they cannot subsequently be undone. A period of four months with regard to transitional provisions means for all time. There is no possibility of reversal, and it means that for at least three months when Parliament is not sitting, the Secretary of State becomes a complete autocrat for the purpose of bringing the Act into operation. There ought to be some check,
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    so that things that are undesirable cannot be pushed through in an autocratic way while we are under the delusion that Clause 286 safeguards us against that risk.
    6.50 p.m.
    Sir A. KNOX: The air of sweet reasonableness with which the learned Attorney-General moved this Clause, was really, I suppose, designed to make the ordinary layman believe that there was absolutely nothing in it, but what occurs to one is, that here is a proposal to rule India by Order in Council for a period, it may be, up to five or 10 years. We have heard a great deal on the part of the Press about a proposal of the Socialist party, if they get into power, to rule this country by Order in Council, but here is a proposal to rule India by Order in Council put forward by the National Government. What is there in this Clause that you cannot do? Paragraph (a) provides that you will have the Government acting and making such changes, adaptations and modifications as may be specified. Secondly, if any of the Governments of India go bankrupt, as in all probability they will, funds will be made available to them; and, thirdly, there is paragraph (c) in which you can
    "make such other temporary provisions for the purpose of removing such difficulties as aforesaid as may be specified in the Order."
    It appears to me that you can do anything either in the air, on the earth, or under the earth. It really is not the very slight and unimportant Clause which the learned Attorney-General has made us believe. Apart from this, does not the Clause stultify every Second Reading speech of Government supporters in which they contended time after time that it is quite impossible to introduce in India provincial autonomy without, at the same time, bringing in this blessed Federation? We heard this time after time. Here is a Clause which envisages bringing in provincial autonomy, and we do not know whether it is five or ten years, or how long it will be before there is Federation.
    6.53 p.m.
    The ATTORNEY-GENERAL: My hon. and gallant Friend the Member for Wycombe (Sir A. Knox) has charged me with a crime of which I should like to be guilty, namely, sweet reasonableness.

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    If I gave him and the Committee the impression that this is a perfectly proper Clause, then I gave them no more than an impression of what is, in fact, the truth. I am glad that my hon. and gallant Friend has appreciated the fact. He is rather of the mind of my hon. Friend the Member for South Croydon (Mr. H. Williams) who says that he has been very suspicious of this Bill, of the way it has been prepared, and of all the tricks that have been played. I gathered some time ago that my hon. Friend and his friends were suspicious, and I am not very envious of that mood in them. If my hon. Friend the Member for South Croydon complains of the Government being guilty of tricks, and if he thinks fit to make that charge, I cannot agree, but I cannot say that it disturbs me very much. He may think that we have been guilty of tricks, but that does not convict the Government of being guilty of the offence. My hon. Friend made a charge. I see that he has gone to acquire fresh ammunition from the hon. and gallant Member for Bournemouth (Sir H. Croft).
    Mr. H. WILLIAMS: No.
    The ATTORNEY-GENERAL: Well, he needs it. I will deal with the point made by my hon. and gallant Friend the Member for Bournemouth. He said that this is going back upon the assurances repeatedly given from the Government Front Bench, that there is no intention of bringing into force the Provincial Government part of this Bill unless, at the same time, the Federal part of the Bill comes into force. My hon. and gallant Friend said that I did not rise to correct him. I thought it was better to make my correction in the right way and at the right time. It has never been said from the Government Front Bench that the two parts of the Bill were to be brought into effect simultaneously. I agree that the general intention of the Bill, is that we should regard it as a whole. The advantages of this Bill are not to be found only in the Provincial part but are to be read in the Federal part of the Bill also, and the Government offer it to the Committee as a whole. But it is perfectly obvious. I think, to any student of the Bill that there are certain things to be done in connection with the accession of the Princes, and the approval of Parliament, after the accession of the Princes and the
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    Instruments of Accession have come into existence, which make it impossible as a matter of practical politics that simultaneously in point of time, Federation is to come into existence compared with the Provincial Government.
    Sir H. CROFT: I appreciate that, and I am sorry if I gave any other impression. I certainly did not wish to dispute what has been said by right hon. Gentlemen on that, Bench. We have always heard from them that it might be a question of two or three months, and so on, but something more than that has been indicated in recent Debates in the House and that there may be delay of years. We have been told that these two great forms of Government stand together, and is it not possible with the machinery we are adopting in the Clause, that you can establish Provincial self-Government without going on apparently to Federal Government?
    The ATTORNEY-GENERAL: I am glad to acknowledge the candid way in which my hon. and gallant Friend always makes his statement. He recognises and always has recognised that the two parts of the Bill cannot come into operation at the same time. That puts my hon. and gallant Friend and myself on common ground. He says there may be an interval of three months. It might well be 12 months or some period of that kind. I do not suppose that my hon. and gallant Friend would quarrel with me if I said that it was likely to take 12 months.
    Sir H. CROFT: It might take 12 years.
    The ATTORNEY-GENERAL: When my hon. and gallant Friend says 12 years, he will perhaps recollect that there are such things as general elections in this country and changes of Government, and, if my hon. and gallant Friend is so sure that he and his friends will have a majority of electors who disapprove of this Bill, they will be able to prevent an abuse of the powers which this Clause gives the Minister. My hon. Friend the Member for South Croydon said that he recognised that some provision of this sort was necessary. That puts him and me on common ground, but assuming some provision of this sort is necessary, I have listened to my hon. Friend with great interest to see what sort of a provision he would approve. He took a point

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    which was hardly worthy of him, that the whole difference was made by the proviso to Clause 286, which provides for an emergency Order-in-Council which could not come before Parliament because Parliament was not in session. My hon. Friend envisaged a state of things which could only come into existence if a Minister were in a position on 1st August when the House was separating to say: "Here is a matter of urgency; I will make an Order-in-Council knowing that Parliament is not going to meet until the end of October." Talk about tricks, my hon. Friend knows the answer to his own speech. The fact is that Clause 286 gives Parliament control over these Orders-in-Council, subject to a provision that in a real state of urgency or emergency, Parliament may not be able to make that control effective for some period which, even on my hon. Friend's assumption, could not possibly exceed three months. Therefore, the proviso is not quite as important as my hon. Friend suggested to the Committee.
    It has been admitted that there must be some lag between the coming into operation of the different parts of the Bill. It has been admitted by opponents of the Clause that some provision of this sort is necessary. Therefore, all that stands in the way of the Committee accepting the Clause is the unworthy idea that it is a plan by which we can govern India by Order-in-Council for 12 years. My hon. and gallant Friend asks: What is a limited period? If there is any anxiety on the part of the Committee on this point, I shall be perfectly prepared to consider whether 12 months, or at the outside, two years, as limiting the periods of these Orders-in Council could not be put into the Bill, so as to make it quite plain that there shall be no attempt by the Minister to govern India by Order-in-Council. I hope that the Committee, subject to that, will be prepared to accept the Clause. I ought to add that the word "any" is omitted from paragraph (c) on the Order Paper. It does not really make any difference in substance, but perhaps the Committee have already taken notice of the slip.
    7.0 p.m.
    Sir H. CROFT: It is very rare that we find ourselves a happy family, and I
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    am glad to think that the learned Attorney-General found so much wisdom in the speeches of my hon. Friend the Member for South Croydon (Mr. H. Williams) and myself. I am glad that he appreciates the fact that they cannot bring the whole of this machinery into force in a moment, and I am grateful for his suggestion that he will consider between now and the Report stage whether there cannot be some limit of time. Although a year seems rather long in this agony in India, if the Government would consider this they would really meet the objections that many of us feel. Quite frankly we are alarmed at the whole change of outlook in His Majesty's Government in recent days on this question, and we do feel that there is a danger that they are going to bring in a half-baked measure of reform in India, which we have always been told is impossible, by some such proposal as this. But if the hon. Gentleman will consider this matter and give us a limit of time, so as to make it clear that this is to be a transitional and not a permanent stage, then on behalf of my friends I would say that we are grateful for it.
    Mr. GODFREY NICHOLSON: By saying that he would reconsider the matter did the right hon. and learned Gentleman mean that it should be a term during which this Clause was valid, or a term during which the Order in Council should be valid?
    The ATTORNEY-GENERAL: It would define the limited period for which alone the Order in Council could operate.
    Motion made, and Question proposed, "That the Clause be added to the Bill."
    Mr. ANNESLEY SOMERVILLE: There has been a proposal to insert a limit of 12 months or two years when we come to Report stage. Will not the interval be governed by the time it takes to bargain with regard to the Instruments of Accession? Until Instruments of Accession of a sufficient number of States are completed will it not be impossible to bring about a Federation? Therefore, is it possible to insert any limit of time in the Bill with regard to the bringing into effect of Federation?
    The ATTORNEY-GENERAL: I think a discussion of that sort probably ought

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    to be taken on Clause 5. But I think that the point is really met by the question which the hon. Member for Morpeth asked and which I answered.

    NEW CLAUSE.—(Provisions as to the custody of public moneys of Burma.)
    (1) Rules may be made by the Governor for the purpose of securing that all moneys received on account of the revenues of Burma shall, with such exceptions, if any, as may be specified in the rules, be paid into the public account of the Government of Burma, and the rules so made may prescribe or authorise some person to prescribe the procedure to be followed in respect of the payment of moneys into the said account, the withdrawal of moneys therefrom, the custody of moneys therein, and any other matters connected with or ancilliary to the matters aforesaid.
    (2) In the exercise of his lowers under this section the Governor shall exercise his individual judgment.—[Dr. Butler.]
    Brought up and read the First time.
    7.4 p.m.
    Mr. BUTLER: I beg to move, "That the Clause be read a Second time."
    This Clause is exactly the same as the one which was moved into the Bill in relation to India, dealing with the custody of public moneys in India. For that reason I beg to move without further explanation that the Clause be read a Second time, but if it be the wish of the Committee I will give a further explanation of its provisions.
    Mr. H. WILLIAMS: I took some part in the debate on the corresponding Clause with regard to India, and I wanted to know what paying into the public account meant. I was then told, in effect, that it would be all right because the Government meant the new Central Reserve Bank of India. Have we set up a similar bank for Burma? It is a little difficult to keep track of everything that happens, but my impression is that we have not got a central bank for Burma, and therefore there is no institution that meets the case. In fact, we have not got a public account in Burma. It would appear that this is not quite the same as the India clause, because the circumstances are different. Burma is not a Federation; it is going to be a unitary State, with no federal reserve system up to now, and with no organised system of accounts, unless the Indian Federal Reserve Bank
    106
    is to have a branch in Burma. In these circumstances, I think we ought to have a more adequate explanation from the Under-Secretary than he has vouchsafed.
    7.6 p.m.
    Mr. BUTLER: I thought it was understood, and that the Committee agreed, that where there had beep an Amendment with regard to India we did not debate at any great length an identical Amendment made with regard to Burma. That was why I did not give a fuller explanation in the first place. With regard to the question raised by the hon. Member, it is the Treasury of Burma that is referred to here; and it is the current account which the Government will keep at the central Treasury into which it is desired that public money should be paid, instead of being left in the hands of an individual department or an individual officer. The Committee will remember that it was thought undesirable that an individual department should credit to itself extra sums over and above the grant made to it; so that an individual department might be suddenly richer by the sale of a piece of land, for instance, and thereby receive more than was originally appropriated to it. In the same way, it was decided in the case of a public officer that it was undesirable, in view of the scattered nature of the Treasuries in India and Burma, that sums of money should be lying about in the hands or individual officers. It was therefore thought desirable that such moneys should be paid into the central account of the Province or the Federation. In this case it is the central account of the Government of Burma, and none of the more complicated questions raised by the hon. Member with regard to reserve banks arise. What is referred to is simply the central bank account of the Government of Burma.
    Mr. H. WILLIAMS: But what banks will it be? You have not set up any Government bank in Burma, and I want to know with what bank this transaction will be. We are now told that money is to be paid into the central Treasury. They do not keep a box in our Treasury in Whitehall. What do the Government mean by the central account?
    Mr. BUTLER: The bank concerned will be the bank where the Government of Burma keeps it account. I do not know

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    the exact method by which the Government of Burma keeps accounts at the present moment, but, obviously, it must have some banking arrangement. The object of the new Clause is not to affect the banking arrangement, but to secure the centralisation of receipts in the circumstances which I have described.
    7.9 p.m.
    Sir REGINALD CRADDOCK: I should like to ask the Under-Secretary how far this refers only to a separated Burma, and how far it refers to an interim period while we are getting rid of the old Act and entering upon the new one. Is this affected in any way by the question of Burma being separated or not by a given date? The country's financial condition is far from flourishing at the present moment, and I am wondering whether this section will be equally applicable whether or not for the time being it is found practicable to separate Burma from the rest of India?
    Clause added to the Bill.

    NEW CLAUSE.—(Power of Secretary of State to make appointments to medical services and posts in Burma.)
    The Secretary of State may appoint persons to any civil medical service of, or civil medical post under, the Crown in Burma.—[Mr. Butler.]
    Brought up, and read the First time.
    7.10 p.m.
    Mr. BUTLER: I beg to move, "That the Clause be read a Second time."
    This Clause is exactly similar to the new Clause moved in connection with India. The Committee will remember that when we were discussing Clause 395 in relation to Burma reference was made to the necessity for a, new Clause in relation to the future arrangements that will be made for the civil medical services of Burma and civil medical posts under the Crown in Burma. In the original Bill as printed it was stated specifically that there would be a Burma Medical Service, Class I. That prejudged the question of the future reorganisation of the superior medical service in Burma, and because that question was pre-judged we decided to omit these original words in Clause 395, and to move this new Clause to give the Secretary
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    of State an opportunity of conforming to whatever arrangements are made in the future, after the discussions at present going on for the purpose of providing a suitable medical service for Europeans and the military in Burma.
    Mr. MORGAN JONES: With what authority is the Secretary of State conferring with a view to arriving at a suitable scheme for the recruiting of the medical service in Burma?
    Mr. BUTLER: The hon. Member will remember that we discussed this question on the Joint Select Committee. It was decided to limit the necessity for medical attendance to the purposes which I have described, and it is with a view to coming to some understanding on that point that negotiations are now proceeding between the Government of India and the Government of Burma as to what is the most suitable method of arranging for the Burma medical services. At present, as Burma is a part of India, the medical services are all bound up together; but we are allowing discussions to proceed as to what will be the exact future of the medical services in Burma for which the Secretary of State shall make appointments for the specific purposes which I described in moving the Clause.
    7.12 p.m.
    Mr. MORGAN JONES: I have no objection to this, but I merely want to say that I understand that the University of Rangoon has a medical faculty and that it will naturally have a great interest in any arrangements arrived at for the future recruitment of the civil medical service. I should very much hope that these appointments, when they are made upon whatever arrangements may be arrived at by the responsible authorities, may be such as to enable an adequate recruitment of young Burmese for the various medical services in their own country.
    Mr. G. NICHOLSON: Will the Secretary of State have power to examine the conditions of pay and service?
    Mr. BUTLER: All the conditions resulting from that recruitment will apply.
    Clause added to the Bill.

    NEW CLAUSE.—(Protection of public servants against prosecutions and suits in Burma.)
    (1) No Bill or amendment to abolish or restrict the protection afforded to certain servants of the Crown in Burma by section one hundred and ninety-seven of the Indian Code of Criminal Procedure, or by sections eighty to eighty-two of the Indian Code of Civil Procedure shall be introduced or moved in either Chamber of the Legislature without the previous sanction of the Governor in his discretion.
    (2) The powers conferred upon the Local Government by the said section one hundred and ninety-seven with respect to the sanctioning of prosecutions and the determination of the court before which, the person by whom and the manner in which a public servant is to be tried shall be exerciseable only by the Governor exercising his individual judgment:
    Provided that nothing in this subsection shall be construed as restricting the power of the Legislature to amend the said section by a Bill or amendment introduced or moved with such previous sanction as is mentioned in sub-section (1) of this section.
    (3) Where a civil suit is instituted against a public officer, within the meaning of that expression as used in the Indian Code of Civil Procedure, in respect of any Act purporting to be done by him in his official capacity, the whole or any part of the costs incurred by him and of any damages or costs ordered to be paid by him shall, if the Governor, exercising his individual judgment, so directs, be defrayed out of and charged on the revenues of Burma.—[Mr. Butler.]
    Brought up, and read the First time.
    7.13 p.m.
    The SOLICITOR-GENERAL: I beg to move, "That the Clause be read a Second time."
    This Clause reproduces, with the necessary modifications, the Clause we discussed earlier this afternoon regarding the prosecution of criminal proceedings against officials, and civil proceedings against officials. The only difference is that as this Clause applies to Burma it makes no reference to the Governor-General. Otherwise it is an identical Clause.
    7.14 p.m.
    Sir H. CROFT: I hope the Committee will not allow this Clause to go through without realising that in the case of Burma we are dealing with a country which is not so far developed politically as the great Indian Empire to which we have been referring earlier on. I ask the hon. Gentleman whether he is satisfied that in a country with such little experience as Burma it is desirable that we
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    should allow cases of this kind to go forward without the Governor definitely giving his sanction. It is a much simpler matter than in British India, because here you have all these officers much more closely under the hand of the Governor, and a case must inevitably come up speedily to him. Surely this is a case where it would be wise to see that there should be no action of a frivolous or vexatious character to which the Governor did not first give his sanction. Is it necessary to put Burma on all fours with India in this matter? We doubt whether it would be wise, and we think that greater security should be given to officials against actions of this description.
    7.15 p.m.
    The SOLICITOR-GENERAL: I will certainly give my views on the point raised by the hon. and gallant Member. I should have thought that if he is right in saying that Burma is politically less advanced than India, the type of vexatious, frivolous litigation which we were considering in our earlier discussion would be less likely to occur there than in British India.
    Mr. RAIKES: Why?
    The SOLICITOR-GENERAL: The suggestion in the previous discussion was that as a result of political agitation frivolous and vexatious proceedings would be taken. I should have thought that one would be less likely to find that sort of thing in what has been described by my hon. and gallant Friend as politically a more primitive society. My reason, however, for not acceding to the suggestion, is that it would not be right to make the kind of condition suggested as a condition to be fulfilled before civil proceedings could be launched. I think it would, or might be, prejudicial to the defendant. If a case has to go to the Governor and he decides that it is a good one and should go forward, I cannot think that this would be a desirable start for the case from the point of view of the defendant. The Governor will have to be very careful not to withhold his leave in any case where there is any shadow of foundation for a claim. It would also, as I stated before, be very undesirable to appear to give a general protection to officials against civil claims.
    7.17 p.m.
    Sir H. CROFT: May I remind the Committee that we give such little time to

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    these vital questions? Here we have the future Colony of Burma, if it is to be called such—we do not know exactly what it is to be called—and I suppose it will be as in the case of Ceylon, where the whole thing went through the back door by an Order-in-Council. Now we have the very important territory of Burma to deal with. What is the harm of providing that the Governor shall be empowered to do what I suggest? He has only to initial the document which will come to him. If there is a charge against an official of the Civil Service he can, if he thinks fit, say that it shall go forward.
    The SOLICITOR-GENERAL: A civil claim is not a charge.
    Sir H. CROFT: I am sorry that I have not been brought up in the legal atmosphere of my hon. and learned Friend.
    The SOLICITOR-GENERAL: It is not a question of legal atmosphere. Anybody knows what a charge is. These civil claims, which may represent claims in respect of money and so forth have nothing to do with a charge.
    Sir H. CROFT: I realise that the cases are absolutely different, but when the Solicitor-General says that with regard to Burma we need have no fear of this kind of thing, because we may have a different atmosphere there than in India—
    The SOLICITOR-GENERAL indicated dissent.
    Sir H. CROFT: Well, the hon. and learned Member said that Burma is not the sort of place where you are likely to have frivolous or vexatious proceedings.
    The SOLICITOR-GENERAL: I did not say that. I said that if my hon. and gallant Friend is right that Burma is politically less advanced, I should have thought that frivolous and vexatious proceedings would be less likely in Burma.
    Sir H. CROFT: The Solicitor-General said that he would have thought that it would have been rather the other way than I suggested, because Burma was politically less advanced than India.
    The SOLICITOR-GENERAL: I expressed no opinion, as to whether Burma
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    was politically less advanced or more advanced than India. I took the hon. and gallant Member's own description.
    Sir H. CROFT: I was expressing the opinion of the Joint Select Committee. My hon. Friend the Member for the English Universities (Sir R. Craddock), who has played such a distinguished part in Burma, will probably agree with me when I say that the whole standard of Burma is, if not 100 years, at least 50 years behind that of India. I thought that was generally accepted. It was indicated in all the documents that were submitted to the Round Table Conferences and also to the Joint Select Committee. I did not think that the actual words were required to be quoted. Where you have a situation like that, surely it is easier for what one might call frivolous attempts to be made to involve officials in proceedings than in a more highly developed political country. The only reason why I mentioned Ceylon was that the people are comparable with those of Burma. They have the same religion. Does the hon. Member on the Government Bench dissent? I thought that Buddhists were in Burma as well as Ceylon. I thought that it was not unfair to say that Buddhism was the principal religion of the two countries. You have not the same kind of disturbances in Burma that you have in India, but there are light-hearted people there who very much enjoy a political joke, just as there are in Ceylon. Anyone who has been following the results in Ceylon since we set up the Constitution there must know that there is a spirit of frivolity and levity in the decisions of the State Council which we want to avoid in Burma. It is for these reasons that I say that it is not unlikely that we shall have the same kind of case arising in Burma that we have seen in India.
    In regard to India there are sheets of cases where officials have been playing their part and doing their obvious duty, but when there is a riot, or murder, or any sort of disturbance, and the official does his duty, immediately a case is brought up against him by political agitators, with the result that the conduct of the police or of the murdered official, or of the murdered official's wife is brought into question whilst the criminals, or those who were guilty of the offence, get away scot free. It is

    113
    against that kind of thing that we want to endeavour to guard the people of Burma. I do not propose to divide again on this subject, although the Solicitor-General has not been able to meet us. I suggest that he should give a little more consideration to this matter at a later stage of the Bill, and I hope that he will see that it would be advisable that the Governor of Burma should himself sanction proceedings against an officer under the new Constitution.
    Clause added to the Bill.

    NEW CLAUSE.—(ineligibility for office under the Crown in Burma of persons who are not British subjects.)
    Subject to any express provision of this Act, no person who is not a British subject shall be eligible to hold any office under the Crown in Burma.
    Provided that the Governor, exercising his individual judgment, may authorise the temporary employment for any purpose of a person who is not a British subject.—[Mr. Ormsby-Gore.]
    Brought up, and read the First time.
    7.25 p.m.
    Mr. ORMSBY-GORE: I beg to move, "That the Clause be read a Second time."
    This is a consequential Clause to the Clause that I moved in regard to India about an hour ago. The reason why the Clause is so much shorter than the Clause in regard to India is because Burma has not Federal States and State subjects in territories adjacent.
    Mr. H. WILLIAMS: I prefer this form to the one with respect to India, and I hope that between now and the Report stage the Government will consider that this form is the better one. I am glad that in connection with this Clause we do not have references to the Siamese and the Tibetans.
    Sir R. CRADDOCK: It is not correct to say that we have not Gurkhas in Burma; we have them in the military police and they come and live on the Borders. There are plenty of them, and I am not sure than some such Clause as we have in regard to India is not required in regard to Burma.
    Mr. ORMSBY-GORE: We will look into the matter between now and the Report
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    stage, and if it is desirable to add "adjacent territories," as in the Indian Clause, we will make the addition to this Clause, in order to enable Gurkhas to be employed in Burma.
    Lord EUSTACE PERCY: What about the people of the Shan States? Are they British subjects?
    Mr. ORMSBY-GORE: I do not quite know whose subjects they are.
    Mr. MORGAN JONES: May I ask for a little guidance? We have had a manuscript copy of a proposed new Amendment which I understood the Government were going to move. How do the Government get over their difficulty? If they suggest that the Clause as it now stands is not adequate, then surely they cannot be satisfied with it as it is.
    Mr. ORMSBY-GORE: The point raised by the hon. Member for the English Universities (Sir R. Craddock) is dealt with by a draft Amendment; that draft Amendment will be put down on the Report stage. It is not put down at this stage or moved in manuscript form in deference to the desire of the Chair not to complicate discussion on the Committee stage by moving manuscript Amendments.
    7.29 p.m.
    Mr. H. WILLIAMS: In the Indian Clause the first two paragraphs related to the eligibility of persons to hold any civil office under the Crown. Paragraph (3) related to "any office." in this Clause the provision is general; it refers to any office. Therefore, it may relate to employment in the Army. I did not realise when we were discussing the Indian Clause that temporary employment may be temporary employment in the armed forces. I want to be clear that this is an authorisation by the Governor to employ foreigners in the armed forces of the Crown in a temporary capacity. Is that the intention?
    Mr. ORMSBY-GORE: Nepalese are technically foreigners. If the Governor thinks it desirable to be able to employ them, he can do so.
    Clause added to the Bill.

    NEW CLAUSE.—(Power of His Majesty in Council to remove difficulties as respects Burma.)
    Whereas difficulties may arise in relation to the transition in Burma from the provisions of the Government of India Act to the provisions of Part XIV of this Act:
    And whereas the nature of those difficulties and of the provision which should be made for meeting them cannot at the date of the passing of this Act be fully foreseen:
    Now therefore, for the purpose of facilitating the said transition, His Majesty may by Order in Council:

    (a) direct that this Act and any provisions of the Government of India Act still in force shall in Burma, during such limited period as may be specified in the Order, have effect subject to such adaptations and modifications as may be so specified;

    (b) make, with respect to a limited period so specified, such temporary provision as he thinks fit for ensuing that, while the said transition is being effected and during the period immediately following it, there are available to the Government of Burma sufficient revenues to enable its business to be carried on; and

    (c) make such other temporary provisions for the purpose of removing any such difficulties as aforesaid as may be specified in the Order."—[The Attorney-General.]

    Brought up and read the First time.
    7.30 p.m.
    The ATTORNEY-GENERAL: I beg to move, "That the Clause be read a Second time."
    This Clause is a corresponding Clause as it affects Burma to the one which I moved affecting India. The hon. and gallant Member for Bournemouth (Sir H. Croft) will be relieved of any doubts as to the simultaneous operation of the federal and provincial parts of the Bill here, because Burma is a unitary constitution. This Clause may be taken subject to the observations that I made before, except in so far as those observations dealt with a double transition. There is only one transition in regard to Burma.
    Sir H. CROFT: May we ask when the Constitution of Burma will come into force? Are they going to go full blast ahead while India is still in the transition stage? This is a question of vital importance. Is Burma to wait until full Federal Government has come into force in India, or is she to go off on the loose by herself? The Committee is entitled to
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    know. I regret that so few Members are taking any interest in questions affecting Burma. I do not think that there have been more than 60 Members present at any of our discussions in regard to Burma, which after all, is a great market on which this country depends. We desire to maintain the fortunes of the people of Burma.
    The ATTORNEY-GENERAL: The hon. and gallant Member must not reproach the Government for the way in which the affairs of Burma have been discussed. The Government were fully prepared to consider everything relating to the country.
    Sir H. CROFT: I hope I may be allowed to intervene. I have not obstructed the proceedings in any way, and this is far too important a subject to be treated lightly. I want to ask the Attorney-General what, in fact, is the proposal?
    The ATTORNEY-GENERAL: I was to tell the hon. and gallant Member. I was merely saying that he must not reproach the Government with any want of attention to or interest in the affairs of Burma. In answer to the hon. and gallant Member's question, the intention is not that Burma should ever go on the loose, to use his rather disrespectful expression, but that Burma should be established as a separate Government with a constitution of her own at the same time as the provincial part of the Bill is brought into operation in India. Whether it will be on precisely the same day of the week I cannot say, but it will come into operation at the same time as provincial autonomy in India.
    Sir H. CROFT: I am grateful to the Attorney-General. Now we know where we are. Provincial government to be set up in India may never come off the transitional period, the whole thing may stop, because we have been told that we cannot have provincial government in India without federal government at the Centre. Therefore, Burma may get her constitution and be able to go forward with it. That fact will interest this country. When the Attorney-General says that the Government are not to blame for the small interest taken in Burma I must remind him that on the Second Reading we asked that Burma should be treated in a separate Bill. It

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    would have been much wiser, because we should then have had a deliberate examination of the whole problem—
    The DEPUTY-CHAIRMAN (Captain Bourne): I hardly think that this arises on the new Clause.
    Sir H. CROFT: I should not have ventured to say anything on that subject but for the remarks of the Attorney-General.
    Duchess of ATHOLL: When the Attorney-General refers to our discussions on Burma, I wonder whether it has occurred to him what a tremendous strain it is upon private Members to keep up with all the details of a measure like this.
    The DEPUTY-CHAIRMAN: We really cannot discuss the previous proceedings of the Committee on a new Clause giving transitional provisions to Burma.
    Clause added to the Bill.
    The DEPUTY-CHAIRMAN: The next new Clause—(Act to be regarded as facilitating dominion. Status)—standing in the name of the right hon. Member for Bow and Bromley (Mr. Lansbury) is not now in order.
    7.36 p.m.
    Mr. LANSBURY: I expected you to give that ruling after our previous discussion, and I only wish to say that in our view the refusal of the Government to give facilities to discuss this matter is one of the worst features of these Debates. I know that I must not carry this matter any further, but I hope I may be allowed to make that protest. We think that the Government should have given us some opportunity for testing the opinion of the Committee on the vital question raised in the suggested new Clause. Everybody has been told that it does not matter what Ministers say on this point and that the only thing that matters is that the House should place it on record that Dominion Status is the ultimate aim of the British Parliament in this legislation. I am sorry that we are not able to discuss the matter.
    The ATTORNEY-GENERAL: I hope that I may be allowed to say that, although the right hon. Gentleman protests against the action of the Government
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    in not giving the Opposition an opportunity of raising this question, it was fully discussed on the Second Reading, and I am not aware of any way within the rules of the Committee, as to which the Government are not the arbiters, by which the right hon. Gentleman can raise this proposal. He has protested, and I must respectfully say that the Government are not guilty of any attempt to block or burke discussion on this important question.
    7.38 p.m.
    The CHAIRMAN: There are two things which I desire to say. First, I wish to acknowledge the way in which the right hon. Gentleman the Leader of the Opposition has been good enough to realise that this matter has already been decided by a previous ruling. Secondly, I have to say this for the protection of the Committee. The right hon. Gentleman has made a protest against the conduct of the Government. I think it is my duty to make it clear that that cannot apply to anything which the Government have done in Committee, because so far as the discussions in Committee are concerned it is a matter which, if there is any blame or the contrary to be attached to anybody, it must be attached to me for the ruling which I have given as Chairman.
    Mr. LANSBURY: I only want to say that in the opinion of my friends and myself if the Government had desired this matter to be brought to the test in the House they could probably have provided some means of doing so.
    The CHAIRMAN: The right hon. Gentleman must realise that we are now not sitting as the House, but as Committee of the House.

    NEW CLAUSE.—(Provincial Intelligence Bureau.)
    The functions of the Governor in relation to the Provincial Intelligence Bureau and all matters connected therewith shall be exercised by him in his discretion under the general superintendence and control of the Governor-General exercised by him in his discretion.—[Sir R. Craddock.]
    Brought up, and read the First time.
    7.42 p.m.
    Sir R. CRADDOCK: I beg to move, "That the Clause be read a Second time."

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    The question whether it is advisable to transfer law and order in the Provinces was decided in the affirmative, but in Clause 57 there is a provision under which in the event of terrorism arising the Government may take over certain functions of the police. Whether those functions are taken over or not, it is at least desirable that over every provincial intelligence bureau the Government should exercise supervision and that they should be under the control of the Governor-General acting in his discretion. It is often said that terrorism is confined to Bengal. That is not the case. Other races in other Provinces have been found guilty of committing terrorist crimes, and in any case this kind of crime is very apt to spread and find imitators in other Provinces. The information which is collected in these Provincial bureaux may be collected from the ordinary police, but they are to be put together by a limited number of men who are to be employed at the bureau as specialists for this purpose, and may contain information of very great importance, extending far beyond the boundaries of the Province. Efforts to seduce troops from their allegiance, civil disobedience, and other kinds of subversive movements will find imitators in other Provinces, and anyone with experience of India will realise to what extent the Provinces are interdependent for information of an important and often secret kind.
    It may be that certain information which comes in this way should be communicated to the local military authorities. It may sometimes be merely the officer commanding the regiment in the neighbourhood in which these cases arise. The utmost secrecy is necessary where the communication must pass from one Governor to another and from the Governor to the Governor-General. Therefore, however much the risk may be taken of entrusting elected Ministers with the carrying on of the ordinary administration of police and of the criminal law, it is most important that this branch at all events shall be kept closely under the control of the Governors themselves, and of those officers who are responsible under them for executive action if peace is disturbed or the country is threatened with conspiracy and attempts to overthrow authority.
    120
    As everyone knows, large results have followed the initiative of simple and apparently rather innocent movements, and it is quite certain that for purposes of that kind you will not ordinarily get a Minister in charge of law and order who is sufficiently in touch with the country at large, outside his own province; you will not get a Minister of that kind who is really in a position in which he can exercise all that co-ordination with other provinces and with the centre; you will not find him for many years to come because you are limited in your Ministers to those who have been elected by the electors. It is highly probable, therefore, that for a long time to come the kind of Minister who will be elected to the legislature will not be the genuine choice of an intelligent electorate, but will be pushed on that electorate by the influence of his own class and the prompting of his own Press.
    For that reason, with such experience as I have had, I do not believe very much in the doctrine that responsibility will create responsible action. There are many reasons why these things which have worked with us for centuries simply do not work in a country like India. I shall not dwell at length on that, because I might be going beyond the scope of the Amendment, but I do wish to say that there are great dangers if the whole of these secret movements, these subversive movements, are not kept under the very strict control of the Governor at the head of the Province. I hope it is possible and likely that the Government will see fit either to accept the new Clause as I have moved it, or to provide for the same object in some other form of language.
    7.50 p.m.
    Duchess of ATHOLL: I wish to support this new Clause. Everyone who has followed the proceedings of the Joint Select Committee must realise the very great importance that was attached by several witnesses to keeping intact the intelligence branch of the Criminal Investigation Department, on which the lives of so many important officials, both Indian and British, depend to-day. I was very interested to realise, only this morning, that this question was the subject of a recommendation by the Statutury Commission. I had not realized that they had made recommendations on

    121
    the matter. I find that in paragraph 190 of the second volume of their Report they state:
    "That the provincialisation of the Criminal Investigation Department, not merely of the Intelligence Department, but of the whole Department, should be carried out, subject to such conditions regarding organisation as the Governor-General in Council might determine."
    In other words they want the Governor-General to have considerable powers of direction and control, not merely for the Intelligence Branch, as the new Clause suggests, but for the whole Criminal Investigation Department, of which it is a very important part. The desirability of putting the Intelligence Branch under the Governor-General was very strongly stressed before the Joint Select Committee by representatives of the European Association, who showed great anxiety about the question of law and order as a whole. They said that if any one thought that self-government for India was going to end terrorism, they were living in a fool's paradise, and they expressed great anxiety as to what would happen to the Intelligence Branch in the event of the transfer of law and order. The President of the European Association in a speech in January of last year again referred to the importance of centralising the administration of the Intelligence Branch in order to keep it intact and carried on with the secrecy which is absolutly essential if it is to be of any use. The Joint Select Committee as a result of the evidence which they heard recommended that:
    "Should the Governor-General find that the information at his disposal, whether received through the channel of the Governors or from the Provincial Intelligence Department or the central Intelligence Bureau, is inadequate, he should, in virtue of recommendations which we make later, possess complete authority to secure from the Governor the correction of any deficiency, and indeed to point out to the Governor and require him to set right any shortcomings which he may have noticed in the organisation of activities of the Provincial Intelligence Branch."
    That recommendation seemed rather like shutting the stable door after the horse is gone, because the Governor-General was not to have power to act in regard to the Provincial Intelligence Department until he had found that the information supplied to him was deficient. If information is ascertained to be deficient, the probability is that that
    122
    ascertainment has not been made until after some tragedy has occurred. Therefore, I have always thought that this recommendation of the Joint Select Committee was very inadequate. In effect it said, "Let us see what happens first, and if anything goes wrong we will give the Governor-General power to require the Governor to supplement a deficiency in the information." Will it be very easy for the Governor to supplement a deficiency of information unless he has himself adequate control over the work of the branch, whereas the branch is to be transferred to the charge of an Indian Minister with the rest of the police department? Will it be very easy for the Governor to remedy a deficiency in the organisation of the activities of the Intelligence Branch?
    At least within the limitations that I have indicated, the Joint Select Committee did want the Governor-General to have some control over the Provincial Intelligence Branch, but so far as I can make out no effect has been given to that recommendation in this Bill. Other recommendations which were made by the Joint Select Committee, designed to meet the dangers foreseen in the transfer of law and order, have been given effect to in the Bill. Some of us think the provisions inadequate, but they are in the Bill. This, however, is a definite recommendation which I cannot find anywhere in the Bill. Therefore I attach great importance to the new Clause. It endeavours to remedy the danger of the Intelligence Branch being rendered largely ineffective. The only action that the Bill proposes to take to that end is in Section 58, where the Governor will have the power to prevent anyone seeing the records of the information sent in. He is to have the power to say what persons are to see the information. That power will also be possessed by the Inspector-General of the Police with regard to members of his service. But it is evident that if the Governor has not felt able to give directions that information in regard to a particular case shall be shown to the Minister for law and order, and if the Minister for law and order is questioned or attacked in the Provincial Legislature in regard to action taken by the police as a result of information which has not been given to the Minister, he will be in a very difficult position. He cannot

    123
    possibly give any effective answer. He will indeed be in a position of great humiliation, in which he might well say, "Where is the responsibility about which so much was said in the British Parliament?"
    It has been said to me that there will be many people concerned with terrorist activity who will utterly refuse to believe that secrecy is possible if the Intelligence Branch is under an Indian Minister. They will say that the Inspector-General is subordinate to the Indian Minister, and they will ask how it is possible that the subordinate has seen information which his chief, the Minister, is denied? They will say it is impossble. It has, therefore, been represented to me that Clause 58 will probably be utterly ineffectual in securing the secrecy which all experts say is absolutely essential if we are to continue to get any information of terrorist activities. If information is not given from the only source from which it can come, that is from inside the terrorist ranks, the first and most effectual protection for the lives of British and Indian civil servants in India will have gone. Sources of information will have dried up and there will be nothing on which any action can be taken.
    The Committee is asked to pass a Bill which does nothing more than I have indicated to safeguard the Intelligence Service at a time when those of us who have read the Memorandum presented by the Secretary of State to the Joint Select Committee have learned that terrorism is not confined to Bengal, as we had been led to understand from the fact that the Secretary of State has never mentioned that there was any terrorism outside Bengal. On the last occasion on which he spoke on this, in July, 1933, my right hon. Friend gave an account of terrorism, and he led us to believe that things were much better, but he confined his remarks entirely to Bengal. Therefore, it was a shock to many of us to read the Memorandum submitted some six months later by the right hon. Gentleman to the Joint Select Committee in which he showed that terrorism, far from being confined to Bengal, had been existing in most of the Provinces of British India since 1930. Yet the Bill does not even give effect to the recommendations which the Joint Select Committee themselves made.
    124
    We feel a very grave responsibility in this matter. To-day we have been discussing the question of giving protection to civil servants against possible charges, criminal or civil. We have had before us the memorial in which they tell us of the dangers under which they carry on their work and how those dangers may be much greater in the future; and yet it is proposed to allow these provincial Intelligence Departments to operate practically entirely under Indian ministers without the direct control from the Centre which the Joint Select Committee themselves recommended. I hope that the new Clause will be agreed to.
    8.2 p.m.
    Mr. BUTLER: I appreciate the importance which hon. Members attach to this Clause, but I do not wish to transgress the bounds of order by referring unduly to the question of the reservation of law and order, with which this new Clause is so intimately bound up. Therefore, I shall have some difficulty—I hope that you will be lenient with me—in endeavouring to adhere to the new Clause. The Clause says that the functions of the Governor in relation to the Provincial Intelligence Bureau shall be exercised by him in his discretion, and it goes on to say under the general superintendence and control of the Governor-General. The first point to which I apply my criticism is the words "the Provincial Intelligence Bureau." I ask myself what this means. Is there in fact in any Province a particular intelligence bureau? The answer to that is that it is certainly not the case. That is one of the difficulties which the Government came up against in considering this point so exhaustively in the Joint Select Committee and in earlier debates in this House. We found it quite impossible to define in such simple words the actual arrangements which do exist in Indian Provinces with regard to secret intelligence. Some have a Special Branch, some have a portion of the Criminal Intelligence Department set off apart to control intelligence, others have rather looser arrangements.
    The first difficulty which we come up against is to define in such simple terms the Provincial Intelligence Bureau, which in most Provinces does not exist as it has existed for some time at the Centre. Were this Clause to refer to the Centre the situation would be quite easy to define. There is there an intelligence

    125
    bureau, and it is proposed in future that the intelligence bureau at the Centre shall continue to be under the Governor-General in his discretion, and it has been suggested that it shall be part of the department of defence and continue to do valuable work in informing the Governor-General of the intelligence from all parts of India. The Noble Lady referred to the report of the Joint Select Committee, notably paragraph 97, where the Committee ask that the Governor-General shall superintend the Governor in the Province who shall in his discretion supply the Governor-General with his information, but in an earlier paragraph, 194, they considered and rejected the proposal that the Special Branch should be reserved.
    Let me consider these two propositions. They suggested that the Special Branch should not be reserved, partly for the reason that I have given, that it is impossible so easily to define it, and partly because the work of the Special Branch in an Indian Province without exception is intimately bound up with the ordinary work of the police. In any Province of which I personally have had experience or any Province on which we have received exhaustive reports, we have been told that the intelligence arrangements or office or whatever there may be in a particular Province, must depend on the day to day working of the police in that Province. For instance, if the intelligence bureau desire information they must acquire it very often through an ordinary police constable who may be operating in some distant part of the district. They may acquire it, as the hon. Member for the English Universities (Sir R. Craddock), with his great experience, has already told us, through military means. It is impossible to isolate the department in a watertight compartment.
    It was for that reason that the Joint Select Committee discarded the idea of the reservation of the Special Branch under the Governor. They proceeded to describe the arrangements which should be made to see that the Governor-General has information in the case of a conspiracy which might lap over the boundaries of one particular Province into another Province, and therefore they proposed that the Governor-General should have the power of superintendence and control, which, incidentally, he would
    126
    have in any case, because we have always understood that the chain of discretion is from the Governor to the Governor-General and the Secretary of State. In Clause 54, which is entitled "Superintendence of Governor-General," there are set out quite plainly powers specifically mentioned which makes it clear that the Governor-General has the power on other occasions to obtain this information from Governors or to give them instructions.
    I appreciate, as the Joint Select Committee did, the danger of a conspiracy in a particular Province, and that is why the Committee, instead of recommending the reservation of the special branch, recommended in paragraphs 96 and 97, and we have inserted in the Bill in Clause 57, special powers for combating terrorism: "Provisions as to crimes of violence intended to overthrow the Government." The hon. Member for the English Universities and the Noble Lady the Member for Kinross and Western (Duchess of Atholl) both desire to achieve this end by simply isolating the special branch, an operation which we have found on inquiry, much as we may have considered doing it, impossible. We have therefore, instead, given the Governor much more effective power. Instead of merely saying that he can isolate the Special Branch, we have said that in cases of necessity the Governor can take over such departments of government as he may deem necessary to combat terrorism or crimes intended to overthrow the Government.
    These powers will enable the Governor to take over such branches of the administration as he thought necessary and no limit has been placed on that, because it cannot be clear now exactly what departments of government it may be necessary for the Governor to take over. Therefore, we find that the hon. Members who moved this Clause and the Government have the same object in mind. Both wish to combat terrorism if unfortunately it should be necessary to do so. They think that by isolating the department they will achieve the objectives which they have in mind. We say that the powers we have in our Bill are much nearer the facts of the Indian situation and give the Governor wide powers in unfortunate cases of necessity. I think that these, combined with the general provision that the Governor-General

    127
    will be able to communicate with the Governor, obtain information from him and give him instructions, are therefore satisfactory for the purposes we have in view, and since this matter was so exhaustively considered on the Joint Select Committee and has already been mentioned in the House, I am afraid that I cannot accept the new Clause.
    8.12 p.m.
    Duchess of ATHOLL: I hope that my hon. Friend will remember that the reason why in this proposed new Clause we deal with this subject in a rather piece-meal manner is because of the decision in the Bill to transfer the police force as a whole. Our wish was that it should be made a reserved subject and if I might say so, a great deal of my hon. Friend's speech was an argument for reservation. He admitted that secrecy was essential, and he pointed out also how intelligence work is mixed up with the general work of the police. We say that, if secrecy is essential and if it is difficult to secure secrecy if the force is to be under an Indian Minister that is an argument for reservation.
    The CHAIRMAN: I hope the Noble Lady will realise that she started by saying that this was a matter which had already been decided.
    Duchess of ATHOLL: I do not wish to transgress. My hon. Friend said that this matter had received exhaustive consideration from the Joint Select Committee. I wish that we could say that this House had exhaustively considered this question of the transfer of law and order. Only three hours have been allotted to this very important subject.
    8.14 p.m.
    Colonel GRETTON: There seems to be one great defect given by the Under-Secretary for India in that there is no linking up of the various intelligence systems in the Provinces. I know that I cannot go into that matter. Intelligence comes from various sources. The Government have rejected the proposal contained in the new Clause. But, surely something ought to be done to meet emergencies which may arise from time to time, involving sending to a Governor of a Province stating that information is wanted about this or that matter and the
    128
    proposal in the new Clause is a much more systematic way of dealing with intelligence than anything else which has been suggested here. There is no indication in the explanation which has been given on behalf of the Government that if the new Clause is set aside, there is any means whatever of linking up the intelligence service of one Province with that of another. A person who is suspect in one Province might escape the observation of the agents of the police and go over the border into another Province and apparently no action could be taken as between the one Province and the other. Surely, the Government have something more in mind about this matter than they have explained.
    I know that there is great difficulty about discussing in this House questions relating to intelligence services. When these matters become the subject of discussion the result often is to destroy means of information and to break up the chain of existing services. But I would ask the Government to give us a general assurance on this matter. We are not so suspicious that we would not accept an assurance from them that they are fully alive to the importance of this matter and that they intend that the Governor-General shall maintain an efficient intelligence service at work throughout India in order that the Government may be able to keep itself properly informed of developments. If we had some assurance of that kind we should feel easier in our mind but what the Government have done has been to reject every proposal which we have put before them and to give us only very unsatisfactory vague and indefinite assurances. Apparently when certain intelligence is desired inquiries will have to be made to see whether the information is in this or that Province—a most unsatisfactory state of things. There could be nothing more objectionable than that the Central Government should set up a service in an autonomous Province and it would be equally objectionable to set up a service in a native State. The only way is to keep what you have and not to hand it over to anybody else. I greatly regret that the Government have not either accepted the proposed new Clause or put forward proposals of their own adequate to fulfil the purpose which I, myself, believe they have in view.
    8.20 p.m.
    Sir R. CRADDOCK: I do not wish to repeat the arguments which have already been used, but I want to refer to one or two points in the Under-Secretary's statement. He said that this service whether called a Central Intelligence Bureau or by any other name varied a great deal from Province to Province. But such a service exists in a number of Provinces, according to the scale of the crime or unrest or suspicion with which it has to deal. In a Province where the C.I.D. intelligence branch is a small one it is an indication that the developments of inter-provincial crime and conspiracy in that area have not been very great and that there has not been much to ruffle the surface of things in that Province. But it is easy to bring into existence the kind of branch to which this new Clause applies—call it by whatever name you like. It is the intelligence branch in some Provinces and the special branch in others but it consists of a very few people. It generally begins with an inspector-general of police getting one of the superintendents to be his personal assistant for the purposes of dealing with particular information. It is true that the information comes from all sources civil and military, including the ordinary constable. Everybody who has any information to impart has to give it. But how it is dealt with and what action is taken upon it remains a close secret in that little branch at the top. As the information becomes more serious or the state of the country becomes more agitated then the strength of the branch is increased. Difference Provinces have hitherto called it by different names but there is no reason why the practice should not continue and why the special branch should not be described in every Province under the same name so as to avoid confusion. I feel that we must press this new Clause.
    8.23 p.m.
    Lieut.-Colonel APPLIN: I think the reasons given by the Under-Secretary for not accepting the new Clause are extraordinarily weak. The fact that the Governor-General has power to take over the department makes it all the more
    necessary to adopt this proposal. We do not want to wait until a crisis before the Governor-General takes over the service. We want to avoid the crisis. The whole object of the new Clause is to enable the Bill to work and to try to obtain for the new Government of India, when it comes into existence, peace, order and tranquillity. Therefore, it is essential to have a central bureau collecting information on the various Provinces.
    Mr. BUTLER: I made it clear that the Central Intelligence Bureau would continue to function; that it would be reserved in the discretion of the Governor-General and would almost certainly be attached to the Department of Defence. The Central Intelligence Bureau in the past has been extremely efficient and I do not doubt that the Central Intelligence Bureau in the future will be equally efficient.
    Lieut.-Colonel APPLIN: I accept that statement, but the point is, will the Provinces come into the general scheme and will the Centre be able to collect the necessary information from the Provinces? Unless that is assured the whole thing is useless. There must be co-ordination in collecting the information from the Provinces. In the last resort, in the event of a breakdown of law and order the Army will be in the hands of whoever has the Intelligence Bureau. The military cannot move and cannot act until they get the information and they will have no means of collecting the information for themselves. For that reason alone it is essential that the Governor-General should have the provincial services of information at his disposal. He should be the head and front of the whole system. Unless he is in that position, how can the Commander-in Chief take action when asked to do so? I beg of the Under-Secretary to accept the new Clause. It can do no harm and may do an infinite amount of good. It may be the means in the future of preserving peace and order in India.
    Question put, "That the Clause be read a Second time."
    The Committee divided: Ayes, 25; Noes, 167.

    Division No. 156.]

    AYES.

    [8.24 p.m.

    Acland-Troyte, Lieut.-Colonel

    Broadbent, Colonel John

    Dawson, Sir Philip

    Atholl, Duchess of

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

    Emmott, Charles E. G. C.

    Bailey, Eric Alfred George

    Craddock, Sir Reginald Henry

    Goodman, Colonel Albert W.

    Balfour, George (Hampstead)

    Croft, Brigadier-General Sir H.

    Gretton, Colonel Rt. Hon. John

    Hepworth, Joseph

    Marsden, Commander Arthur

    Thorp, Linton Theodore

    Keyes, Admiral Sir Roger

    Remer, John R.

    Wayland, Sir William A.

    Lennox-Boyd, A. T.

    Sanderson, Sir Frank Barnard

    Williams, Herbert G. (Croydon, S.)

    Levy, Thomas

    Somerville, Annesley A. (Windsor)

    Lockwood, Capt J. H. (Shipley)

    Taylor, Vice-Admiral E. A. (Pd'gt'n, S.)

    TELLERS FOR THE AYES.—

    Colonel Applin and Mr. Raikes.

    NOES.

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

    Hamilton, Sir George (Ilford)

    Patrick, Colin M.

    Agnew, Lieut.-Com. P. G.

    Hammersley, Samuel S.

    Peat, Charles U.

    Albery, Irving James

    Haslam, Henry (Horncastle)

    Penny, Sir George

    Anstruther-Gray, W. J.

    Haslam, Sir John (Bolton)

    Percy, Lord Eustace

    Aske, Sir Robert William

    Heilgers, Captain F. F. A.

    Petherick, M.

    Attlee, Clement Richard

    Henderson, Sir Vivian L. (Chelmsford)

    Pickering, Ernest H.

    Baldwin, Rt. Hon. Stanley

    Hope, Capt. Hon. A. O. J. (Aston)

    Pickthorn, K. W. M.

    Balfour, Capt. Harold (I. of Thanet)

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

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

    Banfield, John William

    Jackson, Sir Henry (Wandsworth, C.)

    Power, Sir John Cecil

    Barton, Capt. Basil Kelsey

    Jamieson, Douglas

    Ramsden, Sir Eugene

    Batey, Joseph

    Jones, Henry Haydn (Merioneth)

    Rathbone, Eleanor

    Beauchamp, Sir Brograve Campbell

    Jones, Morgan (Caerphilly)

    Reed, Arthur C. (Exeter)

    Bernays, Robert

    Kerr, Hamilton W.

    Reid, James S. C. (Stirling)

    Bossom, A. C.

    Kirkpatrick, William M.

    Reid, William Allan (Derby)

    Boulton, W. W.

    Kirkwood, David

    Rhys, Hon. Charles Arthur U.

    Bower, Commander Robert Tatton

    Lamb, Sir Joseph Quinton

    Robinson, John Roland

    Bowyer, Capt. Sir George E. W.

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

    Ropner, Colonel L.

    Braithwaite, J. G. (Hillsborough)

    Leckie, J. A.

    Rosbotham, Sir Thomas

    Brass, Captain Sir William

    Leech, Dr. J. W.

    Ross Taylor, Walter (Woodbridge)

    Burgin, Dr. Edward Leslie

    Lewis, Oswald

    Ruggles-Brise, Colonel Sir Edward

    Butler, Richard Austen

    Lindsay, Kenneth (Kilmarnock)

    Russell, Hamer Field (Shef'ld, B'tslde)

    Campbell, Vice-Admiral G. (Burnley)

    Lindsay, Noel Ker

    Rutherford, Sir John Hugo (Liverp'l)

    Campbell-Johnston, Malcolm

    Lister, Rt. Hon. Sir Philip Cunliffe-

    Salt, Edward W.

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

    Llewellin, Major John J.

    Salter, Dr. Alfred

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

    Logan, David Gilbert

    Savery, Samuel Servington

    Clayton, Sir Christopher

    Lovat-Fraser, James Alexander

    Selley, Harry R.

    Cleary, J. J.

    Lumley, Captain Lawrence R.

    Shaw, Captain William T. (Forfar)

    Cochrane, Commander Hon. A. D.

    Lunn, William

    Simmonds, Oliver Edwin

    Cocks, Frederick Seymour

    Lyons, Abraham Montagu

    Smiles, Lieut.-Col. Sir Walter D.

    Colville, Lieut.-Colonel J.

    Mabane, William

    Smithers, Sir Waldron

    Cook, Thomas A.

    MacAndrew, Capt. J. O. (Ayr)

    Somervell, Sir Donald

    Croom-Johnson, R. P.

    McCorquodale, M. S.

    Somerville, D. G. (Willesden, East)

    Cross, R. H.

    Macdonald, Gordon (Ince)

    Southby, Commander Archibald R. J.

    Crossley, A. C.

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

    Spender-Clay, Rt. Hon. Herbert H.

    Daggar, George

    MacDonald, Malcolm (Bassetlaw)

    Spens, William Patrick

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

    Maclay, Hon. Joseph Paton

    Stewart, J. Henderson (Fife, E.)

    Denman, Hon. R. D.

    McLean, Major Sir Alan

    Stones, James

    Denville, Alfred

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

    Strauss, Edward A.

    Despencer-Robertson, Major J. A. F.

    Martin, Thomas B.

    Strickland, Captain W. F.

    Ellis, Sir R. Geoffrey

    Mayhew, Lieut.-Colonel John

    Sugden, Sir Wilfrid Hart

    Elmley, Viscount

    Mills Major J. D. (New Forest)

    Sutcliffe, Harold

    Emrys-Evans, P. V.

    Milne, Charles

    Thorne, William James

    Essenhigh, Reginald Clare

    Mitchell, Sir W. Lane (Streatham)

    Tinker, John Joseph

    Fleming, Edward Lascelies

    Molson, A. Hugh Elsdale

    Todd, A. L. S. (Kingswinford)

    Foot, Isaac (Cornwall, Bodmin)

    Moreing, Adrian C.

    Train, John

    Fox, Sir Gilford

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

    Tufnell, Lieut.-Commander R. L.

    Gardner, Benjamin Walter

    Morrison, William Shepherd

    Wallace, Captain D. E. (Hornsey)

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

    Muirhead, Lieut.-Colonel A. J.

    Ward, Sarah Adelaide (Cannock)

    Gower, Sir Robert

    Munro, Patrick

    Warrender, Sir Victor A. G.

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

    Nation, Brigadier-General J. J. H.

    West, F. R.

    Griffiths, George A. (Yorks, W. Riding)

    Nicholson, Godfrey (Morpeth)

    White, Henry Graham

    Grigg, Sir Edward

    North, Edward T.

    Whiteside, Borras Noel H.

    Grimston, R. V.

    O'Neill, Rt. Hon. Sir Hugh

    Worthington, Dr. John V.

    Groves, Thomas E.

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

    Grundy, Thomas W.

    Orr Ewing, I. L.

    TELLERS FOR THE NOES.—

    Gunston, Captain D. W.

    Palmer, Francis Noel

    Lieut.-Colonel Sir A. Lambert Ward

    Hacking, Rt. Hon. Douglas H.

    Parkinson, John Allen

    and Major George Davies.

    8.33 p.m.
    The CHAIRMAN: The next new Clause which I propose to select is that standing in the name of the hon. Member for Middleton and Prestwich (Sir N. Stewart Sandeman), the hon. and learned Member for Nelson and Colne (Mr. Thorp), and Others—(Establishment and constitution of Indian Tariff Board). Before I call that Clause, I want to point out to the Committee that though this is mainly a machinery Clause, it involves questions of principle, which would make it extremely
    132
    difficult for me, without unduly narrowing the debate, to rule out arguments which apply more particularly to other new Clauses, which will be called later, dealing with Imperial preference or preference for the United Kingdom. I think, therefore, it would be in accordance with the general ideas of the representative Committee which has been sitting if I allowed the widest possible debate on this new Clause, so as to cover questions relating to the new Clause on page 1731 of the Order Paper—(Imperial Preference)—in

    133
    the names of the hon. Member for South Croydon (Mr. H. Williams) and others, and the two new Clauses at the bottom of page 1734—(Provisions as to Bills imposing or increasing the duties on imports) and (Higher duties not to be imposed on United Kingdom imports than on other imports)—both in the names of the hon. and gallant Member for Bournemouth (Sir H. Croft) and others. If we took the discussion on this first Clause to cover all those, it would, of course, be permissible to divide on the others when they were called, but I suggest that it would be more in accordance with the arrangement made in the Committee if, unless it is thought that some special point is not covered, it were understood that there would be no further discussion on those three later Clauses when they were reached. I hope that will meet with the general assent of the Committee.

    NEW CLAUSE.—(Establishment and constitution of Indian Tariff Board.)
    (1) For the purpose of giving advice and assistance to the Federal Government on all questions relating to the levying of any duty of customs on goods imported into the Federation or export duty on goods exported from the Federation there shall be constituted a board, to be called "the Indian Tariff Board," consisting of a chairman and not less than two or more than five other members, to be appointed by the Governor-General in his discretion after consultation with the Secretary of State.
    (2) The members of the board shall hold office for a period of three years and shall be eligible for reappointment from time to time on the expiration of their term of office.
    If a member becomes, in the opinion of the Governor-General, unfit to continue in office or incapable of performing his duties under this Act the Governor-General in his individual judgment shall forthwith declare the office of such member to be vacant and shall notify the fact in such manner as he thinks fit, and thereupon the office she become vacant.
    (3) The expenses of the board to such an amount as may be approved by the Governor-General (including the expenses of their staff and such salaries or other remuneration paid to all or any of the members as the Governor-General may determine) shall be charged on the revenues of the Federation.
    (4) The board may make rules—

    (a) for regulating the proceedings, including the quorum, of the board; and

    (b) for authorising the delegation of any of the functions of the board to a sub-committee consisting of members of the board.

    (5) The board, so tar as they consider it necessary or desirable so to do for the proper discharge of their functions, may by notice in writing require any person to furnish them with returns or other information, or subject to the payment or tender of the reasonable expenses of his attendance, to attend as a witness before them or before any person authorised by them and to give evidence or produce documents, and if any person fails without reasonable excuse to comply with the provisions of any such notice he shall be liable on conviction to a fine not exceeding five hundred rupees and in the case of a second or subsequent conviction to a fine not exceeding two thousand rupees.
    (6) The board, or any person authorised by them, shall have power to take evidence on oath and for that purpose to administer oaths.
    (7) The Governor-General shall submit to the board any proposal to impose, increase, decrease, or abolish any duty of customs or export duty and the board shall consider any such proposal and shall report thereon to the Governor-General and the Governor-General may, in his individual judgment, publish such report in such manner as he thinks fit.
    (8) If in respect of any proposal to increase any duty of customs or export duty the board shall be of the opinion that such proposed increase if brought into operation would result in decrease in the revenue derived from such duty of customs they shall report to that effect to the Governor-General, and the Governor-General shall transmit such report to the Secretary of State together with any statement in writing he may see fit to make, and the Secretary of State shall lay such report and such statement (if any) before Parliament.
    (9) The Indian Tariff Board as existing immediately before the commencement or this Act shall be dissolved and such compensation for loss of salary and emoluments as His Majesty in Council may prescribe shall be paid to the members of that board out of the revenues of the Federation.—[Mr. Thorp.]
    Brought up, and read the First time.
    8.36 p.m.
    Mr. THORP: I beg to move, "That the Clause be read a Second time."
    I respectfully agree with you, Sir Dennis, that there is a great question of principle involved in all these new Clauses. The Clause which I now move is taken to a great extent from Section 2 of the Import Duties Act, 1932, and it is designed to set up in India a Tariff Advisory Board with analogous and in many respects identical powers and duties to those of the Import Duties Advisory Committee in this country. It is felt,

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    and indeed it is submitted to the Committee, that what is good enough for the Government of this country might not unfairly be regarded as of some value and assistance to the Government which it is contemplated should be set up in India. The question of the tariffs which will be applied in India is one which has exercised, far more than is generally appreciated, the minds of a great many of the manufacturers in Lancashire, and they have been concerned with what will be the result if this Bill ever comes into effective operation.
    We know that in the past the interests and anxieties of Lancashire have rather been scouted, and a member of the Government on one occasion said that Lancashire should not worry about the paltry 3 per cent. which was put against the goods of Lancashire. The question is capable of reduction almost to a simple proportion sum, but the answer, of course, is not easy to obtain. If in a few short years the duty against goods exported from Lancashire to India has increased from 3 per cent. to over 25 per cent., how much is it going to increase when this Bill becomes an Act of Parliament and the Government in India comes into operation? We know that from one cause or another there has been an improvement in Lancashire, thanks to a great extent to this Government. Some people think that improvement might have been brought about a great deal earlier than it was and that the measures taken by the Government to bring it about could have been more vigorously and potently pushed forward than they have been.
    All this proposed Clause seeks to do is to set up machinery which would have two objects, if not three. One object would be to assist the Governor or the Governor-General in the decision to which he might have to come on the question whether any duties which were placed upon exports from this country to India should be rightly assessed as penal duties. It is, I think, the view of the Committee—it has often been expressed in the House—that no penal duties should be allowed against the imports of this country into India. What better machinery could be devised to advise the Governor-General on such a technical matter than an advisory board which this new Clause proposes to set up? In the second instance, the Board could in case of need
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    give considerable publicity to its recommendations; and it would also form a forum before which the interests of Lancashire could be placed by the merchants and manufacturers who, rightly or wrongly, thought their interests were not being adequately or properly protected by the Governor-General. The remainder of the Clause is really only machinery in that it seeks to put an end to the present India Tariff Board and substitute the contemplated Tariff Board. The attitude of the Government towards the interests of Lancashire will be subjected to an acid test by the attitude they adopt towards this new Clause. The test is whether they are prepared to afford the Governor-General the protection of the advantage of having an experienced opinion upon the various duties that are proposed to be placed against Lancashire goods.
    8.45 p.m.
    Mr. MOLSON: I cannot recollect ever having heard an Amendment moved in this House with so scanty an explanation of what its effect would be. There is at the present time a Tariff Board in India which is under a statutory obligation to answer certain questions, notably whether, in the case of any industry which has applied for a tariff, there is a reasonable prospect that after it has been in receipt of the assistance of a tariff for a certain time it will become a self-supporting industry. The effect of this Clause is to abolish an existing Tariff Board which is very similar to the Import Duties Advisory Committee in this country and to substitute for it a tribunal whose report, if it finds that the effect of an increase in a duty will be to reduce the revenue, in other words, if the tariff is likely to have a protective effect, the Secretary of State will be under an obligation to lay before this House. The effect of this Clause is quite definitely to go back upon the Indian Fiscal Convention, which has been in force since 1920.
    I confess that I find it difficult to understand how that section of the Conservative party who are frequently known as "Diehards" are able to put forward simultaneously and without any feeling of inconsistency two entirely different arguments. We heard them, in their great Second Reading speeches, talking about an India for which we have a sacred trust and expressing the utmost concern for the dumb and docile masses of the

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    Indian people. Those who take that view about this Bill are, most of them, conspicuous for advocating a protective policy for this country, claiming that it would be in the interests of the working classes here. If they consider that we owe to India the same care, the same studious avoidance of exploitation, which a trustee owes to his cestui que trust, I should have thought that it would be impossible for them to refuse to Indian politicians, who have learned from them that a protective policy will be in the interests of the masses of India, the protective tariffs which they claim, when imposed here, are in the interests of the English working classes. Indian politicians who agree with that view have claimed for India the right to put on protective duties against imports from this country. Hon. Members can have it one way or the other. Either they can take the view that because we conquered India we are entitled to maintain a free and open market for our own exports or, on the other hand, they can take the view that India is a sacred trust and that the interests of India and the masses of the Indian people are far more important than the interests of constituents here. How the same hon. Members can put forward both arguments simultaneously I confess that I do not understand. When I hear their speeches I am no longer surprised that Englishmen have, unfortunately, a reputation for hypocrisy in so many countries of the world. The Cotton Excise Duty, imposed in 1894 by the Secretary of State in this country, in spite of the protests of the Government of India, is the usual example cited by Indian politicians when they say that the attitude of the British Government towards India has been one of exploitation.
    What is the history of the Indian Fiscal Convention which it is proposed by this new Clause to abrogate? Let us remember that this is not one of the cases in which the Secretary of State or the Viceroy has, without the authority of this House, made a pronouncement which has afterwards been called a pledge. This Indian Fiscal Convention dates from the report of the Joint Select Committee which sat upon the Act of 1919, and I would like to quote a few words from that report which are very strictly relevant to this point:
    "Nothing is more likely to endanger the good relations between India and Great
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    Britain that a belief that India's fiscal policy is dictated from Whitehall in the interests of the trade of Great Britain. That such a belief exixsts at the moment there can be no doubt. That there ought to be no room for that belief in future is equally clear."
    The Report of the Joint Select Committee was accepted by the Government and, therefore, by the House of Commons. That Fiscal Convention has now been in operation for 15 years. It has been accepted by successive Secretaries of State, Liberal, Conservative and Socialist, and the Simon Commission themselves recommended that there should be no change. The hon. and learned Member who moved this Clause said there had been an improvement in the trade of Lancashire during the time the present Government have been in power. I wonder, therefore, why he should not wish to continue the policy which the present Secretary of State has followed with so much success. There was no attempt at coercion by the Secretary of State when the Indian Delegation went to Ottawa, they went without any orders or any instructions from the Secretary of State and a very valuable trade agreement was reached at Ottawa. Subsequently, there was a further subsidiary agreement about tin sheets. Carrying on in the same spirit, the Secretary of State gave encouragement to the mission headed by Sir William Clare Lees. I am glad to see that there is present an hon. Member who was a member of that mission. As we have heard from him, and as is generally accepted both in this country and in India, that mission did a great deal to improve the relations between Lancashire and the Bombay millowners.
    This Clause is supported by a certain number of those who represent the industry in Lancashire, but it has not the support of those who are best qualified to represent the views of those chiefly affected. Important as the Lancashire cotton trade is, it is well to remember that of the total exports from this country to India cotton yarn and cotton manufactures have only amounted to 22.1, 29.3 and, in the last year, to 22 per cent. of our total exports to India.
    Sir H. CROFT: Is it not a fact that up to a very few years ago exactly the reverse was the case, and our exports of cotton goods to India formed the great majority of British exports?
    Mr. MOLSON: That is, surely, obviously true. There was a time, before the Indian cotton trade was as highly developed as it is to-day, when Lancashire was still successful in maintaining the cotton Excise duties in order to prevent India from developing her own industry and before Japanese competition was as severe as it is at the present time, when the exports from Lancashire formed a much larger proportion of the total exports from this country to India. We are, however, concerned about the present.
    Mr. THORP: Does the hon. Gentleman suggest that the increase of the duty from 3 per cent. to 25 per cent. has not caused that result?
    Mr. MOLSON: I do not question that for one moment. The point I am making is that the policy of Parliament, of successive Governments and of the Joint Select Committee and the Simon Commission all have agreed with the principle that the fiscal policy of India should be left in Indian hands to be influenced by Indian considerations and Indian interests, and that India's fiscal policy should not be dictated to her by this country in the interests of this country. We are concerned with the present trade between this country and India, and with the immense importance to us of India as a market, which is dependent upon Indian good will. I am pointing out that, important as Lancashire and as our cotton exports to India are, they do not amount to more than about one quarter of our total exports to India. For example, in the case of machinery and mill work—that is to a very large extent the machinery for which there has been a demand from India, because of the protective policy which has been followed and the development in India of secondary industries—exports in that single category amounted to from 17.2 per cent. to 18.3 per cent.
    Sir H. CROFT: Would the hon. Member give us the figure of the total exports from this country to India since the War, and compare them with the figure to-day of £36,000,000.
    Mr. MOLSON: I have not those figures, because they are not relevant to my argument. What I can say is that there has been an increase in our exports to India since the Ottawa Agreements were concluded,
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    in which a policy of agreement and good will was followed by the present Government.
    Mr. HAMMERSLEY: I think the hon. Gentleman is not quite correct in his figures. The increase in our exports has surely taken place during the past year.
    Mr. MOLSON: I am sorry, but I have not the figures actually ready, and I should certainly be willing to be corrected. I was speaking from memory, and my memory may be at fault—although, frankly, I do not think it is. The Committee might well pay attention to the views expressed by the executive council of the Associated British Chambers of Commerce, in regard to the general policy which is advocated by the great exporting houses. The Chambers of Commerce were represented by Sir Alan Anderson before the Joint Select Committee, and when the report of the Joint Select Committee was issued, the executive council considered it and passed the following resulotion:
    "The executive council supports the foregoing recommendations made by the Joint Select Committee including the safeguards against commercial, financial and shipping discrimination and penal tariffs. The council trusts that such provisions will be included in the forthcoming Bill as may be found necessary to make these safeguards effective."
    Because the Government's policy has been carefully framed on the lines of the report of the Joint Select Committee; because that is in accordance with the policy which has been recommended by successive committees of inquiry; because it has been followed by Secretaries of State representative of all three political parties, and because originally it was accepted as the policy of Parliament in 1920, I trust that the Government will not accept the proposed new Clause.
    9.0 p.m.
    Mr. FLEMING: I was rather surprised to hear the hon. Member for Doncaster (Mr. Molson) say that the general impression as to Englishmen throughout the world was that they have a reputation for hypocrisy. It is certainly news to me that that is the general impression in those parts of the world that I have visited, and I cannot accept the dictum of the hon. Member. In fact, I have always found wherever I have gone—and I have visited a few countries—that the Englishman is not looked upon as a

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    hypocrite. He has been generally accepted as a man who is not afraid of speaking his mind and who, when he does so, generally tries his best to stick to what he has said. I congratulate the hon. and learned Member for Nelson and Colne (Mr. Thorp) upon the reasonable way in which he moved the proposed new Clause. The hon. Member for Doncaster might not realise the feeling which exists in the neighbouring county to that in which Doncaster lies, in regard to matters which affect the staple industry of Lancashire. I think he would agree that very little has been done for the cotton industry since we came into this House in 1931. I agree that a certain amount has been done, and I give all credit possible to the Government for what has been done. When I listen to the little discussions that go on, and to remarks like those made by the hon. Member for Doncaster, I gather the impression which is rather prevalent throughout Lancashire, that our cotton industry is being sacrificed in the agreements that have been entered on behalf of other industries.
    We may be entirely wrong in that impression. I am willing to have an impression driven away from my mind and the proper ideas put there, but it will take more than what has been said by the hon. Member for Doncaster to do that. It will take more than what he said to alter the impression throughout the length and breadth of the cotton districts of Lancashire. We have noticed, and so probably has every other hon. Member in the House, that whenever we have asked that something should be done on behalf of the cotton industry, we have been put off. We have been told to have patience. When we glance through the Clauses in the Bill, what do we find that will directly affect the staple industry of Lancashire? In Clause 12 (1, f) there is undoubtedly a safeguard tending to prevent discriminatory or penal treatment against goods coming from the United Kingdom or from Burma. What would be the effect if the proposed new Clause were accepted by the Government? Surely it would merely put India into the position which this country enjoys at the present time. I may be entirely wrong in that view, but I fail to see any difference between such a board as is suggested in this proposed new Clause and the Import Duties
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    Advisory Committee which we have in this country.
    It has been said quite truly that there is already a Tariff Board in India, but, if my hon. Friend the Member for Doncaster had been a Lancashire Member, and had heard what is said about that Board in Lancashire, I am sure he would agree with all of us that the sooner that Board finishes its career the better for Lancashire. There is undoubtedly a strong feeling throughout Lancashire to-day that something ought to be done to set up a proper Tariff Advisory Board when a new system of government is being set up in India, and I fail to see how it will in any way detract from that good will about which we hear so much fro mall quarters of the House if we ask the Government to set up such a Board. Surely, it is not against the interests of India that the Governor-General, who under paragraph (f) of Clause 12 has the power to deal with anything that he considers detrimental or penal as regards imports from this country, should be advised by a board which would have the power to obtain, perhaps, more evidence than he would be able to obtain in carrying out that should we set up such a board in this specific duty. If that be not so, why country? Surely that was done because we came to the conclusion that it was better in the interests of this country that the question of tariffs should be, if possible, lifted out of the acrimonous atmosphere of party politics as we find it occasionally on the Floor of the House of Commons, and that is all that this Clause, as far as I understand it, suggests should be done in the interests of India. I cannot see why there should be any objection to the adoption of such a Clause.
    Unless whoever replies on behalf of the Secretary of State can suggest what is the intention of the Government as regards helping that part of the industry of Lancashire which in days gone by exported so much to India to a fairer share of the trade with India, I am afraid that this particular Bill will not prove very palatable to the cotton people in Lancashire. No matter from what party point of view problems are approached in the House of Commons, it seems to me that, when those problems get back to the voter, they reduce themselves to a, question of bread and butter.

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    My impression, during the short time for which I have interested myself in politics, is that, no matter on how high a plane problems may be put, the voter, in the final test, will reduce every suggestion and every beautiful theory to the question of how it is going to affect him as regards his work and wages, and that is how this question of the Tariff Board will be tested by the Lancashire voter. I am speaking quite plainly, and am putting before the Committee quite clearly what we have to face on this question. I cannot see why the Lancashire man should be told: "Yes, we have a Tariff Advisory Board here under the name of an Import Duties Advisory Committee, but we do not want to do that for India." I do not see any reason for not giving the same treatment to India that was given to us here in 1932.
    9.11 p.m.
    Duchess of ATHOLL: I should like to address myself more especially to the speech of my hon. Friend the Member for Doncaster (Mr. Molson) on this Clause. If he will forgive my saying so, I do not think his speech showed that he has studied this subject very deeply. He gibed at us on these benches for being in favour of protection for British workers and at the same time putting in the forefront of our points of opposition to the Government of India Bill the question of the welfare of the Indian peasants. My hon. Friend seemed to think that it was quite impossible to be working at the same time to help our workers and to promote the welfare of Indian workers. He forgets a speech made by Sir Charles Innes, the Finance Member in 1923, when the Indian Tariff Board was set up—a speech in which he said quite frankly, although it was his business to commend to the Assembly the setting up of the Tariff Board, that, if the peasants of India had full representation in the Indian Assembly, he would not be there that day advocating the setting up of a Tariff Board in order to carry out a system of protection which would mean high duties on many things the peasants used. That was a striking indication that, in the opinion of a man who well knew the economic and financial conditions of India, India was not yet ripe for high protective taxes, that her people
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    were not ready for the policy of industrialisation which a tariff was likely to bring in its train.
    I have had information from people who have lived close to the peasants in various parts of India as to the popularity of British cloth, which is now so largely shut out. I am told that the Indian peasants prefer Lancashire cloth to their own because it wears better; and it was said in my presence at a meeting, by one who is recognised as an authority on the conditions of life of the Indian peasant, that the peasant cannot buy the shirt that he wants because of the high tariffs which have been put on by the Indian Assembly. I heard the gentleman in question describe in the most moving terms how, year by year, during the 30 or 40 years he had spent in India, he had seen the peasants gradually increase the little stock of comforts that they could afford, because prior to 1921 the Government of India was steadily reducing taxation and leaving them more for their own pockets. He described how very scanty their clothing was when he first went to India, and how he had gradually seen them become able to buy more clothing and other little comforts, until in recent years higher taxes and duties were put on, when the peasant was no longer able to afford to buy the shirt that he wanted and his standard of living went down. Moreover, the tragedy of the position is that the Indian cloth, so I am told, is kept by the Indian mill-owners at a price only just below that of the British, so that the Indian peasant has to pay very nearly As much for less durable cloth as he would have to pay for the British cloth which he desires to purchase.
    If the hon. Member asks me for any proof of what has been said to me by various men who are recognised as authorities, I would point out to him that the boycott of British cloth in 1930–31 was in no sense a popular measure. I have heard it referred to as such, as if it were a boycott in which the people gladly joined. The evidence is all the other way, namely to the effect that severe pressure amounting to intimidation, often of a violent kind, had to be exercised on dealers to prevent them from stocking British goods. What did that mean? They knew that people wanted to buy British cloth, and they wanted to sell it and it was only

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    through intimidation that they were unable to stock it. I have been told, indeed, that at the height of the boycott there was a great deal of surreptitious buying of British cloth. In one town in particular near the hills dealers who dared not buy British cloth in the main centres such as Delhi or Bombay had to send to smaller towns in order to get their stocks of cloth. They did not bring it in at the front doors of their shops and display it in the front but by the back doors, and they sent it away to the hills on ponies. I was told that during the height of the boycott a great deal of British cloth was carried surreptitiously into the hills and other out-of-the-way places. Indeed, in some places I am told that Congress was obliged to give permits for its sale because people were so anxious to buy it.
    The Indian peasant in his capacity of consumer is therefore suffering because of these high tariffs. Some day, possibly, Indian industry may be sufficiently advanced to be able to give him everything he wants, but to-day it has not reached that point; he has suffered because these high tariffs have been imposed too early in India's industrial development. Again, the Indian peasants suffer as workers from these high tariffs. If my hon. Friend will look at the evidence given before the Joint Select Committee by the Association of Bengal trade unions he will see how they stated that many workers were suffering in health as a result of leaving their villages where they led a comparatively healthy life, to go to sweated labour in the mills in the towns. They spoke in very strong terms of how Indian workers had suffered in health, and how increases in profits to the mill owners had not brought increases of wages, but sometimes reductions.
    Therefore, there is no inconsistency whatever in working at the same time for fair protection for British workers in this country and also for the welfare of the peasants of India. It has been a great matter of satisfaction to me to find that the interests of the British workers and the Indian peasants were in large measure identical. It has been a very great comfort to me to feel that I could work for the interests of the thousands of people in this country who depend for their livelihood on trade with India, and that I could do the same for the
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    people of India, who, in spite of the gibes one often hears, I regard as the greatest overseas trust that has ever been placed in the hands of our country.
    I was also interested in the hon. Gentleman's allusion to the Fiscal Convention. He told us that the Joint Select Committee of 1919 wanted no change in the Convention. From the way he spoke, it appeared as if, in common with some other people, he seemed to think that we on these benches desired to abolish it. If that is his view, it shows how little he understands the position. Does he realise that if and when the Bill passes into law the Convention goes by the board? And does he not realise that it contains safeguards which do not exist in the Bill? [An HON. MEMBER: "Why?"] There again the hon. Member who asked the question shows how little he knows of what is in the Convention. I have here the description of it given by the Simon Commission. On page 244 of the first volume of their Report they describe how it was agreed that the Secretary of State
    "does not interfere with the enactment of any tariff measure upon which the Government of India and the Indian Legislature are agreed."
    The right hon. Member for Epping (Mr. Churchill) said in his Second Reading speech, of which I reminded myself a few hours ago, how in his own experience as a Cabinet Minister the Secretary of State had often been asked to intimate to the Governor-General that a tariff that was under consideration was too high. He told us that on several occasions of which he knew, action of that kind had been taken. But that is only one of the safeguards in the Convention. There are two others. The Report goes on to say,
    " but as a member of His Majesty's Government he cannot divest himself of responsibility for ensuring that no such measure"—
    that is a tariff measure—
    "cuts across general Empire policy or is so unfair to any constituent part of the Empire as to bring India into conflict with it. This responsibility he can, in the last resort, fulfil by exercising his right of advising the Crown to disallow the measure, if passed."
    There are three safeguards which the Fiscal Convention contains. I regret to have to say it again—I said it the other day when we were discussing the Burma

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    trade agreement—that I have not heard any Member of His Majesty's Government even refer to these safeguards when the Committee has been discussing this question. I have heard references made by Ministers to the Fiscal Convention, but I have heard nothing to indicate that the Convention contains a single safeguard or to make clear to the Committee that if the Bill is passed the safeguards will lapse. The reference by the hon. Member for Doncaster is proof of the widespread ignorance which prevails on this subject.
    Mr. MOLSON: I was referring to the spirit underlying the Fiscal Convention. It is perfectly true that as the constitution changes, the actual form of the Fiscal Convention must also change. I was making the point that as far back as 1920 this House accepted the principle that India's fiscal policy should be decided by Indians or by the Indian Government in the interests of India, and not in the interests of this country.
    Duchess of ATHOLL: Can my hon. Friend deny that these powers were given subject to the safeguards I have mentioned? The safeguards are there. They are described by the Simon Commission. They say that there had been some misunderstanding about them, but that as a result of correspondence undertaken by two successive Secretaries of State, Lord Peel and Lord Olivier, the matter had been cleared up, and they described the safeguards in the manner I have just read to the Committee. It is clear that there have always been these limitations on the measure of fiscal autonomy Parliament agreed to give to the Indian Assembly, but these limitations have been left out of account in all discussions here on this subject, and I make no apology for bringing the matter forward and emphasising it as I have done, because I do not think that the Committee or the country realise what safeguards are being given up if this Bill goes through. The safeguard which enables the Secretary of State to veto a tariff even if passed by the Assembly, if it cuts across the general line of Empire policy, I understand to mean that, since the Empire agreed on a policy of mutual imperial preference at Ottawa, the Secretary of State could insist upon a preference being given to British goods in regard to every tariff passed by the Indian
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    Assembly. It is all very well for the hon. Member for Doncaster to shake his head, but it is not for him to settle the interpretation of the Convention. [An HON. MEMBER: "Who does?"] I put this forward as my own interpretation. There may be legal authorities who will dispute it, but I put it forward for what it is worth. I am not going to abandon it merely because of a shake of the head on the part of the hon. Member.
    Mr. MOLSON: If that really was the right interpretation, and if the rest of the Empire had adopted a policy of Imperial Preference, why then was the delegation at Ottawa left completely free to negotiate and come to an agreement, or refuse to come to an agreement, with this country and with the Dominions, and that it was also left that it did not come into operation until it had been accepted without condition?
    Duchess of ATHOLL: It is not for me to explain the actions of the Secretary of State; I can only say that if the Indian Assembly were given to understand that it had complete freedom in this matter, that is in the same spirit as the repeated declarations of the Secretary of State that India has fiscal autonomy. The Ottawa Conference and the Empire policy arrived at there have made this safeguard of very great value, and I would contrast with that the very feeble attempt that the Bill proposes to make to enable the Governor-General to prevent a tariff being passed that is discriminatory against this country. There is no attempt to give the Governor-General power to secure a preference or to use his influence towards a preferences: there is merely a power to prevent a discriminatory tariff, and the power with which the Instrument of Instructions supplies him is to be exercised very sparingly; it is only to be used if he has good reason to believe that the aim of the tariff is more to injure Britain than to aid India. It will very difficult for any Governor-General, however astute, to read the mind of his Minister of Commerce in any matter of that kind.
    It may well be asked of some of the tariffs to-day whether they are not meant to injure Britain more than to help India, because for two successive years a Budget was presented which allowed for a dwindling revenue from these high tariffs on textiles. Anyone can see that from reading

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    the Budget speech last year of the Finance Minister of India. In that speech was given an interesting table showing how in two successive years the Indian Assembly passed a Budget allowing a declining revenue from these high tariffs. If that has been permitted—and no one challenged it—it may very easily happen in the future. That seems to make very valuable the power that the clause we are discussing proposes to give to the proposed Tariff Board to enable them to advise the Governor-General if a tariff would result in decreased revenue. It seems to me extremely desirable from the point of view of Indian finances, which, as we know, are likely to create a great problem, because of all the charges that will fall on the Federation. It seems to me a very valuable step to set up a Tariff Board whose duty shall be to report to the Governor-General if a proposed tariff would result in a decreased revenue.
    I cannot help finding rather a similarity between this proposed power of the Tariff Board and the power which the Government have given to the committee set up under Part I of the Unemployment Insurance Act to advise as to whether the finances of the Unemployment Insurance Fund are getting into an unsound condition. The machinery that is proposed, therefore, should be useful, and I feel that unless we attempt to secure continued preference for British goods in India under the proposed constitution, we shall be faithless to the trust which we have laid on our shoulders at home as Members of Parliament to do all we can to create conditions that will make the utmost amount of employment for the people in this country.
    9.30 p.m.
    Mr. HAMMERSLEY: No member of a Lancashire constituency brought into constant, close touch with the problems of that county, knowing the hardships that the cotton trade is having to undergo, and knowing that those hardships are mainly due to the lack of export trade, could have heard the rather provocative speech of the hon. Member for Doncaster without desiring in some way to undermine the arguments that he put forward. Those arguments have been demolished by the Noble Lady the Member for Perth and Kinross (Duchess of Atholl), but I should like to be permitted to say one or two words on the particular arguments
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    he advanced. His arguments seemed to rest on two legs, both of which, in my view, are fallacious. He referred, in the first place, to the Fiscal Convention. He drew the mind of the Committee to the fact that the various committees which have examined this matter on many occasions had referred to the Convention and had said there should be no change. On that basis he rested his argument. This Bill definitely and absolutely alters the basis of the Tariff Convention. This Bill sets up a new kind of government, and it would be wrong to turn down this new Clause on the basis that it does something in connection with the Fiscal Convention. I think very few Members of Lancashire constituencies desire to go back on the Fiscal Convention. There is no such desire; but they are anxious to see that there should be reasonable safeguards in respect to the position.
    The second argument put forward by the hon. Member for Doncaster was based on the suggestion that the Lancashire cotton trade had now fallen so greatly from its highest export level that it was desirous that we should pay less attention to it. That argument, I think, is one that will not carry much weight in this House. Formerly over 3,000,000,000 yards of Lancashire piece goods were sent to India, and, even allowing for any increase in exportation which might have taken place by reason of the Ottawa agreement, or the better feeling with the Clare Lees agreement, the figure of export now does not exceed 600,000,000 yards—certainly it does not exceed 700,000,000 yards. I am speaking from memory. Therefore, in the light of that catastrophic decline, the position of Lancashire does require very special consideration. I approach the consideration of this new Clause with the attitude of mind of an individual who has consistently advocated, and who believes in, a policy of good will as the basis and as the most sure foundation for our trade relations in India. It is on that basis that I rest. Nevertheless, it must be appreciated that a policy of good will can only be brought to fruition if it is brought into existence in an atmosphere of impartiality. What is the function of this Tariff Board? It is to find the facts and to indicate various suggestions. If by any circumstances the facts as they are well known to the outside world are preverted, if there is a jaundiced view of the position by reason of a partisan tariff board, then we are going to have the

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    movement for good will working in an atmosphere which will not be successful.
    I examined this new Clause not from the point of view of detail but from the point of view of principle—to consider whether or not it is desirable to see that the Tariff Board when it does exist is an impartial board. I should be willing to admit, as I am sure my hon. Friend when he replies will point out, that the scheme as outlined in the new Clause is not workable, and that it is a scheme which has many objections. But it is not on the details of the scheme that I support it. I support it on the question of principle as to whether or not it is desirable to set up some kind of tariff board of a known impartial character. The risk that the Tariff Board may not be impartial is a real risk. We have had some experience of what has happened. In the last tariff inquiry into textiles the findings were so obviously at variance with known facts that it became clear to everybody concerned that the sooner that tariff board inquiry failed, the better. Therefore, it is a real danger, a danger which has been experienced and a danger which all those who associate themselves with me in this matter, realise.
    We do not impugn Indian good will one iota, but we do say that we have a duty to ensure as far as we can that the tariff board shall be impartial, that it should state the facts as it sees them and not gloss over the facts in accordance with some idea of putting forward a nationalistic policy and using the Tariff Board as an instrument of that policy. It is desirable that we should have an impartial Tariff Board, and we ask the Government, in reply, to address themselves to that particular point. We are not going to press the Government in regard to every word of this long new Clause, but we do think that we are entitled to say to them: "Here is a question of principle; a question which will become of the utmost importance not only to the people in India but to the people in Lancashire, as to whether or not the Tariff Board when it is set up will be impartial and will report the facts without any gloss." If the Government cannot accept this Clause, we ask them to consider the matter between now and the Report stage, and let the House of Commons and those of us who are particularly anxious to do something to help
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    the Lancashire cotton trade have some assurance that when the new Constitution takes place there will be in existence an impartial tariff board.
    9.40 p.m.
    Mr. ATTLEE: On this matter the arguments of Lancashire Members, who put forward quite frankly the interests of the Lancashire cotton trade, are a good deal more satisfactory than those who try to gloss over this matter and to suggest that this is some special provision on behalf of the Indian people. We are told that the Indian cotton manufacturers exploit the situation in their own interests. Yes, just as the manufacurers do over here. In the present phase of capitalism groups of capitalists use their national governments as much as they can for their trade interests. To suggest that we have in this country some wonderful impartial Tariff Board, some impeccable committee acting on some principles quite apart from the trade interests of the country, is absolute bunk. All tariffs are directed ostensibly in the national interests of the country concerned or in the interests of trade groups. The issue that we have here is an issue between the manufacturing interests of this country and the manufacturing interests in India and, of course, the consumers will be exploited. A tariff board does not consider consumers any more than the National Government consider consumers when they put on tariffs. Let us get rid of the idea that we are going to interfere in Indian fiscal affairs in the interests of the Indian people. Let us be perfectly frank, as the hon. Member for Stockport (Mr. Hammersley) was when he declared that he is looking after the interests of Lancashire people. The only point to consider is whether this is a wise policy. I suggest that it is an unwise policy if you want to sell your goods to try and set up some form of organisation by which you are going to say to people: "You must do what we want." The result is that you get exactly a contrary movement.
    It is rather curious that this suggestion comes from hon. Members who are never tired of talking about Empire. If they think that it is right that tariff boards should dictate tariff policy, they will have an opportunity in the next week or two. We are to have a large number of Premiers from various parts of the

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    Empire over here. Hon. Members might suggest to those Prime Ministers who are coming over here for the Silver Jubilee that this House should pass a Measure setting up tariff boards and stating that tariffs are not to be put on in Australia, Canada or elsewhere in the Empire except strictly on some abstract principle of justice and that they should have no regard to the particular interests of their own traders. Let hon. Members do that and see what response they would have from those Prime Ministers. If they propose to serve out to India a different measure from that which they serve out to the rest of the Empire they had better say so frankly and put it forward in the name of the old-fashioned exploiting Imperialism, and not try to suggest that they are going to give India self-government but that at the same time they must in the interests of India get control over her fiscal policy.
    Vice-Admiral TAYLOR: Is not the hon. Member forgetting that we are partners with the Government of India and that we have a special responsibility?
    Mr. ATTLEE: I agree, but why not suggest that India should also have a hand in appointing a tariff board over here? I do not understand the hon. and gallant Member's idea of partnership. I think his partnership must be from some naval point of view, such as a partnership between an admiral and a stoker, in which the admiral gives the orders and the stoker does the work. The Noble Lady is probably correct in saying that the Indian peasant is exploited by the Indian capitalist, exactly as they are exploited in this country and in every other country. It is not much good saying that India has been built up on sweated goods. The Lancashire cotton trade was built up on the sweating of small children. Everybody knows that. Let us have no humbug about the methods employed by capitalism, whether in the East or the West. There is nothing very high or moral about them.
    9.44 p.m.
    Sir W. WAYLAND: I support the new Clause, although I recognise its weakness. In reality it only insists on setting up a board similar to what we have
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    here, although the board will be more numerous. I consider that we should have preferential treatment in regard to India. Unless we pass the new Clause we are in the hands of the advisory committee which is to be set up in India, and we know perfectly well that however the advisory committee is composed it is bound to be one-sided in regard to Indian affairs. That is natural. It is a question of every country for itself, and after all we should do the same if the position were reversed.
    It will not be denied that we have done immense good in India and, therefore, I think we should gain some benefit. Why should we be on a par with, or only a little better than, Japan or America, or any European country? If we had a preferential tariff of 20 per cent. Japan could undersell us in the Indian market. Whatever we may say in regard to the quality of English cloth or machinery, or goods, which are exported to India, the Indian peasant, just as the English working-man's wife, will buy in the cheapest market. We have to see what advantage we can obtain in our trade with India. I certainly consider that as we have given so much to India it is not unfair to ask India to give us something in return, and that something should not be less than a 50 per cent. preference in any tariff which India may raise. India must have tariffs for revenue purposes, but if we had a 50 per cent. preference it would not interfere with the total revenue which India would obtain because we should export more goods to India and therefore more revenue would be raised. In my opinion, we made a great mistake during the last 70 years. When we gave self-government to the Dominions we could have made a business bargain with them, and I believe they would have been prepared to have accepted Dominion status and given the goods of this country a big preference. The hon. Member for Limehouse (Mr. Attlee) places all the blame on the capitalists. I should like to ask him whether assuming that cloth was manufactured in India by an Indian Government and was manufactured in this country by a Nationalist Government, or a Socialist Government, whether these two Governments, having to sell and buy, would not be just as keen rivals as capitalists are to-day. Undoubtedly

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    they would. I support the new Clause, and I am sorry that it does not go farther.
    9.49 p.m.
    Mr. HAMILTON KERR: The hon. and learned Member for Nelson and Colne (Mr. Thorp) has raised a subject of vital interest to Lancashire, and one which merits the closest scrutiny of all Lancashire Members. I should like to take the Debate away from the more abstract principles which have been raised by some hon. Members, and study the problem on a purely objective basis. I would like hon. Members to put themselves in the place of a Lancashire merchant delivering his goods in Karachi, Bombay or Calcutta. He will find, as all hon. Members know, a tariff barrier awaiting him. But if these tariffs are raised for admittedly purely revenue purposes, I think he will have scant cause for objection. At the present moment the greater part of the Federal revenues are drawn from duties on imported goods, and under the projected constitution I understand that some 80 per cent. of the Federated revenues will fall under the purview of reserved subjects. These reserved subjects are the Army, foreign affairs and ecclesiastical affairs, and, therefore, if we analyse the situation we find, most unfortunately from the Lancashire point of view, that in fact cotton goods and the duties on cotton goods are in a large measure paying for the Indian Army.
    But if our Lancashire merchant finds that the duties against him are imposed from purely political motives, then he will have very grave cause for complaint. If some hostile Indian administration threatens the Governor-General with an increase in the duties on Lancashire cotton goods if he does not reduce the Army Vote by so many crores or hand over some special department of state, then obviously a case of commercial discrimination will have arisen. Lancashire Members, and Members of the House, must scrutinise very carefully the powers which the Governor-General will enjoy in order to defeat any such move. Clause 17, Sub-section (4) lays upon the appropriate Minister, in this case the Minister of Commerce or his Secretary, the duty of warning the Governor-General of any such projected move of commercial discrimination. Therefore, the Governor-General
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    will have some warning of such a move. Likewise, in the report of the Joint Select Committee it was laid down that the Governor-General should take action where discrimination is projected in fact if not in form. For instance, if a duty is imposed on certain goods of which 70 per cent. come from this country and 30 per cent. from other countries, that duty would in fact heavily hit this country.
    With regard to the constitution of the Tariff Board, we may in future have some member of the board of well known congress views, but in my opinion, looking over the Bill, it seems to me that in Clause 12 the words "prevention of action" would in themselves allow the Governor-General to take any suitable action against commercial discrimination of that kind. I should like to ask whether that is not the case. I think it is better to leave this rather loose phraseology, "prevention of action," as a more suitable safeguard for Lancashire rather than insist on some more definite wording of the Bill. It is upon this aspect that hon. Members for Lancashire will judge the Bill, the safeguards against political discrimination. We as Lancashire Members must closely scrutinise every aspect of the Bill and are confident that the Government will have allowed no loophole which could have been avoided.
    9.54 p.m.
    Mr. OSWALD LEWIS: On the face of it, this is a long and complicated proposal, but the issue raised is a very simple one. The new Clause proposes that a Tariff Board shall be set up and that if an Indian Minister desires to vary an import and export duty, he shall be obliged to submit the proposal to the Board before it can be effective. There is nothing in the proposal to compel the Indian Minister to accept the advice of the Board once it has been given. If the Board is not to have any power of enforcing its resolutions or opinions, we are left to consider what influence it is likely to have. I submit that if we are to judge by the speeches of hon. Members who support the proposal, the Board is not likely to have very much influence with an Indian Minister, and for this reason: We have heard nothing of any demand in India for this Board. We have heard a lot about Lancashire. Do

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    hon. Members really think that by inserting a Clause which sets up a Tariff Board avowedly in the interests of Lancashire, and then saying to an Indian Minister, "You must put your proposals before that Board and hear their advice before you act," the Minister is likely to pay much attention to the advice Quite obviously the Indian Minister would probably be prejudiced from the start against any finding of the Board.
    What is the alternative? The alternative is that we should rely upon free negotiations between the two Governments. Some hon. Members say: "Yes, that is all very well if both Governments honestly want to come to a commercial agreement without any hostility the one towards the other"; but they add: "It may be that an Indian Ministry would desire deliberately to pursue an anti-British policy." It seems to me that the safeguards already provided in the Bill are far more likely to be effective in that case than such a board as is proposed in this Clause. If hon. Members will look at the Instrument of Instructions to the Governor-General they will find in paragraph 14 a description of the circumstances in which be has to discharge his special responsibility in this matter, and it is therein quite clearly set out that he has to use his special powers in cases relating to import or export duties "only if in his opinion the main intention of the policy contemplated is by trade restrictions to injure the interests of the United Kingdom rather than to further the economic interests of India."
    I submit that we are not entitled to ask for more than that. We are not entitled to ask India to sacrifice what she believes to be her economic interests to ours. We are only entitled to ask that she shall not, under the cloak of commercial action, deliberately strike at this country. That is provided for in the Instrument of Instructions. In these circumstances it would be most unwise to set up such a board as is proposed. The analogy of the board in this country falls to the ground for this reason: It is true that we have set up a tariff Advisory Committee in this country, but we can destroy it if we will, and it is not imposed on us from outside. Moreover, even in this country with that board set up, there is considerable freedom of action reserved to the Chancellor of the
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    Exchequer. Suppose that because of some unexpected circumstance connected with currency or some world disturbance it is desired quickly to alter a duty. The Chancellor of the Exchequer can do it in his Budget without any previous inquiry by the Tariff Advisory Committee in this country. But under this Clause an Indian Minister would not be able to do that. The consequent delay might be a very serious matter. While one must have the greatest sympathy with the appeal made by the hon. Member for Stockport (Mr. Hammersley) in the interests of his constituents, we must not allow ourselves to be misled by that into doing something which in fact would not accomplish the purpose which he and others have at heart, and which very likely would hinder the accomplishment of the purpose of proposals that are already in the Bill.
    10.2 p.m.
    Mr. LEVY: I am sorry that the hon. Member for Doncaster (Mr. Molson) is not in his place, because I told him that I was going to criticise the statement that he made. I was amazed at his statement that Englishmen had a reputation throughout the world for hypocrisy. The pedestal upon which this country was built was the word, the bond, of an Englishman. I was talking the other day to a friend of mine who had come back from Bolivia, and he told me that when the natives wanted to keep an oath they swore on the word of an Englishman. That could not happen if there had been any reputation for hypocrisy among Englishmen. I have the honour to represent a constituency in Yorkshire. Yorkshire is very interested in this subject, because it does quite a large export trade with India. I also have some cotton manufacturers in my constituency. When I listened to the hon. Member for Colchester (Mr. O. Lewis) the thought that occurred to me was that we as Members of Parliament are here to represent the views that are put before us by our constituents. Therefore, we have to deal with this matter on the general basis of trade, and not on the isolated case of cotton or any particular commodity.
    I agree with what the hon. Member for Stockport (Mr. Hammersley) said. This new Clause may not be acceptable to the Government in every detail, but I am one of those who have been instructed to support the general principle

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    contained in it. My constituency and the whole of Yorkshire are concerned in this matter. Within the last few years we have seen India's tariffs raised from 3 per cent. to 25 per cent. on goods which Yorkshire exports to India. With a number of my hon. friends I had on the Paper an Amendment to an earlier part of the Bill, the effect of which was that the Governor-General was entitled to have three advisers to help him, one to deal with external trade, and the Amendment asked that one of those members should have actual business experience, in practice and not merely in theory. But that Amendment was never called. I fail to see why, if a Tariff Board is so essential in this country and if we are handing over government to India, we should not have an impartial Tariff Board set up there so that the people of this country who are handing over government to India may feel satisfied that they are getting the protection to which they are entitled. I believe that a good deal of the anxiety which is felt by traders in this country who do an export trade with India would be relieved if they felt that the question of tariffs was to be dealt with by an impartial tribunal. It is not stretching it too far to say that at the present moment they are deeply concerned as to whether there shall or shall not be discrimination against the goods which they import into that country. I sincerely hope that if the Government cannot accept this Clause in the way in which it is framed, they will be able to accept the principle contained in it, and perhaps alter the words.
    10.6 p.m.
    Sir JOHN HASLAM: I rise to support the Clause moved by the hon. and learned Member for Nelson and Colne (Mr. Thorp). But before doing so I should like to say a word with regard to the remarks of the hon. Member for Lime-house (Mr. Attlee) about the sweated labour of the cotton trade of Lancashire. It is quite evident that the hon. Member knows nothing about the cotton trade of Lancashire when he comes out with remarks of that description. The strongest trade union organisation in point of numbers is that of the cotton spinners of Lancashire. It was the richest in finance, and had the highest numbers because they were 100 per cent. of the operatives
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    engaged in the trade. As for the abuse of child labour, all I can say is that the children of Lancashire will stand comparison with the children of the East End of London, and the adults of Lancashire will stand comparison with the adults of East London. The hon. Member may know something about Limehouse, but it is evident that he knows nothing about the operatives of Lancashire, who are quite able to stand examination from any point of view, and well able to look after themselves from a trade union point of view.
    The hon. Member for Colchester (Mr. Lewis) commented on the fact that if a Tariff Board were established it would have no powers. Why, then, be afraid of the board? Even now we have a board in existence, and it has exercised certain powers, which some of us feel has been done in a manner detrimental to Lancashire. If it is wise, useful and necessary to have a Tariff Board in this country, it cannot be very detrimental to have one in India, which no one can claim has reached the system of government which we have in this country. It is claimed that the Tariff Board in this country has removed tariffs outside the reach of political influence, and the same people whom we are asking now to erect a Tariff Board in India are the people who erected the Tariff Board in this country.
    If it is wise to remove tariffs out of the reach of political influence in this country, surely it cannot be very detrimental to do that in India. I appeal to the Government as representing a body of Members who have loyally supported this Measure with great temptations and provocations to do otherwise. With the principle of the Measure we are in hearty agreement. We think that it is the natural result of development, and although we have supported it right through from the beginning, I think we ought to have some consideration on a matter of this sort. It may be that we are asking a good deal of the Government in this matter, but I appeal to them to consider this request that is being made by us. The Tariff Board ought to be, and, I believe, would be helpful to the Governor-General himself. As one who has carefully listened to the whole of the discussions on this Measure, I have wondered what the Governor-General is going to do with all this legislation which

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    is thrust upon him. Talk about a superman or a Philadelphian lawyer; he will have to be a very remarkable person indeed. Whoever he is, he would rejoice in the fact if he could have a board to help and advise him in this particular respect.
    May I appeal to the hon. Gentleman who is to reply on behalf of the Government to see if he cannot meet us in this matter? We feel very strongly on this question. The Clause may not be word perfect, but we do ask for further consideration, and, if necessary, let the Government grant us something on the Report stage. We feel that we have a right to ask for something of this description. After all, we are giving great powers and concessions to India, and we have a right to attach conditions to those concessions and privileges. We feel that now is the time to demand that our trade should have precedence over the exports from other countries when we are making huge concessions, as we are, to the Indian people. We believe that when the Indian people themselves arrive at the stage of self-government which we in this country and most of the Dominions have, we can appeal to them from a mutual trading aspect; but at the present time we feel that the manufacturers of India have an undue preference in the council of India, and that makes us particularly afraid in Lancashire and we feel that some safeguards should be made. I appeal to the Minister to make these as strong as he can on behalf of the export trade of Lancashire.
    10.14 p.m.
    Mr. BUTLER: I feel that the Committee have fully realised the importance which this debate holds for Lancashire in particular, and not only for Lancashire but for all those who are interested and vitally concerned in British trade with India. We have had the privilege of listening to a great many speeches from Lancashire Members to-night. I feel sure that the Committee will bear testimony to their sincerity, and will sympathise with their great county in its difficulties. Any words of mine are inspired by sympathy for the position in Lancashire and sympathy with the mutual trading conditions between Great Britain and India. Under the Chairman's Ruling we are to discuss this new Clause and other new Clauses to do with tariffs in one and the same debate, and I think that it would
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    be for the convenience of the Committee if I range over the whole subject as it has been presented and attempt to answer some of the complicated and difficult points that have been raised. Let me say that I fully realise the loyalty and enthusiasm with which the hon. Member for Bolton (Sir J. Haslam) has given us his interest and support, I fully realise the position in which he is placed in his own county and constituency, and in anything I say I will pay due regard to the appeal which he made to the Government in this matter.
    The original proposal upon which all this discussion has arisen deals with the establishment and constitution of an Indian Tariff Board and it is to that proposed new Clause that I wish, in the first place, to address myself. The Government have naturally looked into this Clause with great interest and with as much sympathy as possible but the more we examine it the more difficult we find it of acceptance as it stands on the Paper. It appears that the main object of the Clause is to secure in India a Tariff Board the members of which are to be people agreeable to the Secretary of State. That is provided for in Subsection (1) which deals with the constitution of the proposed board and that proposal is of course directly contrary to the present practice. Whereas, at present the Tariff Board is appointed by the Governor-General as head of the Indian Government, it is proposed here that in future the appointment should be by the Governor-General in his discretion after consultation with the Secretary of State. That is a vital and radical difference from the constitution of the present board. I feel that there is a great deal of justice in the warning of the hon. Member for Colchester (Mr. Lewis) with regard to a board so radically different in its composition and method of appointment from that which exists at present. A board which was, in fact, subordinate to the Secretary of State would be at once suspect in India and would not, I feel sure, achieve the objects which hon. Members have in mind.
    Under Sub-sections (7) and (8) of the new Clause it is proposed that in certain matters the board shall be under the supervision, if I may use a broad term, of the Governor-General, again acting in his discretion. These Sub-sections deal particularly with revenue duties and with

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    the question of finding out whether such duties are imposed really with a view to obtaining more revenue and whether they are likely to do so. That again would be a direct departure from the constitution of the present Tariff Board. If we examine the objects with which the proposed board is to be set up, and the further proposals of the Clause we find that potential value of the board is seriously diminished. For instance, there is no obligation on the Indian Government to accept the findings of the board. Hon. and right hon. Gentlemen who have been opposing us thus appear to accept the Fiscal Autonomy Convention because they acknowledge that there is no obligation to accept the findings of this board. I am therefore obliged to ask them, in the first place, what would be the value of setting up a board for the objects which they have described, when they do not include in the Clause any obligation to accept the board's findings?
    Sir J. HASLAM: Are the Government here bound to accept the recommendations of our Tariff Board?
    Sir H. CROFT: What is the obligation in the case of the Tariff Board in this country on which this Clause is framed?
    Mr. BUTLER: I think our discussion of this important subject will be of more value if I am allowed to state my case. The hon. and gallant Member will see that I am trying to deal with that point. If it is his idea, as I believe it is, to obtain some sort of control over the findings of this Board and if at the same time there is no obligation to accept the findings of the Board then I am submitting that from the point of view of our critics, the Board appears to lose its most important function and a great deal of its value. I am not referring to my view of the Board. I am pointing out that hon. and right hon. Gentlemen themselves consider that there should be no obligation to accept the findings of the Board and I am questioning the value of the Board from the point of view of those who have spoken in such terms of this subject this evening. Why then is it valuable to set up a Tariff Board? It is obligatory to consult it on questions of tariff policy, but not to accept its findings.
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    Let us see to what impasse this suggested composition of the Tariff Board would bring us. It would involve a very great dilatoriness if, on every occasion that a duty had to be imposed, the Indian Finance Member had to submit the question of raising or altering a duty to the Tariff Board. It would mean that, unlike our Chancellor of the Exchequer and unlike the present Finance Member in India, it would be impossible to frame the Budget without submitting these proposals for the consideration and the views of the Tariff Board, and not only would it result in a very dilatory form of procedure, but it would also result in the very opposite of what the Chancellor of the Exchequer or the Finance Member in India desires, and that is that upon a matter on which publicity was perhaps not desirable, which it was perhaps not desired to air in the full light of day, it would insist that the Finance Member should consult the Tariff Board in framing the detailed proposals of his Budget if they affected tariff policy or altered rates of duties.
    Because it would result in a very dilatory procedure and in disadvantageous publicity, we consider that the board as proposed in this new Clause is unsatisfactory, and we are unable to accept the Clause. We consider that the imposition upon the Executive in India of a castiron procedure of this sort, differing from the procedure which is necessary at present, and the fact that we should be forcing the board to remodel itself, would render this board extremely suspect in the eyes of India, and would really run counter to the whole spirit of our fiscal relations with India, which have grown up over so many years past.
    The hon. Member for Stockport (Mr. Hammersley) raised an important point about the impartiality of the Tariff Board. He seemed to look, from the Lancashire point of view, to an impartial Tariff Board in order to ensure satisfactory trade between Lancashire and India.
    Sir H. CROFT: Shame!
    Mr. BUTLER: The hon. and gallant Member says "Shame." It has been the object of the Government, as he knows perfectly well, and it has been the earnest and perpetual concern of my right hon. Friend, to improve the trading

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    relations between India and Great Britain, and I do not think any hon. Member of this Committee ought to impugn the motives of those responsible for the government of this country or should attempt to credit us with wishing in any way to destroy British trade. In reality, as I shall show later, the trade between India and Great Britain has markedly improved during the last year in cotton-piece goods, and has markedly and steadily increased, particularly in all the other branches of British exports, over the last few years and noticeably since the Ottawa Agreement was framed. It is on the basis of agreement and on the basis of Ottawa that we think the trade between India and Great Britain ought to be improved and developed. I fully sympathise with the point of view of the hon. Member for Stockport, but I think probably that in wishing to achieve it by the constitution of an impartial Tariff Board, he is seeking an ideal which it will be very hard to achieve.
    The Tariff Board in India at present is constituted by the Government of India, and for reasons that I have given in my opening remarks it would cause grave suspicion and defeat the objects of the hon. Member if we were to alter its constitution in the direction which he has in mind. If we were to appoint the Tariff Board so that the Secretary of State had the last word in its appointment, it might be acceptable to Lancashire but most unacceptable to India. [HON. MEMBERS: "To whom?"] To the Indian trading interests and Indian interests altogether in the Assembly, and to all those who are interested in British trade in India. On the other hand, if we conceded a Tariff Board which was solely in the interests of India it would naturally not suit Lancashire. The tariff boards of Canada and this country and elsewhere are appointed by the Government of the day, and we see, therefore, no reason to alter the constitution of the Tariff Board in that respect.
    Sir H. CROFT: Is it not a fact that the tariff boards in Canada and Australia were deliberately set up in order to promote preference throughout the Empire?
    Mr. BUTLER: I sincerely hope the result of the Indian Tariff Board will be
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    an increase in trade between England and India. If my hon. and gallant Friend will not interrupt my remarks, he will find that I shall come to the points on which he desires elucidation. One is better able to pursue an argument if one can do so without interruption. I was saying that there are certain points which it is legitimate to bring to the attention of the hon. Member for Stockport. There is in the Bill definite provision under which the Governor-General by the special responsibility given him in Clause 12 (i) (f) can intervene if there is any penal or discriminatory treatment particularly aimed against British goods. I gather that the hon. Member was depending rather on the impartiality of the Tariff Board to look after British interests. I would remind him that it will be the business of the Governor-General, if any particular penal action is suggested against British goods, to intervene under his special responsibility, and that is the safeguard on which the hon. Member ought to depend.
    Mr. HAMMERSLEY: Do I understand that if it were abundantly clear that the Tariff Board had made recommendations which were obviously contrary to the weight of evidence and to the facts, the safeguard which my hon. Friend mentioned would operate?
    Mr. BUTLER: The safeguard would operate in any case in which it was regarded that British goods were being submitted to penal or discriminatory treatment. If the hon. Member will read paragraph xiv of the Instrument of Instructions he will find that if any of these considerations applied and the Tariff Board reported in a sense so obviously governed by these considerations, the Governor-General would certainly have the right to intervene under his special responsibility. In order to relieve the anxiety of the hon. Member, I would remind him that under the control of the Department of Overseas Trade there is a British trade commissioner in India whose business it is to keep in touch with Indian trade and to foster a spirit of good will in the interchange of British and Indian goods. It will certainly be possible for him to inform the Board of Trade and the Secretary of State and then, through the chain of responsibility, to the Governor-General in his discretion, if it is thought

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    that there is any penal discrimination of British goods in particular.
    Various hon. Members have asked what there is in the Bill which is of benefit to Lancashire. I think I should refer them, as I have referred the hon. Member for Stockport, to the deliberate insertion of the new special responsibility upon which the Joint Select Committee insisted. As hon. Members will know, this matter was considered exhaustively by the Joint Select Committee. It was considered with the aid of two representatives from Lancashire, who both subscribed to the view that this was a satisfactory insertion in the Bill. We have purposely included this special responsibility in order to relieve anxiety, and we do not intend that this special responsibility shall be a dead letter. If, unfortunately, the wrong section in India were to gain control of the policy of trading relations between our two countries—
    Mr. CHURCHILL: Then there is a wrong section.
    Mr. BUTLER: I quite acknowledge that there is a wrong section. We always like to face difficulties. My right hon. Friend has been the first to do it on every occasion. We consider that it is essential to face the fact that there may be occasions upon which the wrong spirit gets the upper hand, and in that case we have inserted on purpose a special provision in the Bill. The Noble Lady the Member for Perth and Kinross (Duchess of Atholl) raised some questions which are of extreme importance, and she said they have never been categorically answered. I have not quite the same recollection, but I think I had better not compete in documentation with her and that it would be safer for me to make a few remarks on the subject.
    Duchess of ATHOLL: I shall be only too glad if the hon. Gentleman can inform me of any occasion on which they have been answered.
    Mr. BUTLER: From my remarks the Noble Lady will see that we have understood this matter to be as clear as daylight both to Great Britain and India for a considerable time. She referred to the Fiscal Autonomy Convention and read from the report of the Statutory Commission the safeguards which were
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    read into the Fiscal Autonomy Convention by the Statutory Commission. She said that, in fact, the Fiscal Autonomy Convention was completely altered by the fact that we had introduced a new Bill, and that therefore neither the Convention nor the safeguards under it would operate. I must say, in answer to that, that it has been clearly understood both in Great Britain and India that His Majesty's Government have no intention whatever of going behind the Fiscal Autonomy Convention or of altering the general spirit of the trading relations between Great Britain and India which has grown up under successive Secretaries of State and successive and different Governments ever since the report of the Joint Select Committee in 1919.
    Duchess of ATHOLL: Is the hon. Gentleman aware that in the discussions in the Indian Assembly in 1930–31 references were made which show that some members of the Assembly quite recognised that the Secretary of State had power to influence the Governor-General in the matter?
    Mr. BUTLER: I am not denying what the Noble Lady has read out from the Statutory Commission, and it is well know that there are perpetual exchanges of views between the Government at home and the Government of India. It must be clear to everybody that if we have a Government in India and a Government in England they will exchange views, and that it is the duty of the Secretary of State to represent his point of view to India, but that does not mean that it is the policy of the Government to go behind the spirit of the Fiscal Autonomy Convention, which, as I have said, has been in operation under successive Secretaries of State and successive Governments since 1919. I think the best way in which I can explain to the Committee that this spirit has continued is by referring to a published document, the Instrument of Instructions to the Governor-General. I will read the last paragraph of paragraph xiv.
    "At the same time, in interpreting the special responsibility to which this paragraph relates"—
    that is, the special responsibility about which I have been talking—
    "our Governor-General shall bear always in mind the partnership between India and

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    the United Kingdom within our Empire which has so long subsisted and the mutual obligations which arise therefrom."
    That sub-paragraph, read with the rest of paragraph xiv of the Instrument of Instructions, which governs the operations of the Governor-General's special responsibility, will show the Committee and Lancashire the sort of safeguard which we intend shall operate in future. I hope that that, together with my general remarks in reply to the Noble Lady, will show that we intend that the same spirit shall continue to exist between the two countries as has existed in the past, largely because of a convention which has brought great good will and better results in trade to both our countries. Before leaving that point I would remind the Committee that if the Governor-General found that a Bill or a Measure had been passed which, for example, had not allowed for sufficient and due inquiry to be made, he would be entitled to withhold his assent from that Measure. That will provide some small extra safeguard for those who are anxious in particular about British trade.
    It would be advisable if I attempted to answer—not at any too great length—some of the other points which have been raised by hon. Members. I have said that the policy of negotiation and agreement between our two countries has borne good fruit. One of the recent results has been a Supplementary Agreement—supplementary to the Ottawa Agreements—recently contracted between the two countries. In return for a concession from the United Kingdom, the Government of India have recently given an undertaking that the measure of Protection afforded to Indian industries shall be only so much as will equate the prices of imported goods to the fair selling price of similar goods produced in India and that wherever possible lower rates of duty shall be imposed on goods of United Kingdom origin. That is a definite insertion in the Supplementary Agreement which, hon. Members from Lancashire will agree, is a very distinct advance.
    If we look at some of the trade figures, we find that not only in actual statement of policy but also in those figures the policy of good will has had definite results. It is a hopeful sign that the boycott has been ended and Indian trade is tending to improve. Cotton exports from Great Britain are rising: in 1933 they
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    were 486,000,000 square yards and in 1934 583,000,000 square yards. Besides these effects, Indian and British trade are tending to balance. There has been an increase in the purchase of Indian cotton by Lancashire, again as the result of an estimable mission which visited India and which purposely encouraged the continued purchase of raw cotton from India. In 1933, 48,296 tons, and in 1934 64,599 tons were bought by Lancashire. Besides cotton—the Committee should bear in mind—there has been a remarkable increase in exports of other commodities. The figures are: for 1932, £25,600,000, for 1933 £26,700,000, and for 1934, £28,600,000, a steady and progressive increase of our exports to India over recent years.
    When we envisage the results of this policy, it would seem madness to go back upon it to the extent proposed by some of the other proposed new Clauses, apart from those relating to the Tariff Board. Hon. Members make a great mistake when they attempt to attribute purely to ill will the deterioration of British trade in India. I think that this can be put down, among other things, to the growth of the Indian industry itself. In 1913–14 the Indian industry produced 1,164,000,000 yards, and in 1933–34 as much as 2,945,000,000 yards—a most remarkable increase. Is this to be wondered at when it is remembered that since the War we have exported £140,000,000 worth of machinery to India, of which this production is the direct result? Besides this phenomenon, there is the growth in Japanese trade. In 1913–14 the Japanese imports were 9,000,000 yards; in 1933–34, the figure was 349,000,000 yards.
    Sir H. CROFT: Can we have the British figures?
    Mr. BUTLER: I think I gave them earlier. In square yards they were 583,000,000 in 1934, a distinct increase over 486,000,000 in 1933.
    Sir H. CROFT: Could we not have the same comparison? Is it not a fact that the imports from the United Kingdom in 1913–14 were 3,104,000,000 yards?
    Mr. BUTLER: That was precisely the point with which I was dealing. I was facing the fact that there had been a progressive deterioration in the quantity

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    of British imports from that date. I did not mention the date, but was trying to show that there were other reasons besides those given by hon. Members for the deterioration of our trade. If my hon. and gallant Friend is an economist, he will perhaps pay some attention to those vital economic reasons which have resulted in the unfortunate diminution of our exports to India. Japanese trade, as I was saying, increased from 9,000,000 yards in 1913–14 to 349,000,000 in 1933–34. Thanks to the policy adopted by the Government of India to restrict the quota of Japanese goods—and this is another feather in the cap of the administration of the Government of India under my right hon. Friend—the imports of Japanese goods were 552,000,000 yards in 1932, and 365,000,000 yards in 1934.
    Another fact which I think is of importance in considering the diminution of British imports to India is the impoverishment of the Indian peasant. My reason for mentioning this point is that it was raised by the Noble Lady the Member for West Perth in her interesting speech. She said that the Indian peasant actually preferred British goods, and I can well believe that he does, because they are softer and more comfortable to wear next the skin, and not so rough. But, unfortunately, owing to the fall in the price of commodities, the Indian peasant can only buy 65 per cent. of what he used to buy in the old days. The result of this has been that he cannot indulge his wish for bleached goods to the same extent as before. In 1929–30, the best year of the post-war period, he consumed 60 per cent. of unbleached goods and 40 per cent, of the more luxurious bleached and coloured goods, whereas now he has to consume 70 per cent. of unbleached goods and only 30 per cent. of bleached and coloured, in which we in our industry are more particularly interested.
    The Indian, as hon. Members know, employs a great deal of cloth, not only to wind round his waist, but to put on his head in order to keep off the strength of the sun. In the first period that I mentioned, 1913–14, the Indian consumption was 16 yards per head of the population, whereas last year it fell away to only 14 yards per head. These are some of
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    the economic reasons why we have suffered in competition with others in the Indian market. It cannot all be attributed to the ill-will which some hon. Members believe to be the sole cause of the deterioration of our trade. I have tried to show that it is not only due to ill-will but to economic reasons that there has been an alteration in the flow of trade from Lancashire to India. If I have taken too long, I must apologise. I have always understood that Lancashire is vitally concerned in the Indian market. Hon. Members have complained that there has not been enough time given to Lancashire, and I wish to show the Committee that the Government are vitally concerned in studying this important problem and that they have looked into it from every point of view. I have tried to show the Committee that the policy of good will has had definite results in the improvement of trade which we have seen, and that either to substitute a tariff board, as is suggested, or to move into the Bill any new Clause on the Order Paper would have a result precisely opposite that which hon. Members desire. It would break down the beginning of a considerable improvement in the trade between our two countries and would have results precisely opposite what hon. Members desire.
    10.46 p.m.
    Mr. BAILEY: I think that those of us on these benches, and indeed most Lancashire Members, will have listened with profound disappointment to the conclusions of my hon. Friend, but we are all bound to recognise the courtesy with which he always puts his case, and that even if he cannot give us what we want he always refuses our requests in the most generous and sympathetic terms possible. I shall endeavour to put an equally strong and, I am afraid, rather an opposite point of view with equal courtesy. First of all, the hon. Gentleman made the assertion that it was unfair to impugn the Government that their object was not the welfare of British and of Lancashire trade. I entirely accept the view that the object of the Government is for the good of Lancashire trade, but you cannot only judge people by their object; you must have regard to how far they are successful in achieving their object. The melancholy fact undoubtedly is that Lancashire's trade with India has

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    so declined that we hear the argument, "It is only now 25 per cent., so that we need not pay all that much attention to it."
    I also agree with my hon. Friend that it is not ill will in India that has been the sole cause of the falling off of Lancashire trade, but nobody can deny that the boycott and the body of ill will in India has been a very powerful cause in the decline of Lancashire trade. I will not follow my hon. Friend into the question of the various causes of the decline of Lancashire trade for the reason that we are now dealing with one specific cause, and for the purpose of this discussion other causes play no part. I would refer to one observation made by the hon. Member for Doncaster (Mr. Molson) who is not now in his place. He twitted us on this side of the Committee with being in a dilemma. He said: "You claim to be the servants of the masses of India. You are thinking of the poor ryot, and, on the other hand, you represent the vested interests of Lancashire." That is perfectly true. We on these benches stand, I believe, for the interests of the peasants of India and of the non-political classes in India, and equally we stand for the interests of the Lancashire working people. I see no real conflict of interests between those two classes, because it has been due to the political association of the cotton manufacturers of Bombay and the Congress party that the cotton manufacturers have been able, to a large extent, to ruin Lancashire, and, at the same time, to deprive the Indian masses of articles they want.
    All that we are asking is that there shall be fair-play for Lancashire operatives and fair-play for India. It is not as if we were asking for preference for Lancashire, which I think we are entitled to ask, in view of the fact that we are giving it to India. We are not asking for any preference for ourselves or for any priority of treatment over countries which have done nothing whatever for India. We are only asking that there shall not be penal discrimination against us from political motives. Is that exploiting the workers of India? Is it not getting very near to hypocrisy to use such language when we merely ask that the country which has done so much for India should not in future be exploited by penal duties having no relation to the fiscal or revenue interests of India? Our whole
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    case is not that we want to interfere with India pursuing a fiscal policy of her own for protective or revenue purposes, but that the Indian politician should not be allowed to penalise British trade merely for political motives. That is all we are asking, and I cannot help wondering at our moderation at asking for so little. I cannot help wondering why so modest a demand should be regarded as exploitation of the Indian.
    The hon. Member for Colchester (Mr. Lewis) and the Parliamentary Secretary both used the argument that Indian Ministers might not like a Tariff Board. Are we to understand that all these discretionary powers are to be exercised with the approval of Indian Ministers? If Indian Ministers will not like the decisions of the Tariff Board against them, will they like the decisions of the Governor-General against them? Why should they regard more favourably an adverse decision by the Governor-General than an adverse decision by the Tariff Board? I should have thought the loyal gentlemen—and I use the term in no sarcastic sense—sitting on the Front Bench would have been anxious to keep the name of the King's representative out of a sordid commercial squabble. Is it not better that the Governor-General should not be faced with the task of making decisions between Lancashire and India, and that such decisions should be made by a judicial body?
    I should like to ask one or two questions as to the attitude of the Government on this question of penal discrimination. I do not want for one moment to accuse the Government of insincerity, but I want to know where they do really stand. Do they really want the safeguard put into their own Act to be effective, so that there shall not be penal discrimination? Before this Debate finishes to-morrow I should like an answer to that point; because if the Government in fact want that particular safeguard to be effective then they will have no objection to providing adequate machinery to make it effective. Is the present machinery effective? Let us consider for a moment the position in which the Governor-General will find himself. We are not going to be faced with some sudden calamitous proposal in the nature of a 50 per cent. addition to the duty, for that would be obviously discriminatory and penal. But we shall be faced, as

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    we have been faced during the last 10 or 15 years, with a series of accretions—none serious in itself but cumulatively ruinous. Three per cent. is nothing. Is the Governor-General going to face all the odium of his Indian Ministers and run the risk of soiling his own name in a commercial quarrel over another 2 or 3 per cent. duty? In other words, is it not absolutely essential, from the standpoint of the Governor-General as much as from the standpoint of Lancashire that there should be an independent tribunal to judge on facts, not policy?
    I understand the attitude of hon. Members on the Opposition side for they say frankly that they would not have this safeguard in the Bill. I quite appreciate their point of view. They do not want that safeguard in the Bill, and I hope Lancashire will mark that fact when it comes to judge them. Labour Members do not want any safeguards for Lancashire operatives. I will do the Government the credit of saying that they do want such safeguards I can understand the attitude of the Labour Opposition but not the attitude of the Government. The Government say: "We want a safeguard, but we will give it in such a way that it cannot be effective." That is what their attitude means. Do the Government think that over a small duty of 2 or 3 per cent. the Governor-General, who will have endless matters to deal with, who is going to be faced with all sorts of constitutional difficulties, is going to run the risk of attack in India and in this country by standing up for the constitution? Whatever we may like to think, we know perfectly well that the machinery in the safeguard will in effect be a dead letter. If the Government want their safeguard to be effective, why should they object to an independent tribunal? When that independent tribunal have given their verdict it should be the duty of the Governor-General to carry out the law. I cannot see any reason why the Government should object to this machinery. Of course, it would be unpopular with Indian ministers. Anything that will give justice to this country will be unpopular with Indian ministers. That is the difficulty
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    we have been up against right from the beginning. We have it on the evidence of the leaders of Congress. We have it in the Indian Press. They tell us that they are going to turn us out bag and baggage and that there can be no peace between this country and India while one shred of our authority remains. When you try to set up effective machinery for your safeguard you find yourselves up against this sort of thing. If you seek to do anything for this country or for Lancashire you incur the wrath of Indian Ministers. The Government ought to think less about incurring the wrath of Indian Ministers and more about doing justice to British subjects in India and in this country. I urge the Government to give the most serious consideration to this matter.
    I am ready to admit that the terms in this Clause require a good deal of modification. I do not think that the Clause, although my name is down to it, is an ideal one, but to-night we are debating a principle. We should be perfectly content if the Government would give us an assurance that our real and genuine anxiety will be met. It is symptomatic that hon. Members who, in the face of great pressure in Lancashire, have been loyal throughout to the Government, are to-night with those of us who have been opposed to the Government on this Bill from the beginning. The hon. Member for Bolton (Sir J. Haslam) who is deeply respected in his constituency and throughout Lancashire for the moderation of his opinions, an hon. Member who more than most Members has sought to maintain in Lancashire the reputation of the National Government, has warned the Government to-night. The hon. Member for Withington (Mr. Fleming) warned the Government in no uncertain terms. If the Government persist in their attitude I cannot help feeling that the political consequences in Lancashire will be disastrous, although I hope that they will not. But it is not so much a question of the political consequences in Lancashire as the economic consequences if this thing goes through. We are so apt to forget in this House, in passing hundreds of Clauses and getting very tired of this Bill in many of its aspects, that some of the things we are doing are leaving our hands

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    for ever. We are the last revising tribunal and if we do not do something now we can never do it. If we do not do it now the opportunity
    It being Eleven o'Clock, The CHAIRMAN left the Chair to make his Report to the House.
    Committee report Progress; to sit again To-morrow.
    The remaining Orders were read, and postponed.

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