Commons Sitting of 18 June 1935

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

PRIVATE BUSINESS.
Private Bills [Lords] (Standing Orders not previously inquired into complied with),
Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That in the case of the following Bills, originating in the Lords, and referred on the First Reading thereof, the Standing Orders not previously inquired into which are applicable thereto, have been complied with, namely:

Swansea Tramways Bill [Lords].

Boston Corporation Bill [Lords].

Hertfordshire County Council Bill [Lords].

Hoylake Urban District Council Bill [Lords].

Bournemouth Gas and Water Bill [Lords].

Milford Docks Bill [Lords].

Bills to be read a Second time.
Provisional Order Bills (Standing Orders applicable thereto complied with).
Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That in the case of the following Bill, referred on the First Reading thereof, the Standing Orders, which are applicable thereto, have been complied with, namely:—
Ipswich Corporation (Trolley Vehicles) Provisional Order Bill.
Bill to be read a Second time To-morrow.

ORAL ANSWERS TO QUESTIONS.
  COAL INDUSTRY.

    UNSALEABLE RESIDUE.
    Mr. TINKERasked the Secretary for Mines whether he is aware that, owing to the improved methods of cleaning coal
    160
    large quantities of unsaleable material are left in and about colliery premises; and what consideration his Department has given to this question?
    The PRESIDENT of the BOARD of TRADE (Mr. Runciman): I am aware that modern methods of handling coal are successful in giving the consumer a cleaner product, from which it follows that more unsaleable material is extracted at the colliery. The disposal of this material must be dealt with by each colliery in the light of its particular circumstances.
    Mr. TINKER: Is the right hon. Gentleman aware that this material is put into heaps at the collieries and that there is danger of spontaneous combustion? Nothing has been done about this matter, and I am asking the right hon. Gentleman to deal with it for the protection of the people working at the collieries.
    Mr. RUNCIMAN: I quite understand the point put by the hon. Member, but we do not see any means of dealing with the subject by general regulations.
    Mr. GORDON MACDONALD: Is the right hon. Gentleman aware that there is before the House a Bill which would deal effectively with the subject, but that the Government will not give facilities for it?

    BURNING PIT HEAPS.
    Mr. TINKERasked the Secretary for Mines whether he is now in a position to say what reply he has had from the colliery owners as to what they intend to do with burning pit heaps and what methods they will adopt to prevent such fires starting?
    Mr. RUNCIMAN: I understand that representatives of the Mining Association have asked for an opportunity to discuss this question with the Secretary for Mines, and that a meeting will be arranged as soon as possible.
    Mr. TINKER: Is the right hon. Gentleman aware that I have been asking this question at intervals for four months, and that I get the same reply every time? I do hope that something will be done.
    Mr. RUNCIMAN: We are getting nearer the date now.

    SHOT-FIRING (ALTERNATIVE METHODS).
    Mr. TINKERasked the Secretary for Mines whether it is his intention during the shot-firing investigation he is now making to take into consideration and examine other means of breaking down coal, such as compressed-air blasting, as this is believed to be much safer?
    Mr. RUNCIMAN: I assume that the hon. Member refers to the study of simultaneous shot-firing which is at present in progress by a Sub-Committee of the Safety in Mines Research Board. This investigation is confined to the safe use of explosives, and does not extend to other means of breaking down coal. The use of such other means, however, receives constant attention and encouragement from His Majesty's inspectors, and the Mines Department is always ready to consider the merits of any new methods which may be brought to its notice.
    Mr. TINKER: Is the right hon. Gentleman aware that there appeared recently in one of the scientific papers a statement about the practice in America? If I send that cutting on to the right hon. Gentleman, will he read it?
    Mr. RUNCIMAN: I will see that it falls into the proper hands.
    Mr. T. SMITH: Is the right hon. Gentleman aware that a great many eminent mining men are not satisfied that simultaneous shot-firing ought to be practised, and will he have further inquiries made?
    Mr. RUNCIMAN: Yes, I am aware that there are differing opinions with regard to simultaneous shot-firing, and the hon. Member can take it that the matter is being closely examined now.
    Mr. LUNN: May I ask whether there is a committee at the Mines Department considering alternative methods of breaking down coal, without the use of explosives?
    Mr. RUNCIMAN: I think I had better be given notice of that question.
    Mr. TINKER: Can the right hon. Gentleman tell us, when we are likely to know the name of the new Secretary for Mines?

    ACCIDENTS (BOYS).
    Mr. DAGGARasked the Secretary for Mines whether he will state the number of boys under 16 years of age killed
    162
    in the mines in Great Britain during 1934 and the number injured which resulted in disablement for three days or more?
    Mr. RUNCIMAN: In 1934, 15 boys under 16 years of age were killed and 4,148 were disabled for more than three days by accidents below ground at mines under the Coal Mines Act. The corresponding figures for surface accidents were four killed and 1,026 injured.

    QUOTA SYSTEM.
    Mr. DAGGARasked the Secretary for Mines whether there is any evidence to show whether any coalowners under the existing quota system are disposing of their quotas at a price which is more profitable than would be obtained from the selling of coal upon the reopening of their own collieries?
    Mr. RUNCIMAN: No, Sir.

  TRADE AND COMMERCE.

    FRENCH IMPORT QUOTAS (BRITISH NEWSPRINT).
    Lieut.-Colonel HENEAGEasked the President of the Board of Trade (1) whether he is aware that the French Government have made a statement that the reduction of tonnage of newsprint into France has been based upon a percentage of the tonnage supplied by each country in previous years, and that a quota of 500 tons has been allowed to the Union of Soviet Socialist Republics when there has been no previous import into that country from the Union of Soviet Socialist Republics; and whether he has made, or proposes to make, representations to France to secure a larger British quota;
    (2) whether he is aware that under the French quota restrictions the quantity of newsprint of United Kingdom manufacture which will be allowed to enter France at the minimum rate of duty during the year 1936 has been reduced to 392 tons as compared with 1,200 tons for a period of 14 months from November, 1934, to December, 1935; whether any representations have been made by His Majesty's Government to the French Government with a view to securing a larger share of the French import quota of newsprint for United Kingdom mills; and, if no such representations have been

    163
    made, whether such representations will be made by His Majesty's Government in the immediate future?
    Mr. RUNCIMAN: The reduction of the United Kingdom share of the French quota for newsprint is due partly to the reduction of the total quota from 75,000 tons for the period November, 1934, to December, 1935, to 47,000 tons for 1936, and partly to the operation of the system adopted for dividing the quota among supplying countries. I am informed that the quota is divided roughly on the basis of the average imports during a period of three previous years, advancing the period one year each time; the division of the quota for November, 1934, to December, 1935, is based on imports in 1931–33, when the United Kingdom supplied 1.38 per cent. of the total, while the division of the 1936 quota is based on imports in 1932–34, when the United Kingdom supplied only 0.77 per cent. of the total. I regret that I do not see any ground on which the French Government could be requested to modify the basis of distribution of the quota. Moreover, under the present system of division the United Kingdom share would rise again to 1.28 per cent. in 1937. The allotment granted to the Union of Soviet Socialist Republics has not operated to reduce the United Kingdom allocation.
    Lieut.-Colonel HENEAGE: Do I understand from the right hon. Gentleman's answer that the share of the United Kingdom is increasing compared with the share that is allotted to other countries?
    Mr. RUNCIMAN: It varies from time to time, but there is a rise for 1936. I do not know how that would compare with some of the others.

    GERMANY AND BRITISH DOMINIONS.
    Mr. T. SMITHasked the President of the Board of Trade the volume of trade between the several British Dominions and Germany for the last available 12 months?
    Mr. RUNCIMAN: As the answer involves a number of figures, I will circulate it in the OFFICIAL REPORT.
    Following is the answer:
    The following statement shows the value of the imports and exports of merchandise in the trade between Germany and the British Dominions during the year ended 31st March, 1935, so far as the particulars are available from the German official trade returns.

    Dominion.

    Imports into Germany.

    Exports from Germany.

    (Thous. Reichsmarks.)

    (Thous. Reichsmarks.)

    Irish Free State

    3,502

    20,447

    Union of South Africa (a).

    49,765

    39,362

    Canada

    44,591

    21,114

    Australia

    70,444

    21,809

    New Zealand

    26,543

    3,387

    (a) Figures relate to "British South Africa," defined in the German trade returns as consisting of Union of South Africa, Basutoland, Swaziland, Bechuanaland, Southern Rhodesia, Northern Rhodesia and Nyasaland.

    Notes.
    (1) The above particulars relate to special trade, i.e., imports for home consumption and exports of domestic produce.
    (2) In the German trade returns imports are attributed as far as possible to country of production and exports to country of consumption.
    (3) Separate particulars in respect of Newfoundland are not available from the German trade returns.
    (4) Mean quoted rate of exchange in London for the year ended 31st March, 1935=12.43 Reichsmarks to the £1.

    ANGLO-RUMANIAN PAYMENTS AGREEMENT.
    Sir EUGENE RAMSDENasked the President of the Board of Trade how many instalments have been paid under the recent Anglo-Rumanian debt agreement?
    Mr. RUNCIMAN: One monthly instalment only has been paid. The Rumanian Government are being pressed to pay the instalments due on 15th May and 15th June.

    ANGLO-BRAZILIAN PAYMENTS AGREEMENT.
    Sir E. RAMSDENasked the President of the Board of Trade when it is expected that payments will commence under the recently concluded Anglo-Brazilian debt agreement; and whether the sum of £1,000,000 is yet available for that purpose?
    Mr. RUNCIMAN: The cash payments provided for in Article 4 of the Anglo-Brazilian payments agreement will begin

    165
    as soon as the necessary particulars regarding the arrears, which are now being collected as rapidly as possible by the Board of Trade and the Bank of Brazil, have been checked and analysed, and when the basis of distribution has been agreed with the Brazilian Government, as provided for in the Article. This process must inevitably take some little time. I have no reason to suppose that the £1,000,000 will not be available as soon as required.
    Sir ARTHUR MICHAEL SAMUEL: May I ask whether any part of this £1,000,000 under the agreement of 27th March this year will be taken from the exchange already allotted to earlier British creditors?
    Mr. RUNCIMAN: I am afraid I could not answer that question without notice.

    SILK AND ARTIFICIAL SILK INDUSTRIES (JAPANESE COMPETITION).
    Captain STRICKLANDasked the President of the Board of Trade whether his attention has been drawn to the fact that in Japan the minimum rates of wages paid by the Teikoku Rayon Company are 1s. 5d. a day for men, 8½d. for women; by the Toyo Rayon Company 1s. 3½d. for men, 7½d. for women; by the Kurishiki Silk and Asahi-Bemberg Companies 11¼d. to men, 5d. to women; and what steps he proposes to take to protect the work and wages of the British silk and artificial silk industries against the effect of these low wage rates?
    Mr. RUNCIMAN: I have seen a Press report that these rates of wages are payable to rayon yarn operatives in Japan. I would remind my hon. and gallant Friend that the silk duties were revised, in accordance with the recommendations of the Import Duties Advisory Committee, in July last.
    Captain STRICKLAND: Is the right hon. Gentleman aware that the Japanese socks I hold in my hand can be purchased for 1s. 2d. for 10 pairs; and how does he expect our British industries to stand against competition like that?
    Mr. HANNON: May I ask what progress is being made with the Anglo-Japanese agreement? Are the negotiations likely to come to a conclusion at an early date?
    Mr. RUNCIMAN: That question does not arise out of the answer.

    FLOUR PRICES.
    Mr. LIDDALL (for Mr. PIKE)asked the President of the Board of Trade the average prices for flour imports from France, Germany, and Italy per sack of 280 lbs. weight for the four months ended 30th April, together with the average prices obtained during the same period on the markets of origin, and the prices of British flour over the same period?
    Mr. RUNCIMAN: As the answer includes a number of figures, I will circulate it in the OFFICIAL REPORT.
    Following is the answer:
    During the four months ended 30th April, 1935, according to quotations in the "London Corn Circular," the average price of imported French flour (ex-ship and store) was about 16s. 6d. per sack of 280 lbs. The "Corn Trade News" quotation for "French Patents" shows an average of 16s. 2d. per sack. Quotations in "The Miller" for Italian low grade flour (Liverpool spot price) during the same period average rather more than 16s. per 280 lbs. Corresponding quotations for German flour are not available. The average price during the four months in question of Norwich straight-run flour ex-mill was 21s. 2½d. per 280 lbs. The 10 per cent. ad valorem import duty is included in the above quotations for French and Italian flour. Each of the above quotations is exclusive of the quota payment of 4s. per sack from 1st January to 16th March and of 4s. 6d. subsequently. The average prices (converted to sterling at the average current rates of exchange) of certain specified grades of flour in Paris, Berlin and Milan, respectively, during January to April, as published in the "Revue de l'Institut International de Statistique," were as follows:

    Market.

    Kind of flour.

    Price per 280 lbs.

    s.

    d.

    Paris

    …

    Prime

    54

    2

    Berlin

    …

    Home grown

    59

    7

    Milan

    …

    Prime

    56

    11

    ITALY AND GERMANY.
    Lieut.-Colonel HENEAGEasked the President of the Board of Trade whether he can give any figures to show the effect on imports and exports in Italy and Germany of their system of insisting that exports and imports to each country should balance?
    Mr. RUNCIMAN: I am circulating in the OFFICIAL REPORT a statement showing the value of the trade of Italy and Germany during the first four months of each of the last three years. I am not

    The total value of merchandise imported into and exported from Italy and Germany during each of the periods January to April, 1933, 1934 and 1935, was as follows:

    —

    January to April.

    1933.

    1934.

    1935.

    Italy:

    Thous. Lire.

    Thous. Lire.

    Thous. Lire.

    Imports

    …

    …

    …

    2,531,113

    2,647,367

    2,566,712

    Exports

    …

    …

    …

    1,978,542

    1,679,590

    1,586,007

    Germany:

    Thous. R.M.

    Thous. R.M.

    Thous. R.M.

    Imports

    …

    …

    …

    1,397,276

    1,545,633

    1,475,723

    Exports

    …

    …

    …

    1,571,527

    1,410,098

    1,307,194

    NOTE.—The above particulars relate to special trade, i.e., imports for home consumption and exports of domestic produce.

    DUTY-BORNE WHEAT (FLOUR EXPORTS).
    Mr. LIDDALL (for Mr. PIKE)asked the Financial Secretary to the Treasury why the British milling industry failed to obtain drawback of duty upon exports of flour made wholly or in part from wheat which had already borne duties; and whether the scheme, based upon the Finance Act, 1932, submitted to the Import Duties Advisory Committee in May, 1933, is still under active consideration?
    The FINANCIAL SECRETARY to the TREASURY (Mr. Duff Cooper): This application was advertised by the committee in 1933, but there was, I understand, delay on the part of the applicants in furnishing the necessary detailed information, and the committee thought it desirable to advertise it again at the end of March this year. It is now under active consideration.

  COMPANIES ACT.
  Mr. HERBERT WILLIAMSasked the President of the Board of Trade
  prepared to say to what extent, if any, the changes indicated by these figures may be due to any policy of endeavouring to secure a balance between exports and imports.
  Lieut.-Colonel HENEAGE: Can the right hon. Gentleman say whether the volume of trade has gone up or gone down?
  Mr. RUNCIMAN: In some cases it has gone up and in others down.
  Following is the statement:
  whether he is considering the introduction of legislation, for the purpose of amending the Companies Act in respect of those matters where experience now shows that amendment is necessary?
  Mr. RUNCIMAN: Legislation for the amendment of the Companies Act, 1929, is not likely to be undertaken at present.
  Mr. WILLIAMS: Is the right hon. Gentleman considering an examination of the various problems which have arisen as a result of the administration of the Act?
  Mr. RUNCIMAN: Yes, a considerable number of letters on the subject have been addressed to us by representative bodies, and they are being carefully examined.
  Mr. BURNETTasked the President of the Board of Trade whether, in view of the repeated failure of the safeguards for preference shares provided by the original terms of a prospectus issued under the Companies Act, 1929, he will prepare legislative proposals to protect

  169
  preference shareholders in a limited liability company from being sacrificed for the benefit of junior shareholders in the same company, or, failing that, will he, in any future company-law amending Bill, introduce a clause forbidding the use of preference shares as part of the constitution of any company subject to the laws of limited liability?
  Mr. RUNCIMAN: I presume that my hon. Friend has in mind the safeguards provided by Sections 61 and 153 of the Companies Act, 1929. I have noted his suggestions which will be considered when the Act comes under review.

  BRITISH SHIPPING (ASSISTANCE) ACT.
  Mr. PALINGasked the President of the Board of Trade how many advances have been made for the purpose of building or modernising vessels under the British Shipping (Assistance) Act, 1935, and the amount of money represented by such advances; how many ships have been demolished under the scheme; and whether any of the ships have been demolished outside the United Kingdom?
  Mr. RUNCIMAN: Provisional approval has been given to proposals which cover the building of seven tramp ships and one cargo liner totalling 39,470 tons gross. The amount of the loans involved is 671,400. Advances are made as the work proceeds, and none has yet been paid, nor have any of the ships nominated under the Scheme yet been demolished. I should like to add that I understand that the shipowners concerned are now making their arrangements with the shipbuilders. I know of no reason why the commencement of the work should be delayed.
  Mr. PALING: Is it possible under this Act for shipowners who are not scrapping their old ships to buy old tonnage from other firms, sell it abroad and so qualify for Government assistance?
  Mr. RUNCIMAN: No, Sir, I am afraid that would not be the exact description of the process that is taking place, but it is in our interest that a number of vessels which are at present of very little use to us should be disposed of as scrap rather than be left to trade in competition with the others.
  Mr. PALING: Is it not the fact that some of these ships have been sold abroad, because people abroad are paying better prices; and is it not also the fact that ship breakers in this country last year supplied rather less than half the amount of scrap that they usually do, while more has been imported from abroad?
  Mr. RUNCIMAN: If the hon. Member is referring to methods of scrapping, it is true that some vessels have been broken up abroad, but their case is provided for in one of the Sections of the Act.

  FOREST WORKERS' HOLDINGS, CANNOCK CHASE.
  Mrs. WARDasked the hon. and gallant Member for Rye, as representing the Forestry Commissioners the number, if any, of forestry holdings under the Forestry Commission in Cannock Chase; and whether the Commission propose to establish further holdings in the near future?
  Colonel Sir GEORGE COURTHOPE (Forestry Commissioner): The number of forest workers' holdings established by the Forestry Commissioners at Cannock Chase is 12. The commissioners do not propose to establish any additional holdings at this forest in the near future.

  BRITISH ARMY.

    EDINBURGH CASTLE.
    Mr. GUYasked the Financial Secretary to the War Office whether he will consider the appointment of a captain of Edinburgh Castle with duties corresponding to those of the Lieutenant of the Tower of London?
    The FINANCIAL SECRETARY to the WAR OFFICE (Mr. Douglas Hacking): I think my hon. and gallant Friend is referring to the office of Governor, which, in the 17th century, was styled "Governor and Constable," or "Captain and Governor," and was at one time held by the General Officer Commanding-in-Chief, Scottish Command. The title corresponding to the Lieutenant of the Tower of London would be Deputy-Governor. At the moment I can only say that the suggestion to revive the title of Governor will be considered.
    Mr. H. WILLIAMS: If any such changes are to be made, will the right hon. Gentleman consider promoting the Constable of Caernarvon Castle to superintendent?

    CHEMICAL DEFENCE EXPERIMENTS.
    Mr. DOBBIEasked the Financial Secretary to the War Office the number of animals, and the kind of animals, used for poison-gas experiments at Porton, Cambridge, and other places in this country, in the years 1925 to 1935; how many perished immediately; and how many died within one month?
    Mr. HACKING: During the years in question, chemical defence experi

    Statement showing the number of animals used for experimental purposes at the Chemical Defence Research Establishment, Porton, from 1925 to 1934, and the number of such animals which were killed as the result of the experiments.

    Animals by species.

    Numbers used.

    1925.

    1926.

    1927.

    1928.

    1929.

    1930.

    1931.

    1932.

    1933.

    1934.

    Rabbits

    …

    …

    474

    385

    86

    190

    134

    116

    97

    145

    123

    87

    Rats

    …

    …

    11

    —

    —

    —

    —

    150

    58

    18

    24

    39

    Goats

    …

    …

    38

    3

    2

    5

    40

    6

    45

    11

    10

    —

    Guinea Pigs

    …

    …

    89

    193

    259

    138

    128

    185

    332

    48

    82

    58

    Cats

    …

    …

    35

    20

    11

    14

    13

    73

    1

    7

    —

    —

    Monkeys

    …

    …

    —

    —

    1

    —

    1

    —

    —

    —

    —

    —

    Mice

    …

    …

    36

    31

    26

    123

    29

    179

    46

    37

    176

    141

    Horses

    …

    …

    5

    12

    —

    —

    —

    8

    —

    —

    —

    —

    Canaries

    …

    …

    —

    —

    —

    24

    16

    —

    —

    7

    —

    —

    Pigeons

    …

    …

    —

    —

    —

    30

    16

    2

    —

    —

    —

    —

    Fowls

    …

    …

    —

    —

    —

    30

    —

    —

    —

    —

    —

    —

    Sheep

    …

    …

    —

    —

    —

    —

    2

    —

    —

    —

    —

    —

    Animals by species.

    Numbers which died or were painlessly destroyed as a result of the experiments.

    1925.

    1926.

    1927.

    1928.

    1929.

    1930.

    1931.

    1932.

    1933.

    1934.

    Rabbits

    …

    …

    235

    319

    79

    157

    73

    89

    40

    102

    108

    76

    Rats

    …

    …

    11

    —

    —

    —

    —

    149

    54

    11

    15

    39

    Goats

    …

    …

    23

    1

    2

    3

    1

    6

    45

    9

    8

    —

    Guinea Pigs

    …

    …

    75

    186

    259

    121

    112

    174

    289

    40

    71

    56

    Cats

    …

    …

    35

    19

    7

    12

    9

    67

    1

    2

    —

    —

    Monkeys

    …

    …

    —

    —

    —

    —

    —

    —

    —

    —

    —

    —

    Mice

    …

    …

    36

    26

    26

    118

    21

    177

    37

    25

    174

    136

    Horses

    …

    …

    —

    —

    —

    —

    —

    —

    —

    —

    —

    —

    Canaries

    …

    …

    —

    —

    —

    24

    16

    —

    —

    7

    —

    —

    Pigeons

    …

    …

    —

    —

    —

    26

    12

    —

    —

    —

    —

    —

    Fowls

    …

    …

    —

    —

    —

    30

    —

    —

    —

    —

    —

    —

    Sheep

    …

    …

    —

    —

    —

    —

    —

    —

    —

    —

    —

    —

    ments with animals were carried out only at the Chennai Defence Research Establishment, Porton, and, up to 1931, at the Physiological Laboratory, Cambridge. Information is not available precisely in the form asked for by the hon. Member, but I am circulating in the OFFICIAL REPORT statements, showing the numbers and kinds of animals used in each year for these experiments and the numbers which died or were painlessly destroyed as a result of the experiments. Since 1929, a large proportion of the animals used was for experiments in connection with the subject of the safety of industrial employés.
    Following are the statements:

    Statement showing the number of animals used for experimental purposes at the Physiological Laboratory, Cambridge, from 1927 to 1931, on behalf of the War Department, and the number of such animals which were killed as the result of the experiments.

    Animals by species.

    Numbers used.

    Numbers which died or were painlessly destroyed as a result of the experiments

    1927.

    1928.

    1929.

    1930.

    1931.

    1927.

    1928.

    1929.

    1930.

    1931.

    Rabbits

    …

    …

    …

    —

    118

    150

    23

    6

    —

    85

    117

    23

    —

    Rats

    …

    …

    …

    34

    1

    —

    —

    —

    —

    —

    —

    —

    —

    Cats

    …

    …

    …

    —

    —

    67

    62

    5

    —

    —

    67

    62

    —

    Pigeons

    …

    …

    …

    —

    —

    16

    —

    —

    —

    —

    2

    —

    —

    Figures prior to 1927 are not readily available.

  AGRICULTURE.

    TOMATO PRICES.
    Mr. T. WILLIAMSasked the Minister of Agriculture the average wholesale price of English, Channel Islands, and foreign tomatoes for the past three years?
    Following is the statement:

    The Average Monthly Prices* (per 12 lbs.) of English, Channel Island and Foreign Tomatoes during the years 1932, 1933 and 1934 were:—

    Description and Year.

    Jan.

    Feb.

    Mar.

    Apl.

    May

    June

    July

    Aug.

    Sept.

    Oct.

    Nov.

    Dec.

    1932.

    s.

    d.

    s.

    d.

    s.

    d.

    s.

    d.

    s.

    d.

    s.

    d.

    s.

    d.

    s.

    d.

    s.

    d.

    s.

    d.

    s.

    d.

    s.

    d.

    English

    —

    —

    —

    23

    6

    14

    10

    8

    11

    6

    11

    5

    1

    4

    2

    4

    11

    7

    0

    7

    3

    Channel Island

    —

    —

    —

    22

    9

    13

    6

    8

    3

    6

    2

    4

    2

    3

    1

    3

    8

    4

    10

    5

    9

    Canary Islands

    5

    5

    4

    3

    4

    11

    5

    6

    6

    0

    5

    7

    —

    —

    —

    —

    5

    9

    3

    1

    Dutch

    —

    —

    —

    —

    9

    10

    7

    3

    5

    1

    3

    5

    2

    6

    3

    7

    4

    3

    —

    1933.

    English

    —

    —

    —

    23

    0

    10

    6

    7

    7

    5

    9

    4

    5

    3

    3

    5

    0

    6

    7

    7

    3

    Channel Islan

    —

    —

    —

    20

    7

    9

    10

    7

    0

    5

    1

    3

    9

    2

    2

    3

    5

    4

    7

    —

    Canary Islands

    4

    0

    3

    5

    3

    6

    4

    0

    4

    1

    —

    —

    —

    —

    4

    3

    3

    8

    3

    3

    Dutch

    —

    —

    —

    —

    7

    6

    6

    0

    5

    0

    2

    10

    2

    3

    2

    9

    3

    4

    —

    1934.

    English

    —

    —

    —

    22

    9

    13

    0

    6

    9

    5

    5

    4

    9

    2

    10

    4

    2

    5

    10

    6

    6

    Channel Islands

    —

    —

    —

    19

    3

    11

    9

    6

    2

    4

    9

    3

    11

    1

    11

    3

    0

    3

    11

    —

    Canary Islands

    4

    7

    4

    6

    3

    9

    4

    10

    4

    7

    3

    2

    —

    —

    —

    —

    3

    3

    3

    2

    Dutch

    —

    —

    —

    —

    8

    2

    5

    5

    4

    3

    3

    5

    —

    2

    9

    3

    2

    —

    * Mean of 1st and 2nd Quality and representing transactions between wholesaler and retailer.

    CORN ACREAGE
    Mr. T. WILLIAMSasked the Minister of Agriculture the number of
    Major GEORGE DAVIES (Lord of the Treasury): With the hon. Member's permission a statement is being circulated in the OFFICIAL REPORT giving the average monthly prices of English, Channel Islands and foreign tomatoes during the past three years. Owing to the seasonal nature of the trade, yearly average prices would be misleading.
    acres under wheat, oats and barley cultivation during the present year, and comparable figures for 1934 and 1933?
    Major DAVIES: I have been asked to reply. Particulars of the acreage under wheat, oats and barley during the present year will not be available until early in August. A statement is being circulated in the OFFICIAL REPORT giving the figures for 1933 and 1934.
    Following is the statement:
    The acreage under wheat, barley and oats on 3rd June, 1933, and 4th June, 1934, in England and Wales was:

    Crops.

    1933.

    1934.

    acres.

    acres.

    Wheat

    …

    …

    1,660,389

    1,759,448

    Barley

    …

    …

    751,349

    860,598

    Oats

    …

    …

    1,494,797

    1,402,017

    DOMINION MEAT (IMPORTS).
    Mr. T. WILLIAMSasked the Secretary of State for Dominion Affairs whether any conclusions have been reached regarding the restrictions of overseas meat imports?
    The SECRETARY of STATE for DOMINION AFFAIRS (Mr. J. H. Thomas): I am not able to add anything to the answer on this subject which I gave the hon. Member for Colchester (Mr. Oswald Lewis) yesterday.
    Mr. WILLIAMS: Can the right hon. Gentleman give a date when it will be possible to make a statement?
    Mr. THOMAS: I will endeavour to explain the situation up to date on Thursday.

  TRANSPORT.

    ROAD EXPENDITURE.
    Mr. T. SMITHasked the Minister of Transport the total amounts spent on road construction in England and Wales for each year since 1929 to 1934?
    The PARLIAMENTARY SECRETARY to the MINISTRY of TRANSPORT (Captain Austin Hudson): The amounts spent by highway authorities in England and Wales on new construction of roads and bridges during each of the three years ended on 31st March, 1931, 1932 and 1933, were approximately £4,406,000, £6,240,000 and £3,822,000 respectively. These amounts are exclusive of administration expenses. Comparable particulars are not available for the financial year
    176
    1929–30 and those for the financial year 1933–34 will be published in due course in the Road Fund Report.

    FORTH FERRY SERVICE, QUEENSFERRY.
    Mr. ALBERT RUSSELLasked the Minister of Transport the numbers of motor vehicles, commercial and non-commercial, which have made use of the improved Forth ferry service at Queensferry, in each month between September, 1934, and May, 1935?
    Captain A. HUDSON: As the answer involves a number of figures I will, with my hon. and learned Friend's permission, circulate it in the OFFICIAL REPORT.
    Following is the answer:
    I am informed that the numbers of vehicles using the ferry during each month from 1st September, 1934, to 31st May, 1935, were As follows:

    —

    Motor Cars.

    Goods Vehicles.

    1934.

    September

    …

    15,265

    560

    October

    …

    9,749

    609

    November

    …

    6,660

    620

    December

    …

    6,891

    656

    1935.

    January

    …

    6,505

    543

    February

    …

    6,488

    597

    March

    …

    9,351

    765

    April

    …

    12,523

    917

    May

    …

    13,908

    1,049

    87,340

    6,316

    LONDON PASSENGER TRANSPORT IMPROVEMENT SCHEMES.
    Mr. G. R. STRAUSSasked the Minister of Transport whether, under the proposed London Passenger Transport improvement schemes, regard will be had to the claims of the South-Eastern district of London for greater tube facilities?
    Captain A. HUDSON: The electrification of the Southern Railway has improved the travelling facilities in South and South-East London, and the London Passenger Transport Board have informed me that in these circumstances they consider that other areas not so well served are more in need of improvement schemes.
    Mr. LANSBURY(by Private Notice) asked the Chancellor of the Exchequer

    177
    whether he can give the House fuller particulars of the arrangements for the London Passenger Transport improvement schemes?
    The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain): I am glad to state that the detailed arrangements between the Treasury, the London Passenger Transport Board, the London and North Eastern Railway and the Great Western Railway have now been concluded and an agreement has been initialled for signature by the parties. A White Paper containing a memorandum on the proposed financial resolution to authorise the introduction of the necessary Guarantee Bill will be available in the Vote Office this evening. Annexed to this memorandum is a copy of the agreement between the parties. The Financial Resolution authorising the introduction of the Bill will appear on the Order Paper to-morrow.
    Mr. THORNE: Is there any truth in the statement that appeared in some of the papers that the Government are to pay the interest on that £35,000,000?
    Mr. CHAMBERLAIN: No, Sir.
    Sir A. M. SAMUEL: Will it not be necessary for private Bills to be introduced, and at once, to enable the work to be carried out; and has my right hon. Friend any information yet in reference to such private Bills?
    Mr. CHAMBERLAIN: Yes, Sir, private Bills will be necessary. I cannot tell my hon. Friend when they will be ready, but no time will be lost in the matter.

  ELECTRICITY SUPPLIES.
  Mr. H. WILLIAMSasked the Minister of Transport the present number of consumers of electricity and, for comparison, the number in 1919?
  Captain A. HUDSON: The official returns of the Electricity Commissioners show that there were upwards of 6,600,000 consumers at the end of 1934, as compared with 2,600,000 at the end of 1927–28. It is computed that there were some 750,000 consumers in 1919, although no official figures are available.
  Mr. HALESasked the Minister of Transport whether he will arrange for his Department to prepare a report show-178
  ing to what extent electric supply companies in this country are under the control of American capital?
  Captain HUDSON: I will be glad to obtain for my hon. Friend such information as is available.

  LONDON REFUSE (DISPOSAL).
  Mr. McENTEEasked the Minister of Health whether the advisory committee on London refuse have concluded their deliberations and, if so, whether it is proposed to, publish their report?
  The PARLIAMENTARY SECRETARY to the MINISTRY of HEALTH (Mr. Shakespeare): The committee have made an interim report dealing with the disposal of house and trade refuse, and copies are available at the office of the Metropolitan Boroughs Standing Joint Committee. The committee are now considering the question of collection.
  Mr. McENTEE: Can the hon. Gentleman say when the final report will be available?
  Mr. SHAKESPEARE: One report is available now. I am not sure when the other report will be available.

  NATIONAL DEBT.
  Mr. CRAVEN-ELLISasked the Chancellor of the Exchequer whether an increase or a decrease in the National Debt has taken place during the time the National Government has been in office; and what are the comparative figures for the years 1931 to 1935?
  Mr. CHAMBERLAIN: The nominal capital of the debt has slightly increased; on the other hand the annual charge has been very greatly reduced. I will circulate the figures in the OFFICIAL REPORT.
  Mr. CRAVEN-ELLIS: May I ask the right hon. Gentleman what are the principal items to account for the increase in the National Debt?
  Mr. CHAMBERLAIN: It is partly due to the borrowing of £350,000,000 on Treasury Bills for the Exchange Equalisation Account, and of course there are assets of more than that value to correspond. There are also the expenses of converting the 5 per cent. War Loan,

  179
  the loss on the foreign credits raised in 1931, and the issue of loans at a small discount in connection with conversion to a lower rate of interest; with a partial offset to these items by the application of Sinking Fund and other receipts to debt redemption.

  —

  1931.

  1932.

  1933.

  1934.

  1935.

  £000

  £000

  £000

  £000

  £000

  Nominal capital of Debt on 31st March

  7,413,309

  7,433,943

  7,643,794

  7,822,298

  7,800,565

  Less, outstanding issues to Exchange Equalisation Account.

  —

  —

  150,000

  350,000

  350,000

  7,413,309

  7,433,943

  7,493,794

  7,472,298

  7,450,565

  Interest and Management Charge in year ending 31st March:

  Internal Debt

  264,262

  279,983

  262,786

  212,010

  211,434

  External Debt

  28,907

  17,940

  22,039

  4,240

  223

  The increase in the nominal total due to the borrowing of £350,000,000 on Treasury Bills for the Exchange Equalisation Account is more than offset by corresponding assets. Other causes of increase in the nominal total have been the expenses of converting 5 per cent. War Loan, loss on the foreign credits raised in 1931, and the issue of loans at a small discount in connection with conversion to a lower rate of interest, these items being partially offset by the application of Sinking Fund and other receipts to debt redemption.

  LAUSANNE AGREEMENT.
  Mr. MABANEasked the Chancellor of the Exchequer whether he will now propose to the signatory Powers to the final act of the Lausanne Conference that the time has now come to ratify the agreement with Germany; and whether he will further propose to the Governments of Belgium, France, and Italy that the conditions precedent to ratification detailed in No. 1 of the further documents relating to the settlement reached at the Lausanne Conference [Cmd. 4129] should now be waived so that ratification may become immediately possible, and thus final authority be given to an instrument at present merely provisional in character and capable of being disturbed by the independent act of any one of six governments?
  Mr. CHAMBERLAIN: No, Sir. His Majesty's Government are not prepared to depart from the view, stated in the reply given to my hon. Friend on 7th November last, that the ratification of the Lausanne Agreement is bound up with the problem of War Debts as a whole.
  Mr. MABANE: In view of the fact that the international situation would be eased
  Mr. DAVID MASON: Is there any prospect of the right hon. Gentleman renewing the operations of the new Sinking Fund during the current year?
  Mr. CHAMBERLAIN: That is another question.
  Following are the figures:
  if this anomaly were regularised, would my right hon. Friend give his reasons for not proposing to regularise the anomaly in the way suggested?
  Mr. CHAMBERLAIN: I do not think it is possible to regularise it in that way.

  DISARMAMENT CONFERENCE.
  Mr. LAWSON (for Mr. RHYS DAVIES)asked the Secretary of State for Foreign Affairs whether he has any statement to make on the present position of the Disarmament Conference.
  The MINISTER for LEAGUE of NATIONS AFFAIRS (Mr. Eden): No, Sir.

BUSINESS OF THE HOUSE.
Mr. LANSBURY: May I ask the Prime Minister what will be the business for Friday?
The PRIME MINISTER (Mr. Baldwin): In view of the urgency of the London Passenger Transport Improvement Schemes, the Committee stage of the Money Resolution relating to the Government guarantee will be taken on

181
Friday instead of the Business of Supply previously announced. If there is time on Friday, other Orders will be taken.

MESSAGE FROM THE LORDS.
That they have agreed to,—
Amendments to—
Bristol Tramways Bill [Lords], without Amendment.

ORDERS OF THE DAY.

  FINANCE BILL.
  Considered in Committee.
  [Sir DENNIS HERBERT in the Chair.]

  FINANCE BILL.

    CLAUSE 1.—(Amendments as to Entertainments Duty.)
    3.12 p.m.
    Mr. NEIL MACLEAN: I beg to move, in page 2, line 3, at the beginning, to insert:
    "As respects entertainments to which the next succeeding sub-section applies the said duty shall cease to be charged on payments not exceeding one shilling and as respects other entertainments."
    The purpose of this Amendment, as no doubt the Chancellor of the Exchequer realises, is to extend the remission of Entertainments Duty which he has granted on all seats at sports and entertainments where the charge does not exceed 6d. We take the view that, while that is a remission of taxation which is well warranted in a great many quarters, and will undoubtedly give satisfaction to a large number of people, there are certain entertainments which do not get that benefit and which we think ought to come within the scope of the remission. The Entertainments Duty is a war tax, and it has been juggled with by different Chancellors of the Exchequer, who at different periods have found it necessary to placate public sentiment by granting some remission of the tax, while on other occasions the duty has been re-imposed. I think the right hon. Gentleman, during his Budget speech, made a statement regarding some of the plays and entertainments affected, and suggested that, if it were possible for him to grant a remission of the duty in the case of some of the entertainments mentioned in Sub-section (3) of Clause 1, it would confer a considerable benefit and at the same time would not endanger the balancing of his Budget. He, of course, is in a better position than I am to state how much money this Amendment would involve, but I do not think the sum would be so large as to make it necessary to consider any question of risk in accepting it. The entertainments in the case of which we are asking for an extension of the remission include
    "a stage play, a ballet (whether a stage play or not), a performance of music (whether vocal or instrumental), a lecture,
    188
    a recitation, a music hall or other variety entertainment, a circus or a travelling show,"
    and I think the right hon. Gentleman will agree that in several of these cases the remission would confer a great deal of benefit. I am certain that hon. Members present will be able to enlarge upon the different classes of entertainments mentioned in the Sub-section, and will be able to show the benefit that would accrue to each and every one of these classes of entertainment. Taking the case of the circus or travelling show, where a marquee is set up at one of the periodical fairs which are held in small towns and villages throughout the country, where the charge for admission does not exceed 1s., the benefit that would accrue to those who run these entertainments and shows would be very considerable, and would go a long way to meet the expenses entailed upon them in travelling from one part of the country to another. It is unnecessary for me to detain the Committee at any length on this matter. The tax on the dearer seats will still be continued; we are only asking that the remission which has already been granted on the 6d. seats should be extended to those at 1s., but not over 1s.; and, in view of the smallness of the sum involved, I feel sure that the right hon. Gentleman will be prepared to meet us and accept the Amendment.
    3.18 p.m.
    Mr. LOGAN: I trust that the Chancellor of the Exchequer will accept this Amendment. I am more anxious than ever to see an opportunity given to the legitimate stage to reduce its prices and so to get a larger clientele. While I have no objection to the cinema, I am anxious that those engaged in orchestras, instead of being mendicants on our streets, should have a favourable opportunity of employment in theatres. In our large cities, especially in Liverpool, the question of "canned" music is becoming acute, and when I look round, as I have had to do for the past 40 years, and see the popularity of the plays produced in Liverpool, I am convinced of the elevating influence that the theatre has upon our people. Recognising, as I do, that other forms of entertainment are now competing against the theatre, and finding that "canned" music is taking the place of the orchestra, I am anxious if possible to see a recrudescence of

    189
    better times for those theatres which are now being practically driven out of business. The production of these plays in our great cities, and particularly Shakespearian plays, has a great educational influence on boys and girls from school, and many classes of people are able to see such productions without in any way impinging upon family life or involving any question of morals. They have had a good tendency. For these reasons, I would like if possible to see it popularised, so that a now dwindling professional body may once again take their place in the practice of the histrionic art.
    Anyone who knows anything at all about it must be fully aware that the theatre is not the vagabond life it used to be in the olden days, but is really beneficial. If only our people could be encouraged to go and see good plays, and the theatres to engage artists, I am convinced that it would be beneficial, and the Chancellor would be doing a great justice if he could see his way to make the concession for which we ask to-day. In other classes of industry professional men have been thrown out of employment, and many theatres, owing to people not being able to go to see the plays, have not been able to keep their orchestras in employment. We have seen theatres turned into cinemas, displacing the performance of the drama and other stage plays, and orchestras have disappeared. It has been very hard lines upon professional musicians in their efforts to obtain a living. I want to see art, drama and the stage play take their proper part in the work of the nation. I am convinced that if the Chancellor of the Exchequer would provide an opportunity for a reduction to be made in the charges for admission our people would be encouraged to take full advantage of the concession, and it is because of that that I make a plea to him to accept the Amendment.
    3.22 p.m.
    Mr. MABANE: The purpose of the Amendment, I take it, is to make the employment of those engaged upon the stage more easy. There does not seem to be much hope that the Chancellor of the Exchequer can accept the Amendment in its present form, but in the Bill that is before us to-day he has made an alteration which shows that he is not un-favourable to the principle embodied
    190
    in the Amendment. He has made an alteration in the scale of Entertainments Duty which can have for its purpose but one thing, which is to make employment easier for all those engaged on the stage as opposed to the films. I have risen in order to ask the Chancellor of the Exchequer to give a hopeful reply. I am sure that it would be a great encouragement to those engaged in this industry if he could give some indication that, if he had the funds available, he would be prepared to extend still further the principle which he has already embodied in the Finance Bill by exempting the particular form of entertainment mentioned in Sub-section (3) of the Clause from Entertainments Duty so far as prices not exceeding 6d. are concerned. If he could give such a hopeful reply he would encourage a greater number of people to carry on in times of great difficulty in the hope that the funds would become available, and that in due course they would be able to secure exemption from Entertainments Duty on seats for which a charge not exceeding 1s. is made in accordance with the terms of the Amendment. When one looks at the particular industry, it is difficult perhaps to believe that a concession even of this character would make the revival of the stage easily possible, because the advantage of the film is so enormous, but I am sure that the Chancellor of the Exchequer wishes to make it possible for employment on the stage to continue and indeed to develop. If he could give but a hopeful reply to the Amendment, I am sure that he would be giving encouragement to a great number of people and to an industry which, as the hon. Gentleman the Member for the Scotland Division of Liverpool (Mr. Logan) has said, is not without its value in the life of the country.
    3.25 p.m.
    Sir PERCY HARRIS: I want to pay tribute to the Chancellor of the Exchequer. [Laughter.] Right hon. Gentlemen and hon. Gentlemen seem surprised. I am an admirer of the very great abilities of the right hon. Gentleman, and I recognise that he has made a very real and constructive attempt to help the theatre. It looks a little ungrateful to ask for more, but the very fact that he is putting words into this Clause singling out the theatre for special consideration is a recognition of

    191
    his interest in and sympathy for the drama. I agree that we have to consider the people employed in this important industry, the actors, the players, the musicians, the stage hands and all concerned, but, even more than that, the great public are concerned. They have to be weaned away from the mechanical theatre and encouraged to go back to the drama and the great British theatre which has been our pride and glory for centuries. It is well to pay tribute to the Chancellor of the Exchequer because he has recognised that principle. I have reason to believe that he is really interested in the theatre, and desires its progress and well-being. It is always easy to ask for more. I agree with my hon. Friend the Member for Huddersfield (Mr. Mabane) that it would be a great thing if the Chancellor of the Exchequer could give a message of hope to the theatres, and say it is not going to end there, and that his aim is to give even further relief in the future.
    One of the difficulties is the complexity and the elaborate differentiation between various seats. If the Committee will turn to the Schedule, it will be seen that on seats exceeding 6d. and not exceeding 8½d., a humble ½d. is to be charged as duty, from 8½d. to 11d., one penny is to be charged, and from 11d. to 1s. 1½d., 1½d. is to be charged, and so on. It seems to be a needless and complicated tax, and it would simplify matters very much if a clean sweep could be made of this tax upon what is, after all, a very low-priced seat. To people who can afford 1s., an extra ½d. or so is very irritating, it is difficult to collect, and is annoying to the box office and the owners of the theatre and cinema. It would be very satisfactory if the Amendment could be accepted, but I appreciate that the right hon. Gentleman has recognised the principle, and it is right that it should be so recognised.
    3.27 p.m.
    The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain): I am sincerely grateful to the hon. Gentleman the Member for South-West Bethnal Green (Sir P. Harris), and also to the hon. Member for Huddersfield (Mr. Mabane), for their recognition of the advance in the direction which they desire which has been made in the Finance Bill, and I am the more grateful
    192
    because I missed any recognition of that fact in the two opening speeches with which the Amendment was moved and seconded. The sentiments which were expressed by the hon. Member opposite are such as have my sympathy, and, indeed, although some of the greatest literature in the English language is to be found in dramatic writing and plays which are literary and are read for their own sake without necessarily having to be seen on the stage, we may perhaps recollect that they would never have been written if they had not been intended to be acted. But in these days when the theatre has fallen upon hard times in competition with a new form of entertainment, I certainly feel that one does not want to do anything to make the lot of the theatre proprietor, producer, playwright or play actors any harder than it is. I have for the first time in this Finance Bill drawn a distinction between what has been described as the living performance, by live performers, and the mechanical form of entertainment, and have made a concession to the former. I do not think it is fair either to one's self or to one's successor to express an opinion as to what may or what may not be done in the future when funds are available which are not available to-day, but I would point out that, once a distinction has been made, a most important advance, I should have thought if I were financially interested in theatres, has already been made, because it is always much simpler to increase a concession which has been given, when a definition has already appeared on the Statute Book, than it is to introduce a new definition and a new distinction between the different kinds of performance. Therefore, in taking this step and making this distinction between the living performance and the mechanical performance a most important advance has been made.
    The hon. Member who moved and the hon. Member who seconded the Amendment were generous in the recognition of the value of this step. They thought it was so good that they would like to have more of it. But one has to consider not merely a particular item but the whole extent of the national expenditure, and I have, as best I can, to apportion whatever concessions can be made, with some attempt at fairness to all kinds of interests. In this particular case the Com-

    193
    mittee may recollect the line which I took. I said that I would give back the whole value of the extra Entertainments Duty which had been imposed in 1931 but that I would make a somewhat different distribution of it. The bulk of the cost was involved in the abolition of the tax on seats up to 6d. There remained a sum of £400,000 distributed over the higher priced seats, which sum I said I would devote entirely to the relief of the living performances, concentrating the relief upon the cheaper seats. I thought that would be most helpful in the competition with the mechanical performances. It will be seen that in the result there is a uniform reduction of duty. Instead of a duty varying with the price of the seat there is a uniform reduction and the percentage reduction on the cheaper seats is much greater than the percentage on the dearer seats. In this way I have utilised the £400,000 which I had allotted myself for this purpose.
    The hon. Member who moved the Amendment suggested that it would not cost very much to go a little bit further. I do not say that it would cost very much. It would cost perhaps about £150,000, but
    it would make a break in the arrangement which I have made and would give a somewhat disproportionate relief in this particular direction. It would exceed the amount of the Entertainments Duty imposed in 1931. In view of the considerable concession that has been made already, I think that those who are interested in these performances might well be satisfied with this to go on with, especially with the distinction that I have made and await a more favourable opportunity before pressing for any further concession. In the case of the ninepenny seats, which are considered to be important, especially in the Provinces, and in the case of the shilling seats which are also important, there has been a reduction from 1½d. to ½d. and from 2d. to 1d., 1d. being taken off in both cases. In the case of both these cheaper seats there has been a substantial reduction. I hope that in view of the advance in this direction that I have made the hon. Member will not press his Amendment.
    Question put, "That those words be there inserted."
    The Committee divided: Ayes, 50; Noes, 187.

    Division No. 233.]

    AYES.

    [3.37 p.m.

    Adams, D. M. (Poplar, South)

    Grenfell, David Rees (Glamorgan)

    Owen, Major Goronwy

    Addison, Rt. Hon. Dr. Christopher

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

    Rea, Sir Walter

    Banfield, John William

    Grundy, Thomas W.

    Roberts, Aled (Wrexham)

    Batey, Joseph

    Hall, George H. (Merthyr Tydvil)

    Salter, Dr. Alfred

    Bevan, Aneurin (Ebbw Vale)

    Harris, Sir Percy

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

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

    Holdsworth, Herbert

    Smith, Tom (Normanton)

    Buchanan, George

    Janner, Barnett

    Strauss, G. R. (Lambeth, North)

    Cleary, J. J.

    Jenkins, Sir William

    Thorne, William James

    Cove, William G.

    John, William

    Tinker, John Joseph

    Curry, A. C.

    Jones, Morgan (Caerphilly)

    West, F. R.

    Daggar, George

    Lansbury, Rt. Hon. George

    Williams, Edward John (Ogmore)

    Davies, David L. (Pontypridd)

    Lawson, John James

    Williams, Thomas (York, Don Valley)

    Denville, Alfred

    Leonard, William

    Wilmot, John

    Dobbie, William

    Logan, David Gilbert

    Young, Ernest J. (Middlesbrough, E.)

    Edwards, Sir Charles

    Lunn, William

    Gardner, Benjamin Walter

    McEntee, Valentine L.

    TELLERS FOR THE AYES:—

    George, Major G. Lloyd (Pembroke)

    Maclean, Nell (Glasgow, Govan)

    Mr. Paling and Mr. Groves.

    Graham, D. M. (Lanark, Hamilton)

    Maxton, James

    NOES.

    Acland-Troyte, Lieut.-Colonel

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

    Cruddas, Lieut.-Colonel Bernard

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

    Chamberlain, Rt. Hon. N. (Edgbaston)

    Dalkeith, Earl of

    Agnew, Lieut.-Com. P. G.

    Chapman, Sir Samuel (Edinburgh, S.)

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

    Allen, William (Stoke-on-Trent)

    Clarke, Frank

    Doran, Edward

    Anstruther-Gray, W. J.

    Clayton, Sir Christopher

    Dower, Captain A. V. G.

    Baldwin, Rt. Hon. Stanley

    Cobb, Sir Cyril

    Drewe, Cedric

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

    Cochrane, Commander Hon. A. D.

    Dugdale, Captain Thomas Lionel

    Beit, Sir Alfred L.

    Colville, Lieut.-Colonel J.

    Eden, Rt. Hon. Anthony

    Benn, Sir Arthur Shirley

    Conant, R. J. E.

    Elmley, Viscount

    Bernays, Robert

    Cook, Thomas A.

    Emmott, Charles E. G. C.

    Blindell, James

    Cooke, Douglas

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

    Boulton, W. W.

    Cooper, A. Duff

    Evans, Capt. Arthur (Cardiff, S.)

    Bowyer, Capt. Sir George E. W.

    Cooper, T. M. (Edinburgh, W.)

    Everard, W. Lindsay

    Brocklebank, C. E. R.

    Craddock, Sir Reginald Henry

    Fermoy, Lord

    Browne, Captain A. C.

    Cranborne, Viscount

    Fuller, Captain A. G.

    Burnett, John George

    Craven-Ellis, William

    Gibson, Charles Granville

    Campbell, Sir Edward Taswell (Brmly)

    Critchley, Brig.-General A. C.

    Gledhill, Gilbert

    Campbell-Johnston, Malcolm

    Cross, R. H.

    Granville, Edgar

    Cazalet, Thelma (Islington, E.)

    Crossley, A. C.

    Grattan-Doyle, Sir Nicholas

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

    MacAndrew, Lieut.-Col. Sir Charles

    Runciman, Rt. Hon. Walter

    Grimston, R. V.

    Macdonald, Gordon (Ince)

    Runge, Norah Cecil

    Gunston, Captain D. W.

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

    Russell, Albert (Kirkcaldy)

    Guy, J. C. Morrison

    MacDonald, Rt. Hon. M. (Bassetlaw)

    Russell, R. J. (Eddisbury)

    Hacking, Rt. Hon. Douglas H.

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

    Salmon, Sir Isidore

    Hales, Harold K.

    McEwen, Captain J. H. F.

    Salt, Edward W.

    Hammersley, Samuel S.

    Maclay, Hon. Joseph Paton

    Samuel, Sir Arthur Michael (F'nham)

    Hannon, Patrick Joseph Henry

    McLean, Dr. W. H. (Tradeston)

    Shakespeare, Geoffrey H.

    Harbord, Arthur

    Macpherson, Rt. Hon. Sir Ian

    Shaw, Helen B. (Lanark, Bothwell)

    Hartland, George A.

    Maitland, Adam

    Shepperson, Sir Ernest W.

    Harvey, Major Sir Samuel (Totnes)

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

    Simon, Rt. Hon. Sir John

    Haslam, Henry (Horncastle)

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

    Smithers, Sir Waldron

    Haslam, Sir John (Bolton)

    Martin, Thomas B.

    Somerville, Annesley A. (Windsor)

    Heneage, Lieut.-Colonel Arthur P.

    Mills, Sir Frederick (Leyton, E.)

    Soper, Richard

    Herbert, Major J. A. (Monmouth)

    Mills, Major J. D. (New Forest)

    Southby, Commander Archibald R. J.

    Hills, Major Rt. Hon. John Waller

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

    Spencer, Captain Richard A.

    Hore-Bellsha, Rt. Hon. Leslie

    Monsell, Rt. Hon. Sir B. Eyres

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

    Horobin, Ian M.

    Morelng, Adrian C.

    Stevenson, James

    Horsbrugh, Florence

    Morgan, Robert H.

    Stewart, J. Henderson (Fife, E.)

    Hewitt, Dr. Alfred B.

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

    Stuart, Hon. J. (Moray and Nairn)

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

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

    Summersby, Charles H.

    Hudson, Robert Spear (Southport)

    Muirhead, Lieut.-Colonel A. J.

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

    Hume, Sir George Hopwood

    Munro, Patrick

    Thomson, Sir James D. W.

    Hurd, Sir Percy

    Natlon, Brigadier-General J. J. H.

    Thorp, Linton Theodore

    Hurst, Sir Gerald B.

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

    Titchfield, Major the Marquess of

    Iveagh, Countess of

    Nunn, William

    Touche, Gordon Cosmo

    Jackson, Sir Henry (Wandsworth, C.)

    Orr Ewing, I. L.

    Train, John

    Jackson, J. C. (Heywood & Radcliffe)

    Patrick, Colin M.

    Ward, Irene Mary Bewick (Wallsend)

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

    Penny, Sir George

    Ward, Sarah Adelaide (Cannock)

    Jamieson, Rt. Hon. Douglas

    Percy, Lord Eustace

    Warrender, Sir Victor A. G.

    Jones, Henry Haydn (Merioneth)

    Petherick, M.

    Waterhouse, Captain Charles

    Jones, Lewis (Swansea, West)

    Peto, Sir Basil E. (Devon, Barnstaple)

    Watt, Major George Steven H.

    Kerr, Hamilton W.

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

    Wayland, Sir William A.

    Kirkpatrick, William M.

    Procter, Major Henry Adam

    Wedderburn, Henry James Scrymgeour-

    Law, Sir Alfred

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

    Williams, Charles (Devon, Torquay)

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

    Ramsbotham, Herwald

    Williams, Herbert G. (Croydon, S.)

    Lees-Jones, John

    Ramsden, Sir Eugene

    Wills, Wilfrid D.

    Leighton, Major B. E. P.

    Bathbone, Eleanor

    Windsor-Clive, Lieut.-Colonel George

    Levy, Thomas

    Reid, David D. (County Down)

    Wood, Rt. Hon. Sir H. Kingsley

    Liddall, Walter S.

    Rickards, George William

    Worthington, Sir John

    Lindsay, Kenneth (Kilmarnock)

    Ropner, Colonel L.

    Lloyd, Geoffrey

    Rosbotham, Sir Thomas

    TELLERS FOR THE NOES.—

    Locker-Lampson, Rt. Hn. G. (Wd. G'n)

    Ross, Ronald D.

    Lieut.-Colonel Sir A. Lambert Ward

    Loder, Captain J. de Vere

    Ross Taylor, Walter (Woodbridge)

    and Sir Walter Womersley.

    Mabane, William

    Ruggles-Brise, Colonel Sir Edward

    3.44 p.m.
    Mr. HOLDSWORTH: I beg to move, in page 2, line 14, at the end, to insert:
    "a football or cricket match or other athletic or sporting contest or exhibition."
    The object of the Amendment is to extend the reduction in the Entertainments Duty to football and cricket matches and other athletic or sporting contests. I am not quite certain of the words, they may be too wide, but I am prepared to alter the phraseology of the Amendment so long as I can get the principle accepted by the Chancellor of the Exchequer. I want to suggest to the right hon. Gentleman that there are thousands of people whose only pleasure to-day is to attend football or cricket matches. Anyone who has had any experience of running a football or cricket club will know how difficult it is to make it pay. There has been a tremendous falling off in the attendance at these matches. I want to encourage a larger attendance by lowering the duty, and also to encourage those people who find a pleasure in watching football or cricket. I am not complaining
    196
    of the attendances in my own county; we invariably get good crowds at football and cricket matches. I have served in an honorary capacity for 20 years in a cricket club, and I know the great difficulty there is in meeting this duty. I can see no reason for drawing a distinction between the entertainments mentioned in Sub-section (3) and the legitimate sport of the people. Whatever may be said from the artistic point of view, there is no doubt that from the health point of view the best thing a person who has passed the age when he can take an active part in these sports can do is to attend the performances given by those who can give the best exhibitions of whatever game they may play. It would not be a very costly gift, and I hope the Chancellor will be able to grant the concession.
    3.47 p.m.
    Mr. KINGSLEY GRIFFITH: I desire to support the Amendment. The Chancellor of the Exchequer has said that he desires to apportion the relief which he is able to give. I would suggest to him

    197
    that the Amendment covers a great number of people who have so far had no share in the apportionment and that they should get some of the benefits at the disposal of the Chancellor of the Exchequer as well as anybody else. I do not know of any principle on which they should be excluded except perhaps that they have no mechanical competitors, but they have other difficulties to meet which we must all realise. On the principle that we should encourage performances by live performers—that may be somewhat doubtful in the case of some cricket matches—I hope the Chancellor will accept the Amendment and thus give some relief and encouragement to a class of people who I am sure he is most anxious to encourage.
    3.49 p.m.
    Mr. McENTEE: I have made no estimate at all of the amount which the concession would cost, but at the same time I hope the Chancellor of the Exchequer will grant it. I have no doubt that the right hon. Gentleman will be guided more by the cost than by anything else, but undoubtedly practically every hon. Member in the House, if the concession could be made at a reasonable cost, would agree that it should be made, and I think that the Chancellor of the Exchequer himself would be willing to make it also. I had something to do with the propaganda which was successfully carried on so far as indoor recreation and entertainments are concerned and which was referred to by the Chancellor; but so far as these outdoor recreations are concerned no concession at all has been made.
    It is probably true to say that from the point of view of popularity outdoor games are even more popular than the cinema. Certainly when the weather is reasonably fine most people would prefer to attend a football or cricket match rather than go to any indoor entertainment. The Chancellor has said that he has tried to divide up reasonably equally amongst those to whom he thought some concession ought to be made the surplus that he had available for distribution. The people who attend these outdoor games apparently did not came in for any consideration at all. I do not think it would be the Chancellor's desire to leave them out of consideration any more than others, but for some reason they were not considered. In all probability the reason
    198
    was that they were not vocal enough. Had they been as vocal as some of us who associated ourselves with the cinema agitation, in all probability they would have got more consideration than they did get. Should the Chancellor refuse to make some concession to-day the probability is that once the matter has been raised the vocal part of the agitation will come.
    I do not like to think that concessions will not be made to people who are entitled to them until those people become so vocal and carry on an agitation to such an extent as to become a nuisance to the Chancellor or the Government. These things ought to be judged on the justice of the appeal that is made and on the needs of the people concerned. I do not know any reason why a person who attends a football or cricket match is less in need of concession than the person who attends a cinema or concert. I hope, therefore, that the Chancellor will give favourable consideration to the Amendment.
    3.54 p.m.
    Mr. CHARLES WILLIAMS: Perhaps the Chancellor will look with a favourable eye on this matter. It is rather a new line that we are having to-day. This is the first of the great Amendments to be proposed by this sub-section of the Liberal party. Those of us who have watched the Liberal party through many years have always rather associated them with some kill-joy matter such as the Tea Duty, or something of that kind, and we have never in our wildest dreams thought that they would come in and put up their foremost spokesmen to speak on behalf of football. It is a new frame of mind. If this is to be the new aspect of this section of the Liberal party surely the Chancellor ought to encourage it. It looks as if we might see the Liberals getting a little fresh air into their somewhat cobwebby minds, and that in due time they might come to realise other benefits which the Chancellor has given them.
    There is one thing which the Chancellor might do for us. I hold very strongly that it is far better that people who are looking on at games, which I never think is the best way of spending time, should be encouraged to look on out of doors rather than indoors. As one who wishes to see as much outdoor

    199
    amusement as is reasonably possible, I ask the Chancellor to consider this matter very carefully. If he cannot make the concession to-day, will he give the proposal special consideration between now and next year? There is a very strong feeling that the youth of the country should be encouraged to get out of doors. When such relics of the past as the hon. Members who sit in front of me appeal to the Chancellor in the matter, surely it is something to which my right hon. Friend might give very careful consideration. Although I do not pledge myself to go into the Lobby in support of the Amendment, I hope that the Chancellor will give most favourable consideration to it or the principle of it when occasion enables him to do so.
    3.58 p.m.
    Mr. MAITLAND: I shall not follow my hon. Friend the Member for Torquay (Mr. C. Williams) in his reference to the Amendment as one involving a question of high party political principle, but rather would I ask the Chancellor of the Exchequer to give a specific denial to the statement which was made by the hon. Member for West Walthamstow (Mr. McEntee), who said that no remission of duty had been made in respect of entertainments of this kind. The hon. Member must have forgotten Sub-section (2) of Clause 1 which lays down that the duty charged under the Entertainments Duty shall cease to be charged on payments not exceeding 6d. To that extent there is direct assistance given to football and cricket matches. I should be glad if my right hon. Friend would give that statement official sanction. I have a personal knowledge of this subject. I happen to be the president of the football club in my Division, and my political reputation is at stake, for I have already told my constituents that to the extent of 6d. there will be no tax on admission to cricket and football matches. I should like an assurance on that point. I would remind the Chancellor that in various parts of the country, particularly in the smaller towns, there are cricket and football organisations which are being carried on with extreme difficulty. They are not the bigger football and cricket clubs, but they are clubs which are performing a distinct service in providing recreation for the people. If not on this occasion, perhaps on some other occasion the
    200
    Chancellor would extend the principle already embodied in the Bill, and so encourage a number of people who, by carrying on these organisations under extreme difficulty, are well worthy of help.
    4.0 p.m.
    Mr. DAVID MASON: I feel sure that if my hon. Friends who moved the Amendment would cut out the part relating to sporting contests and exhibitions, the Chancellor of the Exchequer would have no difficulty in accepting this very admirable Amendment. Everyone, I am sure, will agree that, to whatever party we belong, we all want football and cricket. The tribute paid by the hon. Member for Torquay (Mr. C. Williams) to the Liberal party encourages myself and others to continue, I hope, to go forward on the right path. I hope, therefore, the right hon. Gentleman will allow that it is a very narrow Amendment, merely to include football and cricket matches and athletic events, and that he will see his way now to grant, or, if not right away, to consider the granting of a concession which would be popular throughout the length and breadth of the country.
    4.2 p.m.
    The FINANCIAL SECRETARY to the TREASURY (Mr. Duff Cooper): I can assure my hon. Friend the Member for Faversham (Mr. Maitland) that he has understood the plain English of the Bill, and that it does mean what he conceives it to mean. In that respect he has an advantage over some hon. Members who have spoken to the Amendment, as he has read the Finance Bill, which, apparently, they have not. Even the hon. Member for West Middlesbrough (Mr. K. Griffith) said that those who attended football and cricket matches would have no share at all in these benefits, whereas it is very plainly stated in the Bill that they will benefit to the extent of 100 per cent. by the complete removal of the tax on seats up to 6d. I think hon. Members failed to appreciate that point, and I did not hear from them that note of gratitude which was so plainly discernible in the speeches of those who spoke on behalf of the first Amendment moved this afternoon.
    The Amendment now before the Committee is one which I do not think hon. Members who reflect upon it will really urge my right hon. Friend the Chancellor

    201
    to accept. Those who supported the first Amendment approved very strongly the principle which the Chancellor introduced of differentiating between living performances and mechanical performances, thereby, for the first time, putting entertainments of that sort, which are of some value to the intellectual and artistic life of the community, in a separate category. I hope the hon. Member opposite will use his influence with his party in impressing upon their minds the value of this new distinction which the Chancellor has made. But the value would disappear entirely if we were to place upon the same level
    "a football or cricket match or other athletic or sporting contest or exhibition,"
    and musical performances, concerts, the plays of Shakespeare and the other performances mentioned in the Bill. Then is there the same competition? One of the reasons which has moved my right hon. Friend to make this concession is that the people who are giving these performances do suffer very severely from the new competition to which they have been subjected by the invention of the cinematograph. It has not been contended by anyone this afternoon that cricket matches and football matches have suffered from such competition. Indeed, it has been admitted by the hon. Member for West Walthamstow (Mr. McEntee) that people would far sooner attend an outdoor performance in the afternoon than go to the cinema. Therefore, the main argument of my right hon. Friend for differentiation in the case of living performances does not exist so far as cricket and football matches are concerned. The other reason which influenced my right hon. Friend was that it was made perfectly plain that it was not the public so much who suffered; it was not the people who went to see these entertainments, but it was the people who gave them, the closing down of entertainments and the consequent throwing people out of employment. That is not the case with regard to those who take part in football and cricket matches.
    This Amendment has been supported on two different grounds. On the one hand, hon. Members have said that the people to-day enjoy more than anything else cricket and football on a Saturday afternoon, and will you not give them
    202
    some relief? At the same time, the stronger argument has been put forward that cricket and football clubs cannot carry on because the attendances are so small that they must be given this relief. Hon. Members cannot have it both ways. If such relief were given, it would be those who run the clubs and not those who go to the matches who would benefit. I think that those who support the Amendment, when they come to reflect upon it, will see that it would take away much of the advantage already given to living performances, that it is not based on any unfair or undue competition of a new industry, the cinema, and that it would not benefit the public or the people taking part in the matches. For these reasons, I do not think Members will be inclined to support the Amendment, and I hope that they will not insist on dividing upon it.
    Mr. McENTEE: Could the hon. Gentleman give any estimate of what it would cost to make this concession?
    Mr. COOPER: Not without notice.
    4.9 p.m.
    Major Sir ARCHIBALD SINCLAIR: My hon. Friends and I feel some disappointment at the speech of the Financial Secretary, and I am very surprised at his answer to the question of the hon. Gentleman. This Amendment has been on the Order Paper, and it is customary when hon. Members put these Amendments down to ask the Chancellor or the Financial Secretary how much they would cost.
    Mr. COOPER: I have not advanced the argument of cost against the Amendment. The cost would be about £250,000. That is not, however, the reason why the Government are refusing the Amendment.
    Sir A. SINCLAIR: I am obliged to the hon. Gentleman for giving the answer to me now. I am not surprised that it is not on account of the cost that he rejects this Amendment, because, obviously, the cost is very small—only £250,000. No doubt the Financial Secretary has given an accurate figure, but it might well be, if he would consider the principle of the Amendment, that we could cut out various things. I have no doubt that the Amendment, as loosely drafted, includes dog-racing, for example, and I have no doubt we could cut it down and save a

    203
    good deal of that £250,000, concentrating the benefits on purposes such as cricket and football, which we all wish to encourage. The Financial Secretary said that we should be putting football and cricket on the level of Shakespeare and classical music. Far be it from me to compare two such very unlike things, but I should say that cricket and football in their sphere are just as well to encourage as Shakespeare and classical music in their sphere, and I would point out to the Financial Secretary that his proposal puts on the same level not only Shakespeare and classical music, but revues and such entertainments as "Stop Press," and things which I should have thought far less comparable and of less value to the people of this country than two wholesome sports like football and cricket.
    Then the hon. Member said that some hon. Members had stated that these clubs were so hard pressed that they needed this support, while others argued that they were so popular that we ought to give the benefit to the people who went to these outdoor pastimes, and he said that we could not have it both ways. As a matter of fact, that is exactly the position. In some parts of the country these clubs are very hard pressed, while in other parts people are flocking there in vast numbers. In the one case the benefit would go to the people who attend these matches, and in the other case you would give very much-needed help to some of these very hard-pressed clubs. I know of one club which is probably going to leave the minor championships because of the difficulty of maintaining its ground. I have no doubt that that is typical of many other cases where cricket clubs are struggling to maintain themselves in these difficult days.
    Finally, the Financial Secretary said that we must not take away the advantage which this Bill is giving to living performances, or rather that the Amendment would, to some extent, take away the advantage the Bill is giving to living performances. I cannot imagine any argument more unsound. The living performances do not ask to be defended against football and cricket, but against the cinemas, and the passage of this Amendment would not in any way prejudice the position of the theatre
    204
    employing living performers in the new position which they will enjoy under this Bill. Even now I hope that the Chancellor will give consideration to this very valuable Amendment. It is obvious that it would meet with the approval of Members in all parts of the Committee, and although I do not tie myself to the actual wording of the Amendment—he is aware of the difficulty under which those who put down Amendments labour when it comes to drafting—I hope very much that he will try to see if he cannot meet us in some way before the Report stage. Otherwise we must press the Amendment to a Division.
    4.14 p.m.
    Mr. BANFIELD: I want to point out to the Chancellor of the Exchequer and the Financial Secretary that the effect of the Amendment is not calculated so much to help the big football clubs or the big cricket county clubs, but to help the small football and cricket clubs in the smaller towns and vilages of this country, which clubs perform a far more essential service to sport than do the great clubs in the great towns. The football clubs in the great towns attract a great number of people, but in the smaller towns, such as the one I represent in this House, many of the clubs, owing to their expenditure, have been obliged to go to the wall since the days of the War. The majority of Members here would I think lay claim to the name of sportsmen, and I suggest that by helping these small clubs they will be doing something of advantage to the youth of our country. Generally speaking, the players for these small clubs are drawn from the towns and villages in the locality. The boys who play are all known to each other and a number of people who interest themselves in these sports put their hands in their pockets to assist the small local clubs. In spite of that help the number of such clubs grows less every year, and I hope and trust that the Chancellor of the Exchequer may find some way of meeting their case. If he is not able to do anything now, perhaps the right hon. Gentleman will bear in mind the possibility of doing something at a later stage to help those organizations. I am sure that such an action on his part would be greatly appreciated at a time when we are paying great attention to the needs of the youth of this country and

    205
    when a special appeal is being made on their behalf. Sport of this kind is essential to the happiness and wellbeing of our young men, and I hope that the appeal which has been made this afternoon will not fall on deaf ears.
    4.17 p.m.
    Mr. MACQUISTEN: I am very much surprised at this Amendment. The youth of this country ought not to pay any more than 6d. for witnessing any football or cricket match. Remember that this is not a case of those who are playing football or cricket. It only concerns those who are looking on at those games and the little clubs for whom a special appeal is being made, as far as I know, never charge any more than 6d. for admission to their matches. I submit that it is plenty for any boy to pay for his amusement on a Saturday afternoon, and I am surprised at hon. Members taking up an attitude which would appear to encourage these young fellows in extravagance and encourage the charging of high prices. Those who can afford to pay more than 6d. for amusement of this kind can very well afford to pay their proportion of the tax and thus help other people. We have great football clubs making large profits out of what they charge for admission to their matches and engaged one with another in buying and selling players for thousands of pounds—like cattle being sold on the hoof. I have often been surprised at the extent to which this goes on, because it is nothing more nor less than a form of the slave trade in this country. I feel that I am speaking entirely in the interests of democracy when I say that I hope the Chancellor of the Exchequer will not give way on this matter. A concession has been made as regards the 6d. charge, and I submit that that is quite enough to charge for admission to football and cricket matches except in the case of Lord's ground and great places like that, where the people concerned can well afford to make a contribution to the revenue of the country.
    4.19 p.m.
    Mr. MABANE: I think something ought to be said on behalf of those who intend to support the Government on this matter. I feel that the right hon. and gallant Gentleman the Member for Caithness (Sir A. Sinclair) has been on wrong lines altogether in the case which he has placed before the Committee. In general,
    206
    the case of the smaller clubs has been met by the remission of Entertainments Duty on charges of 6d. and below 6d. I think therefore that the point raised by hon. Members opposite is entirely wrong. As far as I am aware, and I have made inquiries into this matter, the smaller clubs recognise that they have received a valuable concession, and they are not greedy in this matter. The concession which is suggested in the Amendment would really be a concession, not to the smaller clubs but to the large clubs, in the First, Second and Third Divisions of the League.
    Mr. HOLDSWORTH: Why not?
    Mr. MABANE: But the appeal which we have heard has been made on behalf of the smaller clubs. There is no sort of evidence that in the main the clubs in the Football League are not making substantial profits.
    Mr. HOLDSWORTH: The hon. Member's own club made a loss last year. [Laughter.]
    Mr. MABANE: It is all very well for the Committee to laugh, but I think they ought to wait to find out whether that is the case or not. In fact it is not the case—
    Mr. HOLDSWORTH rose—
    The CHAIRMAN: There is a general rule against advertising any business in our Debates, and I think that rule applies equally to advertisements of an unfriendly nature.
    Mr. MABANE: The Committee is well aware that the Huddersfield Football Club does not need advertising. Those of us who intend to support the Government on this matter desire it to be known that we consider the case to have been fully met by the concession on admission charges up to 6d. That meets the case of the smaller clubs and to go beyond that concession will not do any real good.
    4.21 p.m.
    Mr. T. SMITH: I do not intend advertising any football club, except to say that my constituency's team took what steam there was out of Huddersfield and played remarkable football. The hon. Member for Huddersfield (Mr. Mabane) argued that the removal of the tax on charges of 6d. and under had settled the problem, but it has not done so. We

    207
    are grateful for what has been done. I took part in the agitation which led to the removal of the tax on charges up to 6d.
    Mr. MACQUISTEN: We all did.
    Mr. SMITH: I know that the country generally is not ungrateful for that concession, but what we are saying now is that the reduction on charges above sixpence ought to be extended to football and cricket clubs. The position with regard to the average cricket or football club is that attendances are not altogether determined by the tax. As a rule people will follow a winning team and the same thing applies both to the clubs in the smaller towns and those in the larger cities. When teams are doing well, they draw large attendances and when they are doing badly the attendances fall off. The point is that in the smaller towns prices higher than 6d. are charged
    for admission to football matches. There are people who take a keen interest in football but who do not always feel like standing for an hour and a half watching a match. Many people for physical reasons like to have a seat on the stand which costs more than 6d., and I have yet to hear any sound reason why a person in that position should be penalised by the entertainments duty. I suggest that the Chancellor of the Exchequer would be conferring a great benefit on most of the football and cricket clubs in the smaller towns if he accepted the Amendment which I hope will be taken to a Division.
    Mr. MACQUISTEN: Is it not the case that the charge for a seat is a separate charge.
    Question put, "That those words be there inserted."
    The Committee divided: Ayes, 64; Noes, 207.

    Division No. 234.]

    AYES.

    [4.25 p.m.

    Acland, Rt. Hon. Sir Francis Dyke

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

    Mason, David M. (Edinburgh, E.)

    Adams, D. M. (Poplar, South)

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

    Maxton, James.

    Banfield, John William

    Groves, Thomas E.

    Moreing, Adrian C.

    Batey, Joseph

    Grundy, Thomas W.

    Nathan, Major H. L.

    Bernays, Robert

    Hall, George H. (Merthyr Tydvll)

    Owen, Major Goronwy

    Bevan, Aneurin (Ebbw Vale)

    Harris, Sir Percy

    Paling, Wilfred

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

    Janner, Barnett

    Procter, Major Henry Adam

    Buchanan, George

    Jenkins, Sir William

    Roberts, Aled (Wrexham)

    Cleary, J. J.

    John, William

    Salter, Dr. Alfred

    Cove, William G.

    Jones, Henry Haydn (Merioneth)

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

    Cripps, Sir Stafford

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

    Smith, Tom (Normanton)

    Curry, A. C.

    Jones, Lewis (Swansea, West)

    Somerville, D. G. (Willesden, East)

    Daggar, George

    Jones, Morgan (Caerphilly)

    Strauss, G. R. (Lambeth, North)

    Davies, David L. (Pontypridd)

    Lansbury, Rt. Hon. George

    Thorne, William James

    Dobbie, William

    Lawson, John James

    Tinker, John Joseph

    Edwards, Sir Charles

    Leonard, William

    West, F. R.

    Evans, Capt. Ernest (Welsh Univ.)

    Logan, David Gilbert

    Williams, Edward John (Ogmore)

    Foot, Isaac (Cornwall, Bodmin)

    Lunn, William

    Williams, Thomas (York, Don Valley)

    Gardner, Benjamin Walter

    Macdonald, Gordon (Ince)

    Wilmot, John

    George, Major G. Lloyd (Pembroke)

    McEntee, Valentine L.

    Young, Ernest J. (Middlesbrough, E.)

    Graham, D. M. (Lanark, Hamilton)

    Maclean, Neil (Glasgow, Govan)

    Grenfell, David Rees (Glamorgan)

    Mallalieu, Edward Lancelot

    TELLERS FOR THE AYES—

    Sir Walter Rea and Mr. Holdsworth.

    NOES.

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

    Campbell, Sir Edward Taswell (Brmly)

    Crookshank, Col. C. de Windt (Bootle)

    Agnew, Lieut.-Com. P. G.

    Campbell-Johnston, Malcolm

    Cross, R. H.

    Albery, Irving James

    Castlereagh, Viscount

    Crossley, A. C.

    Allen, William (Stoke-on-Trent)

    Cazalet, Thelma (Islington, E.)

    Cruddas, Lieut.-Colonel Bernard

    Anstruther-Gray, W. J.

    Cazalet, Capt. V. A. (Chippenham)

    Dalkeith, Earl of

    Apsley, Lord

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

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

    Balley, Eric Alfred George

    Chamberlain, Rt. Hon. N. (Edgbaston)

    Denman, Hon. R. D.

    Baldwin, Rt. Hon. Stanley

    Clarke, Frank

    Doran, Edward

    Barrie, Sir Charles Coupar

    Clayton, Sir Christopher

    Dower, Captain A. V. G.

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

    Cobb, Sir Cyril

    Drewe, Cedric

    Beit, Sir Alfred L.

    Cochrane, Commander Hon. A. D.

    Dugdale, Captain Thomas Lionel

    Benn, Sir Arthur Shirley

    Colville, Lieut.-Colonel J.

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

    Blindell, James

    Conant, R. J. E.

    Eden, Rt. Hon. Anthony

    Boulton, W. W.

    Cook, Thomas A.

    Elmley, Viscount

    Bowater, Col. Sir T. Vansittart

    Cooke, Douglas

    Emmott, Charles E. G. C.

    Bowyer, Capt. Sir George E. W.

    Cooper, A. Duff

    Emrys-Evans, P. V.

    Briscoe, Capt. Richard George

    Cooper, T. M. (Edinburgh, W.)

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

    Broadbent, Colonel John

    Craddock, Sir Reginald Henry

    Evans, Capt. Arthur (Cardiff, S.)

    Brocklebank, C. E. R.

    Cranborne, Viscount

    Everard, W. Lindsay

    Browne, Captain A. C.

    Craven-Ellis, William

    Fermoy, Lord

    Burgin, Dr. Edward Leslie

    Critchley, Brig.-General A. C.

    Fielden, Edward Brocklehurst

    Burnett, John George

    Croft, Brigadier-General Sir H.

    Fremantle, Sir Francis

    Gibson, Charles Granville

    Lovat-Fraser, James Alexander

    Russell, Albert (Kirkcaldy)

    Gledhill, Gilbert

    Lumley, Captain Lawrence R.

    Russell, R. J. (Eddlsbury)

    Gluckstein, Louis Halle

    Mabane, William

    Rutherford, Sir John Hugo (Llverp'l)

    Grattan-Doyle, Sir Nicholas

    MacAndrew, Lieut.-Col. Sir Charles

    Salmon, Sir Isidore

    Grimston, R. V.

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

    Salt, Edward W.

    Gunston, Captain D. W.

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

    Samuel, Sir Arthur Michael (F'nham)

    Guy, J. C. Morrison

    Maclay, Hon. Joseph Paton

    Shakespeare, Geoffrey H.

    Hacking, Rt. Hon. Douglas H.

    McLean, Dr. W. H. (Tradeston)

    Shaw, Helen B. (Lanark, Bothwell)

    Hales, Harold K.

    Macquisten, Frederick Alexander

    Shepperson, Sir Ernest W.

    Hamilton, Sir George (Ilford)

    Maitland, Adam

    Shute, Colonel Sir John

    Hannon, Patrick Joseph Henry

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

    Smiles, Lieut.-Col. Sir Walter D.

    Harbord, Arthur

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

    Smithers, Sir Waldron

    Harvey, Major Sir Samuel (Totnes)

    Mills, sir Frederick (Leyton, E.)

    Somervell, Sir Donald

    Haslam, Henry (Horncastle)

    Mills, Major J. D. (New Forest)

    Somerville, Annesley A. (Windsor)

    Haslam, Sir John (Bolton)

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

    Soper, Richard

    Heneage, Lieut.-Colonel Arthur P.

    Monsell, Rt. Hon. Sir B. Eyres

    Southby, Commander Archibald R. J.

    Herbert, Major J. A. (Monmouth)

    Morgan, Robert H.

    Spender-Clay, Rt. Hon. Herbert H.

    Herbert, Capt. S. (Abbey Division)

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

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

    Hills, Major Rt. Hon. John Waller

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

    Stevenson, James

    Hornby, Frank

    Muirhead, Lieut.-Colonel A. J.

    Stewart, J. Henderson (Fife, E.)

    Horobin, Ian M.

    Munro, Patrick

    Stourton, Hon. John J.

    Horsbrugh, Florence

    Nation, Brigadier-General J. J. H.

    Strickland, Captain W. F.

    Howitt, Dr. Alfred B.

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

    Stuart, Hon. J. (Moray and Nairn)

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

    Nunn, William

    Stuart, Lord C. Crichton-

    Hudson, Robert Spear (Southport)

    Orr Ewing, I. L.

    Summersby, Charles H.

    Hume, Sir George Hopwood

    Palmer, Francis Noel

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

    Hurd, Sir Percy

    Patrick, Colin M.

    Thomson, Sir James D. W.

    Hurst, Sir Gerald B.

    Penny, Sir George

    Thorp, Linton Theodore

    Iveagh, Countess of

    Percy, Lord Eustace

    Titchfield, Major the Marquess of

    Jackson, Sir Henry (Wandsworth, C.)

    Perkins, Walter R. D.

    Touche, Gordon Cosmo

    Jackson, J. C. (Heywood & Radcliffe)

    Petherick, M.

    Tryon, Rt. Hon. George Clement

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

    Peto, Sir Basil E. (Devon, B'nstaple)

    Wallace, Captain D. E. (Hornsey)

    Jamieson, Rt. Hon. Douglas

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

    Ward, Irene Mary Bewick (Wallsend)

    Keyes, Admiral Sir Roger

    Pickthorn, K. W. M.

    Ward, Sarah Adelaide (Cannock)

    Kirkpatrick, William M.

    Purbrick, R.

    Warrender, Sir Victor A. G.

    Lambert, Rt. Hon. George

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

    Waterhouse, Captain Charles

    Law, Sir Alfred

    Ramsbotham, Herwald

    Watt, Major George Steven H.

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

    Ramsden, Sir Eugene

    Wayland, Sir William A.

    Lees-Jones, John

    Reid, David D. (County Down)

    Wedderburn, Henry James Scrymgeour-

    Leighton, Major B. E. P.

    Remer, John R.

    Wells, Sydney Richard

    Levy, Thomas

    Rickards, George William

    Williams, Charles (Devon, Torquay)

    Liddall, Walter S.

    Robinson, John Roland

    Williams, Herbert G. (Croydon, S.)

    Lindsay, Noel Ker

    Ropner, Colonel L.

    Wills, Wilfrid D.

    Lloyd, Geoffrey

    Rosbotham, Sir Thomas

    Windsor-Clive, Lieut.-Colonel George

    Locker-Lampson, Rt. Hn. G. (Wd. Gr'n)

    Ross, Ronald D.

    Worthington, Sir John

    Locker, Lampson, Com. O. (Handsw'th)

    Ross Taylor, Walter (Woodbridge)

    Loder, Captain J. de Vere

    Ruggles-Brise, Colonel Sir Edward

    TELLERS FOR THE NOES.—

    Loftus, Pierce C.

    Runge, Norah Cecil

    Lieut.-Colonel Sir A. Lambert Ward

    and Sir Walter Womersley.

    4.31 p.m.
    Major LEIGHTON: I beg to move, in page 2, line 14, at the end, to insert "agricultural or horticultural shows."
    Agricultural and horticultural shows are not chargeable as such for Entertainments Duty, but if they have entertainments, they are charged. The point comes up because of what happened in the case of the Shrewsbury floral fete. They asked if they would come under the Clause, under the reduced rate, and the answer was that they would not. If that is the ruling in that particular case, it seems to me that it would be the same with all agricultural shows. If an entertainment is given at a horticultural or an agricultural show, it is not solely that entertainment, but it is the agricultural or horticultural show as well which draws the people, and I feel that it was not the intention of the Chancellor of the Exchequer when he framed his Clause to penalise such shows. I think his idea was to prevent the cinemas
    210
    introducing some small entertainment with living people in order to come under the reduced duty, but it does not seem to me that the right hon. Gentleman meant to bring in entertainments which are entirely of living people at these agricultural shows. The wording of the Amendment may not quite meet the case, but I would ask my right hon. Friend to consider the point and to see whether he cannot do something in order that entertainments at these shows shall benefit under this Clause. These entertainments are entirely by living performers, and as a rule they are variety entertainments, with horses, leaping, bands, and so on.
    4.34 p.m.
    Lieut.-Colonel WINDSOR-CLIVE: I think there is a stronger case for this Amendment than for the last Amendment, because the last one related to amusements only. When an agricultural show has attached to it one of the items

    211
    enumerated in Sub-section (3) of this Clause, I think it should come under the benefit of the Clause.
    4.35 p.m.
    Mr. COOPER: As my hon. and gallant Friends will realise, the great difficulty in the Entertainments Duty is to draw the line between one entertainment and another. Suppose a cinema performance wished to benefit by the new provisions, it might be argued that it was a performance by living performers, and it is left to those who administer the Act to define what entertainments come under the Act and what do not, and to draw their own definitions. So far as agricultural and horticultural shows are concerned, exemption is granted in nearly every case, wherever it can be shown that they are run for philanthropic purposes. In such a case no tax at all is charged, and there is no question of any remission of tax. In the past year 4,000 shows were exempted from all taxation whatever. I am very sorry that we found it impossible last year to exempt the particular show mentioned by my hon. and gallant Friend in the same way as the 4,000 other shows were exempted, but he will see that, as 4,000 shows in this country escaped the tax altogether, the numbers that came under the tax must have been very small. It should not be impossible, and I hope it will not be impossible, for those who failed to satisfy the tax inspectors in the past to satisfy them in the future. If 4,000 can succeed in escaping all taxation in one year, it should not be impossible for others to conform. It is obviously impossible to accept the Amendment, for all the reasons that applied to our regretted refusal to accept the previous Amendment. The only case in which agricultural shows come under the tax is where it is considered that a great part of the attendance at a show is due to some other form of entertainment which is deliberately given in order to attract attendance.
    Major LEIGHTON: In view of what my hon. Friend has said, I ask leave to withdraw the Amendment, but I hope my right hon. Friend the Chancellor of the Exchequer will look into the matter further.
    Amendment, by leave, withdrawn.
    4.40 p.m.
    Mr. ALBERY: I beg to move, in page 2, line 14, at the end, to insert:
    "Provided that in the case of an entertainment which includes both a stage play and an orchestra the duty shall be at the further reduced rate of one halfpenny less than the duties specified in the First Schedule to this Act."
    I am not at all sure that the words of this Amendment are the best that could be found for the purpose in view, but, if the Chancellor of the Exchequer will look favourably on the principle involved, I have no doubt he can find some way of improving the drafting of the Amendment. The Chancellor of the Exchequer in his Budget speech said he was making a gesture which was to help the theatres and those who give living performances. Unfortunately during a rather bad period the tendency has spread for theatres to instal a mechanical orchestra, which is, from the audience's point of view, I am sure the Committee will agree, regrettable. It is still more regrettable from the point of view of those persons who earn a livelihood as musicians. I believe a very great number of our best musicians get through what I might call their period of training, when they do not earn much money, by playing in orchestras in theatres, and I hope the Chancellor of the Exchequer will see his way to extend the concession which he has made to the living performer in a theatre a step further, so as to include the living performer in an orchestra. I believe it to be a matter even of some national importance. There are a great many musicians out of work to-day, and if the present tendency continues, the day must inevitably come when it will become increasingly difficult to find expert musicians to complete really high-class orchestras.
    4.42 p.m.
    Mr. DENVILLE: It is with great pleasure that I rise to support the Amendment. I do it from the fact that I happen to know, I suppose, more about the reasons for this Amendment than does the average Member of this Committee. A short time ago I listened to what I considered was the most astounding thing I had ever heard since I have been in this House, and that was that it cost £150,000 more to concede the taking-off of the tax up to 1s. in the theatres. A sum of £150,000 more spent by the Government in relieving the theatres by

    213
    1s. would put into immediate work in this country anything from 10,000 to 15,000 people. It sounds an extraordinary thing for a small amount of money like that to do so much good, but when I tell the Committee that something like 200 theatres are prepared to-day to open their doors—in the provinces, that is—the moment they know that the tax is taken off up to 1s.—I am speaking with authority—
    The CHAIRMAN: But the hon. Member is not speaking to the Amendment.
    Mr. DENVILLE: I am sorry, because I feel very deeply over this question, and I view this Amendment as the only means by which the living stage can be saved. We have during the past paid too much attention to the London complex of the theatre, and it is in my opinion wrong to consider the London theatre every time, without respect to the provinces. What is it that stays the hand of the Chancellor of the Exchequer from granting this poor, miserable, little £150,000?
    The CHAIRMAN: The hon. Member appears to be directing his speech entirely to an Amendment which has already been dealt with. Perhaps it will help him if he reads the Amendment which he is now supposed to be supporting. He will then see that it refers to entertainments which are partly theatrical and partly orchestral, or, shall I say, theatrical accompanied by an orchestra.
    Mr. DENVILLE: I value your suggestion, Sir Dennis. The Amendment, as I read it, will have the effect of making a further reduction in the Entertainments Duty to those places of entertainment where the entertainers have an orchestra. It is not the first time that such an Amendment has been before the Committee, but I hope that this is the last time. The value of the Amendment is that if the Entertainments Duty is taken off up to 1s.—[Interruption]—I find I am wandering from the Amendment again, and that is because I am letting my feelings get the better of me. Because I am anxious to see justice done in a certain quarter, and because I feel that justice has not been done, I am bound to support the Amendment.
    4.47 p.m.
    Mr. MAITLAND: I support the Amendment although I realise that, as it is
    214
    drawn, it may present certain administrative difficulties. The sentiment of the Amendment, however, appeals to us all because it recognises that a large number of people have for some years been engaged in the theatrical profession as musicians, and any proposal which will lead to a diminution of their unemployment will receive support from all parts of the Committee. I support the Amendment because of the musicians who are out of work and who may be helped if a further reduction is made in the Entertainments Duty. Acknowledgment has not been made to the Chancellor for what has been done for the theatre in this direction, and I wish to express thanks to him for the concession he has made.
    4.48 p.m.
    Mr. JOHN WILMOT: I take it that the purpose of the Amendment is to provide that where an orchestra of living performers is employed to provide the music incidental to a stage play, the performances of living actors and living orchestra shall be liable to a rate of tax still lower than the reduced rate for stage plays under the Schedule. If that be the intention of the Amendment, I should like to support it and to urge the Chancellor to accept it and to give such form as will make it workable. There is no doubt that the growing practice in the London theatres, if not in the provinces, is to get rid of the orchestra and to instal some kind of loud speaker gramophone in its place, and to cover it up with artificial palm leaves. From the point of view of the audience, it is a very poor substitute. From the point of view of the musicians and of musical art, it is a tragedy. This particular kind of employment, that is, playing for a short period in a theatre orchestra, provides what it is necessary that musicians should have, namely, some kind of small employment which will carry them over the period between larger and more serious and important artistic work. Theatre orchestras are often made up of students of great promise and accomplished musicians who are working at this employment between other more important engagements.
    The disappearance of the theatre orchestra, small thing as it may seem, has been one of the heaviest blows to the musicians of this country, and it is difficult

    215
    to think of any other way in which their loss could be made good. I feel certain that the public does not approve of the potted mechanical orchestra. Music is an essential part of most forms of theatrical art, and its place is not taken by the very poor substitutes which the hard times in the theatre have brought into being. The Chancellor has already indicated that it is his wish to do something to encourage the living performer. I am sure that it will be his wish to encourage the living musician. By making this concession he would do far more than merely give him an extra engagement; he would do something which may make it possible for him to go on being a musician instead of turning into a waiter or some sort of unskilled tradesman, to which he must turn if he is not able to earn his living as an artist. I, therefore, urge the Chancellor to make this concession which, small as it is in itself, will be far-reaching in its effects.
    4.53 p.m.
    Mr. CURRY: I feel that the Amendment has been put before the Committee largely on account of the professional musicians who are unemployed. Any movement or suggestion on behalf of the unemployed always, of course, meets with a ready response in every quarter, but I would like to direct the attention of the committee to another phase of this problem. We are going forward into a new age in which, obviously, we must develop the arts to a degree that we have never tried to do before, and we must put the performance of the arts within reach of as many people as possible. At the same time as we are moving forward to that new age, however, we see on all hands mechanical devices being invented which tend to discourage people from developing the art of performing for themselves. If we frame our taxation without regard to the duty of encouraging people to play instruments for themselves rather than to listen to broadcast performances, we are failing to meet the requirements of the age in which we live. If we can give a greater outlet to those who seek to earn their livelihood by musical performance by making a concession of this kind without an undue cost to the nation, we should seize the opportunity to do it. It is for this reason that I am sure the Chancellor will give sympathetic consideration to the Amendment on a
    216
    broader aspect than the financial aspect. We appreciate the great duties that he has to perform and the difficulties of the times, and we do not offer criticism where he feels that the financial situation will not permit the concessions which are being sought from him, but I would like to have the assurance that he does not consider these matters purely from the point of view of pounds, shillings and pence, but from the point of view of encouraging the larger things in our national life.
    4.56 p.m.
    Mr. HANNON: I would like to support the Amendment and to join in the appeal to the Chancellor to consider the case for the musician who takes his part in conjunction with living players on the stage. The plight of the musicians in this country during recent years has been deplorable. We appreciate the concession which has been made by the Chancellor to the living stage, a concession which has evoked widespread appreciation throughout the country. Those of us who have contact with the stage in various ways have heard the warmest gratitude expressed for what the Chancellor did in his Budget. The musician, who has had an exceedingly hard time, is really an essential part of the representation made by the living stage for the edification of the public. While the Amendment may not present a practical proposition and may have to be dealt with by the Treasury in order to make it administratively possible, there is, I think, a real case for the musician to be considered in any concession made to the living stage.
    4.58 p.m.
    Mr. ANEURIN BEVAN: I hope that the Chancellor will be able to give favourable consideration to this proposal, and I am sure that if he does so he will have the support of Members in all parts of the Committee. The cost to the Treasury cannot be excessive, but the benefits to the musical community will be substantial and immediate, because a number of theatres, in order to be able to secure a remission of the tax, will immediately employ an orchestra. It might mean a fall in the revenue, but there would be greater employment among musicians. I do not think that hon. Members who have pleaded for this concession have pleaded for it on the ground simply that a remission of tax

    217
    will lead to an increase of employment, because I think that that argument is a bad one. The argument advanced for this Amendment is that this is employment of the kind which should be encouraged in the interests of orchestral music in Great Britain. It is an exceedingly bad thing that we should continually have our ears jangled with potted music. It ought to be universally appreciated that it is impossible to develop orchestral music unless people are accustomed to the exercise of musical instruments. In the same way that the theatrical art can only be developed in the theatre, so orchestral music can only be developed in the actual use of the instrument itself and, if the use of the musical instrument is retarded and depreciated, orchestral music must necessarily deteriorate. It seems to me, therefore, that there are very substantial reasons why the Chancellor of the Exchequer should sympathetically consider a proposal of this kind. I dare say hon. Members of all parties have received communications from time to time from their constituents many of whom have been thrown out of employment by the institution of some sort of mechanical device to provide music in theatres, and it is a real tragedy that people of artistic sensibility should have their careers frustrated because they have not the opportunity of carrying on their art in the one way in which it might be developed. I hope the Chancellor will give the Amendment the most sympathetic consideration, even if he is not able to accept it in the language in which it appears upon the Order Paper.
    5.2 p.m.
    Mr. CHAMBERLAIN: Hon. Members in all parts of the Committee can be assured that in this matter I have not been guided solely by questions of pounds, shillings and pence. That was proved by the fact that I made a distinction between performances in which living performers are engaged and other kinds of performances. The particular point to which the Amendment draws attention is one of some importance, and I know from my own personal knowledge and experience that, in the past, opportunities of taking part in orchestras employed either in theatres or in cinemas have been of very great benefit to professional musicians who have had a certain
    218
    number of engagements at concerts but who have filled in their time and very much added to their earnings by nightly employment in these small orchestras in houses of entertainment.
    Therefore, I have very considerable sympathy with the object of my hon. Friend, who desires to secure this employment for musicians as against the competition of mechanical instruments. But I am bound to say that I do not think the proposal is one which is likely to be effective or which can be defended on grounds of logic. There are quite a number of performances given on the stage where there is no musical accompaniment of any kind, neither orchestra nor mechanical performance. Are they to have a smaller reduction of duty than where there is an orchestra, and are you to say, "When you have in bagpipes or saxophones you will get another halfpenny"? The thing is not really logical, and I can see no reason why a theatre that employs an orchestra should be better treated than a cinema that employs an orchestra. It seems to me that my hon. Friend has not gone about the idea in the right way. If he really feels that you can, by an alteration of taxation, induce theatres to employ living performers in their orchestras instead of mechanical music, why does he not put down an Amendment to say that this reduction of duty shall not take effect unless there is an orchestra provided for any music that may be required?
    Mr. ALBERY: Would not such an Amendment be out of order?
    Mr. CHAMBERLAIN: I do not see why it should. At any rate, I am not the authority on that question. But if that be the sole object, to try to ensure that mechanical music shall not be used in theatres in place of living musicians, that seems to me to be a very much better way of going about it, and, if my hon. Friend thinks that he would have support for an Amendment of that kind, and discusses it with me, I shall consider it and see whether something of that sort can be done.
    Sir STAFFORD CRIPPS: It would have to be the other way round—provided that where mechanical reproduction of music was used there would be no remission.
    Mr. LOGAN: Do I take it that the right hon. Gentleman means that the words "both a stage play and" should be deleted and that it would apply only to a regular orchestra?
    Mr. CHAMBERLAIN: Perhaps we had better not discuss details. I think the general idea is quite clear.
    5.7 p.m.
    Mr. MABANE: I should like to ask the Chancellor of the Exchequer to bear this point in mind. If such a proposal as he has suggested were adopted, this might be the result. There are many stage performances now, revues and musical comedies, which of necessity employ orchestras. I do not think he would want to make an alteration which would really increase the advantages of a performance which of necessity employs an orchestra and put at a disadvantage a play possibly of a much better character. [Interruption.] I think the point is a sound one. Suppose a panatrope were to play an overture. If I understand the proposal rightly, such a performance would not secure the concession. If that be so, that would simply be giving an additional advantage to a kind of performance which I am certain is not intended to benefit by the proposal of my hon. Friend behind me.
    5.9 p.m.
    Mr. ALBERY: I said in moving the Amendment that I was aware that in its present form it would probably not be accepted. The Chancellor of the Exchequer, I am sure, is only too well aware of the great difficulty under which private Members labour in putting Amendments on the Order Paper. I am very grateful to the Committee for the discussion that has taken place and to the Chancellor for saying that he will give the matter further consideration. He asked whether I was likely to have much support for a proposal to debar the living theatre from getting the reduction unless there is a living orchestra also. I am not sure where he imagines that that support is to come from. It will naturally not come from the theatres. They have only put in the mechanical orchestra in a period of bad times when they were losing money in order to try and make ends meet. I do not think there is any management in London which itself prefers a mechanical
    220
    orchestra to a living orchestra, so if any support is likely to be forthcoming it will obviously be forthcoming from some other direction. I had not in mind in moving the Amendment any intention of discussing anything that had anything to do with the profits made by theratres. I only had it in mind to direct attention to the case of musicians who are out of work in consequence of the present state of affairs and the damage that that is doing and will continue to do to music. I trust that the Chancellor will consider the matter on those lines, and I have no doubt that he and his expert advisers can find some solution which will help us. In the circumstances, I beg to ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.
    Clause ordered to stand part of the Bill.

    CLAUSE 2.—(Withdrawal of rebate on heavy oils used for road transport.)
    5.11 p.m.
    Mr. ORR-EWING: I beg to move, in page 2, line 30, to leave out from "thirty-five," to the end of the Sub-section, and to insert:
    "the rate of the rebate to be allowed under sub-section (3) of section two of the Finance Act, 1928, as amended by section six of the Finance Act, 1933, shall be reduced from sevenpence to fourpence per gallon in respect of all heavy oils used as fuel for mechanically propelled vehicles constructed or adapted for use on roads."
    The effect of this Amendment would be that the duty upon Diesel oil would only be an additional 3d. to the existing penny, making in all 4d. per gallon as against 8d. per gallon in the Bill as it stands. I should like to remove one or two mistaken impressions which might prejudice the minds of the Committee in considering the Amendment. In the first place, I have no connection whatever with any firm manufacturing Diesel engines or with any firm carrying on a road transport business. Any interest that I have in these industries is largely owing to early engineering training and to the fact that I am interested in an industry which supplies certain ingredients that are used in Diesel engines, but far more largely in petrol engines and even more largely in steam engines. There is another mistaken impression which has rather prejudiced the mind of some hon. Members in considering the whole of the Diesel oil problem. It is

    221
    sometimes assumed that the enormous lorries and passenger vehicles that are on the road would not have been there had it not been for the arrival of the Diesel engine into the world of production. That is not the case. These enormous vehicles were already there in the days when the petrol engine was the only engine capable of pulling these big weights, and, even if the Diesel engine were obliterated from the roads by this tremendous tax that it is now proposed to impose on its fuel, these trains and trucks would continue to run on our roads propelled either by steam or by the petrol engine.
    We already have my right hon. Friend's assurance that he does not mean to attack the Diesel engine through his taxation, but I cannot avoid thinking that it is a most desperate and fierce attack upon this particular industry. We are told that the tax is to be imposed to protect the revenue which the right hon. Gentleman has been in the habit of obtaining from petrol. I feel sure that he would not wish to imply that as yet he has actually lost any revenue owing to the arrival of the Diesel engine. That is obviously not the case, because we see that this year he is still budgetting for an additional £1,000,000 of revenue from the petrol duty. I might, perhaps, put it more fairly this way, that I take it that he thinks that his revenue derived from the tax on petrol may eventually be cut into with the expansion of the Diesel engine. Therefore, no definite loss has yet been sustained by the Chancellor through the arrival of the Diesel engine. My right hon. Friend, in attempting to reassure the House about the imposition of this additional duty, stated that so far from orders having been cancelled as a result of the announcement that this duty was to be increased, they had actually increased.
    After that statement certain inquiries were made by the industry, and I should like to tell the Committee the facts of the situation. Sixteen firms manufacturing Diesel engines were asked what would be the effect of the proposed new duty. Out of those 16, six reported a definite cancellation of orders, and some of the others reported that they had only been able to retain orders by giving financial concessions of different kinds, either by lowering the price or spreading over the payments; but every
    222
    single one of the 16 firms, who cover the whole of the firms manufacturing light Diesel engines, reported a serious falling off in light Diesel engine manufacture. In one particular case a firm, 23 per cent. of whose business was normally in this class of work, reported that since the announcement it had fallen to 7 per cent. I feel certain that when my right hon. Friend made his statement as regards orders he was not in possession of these facts, and did not know that the effect on the industry would be as serious as it has proved to be, and I hope that now that he knows the facts he will be the more willing to reconsider his proposed taxation. I hope he will be able to tell the Committee exactly how far the industry has been consulted and what steps have been taken to discover the real effect of this increased duty.
    The reasons for the rapid effects which I have indicated are not difficult to imagine. The effect of the increased duty is confined to one type of user only, the user of road vehicles, and when one remembers that the present price of Diesel oil is round about 5d., or between 5d. and 5½d., a gallon, after the penny duty has been paid, but will by this proposed addition of 7d. be raised to 1s. or 1s. 0½d., a rise of 125 per cent., one can imagine what consternation has been caused among the users of this particular class of vehicle. It is not only a question of the running expenses, though that affects all the running contracts they have for haulage and the carriage of passengers; its most tragic effect is seen in the case of the small proprietor. Only four days ago I received a letter from a small garage proprietor in my own constituency, who was unaware that I was going to raise this question. He reported that he had bought a Diesel engine to re-engine a lorry, at the price of £600, and he asked me how I thought he could possibly afford to continue his hire purchase payments in face of this sudden and unexpected addition of 125 per cent. to the cost of fuel. It is true that by the reduction of the road licence brought about under the present Budget there has been some mitigation of the increased cost of running these engines as a result of the proposed new oil duty, but I must admit that I cannot follow my right hon. Friend when he speaks of the advantage which the Diesel engine

    223
    still holds over the petrol engine. I do not think that when presenting his figures, which were based on a mileage of some 15,000 miles a year by a Diesel lorry as compared with a petrol lorry, he can have included in his calculations any recognition of the fact that the prime cost of the Diesel engine is higher than that of the petrol engine.
    Even if there should be some slight advantage to the Diesel engine as compared with the petrol engine, after this new duty has been imposed, I maintain that far more than a slight advantage is needed to encourage people in business in this country, and in particular those associated with engineering, to adopt any new form of mechanical invention. I have for many years been associated with industries in which new inventions are perpetually being produced, some of them brilliant ones, and the time it takes to persuade any branch of the engineering industry seriously to look into even the most excellent, practical—even brilliant—invention is really rather formidable. If we are to encourage the use of what is acknowledged to be the more efficient type of engine, we must make the advantage of using it as clear as we possibly can, and as clear as the country can afford to allow us to make it, and even my proposal to halve the additional burden on the fuel would, I think, provide only just sufficient advantage to encourage the use of this great advance in engineering. I do not think any Member of this House could blame the industry for the fact that the Diesel engine costs more than the petrol engine. The heavy cost of research would alone be enough to explain at least some of the difference, and there is the fact that the market is at the present moment comparatively small, and the further fact that progress in the development of these engines has been very rapid and has not enabled manufacturers to standardise production in the way that an industry would like to do. There is the fact, also, that new alloys and new metals have to be used, for highly technical reasons; the high temperatures generated in these engines have called for an immense amount of experiment and there have been expensive failures.
    The industry, though young, is amazingly progressive and amazingly keen. Only so lately as 1931 there were fewer
    224
    than 200 Diesel engine vehicles on the roads of this country, but at the end of 1934 there were more than 7,000. That will show that at least some progress has been made. The actual capital in the industry which is to be burdened with this taxation is not as yet colossal, but the time is very near when it may seek to increase development and expect support. Again, the numbers engaged are not as yet large, but they have been steadily increasing, and were increasing very rapidly right up to the time when the Chancellor announced this additional taxation. At present some 6,000 people are directly employed in the industry. I ask whether this is the time to attack this industry or to burden it in this particular way—just when it was beginning to show even more rapid development than it had shown before. I would go further and ask whether this industry should have been attacked or so burdened at all.
    I am sure that every hon. Member must recognise the difficulties that lie before any Chancellor of the Exchequer in these days, but even a wild and savage beast, lurking in the jungle, will wait and consider for some time before deciding on his victim, and will select the most toothsome with some care. We all know that my right hon. Friend is no wild and savage beast, but even the fishermen of the sea are controlled in the matter of the mesh of the nets they use in order that the sea may not be robbed of future adult fish. Though the Chancellor is not a fisherman of the sea, I feel sure that as a fisherman in other waters he must at some time or another have so skilfully cast his fly that some fish has taken it. But when he had examined it in his landing net, and found, perhaps, that it was not quite so big a fish as he would have liked to see there—not an unworthy fish, but one not fully grown—he has carefully removed the fly and, steadying that fish in his hands, has seen it flicker back to life and dart back to the deep pool, and possibly he has smiled to himself as he said, kindly, "Another day, perhaps!" I hope this industry may have a little consideration in that light when we come to the question of taxing it. It is by no means a fish, but is a very live industry, which is providing a very good opening for every kind of metallurgical research. To hamper that research at this stage

    225
    will have a very serious effect not only on the industry itself but on other industries which are already benefiting by the research work done in the manufacture of Diesel engines. An industry which can reduce the weight in pounds per horse-power, as in the case of the Diesel engine, from 41 lb. per horse-power only five years ago to 13 lbs. at the present time, is making very considerable progress.
    There is another aspect of the matter. At present we are subsidising some of our ships, and it seems almost an anachronism that we should attempt to hinder the production of an engine which may form and which should form, and I should say which must form, part of the cargoes of those ships to be exported to other lands. In the export trade the competition in this particular class of engines is terribly keen. It is more particularly keen in the lighter classes of engine, and it is the lighter classes which will be most hit by this proposed new taxation. While we in this country are considering whether an addition of 125 per cent. should be made to the cost of the fuel of these engines, in Germany, from the 1st April this year, there has been a reduction of 66 per cent. in the tax on all goods vehicles and other vehicles, Diesel engined or petrol engined, of a weight of more than two and a-half tons. It is a rather alarming prospect, because Germany is one of our keenest, shrewdest and most advanced competitors in this field. We in this country were late in the development of the Diesel engine for either heavy work or light, and we have still much ground to make up. That is another reason against the tax upon this industry.
    Let the Committee be under no misapprehension as to what they will lose if they hamper and overburden the industry and interfere with its development. There is no denying that the engineer has produced a very efficient engine in the Diesel engine, which uses a fuel possessing the tremendous advantage that it is practically non-inflammable. There are no vital electrical parts of the engine which can be affected by climate, and that has a reaction upon our export trade, especially to the Dominions and Colonies. The exhaust fumes from the engine are non-poisonous, which is also an advantage in crowded and narrow streets. Especially when we
    226
    may have to produce large numbers of tanks for the defence of our country is it of advantage that this engine should be available which will not poison the tank crews working in such confined spaces. Equally for marine work this engine would be available later on, after being developed upon the road. All these are very real advantages, not only in the carrying of passengers and goods, which can be transported far more cheaply, but in the advance of civilisation as a whole. I cannot see how any man has the right to suggest that at this stage of development of our engineering a brake should be put, not only on the production on a particular type of machine, but on something which will improve the life of the people of this country. It cannot be denied that heavy taxation would have that effect. I feel strongly that we are disappointing and cutting off a very live young branch of one of our oldest industries. New industries are like young trees, inter-planted and under-planted among the strong oaks which have built up our reputation. We cannot cut old timber from young trees. It is only fair that we should give encouragement and help to the young industries, in order that they may be developed for the use of future generations.
    5.34 p.m.
    Mr. GUY: I wish to support the Amendment, which has been moved with much appropriate argument and apt illustration by my hon. Friend. He covered the ground so fully that little more needs to be said. I would like to anticipate one argument which the Chancellor of the Exchequer may use in his reply. The right hon. Gentleman has to meet a case, because, on the face of it, the increase of duty on heavy oils from 1d. per gallon to 8d. per gallon is very drastic, without some justification other than has already been given in previous debates. The Chancellor of the Exchequer is the last word in sincerity and fairness. He has said that the increase has been proposed in order to equalise the duty with the duty on the lighter hydrocarbon oils, generally known as petrol. As my hon. Friend has pointed out, although a certain concession on the heavy oils duty has been given by a reduction in the vehicle duty to the same level as that imposed upon petrol vehicles, that advantage has been more

    227
    than cancelled out by the increase in the fuel tax.
    If the Chancellor says that this is an equalising duty, certain factors must be kept in mind. My information is to the effect that the heavy oil used in the Diesel engine gives rather a larger mileage per gallon, and, therefore, assuming that the cost is the same as petrol, the running costs in fuel alone are so much less per mile. My information is, however, that the initial cost of the Diesel engine is substantially heavier than that for the petrol engine, and that the additional cost amounts on the average to £150. Heavy maintenance charges must also be taken into consideration in relation to the Diesel-engined vehicle. That fact is not to be wondered at, because the Diesel engine is almost in its infancy and naturally has not been brought up to the same pitch of efficiency and reliability as the petrol engine. Considering all these factors, one is led to assume that if the tax be fixed at 8d. per gallon on the heavy oil, it will not be an equal tax but a heavier tax than that imposed upon other vehicles. The tax of 4d. a gallon proposed in the Amendment, would, on the other hand, be fair and equal.
    Even though I were wrong, and 8d. a gallon still left a certain advantage to the Diesel engine, the Amendment could be fully justified. My hon. Friend has stated with force the contention that encouragement should be given to the Diesel engine. Let me give an illustration. I have been informed by a large omnibus company in Scotland that during the last year they changed over from the petrol-engined omnibus to the Diesel-engined omnibus. That cost them a considerable sum in capital outlay. They found that with the duty of only 1d. per gallon on fuel they were able to operate on certain thinly populated routes, and to provide a service at fares which was a boon to many low-paid workers, who were helped to travel to and from their work. The company will now revert to the petrol omnibus. The only alternatives would be to raise the fares, or to give up the services that they are at present providing in the district, and which are in many cases being run at a loss.
    It may be said that in the event of the users of Diesel engines on the roads of the country using home-produced heavy
    228
    oil, no duty would be payable, and the tax would be remitted. I have made inquiries of the Ministry of Mines, and I am informed that, although there are a number of potential sources of supply of heavy oil, the supplies are not immediately available, and, although there might appear to be an inducement by the complete rebate of the much heavier tax in order to stimulate those sources of supply, if the number of users of the Diesel engine should diminish in the meantime and the market for the Diesel engine should be reduced, that stimulus would tend to disappear, and there would not be an incentive to develop supplies of home-produced oil. If the duty were reduced to 4d. per gallon, the incentive would remain and if the supply of home-produced fuel were stimulated it would confer considerable advantages. I trust that the Chancellor of the Exchequer will very carefully consider the possible adverse effect of this very heavy duty on the industry manufacturing Diesel engines and upon the users of Diesel engines, and that he will try to see his way to accept the Amendment.
    5.44 p.m.
    Sir P. HARRIS: I would congratulate the mover of the Amendment upon the very strong case he built up and which he reasoned so eloquently and so persuasively. I could also appreciate from the right hon. Gentleman's clear Budget statement the reasons for the duty. Naturally the right hon. Gentleman desires to protect the revenue and to search for a large amount of money to meet the expenditure of the country. Every ingenuity is used in that search, and the Chancellor of the Exchequer is inevitably led to attack first this industry and then the other. Industry, on the other hand, with remarkable ingenuity, tries to escape the burden of tax by developing new methods and substituting new machines for old. Unfortunately, new taxes introduce uncertainty, and, as the mover of the Amendment quite rightly said, discourage enterprise and initiative and experiment in invention.
    I have a vivid memory of the way in which the motor-car industry of this country has been handicapped in competition with other countries because of our method of horse-power taxation. Year after year we tried to persuade the Chancellor of the Exchequer of the day of the necessity for dropping our old

    229
    system of taxation on the basis of horse-power, because it gave a premium to foreign countries that were able, like America, to offer high horse-power at a very much lower price than we could, on account of our horse-power tax. After years of agitation, the Revenue Department were persuaded of the error of their ways, and at last some concession has been made in that direction. Now we see the same kind of thing being done to an infant industry. It is true that the industry of manufacturing Diesel engines has been encouraged by the fact that it could sell its power more cheaply than its competitors, but the premium given to the Diesel engine was undoubtedly too high, as the Mover of the Amendment admits. But surely it is hard to increase at one jump a very small tax to a very high one which comes near to being penal.
    I suggest that from the revenue point of view this Amendment is a reasonable one. It admits the necessity for some increase, but expresses objection to the tremendous increase that the Chancellor is now imposing. If in this new industry we are to be able to compete with foreign countries—and a very strong case has been made with regard to what is being done in Germany—if this new industry is to be encouraged to make the export of Diesel engines a thorough commercial proposition, the method of the Amendment is the right way to achieve that purpose. If the industry is killed completely by making the tax too heavy, the revenue will not get much advantage. It will lose in other directions. It will lose ultimately in Income Tax. Naturally, the industry will first explore the home market, and if the buyers of these engines are not to have the advantage of cheap fuel, which was the great inducement to them, obviously the home trade will suffer, and the revenue will suffer by loss of Income Tax. I think the Amendment is reasonable, and ought to be accepted.
    5.48 p.m.
    Mr. GLEDHILL: In supporting the Amendment I want to speak particularly on the question of local transport. In my constituency the local transport undertaking is run by a joint committee consisting of representatives of the railway companies and of the local authority. They have been gradually scrapping the trams and changing over to omnibuses,
    230
    and, particularly in the last two years, they have purchased a number of Diesel-engined omnibuses. The extra cost that will be entailed upon them by the imposition of this additional tax will be in the region of from £6,000 to £7,000 a year. The right hon. Gentleman formerly had some experience at the Ministry of Health. He will know that the Ministry of Health is persuading local authorities to rehouse their people, and, in doing so, to go outside the district as far as is possible. Obviously, if a housing site is some distance out, the people must be provided with cheap transport to and from their work, and in the Diesel-engined omnibus the local authority has its opportunity of providing cheap transport. With this extra imposition, however, that benefit will be lost, and therefore I suggest that that in itself represents a change of policy on the part of the right hon. Gentleman.
    Another point which should appeal to him, as a former Minister of Health, and which I think has not yet been made, is that the percentage of carbon monoxide in the exhaust fumes is only 0.1 in the case of the Diesel engine, whereas in the case of the ordinary petrol vehicle it is as high as 8 per cent. As regards the actual benefit to the Treasury, in the present year at any rate I do not think the benefit will be very great in comparison with the disturbance that will be caused in the industry generally. When the right hon. Gentleman was good enough to speak in my constituency in December, 1933, he listened to a, number of suggestions with regard to the taxation in his forthcoming Budget; and, whether it was due to those suggestions or whether it was due to suggestions from higher quarters, he was able very largely to meet us in his Budget of 1934. I suggest to him that he might like to carry on the good work and meet us again by accepting this Amendment.
    5.51 p.m.
    Captain STRICKLAND: I hope that the Chancellor of the Exchequer will be able to see his way from a business point of view to making some concession by way of reducing the very heavy additional impost which he proposes to place upon what must be regarded as one of the most promising of the recent developments in road transport. I think that perhaps the Committee will be able to

    231
    see what a severe blow is being dealt, possibly unwittingly, at the industry, by considering the tax itself. It is proposed to place an additional tax of 7d. per gallon on the fuel oil used by the Diesel engine. I suppose that even an optimist would not claim that the Diesel engine would do more than 14 miles to the gallon, so that a tax of 7d. per gallon on its fuel oil must necessarily mean, without any equivocation whatever, an additional ½d. a mile on the running cost of those engines which run on Diesel oil. To take a concrete example, the London Passenger Transport Board, which has a very large fleet of Diesel-engined vehicles, has either been making, during the last 12 months, an extortionate profit out of the passengers whom it carries, or, conversely, it will be compelled to raise its fares in the City of London in order to meet this additional tax which is to be placed upon it. I cannot think that the London Passenger Transport Board has been making extraordinary profits on its undertaking. No doubt my hon. Friend the Member for Central Wandsworth (Sir H. Jackson), whom I see in his place, could inform us whether that has been done. This, however, is a sudden burden placed on an industry with very little notice. It might be justified in the long run, but a sudden imposition of this nature placed on an industry must have disastrous effects. I have been speaking of the passenger side, but when one considers the forward contracts that are made for carriage in goods vehicles on the roads, one can see what a disastrous effect the imposition of this tax may have.
    There is one point that has not yet been touched upon, and I would venture to ask the Chancellor whether he would consider it and give us a reply upon it. On what does he base his statement that a loss of revenue has occurred as a result of the use of the roads? In making his Budget statement, he said that he had lost revenue. If he has lost revenue, I wonder if he could supply us with the exact quantity of Diesel oil that is used by passenger and goods vehicles in this country, as compared with the quantity that is used for stationary engines. I speak entirely subject to correction, but I think he would find that the major part of the Diesel engine oil used is not used
    232
    by the road users, and I cannot understand why there should have been this concentration of taxation on one little section of industry, namely, the road transport and passenger section. An additional tax placed on the goods transport of this country is an indirect tax on the industry and trade of the country.
    When one examines the Chancellor's statement that he has lost revenue, one wonders if it is really strictly accurate. I think that what he had in mind was that he had not realised quite as much as he thought he was going to get out of this taxation. The figures show that there has been a continuous rise in the yield of the fuel tax in this country since the year 1928–29, when it, yielded £12,900,000. In the five following years it was respectively £15,043,000, £15,900,000, £29,277,000, £35,310,000 and £40,500,000, while last year it was £42,323,000. Therefore, the right hon. Gentleman cannot claim that he has actually lost revenue, but simply that he has not gathered into his coffers from this particular source as much as he estimated. If that be the argument, surely it should have been applied in previous years, but with regard to the previous year the statement made was as follows:
    "The Budget estimate of revenue for 1933–34 was £37,750,000, including £2,000,000 from the duty on heavy oils, but making no allowance for the exemption granted to vessels engaged in home waters, which was estimated to cost about £100,000 a year. The actual receipts were £40.4 million, including £2¾ million from the duty on heavy oils. The surplus may be attributable, at least in part, to a reduction of 2½d. per gallon in the retail price of petrol in May, 1933 (only partially offset by the restoration of 1d. per gallon in the following November), to a fine summer, and to the improvement in trade and industry in general which occurred during the year."
    That is the way in which the Chancellor explains it when he has a sum coming in in excess of what he estimated, but when the sum coming in is less than he has estimated he picks on road transport and says that it is owing to conversion from the petrol engine to the Diesel engine that this revenue has been lost. I venture to suggest that there has been no loss of actual revenue, but a gain every year from this source of taxation, and I ask the Chancellor, in all fairness to this industry, to give his consideration, first, to the question whether a jump from 1d. to 8d. is not too serious a blow to deal at an industry in one fell sweep; and,

    233
    secondly, whether, if he has in mind, as may be the case, a desire to put the petrol engine on the same footing as the Diesel engine, the obvious way would not have been to reduce the tax on the petrol engine and make it equal to the Diesel engine in that way, instead of by raising the tax on Diesel oil.
    I hope the right hon. Gentleman may be able to meet us in this matter. The industry is a growing one, which is providing increasing employment in this country and which, I believe, will be of the greatest benefit, not only to those workers who require transport from the suburbs of our cities to their work at the centre, but also for the conveyance of goods about the country. I think it would be well, also, to remove any sort of impression that the road industry has been selected as the one industry to receive penal treatment in this year's Budget. Therefore, I would ask the Chancellor of the Exchequer to give this matter his serious consideration, and see whether he cannot accept the Amendment which has been moved in such reasonable terms, and which, I am sure, will be supported by Members of all parties in the House.
    6.0 p.m.
    Mr. MACQUISTEN: This heavy duty is an attack upon transport. It is going to hinder it. Transport, I believe, is civilisation. What is the problem which besets us as a result of the industrial age? The concentration of population due almost entirely to the railway companies which congested the population together round the industries and caused the building of these great towns of which we hear so much with regard to slums. The hope of the people now is to get the population dispersed, and how can you do it except by cheap transport? You have enormous railway interests which represent much less capital and far fewer employed people than the motor industry, but they are concentrated and of great power. They are trying, like the old lady who tried to keep back the tide, to sweep back the motor industry. This is a tax upon the Diesel engine, to which I look with hope at least to see the population in much happier circumstances dispersed over the countryside. That is what I hope for, and here we have the National Government proposing to place this tax upon it. If the Amendment is carried it will mitigate the blow. It is far too soon to tax the industry
    234
    in this way. The right hon. Gentleman might have waited until the chicken grew up before he made a boiling fowl of it. It is not grown up. Only last week I was travelling in one of those magnificent omnibuses of 130 horse power on the West Highland service on climbing hills over which no railway would ever attempt to tunnel. The population is being taken out to those parts.
    Look how the population is being dispersed all round our great towns. It is because of the improvement of our transport. I hope the time will come when no one will think of living in tenements and in the great piles which are put up in our cities, and when every man will be living in a cottage and have a garden. This will be brought about through road transport, and nothing else. You will never do it by means of the railway. It only congests and adds to the social evil. I am looking at this matter from the point of view of the public good as well as the industry itself. We want to see the industries stimulated and prosperous, but industries must be looked at from the point of view of whether they serve the public good. We must not take the narrow view. That is where, I think, the point of view of Members of this House with regard to the railways is wrong. We do not want to see railway capital go awry and railway workers unemployed, but the question is: Do they serve the public as well as something else?
    The DEPUTY-CHAIRMAN (Captain Bourne): The hon. and learned Member had better keep to the Amendment which is before the Committee.
    Mr. MACQUISTEN: I am sorry if I have digressed. This tax is going to hinder one of the healthiest and most growing industries we have, and one which, if it were allowed to progress unhindered would develop and do more to mitigate all the evils with regard to health, housing and unemployment than any other industry. I deeply regret that it has been so heavily struck by this Budget, and if the tax were reduced to a more moderate but still extravagant figure, the industry would have some chance of developing, and its strength would become so great that the revenue derived from it would be adequate for the needs of the Chancellor. The proposed tax is no less than £8 per ton.

    235
    The Amendment reduces it to £4—a huge tax. How the railways would complain of a tax of even £1 on their coal! There has never been any industry taxed so much as the motor industry, and this is just about the last straw in the taxation of the most prosperous and virile industry in this country.
    6.6 p.m.
    Mr. CHAMBERLAIN: My hon. and learned Friend holds, like many Scotsmen before him, that the highest form of civilisation is that which provides you with means of getting away from where you are and finding yourself somewhere else.
    Mr. MACQUISTEN: Boswell said to Johnson:
    "The reason why we Scotsmen come to England is that it is difficult to make a good living among other Scotsmen; so we come down among the softer races."
    Mr. CHAMBERLAIN: I would remind my hon. and learned Friend of the words of Dr. Johnson:
    "Depend upon it, the noblest prospect which a Scotchman ever sees is the high road that leads him to England."
    If it be true that transport is the highest form of civilisation and that taxation is an attack upon it, his argument applies to all taxation of transport as much as to the particular tax the subject of this Amendment.
    Mr. MACQUISTEN: There is no tax on roads.
    Mr. CHAMBERLAIN: A tax on petrol, at any rate. It is just as much subject to the strictures of my hon. and learned Friend as a tax upon heavy oil. The Amendment with which we are concerned is designed to reduce the tax I was proposing to put upon what is known as Diesel oil when used in road vehicles, and my hon. Friend the Member for Weston-super-Mare (Mr. Orr-Ewing) who moved the Amendment brought forward considerable weight of argument in support of his thesis. He made a very good case, but I am bound to say that he made it by suppressing those parts of the case which told against him and only emphasising those parts in his favour. I know that that is the device of all advocates and one which is very frequently successful, but it is generally necessary to view the case from both sides.
    236
    I should like to remind the Committee of some of the points on the other side from that which my hon. Friend mentioned in moving his Amendment. He described this tax as a fierce attack upon a particular industry, the result of which, whatever the intentions of the author, would be not only to check its development, to throw people out of work and to sterilise the capital which had been put into it, but altogether to hinder its further development. If the Diesel engine industry stood alone there might possibly be some point in the observations of my hon. Friend, but we cannot consider the Diesel engine industry alone. This is an industry which is in fierce competition with another industry, namely, the industry which produces petrol engines, and what the Diesel industry has been doing during the last few years is to make remarkable progress at the expense of the petrol engine industry. It is in relation to that competition that I have to consider the position. My hon. Friend challenged my statement that in consequence of the Diesel engine I was losing revenue, and he justified his challenge by saying that the revenue from petrol continued to increase.
    My hon. and gallant Friend the Member for Coventry (Captain Strickland) adopted a somewhat similar argument. He seems to think that the way I made my calculation was to compare my estimate with the actual revenue that was produced, and that if my estimate proved to have been in excess of the actual yield, I at once picked out the Diesel engine as the cause of the trouble. That is not the way I made my calculation at all. I made it on these simple facts. I took the amount of Diesel oil used for the purpose of road vehicles as near as I could get it. I knew how much that would be at the rate of 1d. a gallon. I estimated the equivalent amount of petrol which would have been required for the same purpose, and I knew how much that would be at the rate of 8d. per gallon, and the difference represented the loss of revenue I had sustained by reason of the fact that Diesel oil had cut out petrol.
    Captain STRICKLAND: Will my right hon. Friend forgive me for asking him if he keeps a separate record of the heavy oil used for road vehicles as distinct from industrial use?
    Mr. CHAMBERLAIN: No, Sir, I do not keep a separate record for the purpose, and I have no means of doing so, but that does not exhaust the resources of civilisation. What I did was to apply to the oil companies who do keep a record of the kind and they were good enough to supply me with the figures. My hon. Friend may perhaps be interested to know the figures which they gave me of the oil for use in Diesel engines. In 1932 the amount was 2,601,000 gallons; in 1933, it had risen to 8,275,000 gallons, and in 1934 to 20,907,000 gallons. Hon. Members will see that the increase in the amount of Diesel oil used for this purpose was going up by leaps and bounds, and when my hon. Friend who moved the Amendment said, "Is this a time to introduce taxation of this kind?" it seemed pretty clear to me that if this is not the time, there never will be a time, because, as my hon. and learned Friend said just now, the Diesel engine alone will soon get so strong that there will soon be no doing anything with it at all.
    Mr. MACQUISTEN: I did not say that.
    Mr. CHAMBERLAIN: Perhaps I added a little to what my hon. and learned Friend said.
    Mr. MACQUISTEN: The right hon. Gentleman has turned it upside down.
    Mr. CHAMBERLAIN: That is the conclusion I made from his observations.
    Mr. MACQUISTEN: My argument was that it completely outstripped the petrol engine and that it would be of great benefit, and there would no longer be people burned to death.
    Dr. O'DONOVAN: They will still be run over.
    Mr. CHAMBERLAIN: To say that I did not get as much revenue as I might have got from these sources does not seem to offer me much consolation, because they come to very much the same thing in the end. As a matter of fact, I estimated that in 1934–5 the loss was £1,300,000, and in another year, if the use of the Diesel engine continues to grow, it will be very much more, and I am not able to afford a loss of revenue of that character. But when hon. Members talk so glibly about the development of the Diesel engine, let them remember that it is not a natural develop-
    238
    ment at all. It is an artificial development which has been created by the differential taxation between these two kinds of oil and spirit used in competition with one another. Petrol is taxed 8d., and Diesel oil is only taxed 1d. In addition to that, a gallon of Diesel oil will do one and three-quarter times as much as a gallon of petrol, and, it seems to me that the enormous advantage of the Diesel engine is largely explained in the tremendous increase in the figures I have given.
    I do not want, as I have said before, to cramp the development of a very fine piece of engineering work in the development of the Diesel engine, but I really do not see any particular reason why it should be, I might almost say, subsidised, or, at any rate, given such a tremendous artificial advantage as it has by this preferential taxation. Although it is quite possible to say that the thing should be really equalised, that is to say, that I should put up the duty not to 8d. but to a figure which would take account of the additional mileage which each gallon of Diesel oil would cover, I have been content to equalise the actual figure of duty of 8d. in each case, and to equalise at the same time the licence duties. I still believe the Diesel engine has substantial advantages over the petrol engine for certain kinds of road vehicles which will enable it, if not to go on increasing its use at the pace it has been doing under this artificial stimulus, at any rate, to follow it up and to be adapted to the needs of the road in a perfectly normal and natural way. I cannot accept the Amendment, and I hope that after this explanation the Committee will see that there is no reason why I should.
    6.15 p.m.
    Mr. HOLDSWORTH: Those who are interested in all forms of road transport must be exceedingly disappointed with the Chancellor of the Exchequer's reply. If there is one thing more than another which appeals to reasonable men it is that there should be a sense of equity in all forms of competitive industry. The Chancellor of the Exchequer has based his case upon that particular principle, and I think that none of us would disagree with him in that respect. Certainly, I should not defend for one moment the idea that one industry should succeed at the expense of another. I agree with the hon. and gallant Member

    239
    for Coventry (Captain Strickland) when he said that the correct way to treat the matter was to lower the tax on petrol. Some of us who are interested in the development of the transport industry feel the tremendous cost put upon industry in general in this way. If we could calculate the cost from the raw material to the finished product of the terrific taxation on the transport industry we should be extremely surprised. My point is that there is a very unfair burden put upon this particular industry. Why should we single out one form of industry to bear a taxation of between £70,000,000 and £80,000,000 a year?
    The DEPUTY-CHAIRMAN: We are not discussing the general taxation on transport.
    Mr. HOLDSWORTH: I realise that, but I submit that there is no ground for the Chancellor of the Exchequer refusing the Amendment. He ought to have brought things into line by reducing taxation on the other side. I would emphasise the point made by the hon. Member for Halifax (Mr. Gledhill). The Bradford municipal undertaking, so far as transport is concerned, has been going through a very difficult time for a number of years. There had to be a rate to cover the loss in one particular year, but after putting on the road omnibuses run by Diesel engines we turned that loss into a profit of £3,000 during the last complete year. The putting on of this particular duty has brought down that profit to a few pounds. The extra cost of this levy on the Diesel engine has cancelled out the profit that we had succeeded in making. I hope that those who believe that this branch of the transport industry is suffering a grave injustice will carry their belief into the Division Lobby and vote for the Amendment.
    6.19 p.m.
    Mr. ORR-EWING: I feel some sense of disappointment in the reply given by the Chancellor of the Exchequer to what I looked upon as a reasonable proposal. I had hoped that he would have answered my question as to whether he had consulted with the industry and what information he had got from it as to the effect of his original proposal. I would ask now whether he would be prepared, without pledging himself in any way to alter the original proposal, to con-
    240
    sult with the industry in order that he may be made more fully conversant with the effects of the proposals in the Bill, between now and the Report stage. I would not ask him to give any pledge of what he would propose to do after receiving that information, but I would beg him to take into consultation those whose livelihood depends upon the existence of this industry.
    There is one further point to which I would call attention, and that is that his argument was based rather on the assumption that the Diesel engine industry and the petrol burning engine industry were in direct cut-throat competition in every case. As a matter of fact, the largest manufacturers of Diesel engines are also manufacturers of petrol engines, and they are developing the Diesel industry beside their existing petrol engine industry. I would once more beg the Chancellor of the Exchequer to get into touch with the industry before the Report stage.
    Amendment negatived.
    6.21 p.m.
    Captain WATERHOUSE: I beg to move, in page 4, line 41, at the end, to insert "or any vehicle being a road roller."
    The adoption of this Amendment would have the effect of exempting from the tax oil used by road rollers. The tax is levied on heavy oil used in mechanically propelled vehicles constructed or adapted for use on roads. I am not sure whether a roller comes under the category of a vehicle. All vehicles have a licence duty to pay. Even an agricultural tractor has to pay licence duty, but the road roller pays for no such licence. Therefore, from the start it is in a category by itself. Is it constructed for use on the road? One might ask when is a road not a road, and the answer might be when it is blocked by a Belisha beacon, or when it is occupied by a steam roller. The road roller does not of itself travel from area to area on the road, but only goes short distances from job to job. When it is going from area to area it is either put on a train or put on another vehicle. Certainly, when they are on the roads they leave them all the better for their passing. The road-making machine, from the Diesel engine which drives the compressor to the pneumatic drills in the quarry, and the Diesel engine which

    241
    drives the tar plant, are exempt from tax, and it seems absurd that the one machine without the use of which all this ancillary machinery would be useless, should be asked to pay this tax. It means compelling the roller to pay a tax in order to keep up the road which the roller itself is making.
    There is one further aspect to which I would draw attention, and that is the question of export. There has been a definite change from steam to Diesel in road rollers during the last two or three years. About 100 Diesel engines are made for the home market and no steam engines, while about 300 are made for export. If this tax is maintained on the road roller, there will be a change back to steam, and in that case the number of rollers which will be made for the home market will be decreased, and our competitive power in foreign markets will be lessened, with consequent decreased employment in areas where we most need it.
    6.24 p.m.
    Mr. DENMAN: May I press this Amendment upon the attention of my hon. and gallant Friend? The question is a simple one, and that is, in which category is the road roller put? Is it to be regarded as a road user or a road maker? The list of exemptions is clear. The machines that go to the making of roads are exempt. The excavator and the trench digger are exempt. They only pay the one penny Diesel oil tax, but when the road roller comes along it has to pay the eightpenny tax. That is an obvious anomaly. I trust that the Government will be able to meet us by accepting the Amendment.
    6.25 p.m.
    The PARLIAMENTARY SECRETARY to the MINISTRY of TRANSPORT (Captain Austin Hudson): The effect of the Amendment would be to put the road roller in the same category as agricultural tractors and trench diggers so far as this tax is concerned. We have to acknowledge that there is a special case for road rollers, and as I understand the financial effect would be negligible, we are prepared to accept the Amendment.
    Amendment agreed to.
    Clause, as amended, ordered to stand part of the Bill.

    CLAUSE 3.—(Reduced licence duties on heavy oil vehicles.)
    6.26 p.m.
    Mr. D. G. SOMERVILLE: I beg to move, in page 5, line 34, to leave out "and is in force on."
    In the case of a person who took out a quarterly licence and discontinues it during the summer, he will lose the benefit of any rebate, although he has every intention of renewing his licence in the third or fourth quarter of the year. Having paid for one or two quarters it seems unfair that he should not have the benefit of such payments and be entitled to claim the rebate.
    6.27 p.m.
    Captain HUDSON: I think my hon. Friend is misinformed as to the effect that his Amendment would have. The effect of Clause 3 is that after August, when the reduced rates come in for certain classes of vehicles, people who have taken out a licence for the whole period shall get a rebate equivalent to the reduced licence for the months after 1st August, that is for five months. It is obvious that the rebate could only be given to people who hold a licence at that time. Suppose somebody had surrendered his licence at the end of the half year, 1st July. When he did so, he would receive his rebate. If, say, his licence was £90, he would receive back £45, being half the money he had paid. If the words which the hon. Member proposes to leave out are deleted, he would also be entitled to a further sum equal to the rebate for the five months after August when this Clause comes into operation. He would already have had back his half, and he would be given a further gift to which he was not entitled in the least degree. I am sure that the hon. Member does not mean that, but that would be the effect of his Amendment. Under Clause 3 as it stands, with the words left in, every licence holder, if he surrenders his licence or if he does not surrender it, will be entitled to a rebate. We cannot accept the Amendment.
    Amendment negatived.
    Clause ordered to stand part of the Bill.

    CLAUSE 4.—(Amendment as to classification of certain vehicles for purposes of duty.)
    6.30 p.m.
    Mr. SCRYMGEOUR-WEDDERBURN: I beg to move, in page 6, line 31, at the end, to insert:
    "(2) Sub-paragraph (a) of paragraph four of the said Schedule which, as amended as aforesaid, charges the minimum duty on certain agricultural vehicles, shall have effect as if after the words 'farming implements' there were inserted the words 'a living van for the accommodation of persons employed in connection with the vehicle.'"
    The point raised by the Amendment is of small consequence, and need not detain the Committee for more than a few moments. As we have been reminded, the Finance Act, 1933, imposed a high rate of duty on mechanically propelled vehicles with a lower rate on those used for agricultural purposes. Paragraph 4 (a) of the Seventh Schedule of that Act, which my Amendment proposes to alter, reads:
    "Locomotive ploughing engines, tractors, agricultural tractors and other agricultural engines, which are not used on roads for hauling any objects except their own necessary gear, threshing appliances, farming implements, or supplies of water or fuel required for the purposes of the vehicle or for agricultural purposes—5s."
    Vehicles of the kind described in that paragraph are sometimes used to haul living vans for the accommodation of the persons employed with the vehicles, and at present it is doubtful whether these living vans are covered by the words "necessary gear," and, therefore, legally entitled to be exempt from the higher tax. The Amendment is designed to remove that doubt and to provide definitely that a living van shall be one of the appliances which a tractor may haul without being liable to a higher rate of duty than 5s.
    Captain HUDSON: There is a doubt as to whether the living van, if these words were not inserted, would not be liable to a tax of £12 or £20, and as this will be some small contribution to the agricultural industry, we are prepared to accept the Amendment.
    Amendment agreed to.
    6.34 p.m.
    Lieut.-Colonel ACLAND-TROYTE: I beg to move, in page 6, line 31, after the words last inserted, to insert:
    244
    "(2) Sub-paragraph (b) of the said paragraph four (which as so amended charges the minimum duty on vehicles designed, constructed, and used for the purpose of trench digging and other excavation work) shall have effect as if for the words 'and other excavation work' there were substituted the words 'or any kind of excavating or shovelling work.'"
    I understand that the Government are prepared to accept this Amendment, and also the other two Amendments in my name which are to some extent consequential. Therefore, I need not detain the Committee very long. There seems to be some distinction between a mechanical shovel and a mechanical excavator. The object of the Amendment is to put the mechanical shovel on the same basis as the mechanical excavator. The second Amendment, to provide that a snow plough shall not be deemed to be a trailer, seems an obvious Amendment to make, as is also the third Amendment, which alters the date so as to bring the Clause into operation in October rather than in January. There may be snow between October and January.
    Captain HUDSON: It has been held that the definition in the Finance Act, 1933, of a trench digger does not cover a mechanical shovel. These vehicles are not constructed or used for haulage purposes or for the carriage of goods. We feel, therefore, that the definition should be widened in order to cover these machines, and I am prepared to accept the Amendment.
    Amendment agreed to.
    Lieut.-Colonel ACLAND-TROYTE: I beg to move, in page 6, line 31, after the words last inserted, to insert:
    "(2) A snow plough shall not be deemed to be a trailer for the purpose of the said paragraph five."
    Captain HUDSON: The Government are prepared to accept this Amendment. It might be considered by the courts that a snow plough was a trailer and, therefore, liable to the higher duty. That is not the intention, and we are therefore prepared to accept the Amendment in order to make the position quite clear.
    Amendment agreed to.
    Lieut.-Colonel ACLAND-TROYTE: I beg to move, in page 6, line 32, at the beginning, to insert:
    "The provisions of this Section which relate to snow ploughs shall come into operation on the first day of October, nine-

    245
    teen hundred and thirty-five, and the other provisions of."
    Captain HUDSON: We feel that this is a more suitable date, because there may be some snow between October and January.
    Amendment agreed to.
    Clause, as amended, ordered to stand part of the Bill.
    Clauses 5 and 6 ordered to stand part of the Bill.

    CLAUSE 7.—(Exemption of educational cinematograph films from Customs Duty.)
    6.37 p.m.
    Mr. COOPER: I beg to move, in page 7, line 28, to leave out "concern or institution," and to insert "person."
    The Amendments to this Clause are purely drafting, and are necessary owing to the technicalities of legal language. Apparently, in the opinion of those best qualified to advise us, "concern or institution," would not include the individual or person, whereas the word "person" in legal language would include a concern or institution. The Amendment will make the position perfectly plain, and enable us to carry out the international obligations into which we have entered.
    Amendment agreed to.
    Five consequential Amendments made.
    Mr. COOPER: I beg to move, in page 9, line 16, at the end, to add:
    "and for the purposes of this section a person carrying on business shall be deemed to be established in the country in which his principal place of business is situated, and any other person shall be deemed to be established in the country in which he is resident."
    This Amendment is also of a drafting character. It is necessary for legal purposes to define exactly what "established" means, and the words proposed to be added will explain the position satisfactorily.
    6.39 p.m.
    Sir S. CRIPPS: What is the effect of the Amendment? Sub-section (2) says:
    "A cinematograph film produced by a concern or institution established in a foreign country shall be certified by the Board of Education under this Section if the Board are satisfied that the film is entitled to exemption from Customs Duty under the Convention for facilitating the international circulation of films of an educational character."
    246
    Suppose an American company which has its chief place of business in America produces the film in a British studio, is it the intention that such a film shall be deemed to be American and imported into this country, or will the fact that the film is produced in this country, irrespective of its being produced by a foreign company, make it a British film? I am not clear whether the intention is to make it a foreign film if it is produced here by a foreign company, or to make it a British film.
    Mr. COOPER: I do not think that that point has been closely considered. The object of the Clause is to make it plain that if a film is produced here, the nationality of the producers shall be decided by where their principal place of business is. In the instance quoted by the hon. and learned Member it would be difficult to say which was their principal place of business; perhaps it would be the place where the film was actually produced. But it is a legal point upon which legal opinion varies.
    Sir S. CRIPPS: Perhaps the Financial Secretary will look into that matter, because it obviously may raise difficulties in the future.
    Amendment agreed to.
    Clause, as amended, ordered to stand part of the Bill.

    CLAUSE 8.—(Customs Duty on rice in the husk.)
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    6.43 p.m.
    Mr. CHARLES BROWN: It is difficult to understand why this Clause has been inserted. We were informed on a former occasion by the Parliamentary Secretary to the Board of Trade that the reason was that it was demanded by the Government of India, and that it was in the spirit of the Ottawa Agreements. I imagine that this will be the contention which the hon. Member will advance to-day. The Ottawa Agreements encouraged certain people in this country to do certain things, but the change of attitude on the part of the Government has put these people into great difficulty. The vagaries of the Government are difficult to understand by those engaged in trade and industry. They do one thing at one time and then, later on, change their minds and do something entirely contrary to that which they

    247
    have previously done. As a result of the Ottawa Agreements certain people became interested in dealing with rice, and have carried out the process of cleaning the paddy. A considerable amount of labour has been employed in milling and in the complementary services of transport and carting. But now the Government come along and, in order to give what is a very slight advantage to India, insert this Clause in the Bill.
    The whole argument for the Clause turns upon the question as to whether there will be any considerable advantage to India. There will be certain disadvantages to some sections of people in this country engaged in the milling of rice; there will be real hardship for them, but, viewing this from an Empire point of view, will there be any real advantage to India by the insertion of this Clause? No one can examine the figures in connection with this matter without seeing at once that if there is any advantage at all to India it is very small indeed. Without quoting the figures, I am certain that if the Parliamentary Secretary can convince us that there is any real advantage to India which is in any way a compensation for the injury and the injustice done to the rice milling industry in this country, there will be no substantial reason for moving the deletion of this Clause. I am inclined to think that the Parliamentary Secretary will find that a very difficult task. At any rate I am prepared to hear what he has to say.
    6.46 p.m.
    Sir WALDRON SMITHERS: The Parliamentary Secretary to the Board of Trade, when speaking on the Budget Resolution, said, with regard to this Rice Duty, that it might be a difficult thing to follow. I agree with him. It is a technical matter, and it is therefore as well to be quite clear about it at the outset and to define quite broadly what we are discussing. During the past three weeks I have spent about 14 hours in conference with the rice millers of this country, with the officials of the Board of Trade, with the Parliamentary Secretary himself, and again with the rice millers, and having studied the question, and having been instrumental in sending out a memorandum to every Member of Parliament, I have put my name to this Amendment because I believe that the
    248
    Board of Trade have put this Clause in the Bill owing to a misunderstanding.
    The more I study the matter the more I am convinced that the case which I am about to state leaves no loophole whatever. I ask the Government to be brave and to acknowledge that there is a misunderstanding, and to withdraw this Clause. The Clause imposes a Customs duty of two-thirds of a penny per lb. on rice in the husk. Rice in the husk is known commercially as paddy. Paddy is the rice stripped from the stalk. Paddy when milled produces four different articles. There is, first, what is called either whole rice or clean rice or grocer's rice or white rice. I have here figures audited by chartered accountants which prove that the amount of white rice, number one, which can be obtained from the paddy varies between 43 per cent. and 60 per cent.; and the average yield of white rice is about 55 per cent. Then there is broken rice, which incidentally comes into this country free of duty. It represents about 12½ per cent. Then there is the bran which comes in with a 10 per cent. duty. That is again about 12½ per cent. of the results of milling. Then there is the waste, which is of no value and at times costs the millers money to get rid of it. It is about 20 per cent. That gives us a total of 100 per cent.
    There are some minor points which may be adduced, but, speaking broadly, there are two kinds of rice; there is the round grain and the long grain. The round grain rice is known as the Japan type of rice, and it comes principally from Spain, and from Italy, Egypt and Japan, and a small amount from Australia. I shall refer to that kind of rice as foreign rice. Then there is the long grain rice produced in the Empire. Some comes from America and some from Java. I do not want to go into too many details. As I have said, roughly speaking there are two kinds of rice. It is interesting to note that they are really two different articles. The Empire rice commands in this country a price varying between 8s. 7½d. and 14s. 6d. a cwt., whereas the foreign rice commands between 21s. 6d. and 30s. a cwt. They are two distinct articles, and the British housewife knows perfectly well which article she wants. She can use the cheaper form of rice for some purposes

    249
    but when she wants to give her husband a nice rice pudding she invariably buys the more expensive kind, which is not produced in the Emire.
    The consumption in the United Kingdom of all rice, Empire and foreign, is between 70,000 and 75,000 tons a year. The Ottawa Agreements have conferred enormous benefits on the Empire, and India and Burma being by far the largest producers of rice in the Empire have benefited proportionately. The Ottawa Agreements are working naturally, and I contend that there is no need for this duty of two-thirds of a penny on the imported foreign paddy. I am bound in this rather technical matter to give the Committee some figures of the rice imports into this country. In 1931 the Empire sent to this country 31 per cent. of the rice consumed here, but by 1934 the 31 per cent. had gone up to 60 per cent., mainly owing to the Ottawa Agreements. That is to say, the importation of Empire rice in those three years has practically doubled. The foreign rice imports show exactly the opposite trend. In 1931 the imports of foreign rice—I am taking the paddy figures converted into white rice equivalent—were 68 per cent. of the total consumed, whereas in 1934 the figure had fallen to 39 per cent.
    So the Committee will see that the Ottawa Agreements work exactly according to plan. I am not here to speak in any way against the Ottawa Agreements, for I am all in favour of them. This tendency for the imports of Empire rice to increase and for the imports of foreign rice to decrease, is shown in the latest figures available for the first four months of this year. You cannot take four months as typical of the whole year, owing to seasonal variations, but the fact remains that the imports of Empire rice have gone up to 76 per cent. and the imports of foreign rice have gone down to 23 per cent. I am told from an authoritative source that it is expected that this year foreign rice will not exceed 30 per cent. of the total consumed in this country. On the Budget Resolution the Parliamentary Secretary to the Board of Trade said:
    "At present it is subject to a 10 per cent. duty under the Import Duties Act. This Resolution increases that duty to two-thirds of a penny a lb. as from the 16th April of this year for this year."
    250
    Later in the same speech the hon. Gentleman said:
    "As the imports of paddy threatened to undermine the preference which India had obtained for husked rice, India suggested to us that the matter might be put right by a small increase of that duty."
    I ask the Parliamentary Secretary how he would define a "small increase." The original duty of 10 per cent. was equal to 10½d. per cwt. on the imported paddy. The two-thirds of a penny a lb. now proposed is equal to 6s. 2¾d., which means a sevenfold increase of the original duty. Does the hon. Gentleman call that a small increase? I contend that the increase is penal and unjust. The Parliamentary Secretary also said, in the same speech:
    "The rate of duty of two-thirds of a penny per lb. has been calculated to give India a preference on paddy corresponding to the preference of a penny on cleaned rice."—[OFFICIAL REPORT, 1st May, 1935; col. 461, Vol. 301.]
    I should remind the Committee that after Ottawa the penny per lb. duty was imposed on the importation of foreign cleaned rice, and the Parliamentary Secretary has stated that this two-thirds of a penny is to correspond to the penny a lb. on the cleaned rice. I have already explained the proportion into which the paddy breaks up—55 per cent. of white, clean rice; 12½ per cent. of broken rice, which comes in free; 12½ per cent. of bran, which pays 10 per cent. duty; and 20 per cent. of refuse which costs the millers money to get rid of it. Taking all those factors into calculation the two-thirds of a penny per lb. works out at a duty of 2d. per lb. on the white rice produced from the imported foreign paddy. It may be said that that has nothing to do with the amount of the duty, that it is owing to working costs. But if the millers of this country can carry on at a small profit the business of importing paddy into this country and milling it here, and if the duty works out at 2d. a lb. on the white rice, then it seems obvious that the British public cannot eat the rice unless it is imported and prepared in the proper form. Therefore in reality the two-thirds of a penny proposed in this Clause is equal to an import duty of 2d. per lb. on the rice produced from the imported foreign paddy.
    I have already shown that the imports of Empire rice are increasing and that the imports of foreign rice are decreas-

    251
    ing. I would like to ask the Parliamentary Secretary a question. Have the Government any option in this matter? Must they blindly carry out the request of India to levy a duty of two-thirds of a penny on foreign paddy? I would remind him and his chief that, while I am entirely with them in trying to carry out the spirit of Ottawa, they are the Board of Trade of the United Kingdom, and therefore should look after the interests of the millers in this country. I would like further to ask him if, before this Clause was put in the Bill, the rice millers of this country were consulted? This duty is not put on for revenue purposes. He himself said in his speech on the Budget Resolutions that the revenue would be very small. It is put on simply as a sequence to the Ottawa Agreement. There could have been no harm done in consulting the rice millers. They could not have anticipated anything. They could not have done anything to feather their own nests if they had advance information. The rice millers supplied the figures to the India Trade Commission. They gave their trade figures quite freely, and these figures are now being used against them. I maintain that the duty proposed in this Clause will not help India. The only effect of this Clause, if it is not withdrawn, will be to make a present of milling of foreign paddy to the foreigner, for this type of rice, this expensive rice, will still come into the country, whether it comes in in the form of paddy or in the form of cleaned white rice.
    Those who proposed this Clause were misled by the great increase in the paddy import figures. The Parliamentary Secretary in the same speech to which I referred stated that in 1932 there were two cwts. of paddy imported into this country; in 1933, 20,000 cwts., and in 1934, 330,000 cwts. That is true, but from the figures I have already given the imports of foreign rice of whatever form—whether in the form of white rice or in the form of paddy—are appreciably going down, whereas the imports of Empire rice are appreciably rising. When he mentioned these paddy figures he did not take into account the total foreign rice imports. Having put down this Clause, of course it is difficult for the Government to withdraw it, but I think I can show that it will not achieve the desired
    252
    object. I would like to ask the Parliamentary Secretary how this agitation began. I believe, about 18 months or two years ago, the agitation originated from the Rangoon millers. They asked the Burma Chamber of Commerce to request the Government of India to ask for this duty. I believe that is the fact, but I am not sure. If it was the fact, may I ask the Parliamentary Secretary this further question? Did the Indian Government, or whoever made this request, realise when they made it that the United Kingdom millers, who have co-operated loyally to push the sale of Empire rice in this country, are being penalised to the benefit of the foreign millers? I believe if those who advocated this duty had realised that, the Clause would never have been put in the Bill. The Parliamentary Secretary talks about the spirit of Ottawa. A Clause of this kind cannot be put forward in the spirit of Ottawa if it can be proved that it is no good to India, and at the same time does serious harm to the rice millers of this country.
    I want to repeat that I am here to maintain the spirit of Ottawa, but it is a fact, if hon. Members would please throw their minds back to what I said at the beginning of my speech about the two different kinds of rice, that as yet the Empire cannot produce, and does not produce, this particular form of high-priced rice. If proof were needed of that, proof is forthcoming to the full, because the British public will only pay round about 10s. a cwt. for the Empire rice, and they are willing to pay £1 a cwt. for this different form of high-priced foreign rice. The Empire cannot produce this particular form of rice, and does not produce it. It takes eight or 10 years, I am informed, for the new rice seed to become hybridised and get going in a new country. The Empire is doing her best to produce the higher-priced rice. Seed has been sent to Burma and in time, no doubt, all the rice consumed in this country, of both qualities, can be and will be supplied by the Empire, but to-day about 40 per cent. of the rice consumed in this country and demanded by the British public is not available from Empire sources. It is true that the process of development of the dearer kind of rice is going on in the Empire. Some Empire rites are brought to England. They are graded, cleaned and polished—

    253
    I believe that is the technical term—and they do to some extent compete with the higher-priced foreign rices, but even so they are inferior to these higher-priced rices; but as yet the Empire cannot produce enough of these higher-priced rices for which there is a general demand in this country.
    I am told by gentlemen for whom I am speaking to-day—and I believe them to be honourable men who have told me the truth right through—that although this type of rice—the rice they call the Japan type of rice, and what I am calling the foreign rice—is inferior to the foreign rice, they have taken every available bag of that kind of rice produced in the Empire, but the British public still have a taste for and demand the higher-priced rice. Here is really the pith of my whole argument. As long as foreign rice comes into this country, I do beg the Government to allow that rice to be milled in this country, so that the work may be done here. I honestly believe, after very careful study of the whole subject for many days, that the effect of this Clause will not be to diminish the total imports of foreign rice paddy and clean rice together, but merely to hand over the milling of it to the foreigner, and it will not benefit India. The Indian trade representatives have admitted in the past that as yet India and the Empire cannot produce these higher-priced rices. I want to ask the Parliamentary Secretary: Is it the policy of the Government to allow no foreign rice at all, and to deny the British public the use of the higher-priced rice which comes in in spite of the duty of a penny a pound? Let the Government be logical. Let them prohibit foreign rice altogether; but if they are going to allow foreign rice to come into this country at all, then let these men who have set up an industry under the Ottawa Agreement and who look for a certain security over a period of years carry on—let the Government allow the foreign rice that does come in to be milled in this country
    It can be argued that the price difference between foreign rice and Empire rice should greatly assist the sale of Empire rice here and force the public to switch over from one to the other, but there is a limit to this, and unless you have prohibition of foreign rice, the demand for foreign rice will still persist. All the available higher-priced Empire-grown rice
    254
    is now being obtained, and yet the public will still demand—and get over the penny duty—about 40 per cent. of their consumption in the United Kingdom. While this demand persists I do beg the Government to allow the milling to be done in England. The imposition of this duty, as the hon. Member who moved this Amendment pointed out, does nothing for India. I am going to give the Committee same rather remarkable figures. The world production of rice is about 58,000,000 tons, excluding China and Russia. Of this, India and Burma produce about 30,500,000 tons and the rest of the Empire 500,000 tons. Last year there was milled in this country 20,000 tons of paddy, which produced about 10,000 tons of clean white rice. That 10,000 tons, milled from foreign paddy, is only.0315 per cent. of India's production, yet Clause 8, as drafted, for the sake of.0315 per cent. of India's production, will definitely put a complete stop to the milling in the United Kingdom, throw out of work those employed, and the millers will lose one-third of their business. It is rather interesting to know that during the last few days India has bought 15,000 tons of paddy from Saigon, which, I believe, is in Cochin-China, under French protection. I want to ask the Parliamentary Secretary: Is there an import duty on paddy into India?—because you have the paradox that while India is asking protection of this nature, she should at the same time be refusing the United Kingdom millers similar facilities. I understand that the Empire countries, Australia and Canada, protect their milling industry, and why should not the United Kingdom millers, the oldest of all, receive similar consideration?
    The United Kingdom millers—and this is a most interesting point—are well aware of conditions in the East. They have their correspondents there, and in some instances their partners have large businesses in the East. Many of them have spent many years in the East and know the conditions well. Further, the United Kingdom millers are the largest buyers of Empire rice. They import 75 per cent. of the Empire rice in this country and the fairness of their claim should be admitted. Does India realise that she is ill-treating her best customer? The rice produced from foreign paddy does

    255
    not affect Empire rice, but this rice produced from foreign paddy does affect the price of imported foreign clean rice. It can, I am informed, be sold—that is the rice milled from the paddy—at about 1s. a cwt. cheaper than the imported foreign clean rice. That should appeal to hon. Gentlemen opposite, because the industry in this country produces rice at slightly below the imported finished article from abroad. As the Empire learns to produce the higher-priced rice the situation will cure itself naturally. I believe that the trend of the figures which I have given—decreasing imports of foreign rice and rising imports of Empire rice—will continue, even if this Clause is omitted from the Bill.
    In conclusion, I make two suggestions to the Parliamentary Secretary. I ask him whether, after the arguments which I have produced—and I think any hon. Member who has read the memorandum will agree that there is no loophole in those arguments—he will withdraw this Clause for one year and see whether what has been termed the undermining of the Ottawa Agreement is indeed a reality. During his speech on the Budget Resolutions he used such expressions as "the undermining of preference," and "the threatening of preference," and "the frustration of preference" and other phrases to that effect. I think I have shown clearly that the Ottawa preference has not been undermined and that the Agreements are working well, in the spirit and in the way which those who framed them desired. Will he therefore withdraw this Clause in order to see whether the complaint of India will be substantiated or whether the natural tendency to which I have referred will continue?
    If he cannot do that, will he, either by law or by a gentleman's agreement—such, for instance, as an agreement that certain taxation upon beer shall not be passed on by the brewers to the consumer—come to some arrangement with the millers or the importers that the amount imported last year or over a period of years, or whatever he considers a fair amount, shall not be exceeded this year, and that the status quo shall continue for another year. It can then be seen whether the tendency to decrease the imports of foreign rice and increase the imports of Empire rice will con-
    256
    tinue. The Clause as it stands can have no other effect but that of putting out of business those engaged in rice milling and the people whom they employ. It will do double harm because the importation of paddy means the importation of double the bulk, involving shipping, transport and handling, all of which goes to create more work. If the Clause is not withdrawn the milling of paddy in this country will be stopped, and I contend very strongly that it will not in any way benefit India.
    7.19 p.m.
    Mr. CLEARY: I do not pose as an expert on this subject, but it affects firms and factories in Liverpool and any reference to the importation of "paddies" is of course relevant to the City of Liverpool. There are two or three points which I desire to place before the Committee on the basis of the information which has been given to me. This industry, as we have it in Liverpool and in other parts of the country, employs a large amount of labour in transport, cartage and warehousing, which employment will no longer arise if the rice is milled abroad. Again, the yield of clean rice is only 50 per cent. and the argument is therefore advanced that this proposal will, in effect, place a duty of 2d. per lb. upon British-milled white rice while there will be a duty of only 1d. per lb. upon the same rice milled by foreign millers. Another point brought to my attention is that the duty will not check the importation of foreign rice but will merely transfer to foreign mills the milling now done by British millers. On the question of benefiting India, which, apparently, is the desire behind the action of the Government, the interested parties point out that it affects luxury rice which India cannot yet produce and, therefore, the desired effect will not be achieved by the new duty. It is difficult to appreciate why British millers, who are working their hardest to oust foreign rices from the United Kingdom market, should be penalised in this way. Finally, there is the effect upon Liverpool, already a depressed and hardly-hit area, to strengthen the plea for fresh consideration of this important point, and the hope that the representations that have been made in the Committee by hon. Members and by the interests concerned, will have some effect.
    7.22 p.m.
    Mr. HERBERT WILLIAMS: I am not an expert on this subject, as is my hon. Friend the Member for Chislehurst (Sir W. Smithers), but I have tried to understand this Clause in the light of the information available in the May issue of the Trade and Navigation Returns, published yesterday. Unfortunately that information is not as complete as I would like. Rice appears in three categories in the monthly return, though no doubt the annual statement, which will be published later, will contain fuller information. The three categories are, first, rice, husked or clean, second, broken rice and mixtures of whole and broken rice and third, rice meal and dust. Unfortunately, the particular class of rice, the duty on which it is proposed to alter, does not appear to be separately classified in the returns. There is, therefore, available to us no information as to what has been happening with regard to the importation of the kind of rice which we are discussing, namely rice in the husk. No doubt the Customs have that information and perhaps the Parliamentary Secretary to the Board of Trade will give it to us when he replies.
    Let us examine, however, what has happened in the case of those classes of rice on which information is available. The returns give certain particulars for the current year, for 1934 and for 1933. I take the first five months of each year and there is no reason to believe that they are not characteristic of the whole 12 months in each case. The imports of the first category from British India in the first five months of 1933 were, 387,000 cwt.; in the same period of 1934 that figure had increased to 498,000 cwt., and in the present year it had increased to 596,000 cwt. That is a remarkable rate of increase which indicates that as far as "rice, husked or cleaned" is concerned India is doing very well. I may mention that the imports in the first five months of this year were worth £250,000. When we come to "broken rice and mixture" which apparently is not very good stuff there has been some decrease in the amount from India though not much of a decrease—nothing comparable in quantity to the very large increase under the first heading.
    I come to the important category, namely rice meal which is a very much more valuable product. Whereas rice
    258
    husked is worth about 10s. a cwt., rice meal is worth nearly 14s. a cwt. Under that head, I find that the imports from India have increased to a marked extent. In five months of 1933 they amounted to 67,000 cwt., but in 1934 that figure had increased to 106,000 cwt. and there is a slight drop this year when the figure is 103,000 cwt. But the most significant figure of all is that of the imports of rice meal and dust from foreign countries this year. I wish that I had looked up the April figure because this change came into operation some time during April, but whereas in the month of May last year we imported rice meal and dust from foreign countries to the extent of only 146 cwt., in May of this year the figure was 10,638 cwt. Apparently, foreign rice flour is now suddenly coming in, to a much larger extent than formerly. It may be that this is only the figure for one month, but it is the first complete month since the change was made and it seems to show that while shutting out rice in husk, we have a very large increase in the imports of the much more valuable commodity rice meal. It is true that in 1933, 1,035 cwt. came in, but I ask the Committee to consider that the figure this month is ten times the figure of May, 1933, and the value was £35,000 in the month, so that it is not a negligible value.
    I never like to draw definite conclusions from the statistics of one month. I know how dangerous it is but in so far as these figures have any significance they confirm the case made out by my hon. Friend the Member for Chislehurst. He said that if you put a duty on the raw material and did not, at the same time, increase the duty on the manufactured product, all that happened was that you did not import the raw material but you did import the manufactured product and displaced your own people from employment. As far as these figures go, subject to the qualifications which I have just made, they confirm that point of view. In all the circumstances, unless the Parliamentary Secretary can produce a volume of evidence of a kind which it is a little difficult to anticipate—though I know what wonders can come out of the Board of Trade—some of us will be in a considerable difficulty. Anxious as we all are on this side to promote Imperial unity and Imperial trade, this seems the wrong

    259
    way of going about it. Unless this Clause is to be accompanied by another Clause and a further Financial Resolution, imposing definitely higher duties on husked rice and rice meal, many of us will find ourselves in a position of great difficulty when you, Captain Bourne, put the Question from the Chair.
    7.28 p.m.
    The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Dr. Burgin): The proper course for a Minister to take, in view of the way this matter has been debated, is to give the fullest possible information to the Committee at the earliest stage in the discussion, so that the contrary point of view can be expressed. I do not dissent from the broad statement of facts made to the Committee, but I want to give to the Committee some information which they have not yet had. Let us approach this matter from the year 1932, trace out the importations of rice since, and see whether the deductions that have been drawn by hon. Members are correct or whether the facts are capable of any other explanation. Let us also bear in mind that while it may be necessary, in order to implement an agreement under the Ottawa arangements, to impose a duty on a particular substance, namely, paddy, there is, of course, nothing to prevent any industry from applying at any time to the Import Duties Advisory Committee for a duty on some other article which may be affected consequentially by what we are doing in this Finance Bill. For instance, reference was made in the concluding remarks of the hon. Member for South Croydon (Mr. H. Williams) to the fact that the effect might be that art imported article could come into this country in a manufactured state rather than the manufacture being carried on here. Assuming that to be true, there would be no objection to the millers of rice in this country applying to the Import Duties Advisory Committee to consider the case whether or not a duty should be imposed, under the ordinary procedure, higher than the existing duty on clean rice.
    But how does this matter come about? One of the aims of the Government of India at the Ottawa Conference was to increase the trade of India with the United Kingdom in rice generally. That was the very definite object of the Gov-
    260
    ernment of India. The United Kingdom supplies of rice for home consumption had, up to that time, been imported in the form of clean, whole rice, and India sent roughly a third and other countries sent roughly two-thirds. I am taking the figures roughly, but I have the exact quantities should the Committee desire them. One of the provisions, therefore, of the agreement concluded with India at Ottawa was an undertaking on the part of Great Britain to increase the duty on rice husked, including cargo rice and cleaned rice, but not including broken rice, to a penny a pound, and that duty was imposed as from the 1st January, 1933, by the Ottawa Agreements (No. 2) Order, 1932, made under the Ottawa Agreements Act. The object, to increase the trade between India and the United Kingdom in rice; the method of doing it, a duty on foreign rice with a view to giving India a preference. That substantial preference has, as the figures which have been quoted have shown, worked very well, in that the imports from India have tended steadily to rise, whereas the imports from other countries have tended to fall.
    If I may trouble the Committee for a moment with figures to the nearest 100,000 cwt., I think I can make the position clear. In the years 1930 to 1934 the imports of cleaned rice into the United Kingdom from India, to the nearest 100,000 cwt., have been 400,000, 500,000, 500,000, 600,000 and 800,000 cwt. On the other hand, the imports of cleaned rice from other countries, not separating between Empire and foreign but merely taking non-India, have shown a tendency to decrease, as the figures from 1930 to 1934, again to the nearest 100,000 cwt., show, namely, 900,000, 1,000,000, 1,000,000, 400,000, and 500,000 cwt.—a tendency rather to fall, a rather surprisingly large import in the year 1932, whether or not connected with forestalling I do not pause to say, but in 1933 falling to under 400,000 and in 1934 still being under 550,000, so that you do get the effect of the Ottawa Agreement implemented by figures showing a progressively increasing import of rice from India and a progressively decreasing import of rice from other countries than India.
    The case that has been made out this evening has been that you have a British industry, employing British labour, carrying on a legitimate trade, that has

    261
    a right to expect some security in its trading position, threatened by a Clause in this year's Finance Bill. I think that accurately puts the case that has been put forward by the hon. Member for Mansfield (Mr. C. Brown) and the hon. Member for Chislehurst (Sir W. Smithers), and supported by the hon. Members for Wavertree (Mr. Cleary) and South Croydon. Let us look at the facts. In the year 1932 no trade of any magnitude in the importation of foreign paddy existed at all. The contemplation that anybody would import foreign paddy for the purpose of hulling and husking in this country had not entered the mind of the Government of India or of the negotiators on the part of the United Kingdom Government in dealing with this matter at Ottawa.
    In the year 1932 there were 2 cwt. recorded in the Customs return as the total quantity of this foreign, usually Spanish, uncleaned rice that came into this country. But what happened? It was perceived that there might be a possibility of importing that paddy and a trade has sprung up, since 1932, in a foreign imported article. Since the Import Duties Act of 1932 a business that is built upon the basis of its material being a foreign import is built up with the knowledge that there may be a restriction or a duty applied to that foreign commodity. That is self-evident. That it has to be dealt with on its merits, I admit at once, but I want, in examining the case of the British miller, who says: "I think I was entitled to security of trading conditions for the new industry I have started," to reply: "You have started this with the knowledge that the material upon which you were depending was a material coming from a foreign country, in regard to which the Import Duties Advisory Committee could at any moment, upon proper application, make a recommendation with regard to a duty." The 2 cwt. in 1932 became 20,000 cwt. in the following year, became 333,000 cwt. in 1934, and in the first five months of this year has increased to the rate of 500,000 cwt. in the course of a year.
    There is, therefore, something going on to which the Government of India were entitled to pay very considerable attention. What has been the effect of the importation of this commodity, hitherto not imported, but imported in this
    262
    startling geometrical progression since the year 1932? It has been, in the mind of the Government of India, to constitute a menace to the preference of a penny a pound on rice which the Ottawa Agreement was intended to give them. I am not arguing the reasons which the Government of India had for coming to that conclusion, but I am telling the Committee as a fact that the Government of India have come to the conclusion, on what appear to them to be good evidence and satisfactory grounds, that this sudden growth of an unlooked-for import, not taken into account at Ottawa, has, in their judgment, constituted a new factor which in their mind seriously threatens the preference of a penny a pound which it was the contractual obligation of the United Kingdom to give them as a result of the Ottawa Agreement.
    Sir W. SMITHERS: Is the figure of 500,000 cwt. for 1935 the figure for the five months or the rate per annum?
    Dr. BURGIN: It is the annual rate.
    Brigadier-General Sir HENRY CROFT: Is it a fact that these particular milling operations have largely been created under Spanish influences?
    Dr. BURGIN: Perhaps we might deal with the matter rather more generally than by an examination of that particular point. The point that I am making is that the Government of India, faced with this complete alteration in trading conditions since 1932, have come to the United Kingdom Government and said, "This new trade that has sprung up, this trade whose origin is subsequent to 1932, this trade which we constantly warned the millers we should regard as being likely to undermine our preference, is having the precise effect that we said it would have." The United Kingdom has, to some extent, as a consumer had a prejudice in favour of the expensive foreign rice, and one of the objects of Ottawa in attempting to increase the trade between the United Kingdom and India in rice was to overcome the prejudice that appears to exist with regard to the difference between Empire rice and these foreign ricer, and India has come along and said, "When this method of paddy import first showed itself by the trade returns, we instructed our trade commissioner to inform the United Kingdom authorities that we

    263
    regarded this trade as an inroad upon the preference." That inroad having continued in the very startling way to which I have called attention, the Government of India have renewed their protest and asked that this duty should be put on to deal with a situation which, in their view, evades the preference that we had intended to give them at Ottawa.
    Some reference was made to the calculation of the duty. The hon. Member for Chislehurst gave a long account of the different qualities of rice, the different ways in which they were treated, their different yields, and so on. I do not pause to examine the accuracy of those technical details. I am willing to accept them for the purpose of this argument, without of course, having had expert advice as to their accuracy, but the calculation of two-thirds of a penny a pound has been made by those best qualified to do it as being the figure to which the 10 per cent., the one-tenth of a penny at present, ought to be raised in order to give India a preference for paddy corresponding to the preference of a penny a pound on clean rice after allowance is made for loss of weight on milling. I am only saying that because there is nothing capricious about the two-thirds of a penny. It is a mathematical calculation intended to be a complete fulfilment of the United Kingdom agreement with the Government of India made at Ottawa, and is intended to be the precise equivalent of the penny a pound on clean rice after allowance is made for loss of weight on milling.
    That really is the Government's case—a request from the Government of India to implement a provision of the Ottawa Agreement under which the plain intention was to give this preference of a penny, a new trade arising, new circumstances coming into existence which appear to undermine the preference already conceded, and so a duty of a corresponding type imposed against the other articles to bring about the same result. If, as a consequence, the foreign rice still comes in, if it be true that this will not have the effect of shutting out the demand for other rice, then application for a duty on that rice must be made, in accordance with the ordinary procedure, by organised bodies in the trade who give the proper evidence and are subject to the proper examination. This is a matter which arises now, and all I have to do is to ask
    264
    the Committee to resist the Amendment, which would, of course, have the effect of leaving the duty on paddy at a tenth of a penny, as it is now.
    7.45 p.m.
    Mr. H. WILLIAMS: As I understand it, the Parliamentary Secretary has established a complete case for doing something with this new importation, but can he give me any reason, other than pure pedantry, why we do not at once alter the duties right along the scale and then provide, if it is necessary that they should be subsequently adjusted, that the Import Duties Advisory Committee should be free to make any subsequent minor adjustments? Why, for pure pedantry, should we imperil the industry while the Advisory Committee examines the matter?
    7.46 p.m.
    Sir H. CROFT: May I urge the Minister to consider whether, on the facts given earlier in the Debate, this proposal may be defeated by the importation of foreign meal? Having taken an active part in resisting a certain Measure at an earlier date, I feel that it would be rather unfortunate if one of our first acts here in a Debate on trade with India, was to fail to listen to the serious fears which have come from such important bodies as the Chamber of Commerce in Burma and which are also felt very strongly in India. I confess I do not know a great deal about this subject, but I believe it is true that the Spaniards saw an opening and are proposing another mill in Liverpool, through which they are hoping to get an inflow of Spanish rice into this country. It is true also that German interests have established a factory on the Thames. If these facts are true, there is a danger of certain importing concerns permanently establishing this foreign trade.
    Mr. C. BROWN: Is it not part of the hon. and gallant Gentleman's policy to attract new industries to this country?
    Sir H. CROFT: Yes, unless they harm Imperial interests. Under the Ottawa policy we have definitely undertaken to do everything we can to deflect the importation of rice from foreign countries to India, and that policy has been highly successful. I am only anxious at the moment to see if we can get at the facts. I rejoice to hear from the speech of the hon. Member for Mansfield (Mr. C.

    265
    Brown) that there are at long last representatives on those benches who wish to see more food produced in this country. I am glad to see that their education has gone on. At the same time, I believe that the actual amount of employment in hulling is very small and involves the employment of only two or three men in each factory. We should take care that there is not any feeling engendered in these early days in India or Burma that we are not carrying out the full spirit of the Ottawa Agreement.
    7.50 p.m.
    Sir BASIL PETO: I should be glad to know the Parliamentary Secretary's answer to the point which was put by two hon. Members who addressed the Committee before he rose, namely, that if you leave this Clause as it is the major effect will be to raise the duty on foreign rice milled in this country to the equivalent of 2d. a lb., whereas the ground rice, if it is milled abroad, will come into this country and will pay a duty of 1d. per lb. If that be so, this Clause will penalise the milling of this article in this country and allow the milled article to come in with an advantageous rate of duty. If the duty is still to be 1d. a lb. on the milled foreign rice, what good are we doing to India? That is the point I would like answered. We seem to be proceeding, as the hon. Member for South Croydon (Mr. H. Williams) said, on the principle of pedantry, and this principle will in the meanwhile kill a new industry in this country and do no good except to foreign millers. It certainly will not do any good to India. The Parliamentary Secretary did not deal with that point. If the statement circulated to hon. Members be true, we ought to pause seriously before we pass this Clause. It seems that it ought to have something added to it which will make it possible to carry on the industry of milling the foreign rice in this country, at any rate, on terms not inferior to those under which it can be done abroad. We should not put out of business milling in this country unless we do something, by raising the duty on the finished product, so as to allow them to compete on equal terms.
    7.53 p.m.
    Mr. D. D. REID: I cannot say that the Parliamentary Secretary has convinced me. As I understand his argu-
    266
    ment, it is that this trade of importing paddy has grown up since 1932. Can he tell us how much foreign milled rice was imported into this country before 1932? I understand that foreign rice and Empire rice have all the time been coming into this country. They serve, to a large extent, different purposes. The Parliamentary Secretary's argument was that since 1932 foreign rice has been coming into the country and that it has produced a new industry here. I do not suppose that we have got to the stage when, if people prefer foreign rice, they are to be told they cannot have it. I presume, therefore, that it will always come in. The only point before the Committee, therefore, is whether the result of this Clause will be to drive the trade away from the mills in this country. If that will be the effect, we ought not to pass it. The hon. Gentleman talked about prejudice in favour of foreign rice. It is not prejudice; it is a difference in taste. I understand that for cooking purposes foreign rice and Indian rice serve different purposes and that they are not at all the same thing. Therefore, let us be certain that if we are not going to do India any good we are not going to do ourselves any harm.
    7.55 p.m.
    Mr. GURNEY BRAITHWAITE: I have listened with care to every speech in this interesting technical Debate, including that of the hon. Member for Mansfield (Mr. C. Brown), who, not for the first time, has stood up as the champion of the employment of our own people; and also the speeches of the hon. Member for Chislehurst (Sir W. Smithers) and the Parliamentary Secretary. In spite of listening to all these speeches, I am still in a situation of considerable difficulty with regard to this Clause. The matter seems to me primarily one of machinery. I think that the hon. Member for Mansfield and the hon. Member for Chislehurst made out their cases, and that the Parliamentary Secretary also theoretically established his case for dealing with one item in the whole machine of Imperial preference. I would, however, ask the Parliamentary Secretary whether there could be a more unfortunate method of operating the machine of Imperial preference than through this Clause and by throwing out of work our people at home? It would, perhaps, strike a blow at the whole policy, and it would be most un-

    267
    fortunate from the point of view of the signatories of the Ottawa Agreements.
    The point seems to be one of machinery. Is it not possible for us to act in this matter without the inevitable delay which would result from these millers having to make application to the Import Duties Advisory Committee? That body has done extremely useful work in setting up our tariff system, but the fact remains that this House can impose duties whenever it thinks fit, and at once. I suggest to the Parliamentary Secretary that the practical way of dealing with this difficult and technical matter might be to insert in the Finance Bill between now and the Report stage the necessary consequential duties to retain the Imperial preference policy which is being inserted in this Clause, and to make the duties upon the foreign product operate from the Report stage. I am not prepared at this stage to vote against the Clause, but if, when we reach the Report stage, I find that the necessary consequential duties have not been inserted in order to deal with the difficulty raised by the hon. Member opposite, I shall feel it my duty to go into the Lobby against the Government.
    7.58 p.m.
    Mr. C. WILLIAMS: It seems that the only possible argument in favour of the Government's provision is that something may be done to upset the Ottawa Agreement. I understand from the Debate, and it was admitted by the Parliamentary Secretary, that, as a result of the Ottawa Agreement, the Indian portion of the rice trade has been steadily rising. If that be so, what is the India grievance? If they have more trade than before Ottawa, it means that there is less foreign trade to this country. The Government then come to the Committee with the remarkable fact that, whereas in 1932 only two cwt. of foreign rice was milled in this country, there were in 1934 330,000 cwt. In other words, foreign rice, which was previously milled abroad, is now, for the purpose of getting into our market, being milled here and is employing British labour. Why is it milled here? It is because our people are in a position to do it better. The Parliamentary Secretary shakes his head, but he never gave any reason to show why India should complain if her trade is rising. It may be that the
    268
    rice that is being milled here now was previously milled in India, but we were not told that. If it be part of the agreement that India should have this valuable milling trade as well, we accept it, but the position which has been put to us in this Debate is not very strong so far as the Government are concerned because they have given no reason whatever.
    India is getting an ever-growing proportion of the rice trade, and we are simply taking apparently from some other source the actual manufacture. If the Indians think that, by getting it polished here, sooner or later they will be in a different position and will not have the advantage in these markets that they have to-day, what you must do is to increase their preference, but you should not do it in such a way that you kill our grinding, milling and polishing trade. The Government should go into this matter very carefully, and, unless they can produce a very much stronger case than they have done, somewhere between now and Report, they ought to deal with it in such a way that they do not kill this new industry. The Parliamentary Secretary said that surely they knew that this was happening. They knew that they were taking this risk. What risk? The risk of building up under a tariff an industry employing people in this country? That is admitted. That is the position that we see to-day, and we ought to be able first of all to preserve the Indian trade in accordance with our agreements, which we are doing, and in the second place to preserve our own very valuable trade and turn the raw material into the finished product in this country. I appeal to the Government very strongly, if they cannot accept the Amendment, to undertake to go into the question from the point of view of the trade and industry of the country. They have not shown us that the Indian trade is losing its market. They have shown that there is this enormous growth of the Indian trade. It may be that we are manufacturing the Indian raw material in this country.
    Dr. BURGIN: Substantially there are no imports of Indian paddy at all.
    Mr. WILLIAMS: That takes away the only possible loophole. I hope the Government will consider the matter very carefully.
    8.3 p.m.
    Mr. OSWALD LEWIS: The Parliamentary Secretary has sought to convince the Committee that this importation undermines, or threatens to undermine, the agreements made at Ottawa. It seems to me that to support that contention, he must be able to produce certain figures showing that the importation of foreign paddy constitutes an addition to the total imporation of foreign rice of all kinds. As I understand the case put by many Members on both sides, it is that the importation of this paddy is merely a substitution for foreign cleaned rice and not an addition to the total importation of foreign rice of all kinds. Seeing that the figures of the total importation of foreign rice of all kinds are still falling, it would at first sight seem as if the argument rests with those who are opposing the Clause rather than with the Parliamentary Secretary. If the hon. Gentleman has any figures to show us that this foreign paddy constitutes an addition to the total importation of foreign rice of all kinds, and therefore undermines the agreements, or that it will grow to an extent which will undermine the agreements, he will prove his case. In the absence of any such figures it seems to me that his whole case falls to the ground. The form in which we choose to import such foreign rice as we take is no business of the Government of India. They are concerned with the total amount that we import in order that by reducing it we may increase the total of Indian rice that we import, but they are not concerned with the form. Unless we can hear something further from the Parliamentary Secretary I hope very much that he will tell us that he will reconsider the Clause before Report; otherwise, it seems to me to be exceedingly difficult for any supporters of the Government who have listened to the Debate to support him in the Division Lobby, although he may be supported by those who have not heard the Debate.
    8.7 p.m.
    Sir W. SMITHERS: I was very disappointed with the Parliamentary Secretary's reply. He did not even take the trouble to answer two or three definite questions that I put to him. I asked him, first, how the agitation arose and whether he realised what the effect would be on British millers. He might have answered that specific question, of which
    270
    I thought he took a note. He gave the figures of non-Empire exports, and he said that the object of the Ottawa duties has been carried out and that the one-third importation from Empire sources and two-thirds from foreign sources previous to Ottawa had been reversed. I really cannot see what complaint the Indian people have. There is another point that he did not see fit to take up. I pointed out that it is only 10,000 tons of cleaned white rice resulting from 20,000 tons of paddy that we are asking to be kept going, which is a very small proportion—.0315 per cent. of the whole Indian production. I also asked if the British Government have no option. Have they simply to take the Indian Government's word blindly? All he could say was that he was not aware of the reason which had prompted their request. In fact, it was not his business to know. They asked for this duty to be put on, and the British Government had done so. Why was not the matter gone into more carefully? Are we really to be told seriously that the Indian traders are to say that the 40 per cent. of better class rice consumed here is merely a prejudice when the public are willing to pay double the price for it? Things are coming to a pretty pass when we are to be told by Act of Parliament whether we shall eat rice at £1 or 10s. a cwt.
    There is a further point that demands some explanation. The hon. Gentleman said that the two-thirds of a penny was decided upon by those best qualified to judge. Surely those best qualified to judge are the people engaged in the trade themselves. As there is no revenue attached to the duty why were not the millers, who in my opinion are best able to judge, consulted? The hon. Gentleman completely ignored my suggestions to defer it for a year and see if the Indian complaint was in reality a good one, and also to give some form of quota. I hope he will do something before the Report stage to put the matter right.
    8.12 p.m.
    Dr. BURGIN: Of course, I give the Committee the assurance that everything that has been said will be most carefully taken into consideration between now and Report. Obviously, speeches of the character that have been made deserve the closest attention, and calculations and figures will all be closely looked into. I

    271
    am very sorry if my hon. Friend thought me guilty of any discourtesy. I had, of course, no such intention, but in a speech of short dimensions in which I was endeavouring to give the information in my possession I did not reply textually to the long series of questions—
    Sir W. SMITHERS: Four.
    Dr. BURGIN: I took down seven. It was not that there was any difficulty in replying to them. I will, of course, go into all those matters. Having given that assurance, let me briefly pull the argument together. I would make particular reference to the speech of the hon. Member for Torquay (Mr. C. Williams), who seemed at some pains to understand why these imports of paddy from foreign countries should be discouraged and why an industry that is growing up here should be affected by a Clause of this kind. Let me tell him why. At Ottawa it was agreed that there should be a penny duty on rice and, of of course, a preference. Paddy under the ordinary general ad valorem duty, not being rice, is only liable to a tenth of a penny. Certain clever people see that it would pay them to import paddy, perform operations on it in this country, and sell it in competition with the rice that comes in at a penny.
    Mr. C. WILLIAMS: It is clear that we have the industry in this country, and it is equally clear that no proof has yet been given that this is taking away Indian trade, and the Indian trade is still growing.
    Dr. BURGIN: I wanted to proceed by stages. I wanted to point out that it was not an accident that paddy is imported when it has a duty of only one-tenth of a penny per lb. whereas rice has a duty of one penny. It is wrong to imagine that all foreign rice is expensive or is of good quality. There is quite a large amount of cheap foreign rice which comes into this country. There is a large field in which the preference given to India is effective in stimulating the consumption of Indian rice. It is very largely a price question. The average price for the rice from India last year was about 7s. 10d. per cwt., from Spain 10s. per cwt. and from Italy 11s. The present duty of one penny a lb. on foreign cleaned rice is 9s. 4d. per cwt.,
    272
    so that gives Indian rice a very substantial price advantage, because it makes the price of the foreign rice more than double that of the Indian. Have I made that point clear—that by that price difference there is a very considerable advantage to India? But that advantage will be reduced and cut into if it pays to import paddy, mill it here and sell it in competition with the cheaper rice. The average value of the imported paddy from Spain in the first four months of this year was 8s. 8d. per cwt. A duty of 10 per cent. only is payable on that paddy, that is, one-tenth of a penny per lb. There is, therefore, the opportunity of milling Spanish paddy here and selling the cleaned Spanish rice at a lower price than would be possible if clean Spanish rice were imported, and it would be possible, therefore, to cut into the competition in price levels between Indian and the cheaper foreign rice. That is the position; and I end as I began by saying I would ask the Committee to resist the Amendment, which would have the effect of putting the duty on paddy back to one-tenth of a penny and encourage this biting into the preference given at Ottawa. But between now and Report stage I will examine with the officials and with everybody else concerned the speeches and arguments which have been put forward to-day.
    8.18 p.m.
    Sir W. SMITHERS: If these arguments are to be taken note of it is impossible to let the speech of the Parliamentary Secretary pass without saying two or three more words. He has produced arguments now to show that the rice produced from imported Spanish paddy can be sold at a cheaper price than the clean imported Spanish rice. I agree, and I told him that in his room at the Board of Trade. In my speech I said the difference was about 1s. per cwt. But I do deny absolutely that the rice milled from the Spanish paddy can in any way compete with Empire rice. There is one other point which my hon. Friend the Member for Colchester (Mr. Lewis) put forward which is most important. He made the point that what mattered was the total imports of rice from foreign sources, in whatever form. May I give the Committee the figures of cleaned rice, excluding paddy—foreign cleaned

    273
    white rice? In 1932 they were 53,000 tons and they have fallen to 21,000 tons, fallen by over half. In a letter from the Parliamentary Secretary's own Department, dated 13th June, it states:
    "Very little cleaned rice has been imported from Spain this year."
    Naturally, very little cleaned rice. All we want is that the rice shall come in the form of paddy and be milled in this
    country, and that will naturally stop any increase in imported foreign cleaned rice. I do hope these points will also be taken into account when the hon. Gentleman and his advisers look into the matter.
    Question put, "That the Clause stand part of the Bill."
    The Committee divided: Ayes, 185; Noes, 53.

    Division No. 235.]

    AYES.

    [8.20 p.m.

    Acland-Troyte, Lieut.-Colonel

    Guy, J. C. Morrison

    Pownall, Sir Assheton

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

    Hacking, Rt. Hon. Douglas H.

    Procter, Major Henry Adam

    Aske, Sir Robert William

    Hales, Harold K.

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

    Assheton, Ralph

    Hammersley, Samuel S.

    Ramsbotham, Herwald

    Balley, Eric Alfred George

    Hanbury, Sir Cecil

    Reed, Arthur C. (Exeter)

    Balfour, Capt. Harold (I. of Thanet)

    Hannon, Patrick Joseph Henry

    Reid, William Allan (Derby)

    Barrie, Sir Charles Coupar

    Harbord, Arthur

    Remer, John R.

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

    Haslam, Henry (Horncastle)

    Rickards, George William

    Beit, Sir Alfred L.

    Haslam, Sir John (Bolton)

    Ropner, Colonel L.

    Birchall, Major Sir John Dearman

    Hellgers, Captain F. F. A.

    Rosbotham, Sir Thomas

    Boulton, W. W.

    Herbert, Capt. S. (Abbey Division)

    Ross, Ronald D.

    Bower, Commander Robert Tatton

    Hills, Major Rt. Hon. John Waller

    Ross Taylor, Walter (Woodbridge)

    Bowyer, Capt. Sir George E. W.

    Hore-Bellsha, Rt. Hon. Leslie

    Russell, Albert (Kirkcaldy)

    Bracken, Brendan

    Hornby, Frank

    Russell, Hamer Field (Sheffield, B'tside)

    Braithwaite, J. G. (Hillsborough)

    Horsbrugh, Florence

    Russell, R. J. (Eddisbury)

    Broadbent, Colonel John

    Hurd, Sir Percy

    Rutherford, John (Edmonton)

    Brocklebank, C. E. R.

    Jackson, J. C. (Heywood & Radcliffe)

    Rutherford, Sir John Hugo (Llverp't)

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

    Jamieson, Rt. Hon. Douglas

    Salt, Edward W.

    Brown, Rt. Hon. Ernest (Leith)

    Joel, Dudley J. Barnato

    Samuel, M. R. A. (W'ds'wth, Putney)

    Burghley, Lord

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

    Selley, Harry R.

    Burgin, Dr. Edward Leslie

    Kerr, Hamilton W.

    Shaw, Helen B. (Lanark, Bothwell)

    Burnett, John George

    Lamb, Sir Joseph Quinton

    Shaw, Captain William T. (Forfar)

    Campbell, Sir Edward Taswell (Brmly)

    Lees-Jones, John

    Shepperson, Sir Ernest W.

    Campbell, Vice-Admiral G. (Burnley)

    Lennox-Boyd, A. T.

    Simmonds, Oliver Edwin

    Campbell-Johnston, Malcolm

    Lewis, Oswald

    Simon, Rt. Hon. Sir John

    Carver, Major William H.

    Liddall, Walter S.

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

    Cassels, James Dale

    Llewellin, Major John J.

    Smith, Louis W. (Sheffield, Hallam)

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

    Lloyd, Geoffrey

    Somerville, Sir Donald

    Cazalet, Thelma (Islington, E.)

    Lockwood, John C. (Hackney, C.)

    Somerville, Annesley A. (Windsor)

    Chamberlain, Rt. Hon. N. (Edgbaston)

    Loftus, Pierce C.

    Southby, Commander Archibald R. J.

    Clayton, Sir Christopher

    Lovat-Fraser, James Alexander

    Spencer, Captain Richard A.

    Cobb, Sir Cyril

    Mabane, William

    Spens, William Patrick

    Cochrane, Commander Hon. A. D.

    MacAndrew, Lieut.-Col. Sir Charles

    Stanley, Rt. Hon. Lord (Fylde)

    Colville, Lieut.-Colonel J.

    MacDonald, Rt. Hon. M. (Bassetlaw)

    Stevenson, James

    Conant, R. J. E.

    McKie, John Hamilton

    Stewart, J. Henderson (Fife, E.)

    Cook, Thomas A.

    McLean, Dr. W. H. (Tradeston)

    Stones, James

    Cooke, Douglas

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

    Stourton, Hon. John J.

    Cooper, A. Duff

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

    Strickland, Captain W. F.

    Cooper, T. M. (Edinburgh, W.)

    Martin, Thomas B.

    Stuart, Hon. J. (Moray and Nairn)

    Courtauld, Major John Sewell

    Mayhew, Lieut-Colonel John

    Summersby, Charles H.

    Courthope, Colonel Sir George L.

    Mellor, Sir J. S. P.

    Templeton, William P.

    Craddock, Sir Reginald Henry

    Mills, Major J. D. (New Forest)

    Thomson, Sir James D. W.

    Cranborne, Viscount

    Mitchell, Sir W. Lane (Streatham)

    Thorp, Linton Theodore

    Crookshank, Col. C. de Windt (Bootle)

    Moore, Lt.-Col. Thomas C. R. (Ayr)

    Titchfield, Major the Marquess of

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

    Moreing, Adrian C.

    Todd, A. L. S. (Kingswinford)

    Croom-Johnson, R. P.

    Morris, John Patrick (Salford, N.)

    Touche, Gordon Cosmo

    Cruddas, Lieut.-Colonel Bernard

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

    Train, John

    Davies, Edward C. (Montgomery)

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

    Wallace, Captain D. E. (Hornsey)

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

    Moss, Captain H. J.

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

    Dower, Captain A. V. G.

    Muirhead, Lieut.-Colonel A. J.

    Ward, Sarah Adelaide (Cannock)

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

    Munro, Patrick

    Warrender, Sir Victor A. G.

    Eastwood, John Francis

    Nall, Sir Joseph

    Waterhouse, Captain Charles

    Elmley, Viscount

    Nation, Brigadier-General J. J. H.

    Wedderburn, Henry James Scrymgeour

    Emmott, Charles E. G. C.

    O'Neill, Rt. Hon. Sir Hugh

    Wells, Sydney Richard

    Fleming, Edward Lascelles

    Orr Ewing, I. L.

    Williams, Herbert G. (Croydon, S.)

    Fremantle, Sir Francis

    Penny, Sir George

    Wills, Wilfrid D.

    Fuller, Captain A. G.

    Percy, Lord Eustace

    Womersley, Sir Walter

    Ganzoni, Sir John

    Perkins, Walter R. D.

    Worthington, Sir John

    Gillett, Sir George Masterman

    Peters, Dr. Sidney John

    Wragg, Herbert

    Gledhill, Gilbert

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

    Gluckstein, Louis Halle

    Pickthorn, K. W. M.

    TELLERS FOR THE AYES.—

    Grimston, R. V.

    Pike, Cecil F.

    Mr. Blindell and Captain Hope.

    Gunston, Captain D. W.

    Powell, Lieut-Col. Evelyn G. H.

    NOES.

    Adams, D. M. (Poplar, South)

    Banfield, John William

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

    Addison, Rt. Hon. Dr. Christopher

    Batey, Joseph

    Cleary, J. J.

    Attlee, Rt. Hon. Clement R.

    Bevan, Aneurin (Ebbw Vale)

    Cove, William G.

    Cripps, Sir Stafford

    Janner, Barnett

    Owen, Major Goronwy

    Curry, A. C.

    Jenkins, Sir William

    Roberts, Aled (Wrexham)

    Daggar, George

    Jones, Henry Haydn (Merioneth)

    Salter, Dr. Alfred

    Dobbie, William

    Kirkwood, David

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

    Edwards, Sir Charles

    Lawson, John James

    Smith, Tom (Normanton)

    Evans, David Owen (Cardigan)

    Leonard, William

    Thorne, William James

    Gardner, Benjamin Walter

    Llewellyn-Jones, Frederick

    Tinker, John Joseph

    Graham, D. M. (Lanark, Hamilton)

    Logan, David Gilbert

    West, F. R.

    Greenwood, Rt. Hon. Arthur

    Lunn, William

    Williams, Edward John (Ogmore)

    Grenfell, David Rees (Glamorgan)

    Macdonald, Gordon (Ince)

    Williams, Thomas (York, Don Valley)

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

    McEntee, Valentine L.

    Wilmot, John

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

    Maclean, Neil (Glasgow, Govan)

    Young, Ernest J. (Middlesbrough, E.)

    Groves, Thomas E.

    Mallalleu, Edward Lancelot

    Grundy, Thomas W.

    Mason, David M. (Edinburgh, E.)

    TELLERS FOR THE NOES.—

    Harris, Sir Percy

    Milner, Major James

    Mr. John and Mr. Paling.

    Holdsworth, Herbert

    Nathan, Major H. L.

    CLAUSE 9.—(Customs duty on soya beans.)
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    8.30 p.m.
    Mr. C. BROWN: I hope the new Secretary of State for the Colonies will make a better case for retaining this Clause in the Bill than the Parliamentary Secretary to the Board of Trade was able to make for retaining the previous Clause. The new Colonial Secretary and myself represent adjoining divisions, and I would like to congratulate him upon appearing for the first time on that bench in his new office. I do not know whether he will use the same kind of argument as was used by his predecessor in respect of the Budget Resolution on this matter. We were informed, when the Resolution was before the Committee, that the Clause embodied a great piece of Imperial policy and that the intention behind it was to give a preference to the oil-yielding products of the Colonial Empire against the oil-yielding products from the Far East. The previous Colonial Secretary never suggested that there was any production of soya beans that mattered in the British Empire, but he said that there were possibilities in that direction, and his avowed intention was to give a decided preference.
    When we were discussing the preceding Clause I called attention to what I said were the vagaries of the Government, who do one thing at one time and a year or so afterwards do something which conflicts with it. I see the Parliamentary Secretary to the Board of Trade smiles because I am repeating my previous argument. The inclusion of this Clause provides a clear illustration of the contradictions in Government policy. One of the intentions of the Government has been to help the farming community in this country, and they are subsidising various farm products in order to keep
    276
    up the price of those products for which, otherwise, an economic price would not be obtainable. By this Clause the Government are pursuing a policy which will adversely affect the farmer by increasing his costs.
    When the Resolution was before the Committee I listened with great interest to a speech in which an hon. Member argued that cattle feed made from the soya bean was far more nutritious, because of its chemical content, than cattle feed made from oil-yielding products of the Colonial Empire, and he was an expert on the matter. So far as I was able to judge, no other speaker in the Debate controverted that argument. If he were correct, it is obvious that if the British farmer is deprived of cattle feed made from the soya bean and has to use cattle feed made from palm kernels, ground nuts or oil extracted from other Colonial products, he will have to use more of that cattle feed to get the same result, and will have to pay more in the long run for the raw material with which to feed his cattle. That reveals a contradiction in Government policy in regard to the farming industry. Presumably the present proposals are intended to stimulate and benefit Colonial products from which oil can be obtained for the same purposes as oil produced from the soya bean, but with less nutritive value and less advantage to the parties concerned. At one and the same time the Government are increasing the farmer's costs and are subsidising him to enable him to get a better price for the products from his farm.
    Other hon. Members will probably have something to say upon the subject as it affects their constituencies, so I will leave the employment side of it to them, and will content myself with calling attention to what I conceive to be the inherent contradictions in Government policy in

    277
    many of the economic courses they pursue. We shall be doing the Government a kindness therefore, if we delete the Clause from the Bill.
    8.35 p.m.
    Mr. CLEARY: I support this proposal for the same reason that I supported the proposal to leave out the previous Clause, namely, because of the effect of the Government's policy upon Liverpool and my own constituency, particularly from the point of view of employment. My fears are borne out by the fact that the employers and the employés are united in their opposition to the new duty. The Joint Industrial Council for the seed crushing and compound cake manufacturing industry in Liverpool has supplied certain information, which comes particularly from the employers' side, and the joint representations from both sides of the industry emphasise the point that many hundreds, and perhaps thousands, will lose their employment if this new duty is persisted in. The underlying suggestion of the Government's policy seems to be that the seed crushers ought to use more Empire produce, and by Empire produce I mean ground-nuts, palm kernels, and copra. But I would suggest very humbly, because I am not by any means an authority on the subject, that that shows abysmal ignorance of the trade. I say that because, in crushing, two products are produced—first, oil, and, secondly, cake or meal; and it follows that the crusher must be able to dispose of the two products in about the proportions in which they are produced.
    I should like, if I may, to quote some figures from the statement given to me by the Joint Industrial Council to which I have already referred. Soya beans yield 16 per cent. of oil and 80 per cent. of meal; ground-nuts yield 43 per cent. of oil and 56 per cent. of cake; palm kernels, 45 per cent. of oil and 55 per cent. of cake; and copra, 63 per cent. of oil and 36 per cent. of cake. Therefore, assuming that the crushers were trying to substitute 170,000 tons of soya beans by 170,000 tons of ground-nuts, they would have to try to market 73,100 tons of oil and 95,200 tons of cake, instead of 27,200 tons of oil and 136,000 tons of meal. How can the crushers dispose of the extra 46,000 tons of oil on the top of the existing quantities. It is computed that, if the new duty is carried, United Kingdom
    278
    crushers will lose 110,000 tons of crush, and there will be a shortage of meal amounting to about 100,000 tons, which would have to be made up by importing foreign cakes. It is pointed out that the price of feeding stuffs has already risen owing to the fact that the proposed duty has had to be taken into consideration. These are the points brought forward in representations by the employers' and the employés' side of this most important industry in Liverpool and in the country generally. I suggest with all deference that representations coming from such quarters might receive the consideration of the Minister.
    8.39 p.m.
    Brigadier-General NATION: May I also be permitted to offer my most sincere congratulations to the new Secretary of State for the Colonies on assuming his high office. At the same time, I should like to say how sorry I am that, on the first occasion on which I address him as Secretary of State, I shall have to oppose the policy adopted by his predecessor. The late Colonial Secretary, speaking on the Budget Resolutions with reference to soya beans, stressed the point that the Colonies had nearly all asked for this duty, and that it was being put on in the firm belief that the Colonial products, that is to say, ground-nuts, palm kernels, copra, and so on, were a real substitute for what was being produced in this country from the soya bean. When that Debate took place in the House, I think that many Members, and certainly I myself, had not had the time to go into the question as fully as we should have liked. During the Whitsuntide Recess I have spent a great deal of time studying this question from every angle. I have visited factories where crushing was taking place, I have been in communication with a number of farming and agricultural interests, and I find wherever I go that in no case is it admitted that the product of the soya bean is replaceable by the products from other nuts and kernels. The products from the Colonial nuts and kernels are of far lower protein value than that from the soya bean, and therefore they are used for different purposes. It goes without saying that I am a firm supporter of Empire preference, and would do nothing that would in any way damage Colonial development or Colonial enterprise, but from all my inquiries I find that the

    279
    Colonies cannot produce the soya bean, and that what they produce cannot replace what is required by the farmers and is made from the soya bean. Therefore, I think there is much to be said for the retention of the import into this country of the low-priced soya bean.
    With regard to the palm kernels which come from our Colonies, I find on inquiry that the amount we import is comparatively small, and that the sale for the cake and meal from these kernels is also small and a diminishing quantity. A few years ago we had a very large export trade in palm kernel cattle feed to Germany and Belgium, but that is now completely stopped. I find also that the oil from these kernels is what is called a hard oil, and cannot in any way take the place of the oil resulting from the crushing of the soya bean, which is a liquid oil and is used for a different purpose. With regard to ground-nuts, since the Ottawa Conference these have been made into cake to a very large extent in India, and India is sending to this country ready-made cattle cake and cattle meal in ever-increasing quantities. I find that between 1933–34 alone the increase was something like 100 per cent., and that means that less and less is made in this country. The oil that is produced from the ground nuts is of such enormous extent that an outlet cannot be found for it in this country. Something like 50 per cent. of oil is produced in the process of the manufacture of the cake or meal, but in the manufacture of meal from the soya bean there is only something like 15 per cent. of oil, and that can be easily disposed of. Therefore, it is obvious that ground nuts and palm kernels can in no way take the place of the soya bean, either with regard to the manufacture of the meal or the disposal of the oil.
    I have also discovered from the farming industry that they require the soya bean for particular purposes at a particular time, that although they use the other cattle stuffs they have to have the soya bean for particular purposes. If the 10 per cent. duty on soya beans is confirmed, it will have the effect of putting up the price of soya cattle feed in this country and of encouraging the introduction of foreign made soya meal. We have had negotiations with the Board of Trade, and they recommend that we should apply for a, tariff on foreign im-280
    ported cattle food made of soya beans. If we do that, it will put up the price of foreign-made soya meal, and the farmer will be doubly handicapped. The home-made soya cake will be increased in price and foreign-made soya cake will also be increased in price, and both will hit the farmer. We have therefore arrived at this situation. The Colonies want us to use palm kernels and ground nuts. As far as we know at present, they cannot produce soya beans in anything like commercial quantities. Although in this country we use palm kernels and ground nuts to a certain extent, we need the soya bean as well. All farmers will support that statement.
    From inquiries I have made I cannot find anybody in this country who is in favour of this duty. I do not know who has been consulted, if anybody. I believe that possibly the Liverpool Chamber of Commerce might be in favour of this duty. I do not blame them for that at all. Liverpool is very highly interested in the West African trade and naturally they would like to see a greater import of colonial products into this country. The soya bean does not go to Liverpool to the same extent, and naturally, if they were consulted, they would be in favour of the duty. On the other hand, the other industries which are so much affected should also have a voice in the matter. The chief manufacturing town in this country for soya crushing is no doubt Hull, and I do not think that the Hull Chamber of Commerce has been consulted in this matter at all, and from inquiries that I have made I do not think that the farming industry has been consulted. Therefore, it is a little hard that this duty should be imposed after what seems to me to be insufficient inquiry.
    I repeat that I would like to see the Colonies develop in every possible way. If they could only show that they can grow the soya bean and produce it in sufficient quantities and at a price that we can afford to pay, I should not be opposing this duty, but until such time arrives that the Colonies can produce the soya bean, it is a pity that we should impose a duty, the result of which will inevitably be to put restrictions upon a flourishing industry just at the very time when we are supposed to be doing better all round, when unemployment is going down and when everybody feels happy for the future. By all means let us con-

    281
    sider the matter and say to the Colonies: "Go ahead, make your experiments, show us that you can grow soya beans; we want soya beans. As soon as you can tell us that you can produce soya beans at a price which we can pay compared with the price at which we can get them from foreign countries, and in the quantities that we require, we will do all we can to help you with the necessary tariff." In the meantime, I hope that the Government will seriously consider whether it is a good policy to impose a further burden upon one of our chief industries. I hope that the new Colonial Secretary will be able to give me some hope that between now and the further stages of this Bill he will give this matter consideration anew.
    8.51 p.m.
    Major PROCTER: I was surprised to hear the hon. Member for the Wavertree Division of Liverpool (Mr. Cleary) speaking against this duty, which is designed to, and I believe will, greatly assist the trade of the dockers and sailors of Liverpool and the West African trade in general. He must know, coming from that City, which has been described as one of the distressed areas, that one of the causes of the distress is due to the loss of the West African trade.
    Mr. CLEARY: I pointed out that I was speaking from a brief supplied by the Joint Industrial Council representing both sides of the seed crushing industry—employers and employed—in Liverpool.
    Major PROCTER: I hope that it is well known in Liverpool that the hon. Member is speaking on behalf of the employers.
    Mr. CLEARY: And employed—the Joint Industrial Council.
    Major PROCTER: I as a Conservative Member—and I was born in Liverpool and lived there for many years—to-night speak on behalf of the dockers and the men whose living depends upon the trade between Liverpool and West Africa. The whole of the argument so far has been based upon the assertion that if you put on a 10 per cent. duty you thereby necessarily increase the price. The tariff policy of this Government has clearly shown that if there is an alternative supply of any article the person or the country supplying the product pays the duty.
    Mr. KIRKWOOD: That was the idea.
    Major PROCTER: That is borne out by the facts. When the soya bean was left on the free list, the price of the soya bean declined more than 10 per cent., but that decline in price was not reflected in a diminution of price to the consumer. As the price of the soya bean is now 10 per cent. less than it was formerly, the manufacturers of the soya bean meal cake can still supply the cake for the farming industry and pay the duty without increasing the price, if they so desire, because that margin still remains. Furthermore, the argument on the other side has been based upon the increase in price. I wish that that were so. My regret is that the duty has not been made considerably higher. The soya bean is grown in Manchukuo and is under the rule or oversight of Japan. It comes over in Japanese ships, and employment is given to Japanese or Chinese labour in growing the bean and in bringing it to this country. On the other hand, our own Colony of West Africa has been very badly hit. The removal of the duty on whale oil enabled the Norwegians still further to strike at one of our most loyal and, from the trade point of view, very valuable Colonies. Germany is not buying West African goods. France, whose colonial policy is far wiser than ours, brings its colonial products from its own colonies and keeps out as far as possible the products from our Empire.
    West Africa is one of the greatest markets for the cotton industry, and in former years gave employment to many thousands of Lancashire cotton operatives, and also to dockers and British seamen who carry and handle West African trade with Liverpool. Because the commodity of the West African natives, the palm kernels, has been reduced in price by over one-third, the West African can only give one-third of the employment that he formerly gave to the people of this country. Therefore, the present policy of the Government is a first step towards that which some of us would like to see, namely, a Customs Union throughout the whole Empire. We recognise that we belong to one great family, and that West Africa and the other Colonies of the British Empire are very valuable markets for our goods. If we can increase this duty and keep out the soya bean we shall help employment

    283
    in Liverpool and in Lancashire and do good to the British Empire. I hope that the time will come when the duty instead of being diminished will be increased more and more, with the result that our own Colonial Empire will benefit and therefore British trade, and particularly Lancashire trade, will benefit, because Lancashire trade depends upon the Colonial Empire, which this duty is designed to help.
    8.59 p.m.
    Mr. HASLAM: I join in congratulations to my right hon. Friend the new Secretary of State for the Colonies, and I should like to ask him a few questions. In regard to tariffs, we must concern ourselves very closely with the diverse interests concerned. The hon. and gallant Member for Accrington (Major Procter) put the point of view of the dockers of Liverpool and painted a glowing picture of what might happen if West Africa were greatly developed and trade between West Africa and Liverpool were greatly developed. We have heard other points of view. The hon. and gallant Member for Hull, East (Brigadier-General Nation) spoke for the industries of Hull, and the hon. Member for Wavertree (Mr. Cleary) spoke for the industries of Liverpool. The questions that I would put to the right hon. Gentleman are connected with the industry of agriculture. Feeding stuffs and their cost play a very big part in agriculture, and everyone will agree that agriculture has been going through very bad times, particularly the livestock side of the industry. The beef producer, the cattle raiser, has been in a difficult position for several years. He has had to face very severe losses. Prices have fallen and at the present time the Government are assisting with a not inconsiderable subsidy, which is absolutely vital if the industry is not to sink into bankruptcy. Then there is the pig side of the industry. That is none too prosperous, and these particular feeding stuffs are used for pigs. We also know that the poultry side of the industry is in considerable difficulty.
    I would ask my right hon. Friend whether he has satisfied himself that the alternative feeding stuffs which may be made from palm kernels from West Africa or ground-nuts from India are adequate and good substitutes for the
    284
    soya bean. There is a certain amount of scientific evidence that the soya bean is a highly nutritious product. It contains a good deal of the protein necessary in all feeding stuffs. The hon. and gallant Member for Accrington stated that in spite of the lack of the duty on soya beans the price to the consumer, the stock-feeder, in whom I am interested, has not been reduced.
    Major PROCTER: My point was that the import price of the soya bean has declined more than 10 per cent. since the question was first discussed, but the price to the consumer has not been reduced by 10 per cent., but has remained what it was. Therefore, by the imposition of the 10 per cent. duty the manufacturers have still that margin to play with without increasing the price.
    Mr. HASLAM: That is a question which my right hon. Friend will perhaps be able to answer. It is a very important point to the cattle raiser, the pig-feeder and the egg producer who are the people I am endeavouring to represent this evening. If they do not get any advantage from the absence of the duty they naturally want to know why it is, and they will not take the same view that they otherwise would. It is of vital importance to the live-stock producers of this country that they should get feeding stuffs of the best quality and at the lowest possible price, consistent with fair profits and fair wages. That is all that we in agriculture ask. We do ask that we should get the very best feeding stuffs on that basis. It is not unreasonable; and I hope the Secretary of State will assure the agricultural industry that it will be at no disadvantage by the duty and the possible substitution of palm kernels and ground nuts for the soya bean. It will want some justification, because the soya bean is a very valuable feeding stuff and farmers are prepared to pay a rather higher price for cake made from it than for cake made from other materials. The imposition of this duty, from the point of view of agriculture, requires some justification.
    9.6 p.m.
    Captain HEILGERS: I had not intended to intervene in the debate because I took part in the last discussion in the House on this subject, but, in view of the speech which has just been delivered by the hon. Member for Horncastle (Mr.

    285
    Haslam), I should like to make it clear that the views he has expressed do not represent the unanimous opinion of agriculturists. As far as I am concerned, I would much rather support the views expressed by the hon. and gallant Member for Accrington (Major Procter). The manufacturers of the soya bean meal might have come down in their price during the last two years. There has been but a very small fall in the price to the agricultural consumer, and I do not think that the duty necessarily means any increase in the price to farmers who purchase soya bean meal. On the other hand, I consider that the West African trade is of great importance to Lancashire, and that the well-being and prosperity of Lancashire is of great importance to agriculture. Indeed, so far as agriculture is concerned, its future prosperity depends largely on a greater access of prosperity to our manufacturing districts.
    9.8 p.m.
    Mr. CLARKE: I desire to oppose the Clause because there is a large mill in my division which will be seriously affected by this duty. I understand that at least 100 men will be dispensed with immediately it comes into effect, and, as in this particular case they deal with cargoes of soya beans running into thousands of tons, it is a pretty serious matter from their point of view. If they have to introduce another raw material, such as palm kernels, when the percentage of oil will be so much greater that it will produce far less cake, there will be a much bigger import of oil cake and the price may be anything. It will affect their manufactures to such an extent that they will have to dispense with a number of men, and, if that applies to a number of other mills, it is a serious matter from the point of view of employment. They are also somewhat doubtful as to whether they will be able to get soya beans from the colonies in time to be of much service to them in the next year. The duty, therefore, should be brought in gradually. Instead of 10 per cent., it should be considerably less until such time as the colonies can produce the soya bean in sufficient quantities. For these reasons, I support the Amendment.
    9.10 p.m.
    The SECRETARY of STATE for the COLONIES (Mr. Malcolm MacDonald): In the first place, I must thank those hon. Members who have been good enough to commence their speeches with a few words of a kindly personal nature, and I should have been only too happy if I could have reciprocated the good will from the other side by saying that I have authority to accept the Amendment. I am afraid that I cannot do that. The effect of the Amendment would be to keep the soya bean on the free list and prevent us from levying a duty upon them as from 1st of August onwards. The reasons why we are anxious to make this change were fully stated, in a way which was greatly appreciated by hon. Members, by my predecessor in the full Debate which took place on the Resolution. To-day some of the arguments on the other side have been repeated, and I certainly would admit that the hon. and gallant Member for Hull (Brigadier-General Nation) and others who have spoken on behalf of the crushing industry, have made out a certain case from their point of view. They have represented the case of a certain interest, an important interest, but I would urge that it is a smaller and narrower interest than the wider one which we are seeking to help by this Measure, that is, to stimulate and develop a branch of our Imperial trade.
    But even from the point of view of the interests of the industry I do not believe that the case is nearly as strong as they make out. They urge that the result of the duty will be to prevent soya beans being brought into this country for crushing and that therefore large numbers of men will be thrown out of work in the crushing mills. In introducing this proposal, it is the purpose of the Government that the place of the soya bean should be taken by rival raw materials coming in from the Colonies, ground nuts and other substances, which, equally with the soya bean, will require crushing in this country, and which equally will require treatment and which will, therefore, employ additional men in the process. The employment which is lost on the soya bean should be made up on the ground nuts and other substances. Again, it is urged that the shipping which now brings the soya bean will be reduced in numbers, but the reply to that is that

    287
    there will be an increase in the number of ships carrying other goods from the Colonies.
    Brigadier-General NATION: I thought I had made it clear that ground nuts and palm kernels cannot take the place of the soya bean for cattle feeding purposes, and that the shipping which will be required for the carrying of the cargoes of soya beans will be less on account of the smaller imports of soya beans because of the higher prices which will result if the duty is imposed.
    Mr. MacDONALD: Many of the authorities on that matter would beg to differ from the hon. and gallant Member. I am assured that the increased importation of palm kernels and ground nuts will fully satisfy the requirements of the farmers and users of cake in this country. That is a point with which I was going to deal later. I am only saying, in the first place, that from the point of view of the seed-crushing industry there ought not to be a reduction of employment, and that from the point of view of the dock labourers unloading the ships there ought not to be any reduction of employment either. I would add that, whereas I am told that soya beans coming from Manchukuo are carried to this country very largely in foreign ships, the ground nuts and palm kernels and copra and other substances which will take their place will be carried from the Colonies to this country in British ships. Therefore I urge that, from the point of view of our docks and shipping, the arguments in this matter are by no means all on one side of the case.
    But, as I have said, we are seeking to serve a much wider interest. We are seeking to stimulate and develop a certain important branch of Imperial trade. Soya beans come in entirely from foreign sources. It is absolutely true that they do not compete with soya beans coming in from the Colonies, because the Colonies do not produce soya beans at the present time. But we are very much hoping, and we are encouraged to believe as a result of experiments, that this will stimulate production of soya beans in some of the Colonies. That is not our main purpose, however. Although soya beans from Manchukuo do not compete with soya beans from the Colonies, they do compete very effectively with palm kernels and ground-
    288
    nuts and copra and other substances from the Colonies.
    My hon. and gallant Friend has said that he made inquiries about the imports of palm kernels, and that he found that those imports were very little indeed and were steadily diminishing. That is absolutely true. It is the whole point of the policy of the Government in this matter. As a matter of fact the imports used to be very substantial indeed, and still are fairly substantial, but they are diminishing because of the competition of soya beans from Manchukuo. In 1919 317,000 tons of palm kernels were imported into this country. In 1934 that total of 317,000 tons had fallen to 134,000 tons.
    Dr. ADDISON: But that was the year after the War. Has the right hon. Gentleman the figure for 1921?
    Mr. MacDONALD: I have very carefully studied the figures in order to get an average and fair figure. Other figures which were quoted on the previous occasion were for quite abnormal conditions and abnormal years.
    Dr. ADDISON: Will the right hon. Gentleman give the figure for 1921?
    Mr. MacDONALD: I have not got the figure for 1921 here, because I have gone through the whole list of figures very carefully and have picked out those which are fair and representative of trade in the two periods, and I have rejected the figures for 1921 or other years which were not so representative as the figures that I am giving. I have said that there was that very great fall in the imports of palm kernels between 1919 and 1934, whereas in the same period imports of soya beans have increased from 62,000 tons to 178,000 tons. So that while one trade has been decreasing the other has been expanding at a very considerable rate. That explains the fact which my hon. and gallant Friend discovered, that this trade in palm kernels is becoming less and less important as the years go on. It is in order to encourage the Colonies to get back trade which they used to enjoy and which will so greatly benefit the constituents at any rate of neighbours of my hon. Friend the Member for Wavertree (Mr. Cleary) that we are anxious to put through this policy.
    The Colonies where these commodities are produced have been suffering very

    289
    severely from the effects of the depression of recent years. They used to be able to send these things into other overseas markets, but owing to the restrictive policy of foreign governments those markets have been lost, and the only great and reliable market overseas which is left to them is the United Kingdom market, and we are anxious to secure that market still more firmly for them as soon as possible. From that wider results will flow. My hon. Friend the Member for Mansfield (Mr. C. Brown) spoke about the British farmer. I believe that the British farmer is going to benefit from this policy. If we can improve the prosperity of our Colonies they, being amongst our best customers for some industrial products, will purchase more of those industrial goods, the goods of Lancashire for instance. Lancashire sells nothing to Manchukuo, where the soya beans come from, but Lancashire sells a great deal to Nigeria and the other West African Colonies, to the Western Pacific Colonies, to Ceylon and so on, where ground nuts and palm kernels and copra are produced.
    Mr. LOGAN: While the right hon. Gentleman is advocating that policy does be remember that representations were made to this House in regard to the palm kernels, and that that industry has entirely gone because of the question of whale oil?
    Mr. MacDONALD: Again this is going to lead to production of palm kernels as against competition from whale oil. My hon. Friend showed that he appreciated that in the speech which he delivered on the last occasion when this matter was debated, though he ceased to appreciate it by the time he walked into the Division Lobby. By encouraging the importation of palm kernels into this country and the extraction of oil from those things we are helping that industry against whale oil or vegetable oils coming into this country from foreign countries. I was in the middle of arguing that if we can help the Colonies, who are our good customers, and make them more prosperous so that they can buy more of our industrial goods, the farmer in this country in his turn is going to get some of the benefit, because his market is made up out of the purchasing power of workers in Lancashire and other industrial centres.
    290
    I would like to answer the question put to me by my hon. Friend the Member for Horncastle (Mr. Haslam). He asked whether I had satisfied myself that the farmer would not suffer owing to this change by having to put up with an inferior quality of feeding stuff or by having to pay more for feeding stuff of the same quality. On the question of the nutritive value of soya cakes as against ground nut or other cakes, I believe that the experts as usual differ. They have differed this evening. On the last occasion on which the matter was discussed something like half the agricultural Members who spoke took one view, and the other half took the opposite view. I take the very highest authority on this matter, who is of course my right hon. Friend the Minister of Agriculture. I am bound to stand by what he says. It is a habit we have in the National Government. This is an example of two wings of the Government standing firmly together. But, in all seriousness, the Minister of Agriculture two or three years ago carried out a very careful investigation into this matter and came to the conclusion that the nutritive value of soya cake and that of ground nut cake are just about equal. There is no choice between the two—and when we particularly asked the Ministry of Agriculture last week whether they still held that view they confirmed it and said that they were quite ready to stand by their judgment.
    Therefore, as one of the agricultural Members said on a previous occasion, it is a matter of price. When we look at the prices of these goods we see that the advantage is all on the side of the product from Colonial raw materials. The latest figures I have been able to get show that when soya cake was £6 13s. 9d., ground nut cake was £6 and palm kernel cake was £5 10s. In this case, therefore, by purchasing the Empire product the farmer can get as good quality at a less price. With regard to the suggestion that there is a much larger percentage of oil in these substances coming from the Colonies and that we might be faced with an enormous surplus of oil in this country, there is no reason at all why the oil extracted from these substances should not be used in substitution for the vegetable and whale oils coming into this country from foreign countries to-day—as they do in very large quantities.

    291
    For those reasons, I am unable to ask the Committee to accept the Amendment, and I would ask them to resist it in the interests not only of people in this country engaged in industry and farming but also in the interests of the very depressed Colonies for whom we are trustees.
    9.28 p.m.
    Mr. CLEMENT DAVIES: May I join with other Members in congratulating the Secretary of State on undertaking his high office. May I at the same time commiserate with him on having such an awful legacy handed to him, on the first time he addresses the House, by his predecessor in title. I understand that the case made by the Secretary of State is as follows: I am going to interfere with the free import of soya beans into this country in order that by so doing I can compel the people of this country to use palm kernels, or copra, or groundnuts which come from the Colonies. If that is his policy, let him be bold enough to say that in no circumstances shall soya beans be brought into this country. That would be a clear-cut policy which I could understand.
    The soya bean is a peculiar product. It grows in one country and in one country only and that country is Manchukuo. Experiments have been made in trying to raise it in other parts of the world, but so far they have all been a complete failure. There is only one country where this article is produced, but the world as a whole is its market and England together with other countries is competing in the market for that product, of one country, which has certain special qualities. With the possible exception of France, soya beans are being introduced freely into every other country of the world to try to assist the farmer. Primarily, the soya bean is valuable as a cattle food. The soya bean only produces something like 16 per cent. of oil, but the rest of its content is very valuable as a cattle food. It contains more protein than any other kernel and has a special value for the farmer. As I understand it at the present moment, special machinery is used and special people are employed in crushing it. It may be sold as straight cake, but what is being done with it more nowadays is to use it with other seeds in forming the best mixture of all for the various pur-
    292
    poses for which feeding stuffs are required. There is a special mixture for dairy cows, another for fat cattle, another for sheep and another for pigs. That mixture is essential to get the best cattle foods.
    Can it be said in any way that a substitute can be found? The answer is in the negative. I do not know what authorities the Secretary of State has consulted, but I am perfectly certain that if he consults the trade and his agricultural experts he will find that there is no proper substitute for this soya bean. Yet the policy of this country at present is to make it more expensive to the farmer, while other countries will be importing it freely. The result is that we shall be in a worse position as regards feeding-stuffs even than we are at present—and at the present time we are importing over 500,000 tons of cake into this country every year. What is going to happen now is that the quantity produced in this country will be lessened rather than increased.
    I could not follow one other argument used by the right hon. Gentleman. He said that already there is an encouragement to use the palm kernel or ground nut because the price of the cake made from the palm kernel or the ground nut is less than the price of cake made from the soya bean. Then why is it that the farmer asks for the soya bean cake? He is prepared to pay a higher price for it because he needs it—and now the policy is that he has got to pay more.
    It is an extraordinary thing that while the Minister of Agriculture is doing his best to maintain this great industry on its feet, other Members of the Government are taking away from it all the time the benefits given, whether by trade agreements made by the Board of Trade with Denmark and Poland and other countries which allow foreign produce to compete with the farmers here, or in other ways. Now the Government are going to add to that policy by increasing the burden on the farmer by making him pay more for soya bean cake—an essential feeding-stuff for his cattle, sheep and pigs. For these reasons I think the Government have made a great mistake; and they are not going to help West Africa in the slightest degree. Fortunately I know something about West Africa. I suppose we are the biggest importers in the world of palm kernels and ground

    293
    nuts from West Africa, and I do not see how West Africa is going to benefit in the slightest degree by shutting out this peculiar product which only grows in one part of the world and for which the rest of the world competes. For these reasons I oppose the Clause.
    9.34 p.m.
    Sir ERNEST SHEPPERSON: I agree with the last speaker in my misgivings about this tax so far as it concerns agriculture. But I particularly want to say that I entirely disagree with him in this statement that soya beans are only grown in Manchuria. That is untrue, because they are grown in England too. I myself have been growing them. When I realised that there was going to be a duty on the importation of foreign soya beans, I thought the best thing I could do would be to take advantage of that protection and grow them myself.
    9.35 p.m.
    Mr. GRAHAM WHITE: I wish to associate myself with the observations and also with the conclusions of my hon. and learned Friend the Member for Montgomery (Mr. C. Davies). Particularly, I should like to associate myself with his expression of pleasure at hearing my right hon. Friend the Secretary of State for the Colonies address the Committee for the first time in that capacity and also with his expression of regret that the occasion should be the presentation of an argument which seems to be founded upon a fallacy. I had hoped that my right hon. Friend would have dealt with one or two of the questions which were addressed to his predecessor in a previous Debate upon this subject and to which on that occasion no answer was given. I am not altogether surprised that no answer was given because I do not believe there is any effective answer. The idea of helping the West African Colonies is one which must appeal to every Member of the Committee, and I believe that if a case were made out on that ground, there is nobody who would not be behind my right hon. Friend in this proposal. In point of fact, however, he is here wrestling with a difficulty which cannot be overcome by legislation. That is the physical difficulty involved in the difference in the proportions of oil and meal yielded by these two products which are being considered.
    294
    Soya beans produce a much larger quantity of meal than ground nuts, and ground nuts produce a larger quantity of oil. Those engaged in the crushing industry must be able to dispose of the meal and the oil in the proportions in which they are produced, and if we were to attempt to substitute the present crush of soya beans by a like amount of ground nuts, we should produce 46,000 tons of oil more than is produced at the present time. My right hon. Friend who dealt in passing with this point suggests that this oil might be used in substitution for some other product or dealt with in some other way, but I am assured that it could only be got rid of by depressing the price because the market is already satisfied. Therefore so far from helping West African producers and shippers, it could only injure them by depressing the price. But that is not the whole story. From the same operation there would result a shortage of something like 100,000 tons of meal. The substitution of the present import of soya beans by a like amount of ground nuts would lead to a surplus of oil and a shortage of meal to the extent indicated, and we may assume, whatever the substitute for that meal, that it would not be imported from the British Dominions. It seems to me that the whole proposal is based upon a fallacy and that this is a physical difficulty which cannot be overcome by legislation.
    Major PROCTER: Can the hon. Member say how these problems were solved before the soya bean was introduced?
    Mr. WHITE: I am afraid that my knowledge of the history of this matter does not go back to those early times but my hon. Friend knows that the practice in every industry is bound to change. If you go back for 15 or 20 years you will probably find that the practice in the seed crushing industry was entirely different from what it is to-day and probably in another 10 or 20 years time it will be different from what it is at the present time. To talk about going back reminds me of the point raised by my right hon. Friend the Member for Swindon (Dr. Addison) who asked about the importation for a particular year. Prior to the earlier discussion on this subject I made a careful study of the figures of the importation over a number of years. I notice that when this question is raised

    295
    in Debate the year 1919 always seems to be chosen by speakers on the Government side. My right hon. Friend's predecessor took that year but by taking particular years, here and there, one can prove anything and where anything can be proved from figures we may also take that those figures prove nothing.
    If we take the year 1910 we find that the importation of soya beans was 413,000 tons or greatly in excess of anything we have at the present time. I am assured by those who have made a careful and practical study of the matter that the importation from West Africa has not in fact suffered through the importation of the soya bean. My hon. and learned Friend the Member for Montgomery asked why farmers should be prepared to pay 10s. a ton more for soya bean cake than for
    other kinds of cake. I have sufficient esteem for the common sense of agriculturists to believe that they know their own business and that they would not pay 10s. a ton more for a particular product unless they knew they were getting value for their money. As I say, the idea behind this proposal is one which would naturally appeal to every Member of the Committee. We know that West Africa has suffered and is continuing to suffer although I understand that the situation is now beginning to improve. But if we support this proposal in the belief that it is going to help West Africa I submit that we are founding hopes upon a fallacy.
    Question put, "That the Clause stand part of the Bill."
    The Committee divided: Ayes, 197; Noes, 63.

    Division No. 236.]

    AYES.

    [9.45 p.m.

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

    Cruddas, Lieut.-Colonel Bernard

    Lindsay, Kenneth (Kilmarnock)

    Agnew, Lieut.-Com. P. G.

    Culverwell, Cyril Tom

    Little, Graham., sir Ernest

    Albery, Irving James

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

    Llewellin, Major John J.

    Aske, Sir Robert William

    Denman, Hon. R. D.

    Lloyd, Geoffrey

    Assheton, Ralph

    Drewe, Cedric

    Lockwood, John C. (Hackney, C.)

    Balley, Eric Alfred George

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

    Loder, Captain J. de Vere

    Baldwin, Rt. Hon. Stanley

    Ellis, Sir R. Geoffrey

    Loftus, Pierce C.

    Balfour, Capt. Harold (I. of Thanet)

    Elmley, Viscount

    Lovat-Fraser, James Alexander

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

    Emmott, Charles E. G. C.

    Mabane, William

    Beit, Sir Alfred L.

    Emrys-Evans, P. V.

    MacAndrew, Lieut.-Col. Sir Charles

    Bevan, Stuart James (Holborn)

    Fermoy, Lord

    McCorquodale, M. S.

    Blindell, James

    Fielden, Edward Brocklehurst

    MacDonald, Rt. Hon. M. (Bassetlaw)

    Boulton, W. W.

    Fleming, Edward Lascelles

    McLean, Dr. W. H. (Tradeston)

    Bower, Commander Robert Tatton

    Fremantle, Sir Francis

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

    Bowyer, Capt. Sir George E. W.

    Fuller, Captain A. G.

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

    Bracken, Brendan

    Ganzoni, Sir John

    Martin, Thomas B.

    Braithwaite, J. G. (Hillsborough)

    Gillett, Sir George Masterman

    Mayhew, Lieut.-Colonel John

    Broadbent, Colonel John

    Gledhill, Gilbert

    Mellor, Sir J. S. P.

    Brocklebank, C. E. R.

    Graves, Marjorie

    Mitchell, Sir W. Lane (Streatham)

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

    Grimston, R. V.

    Monsell, Rt. Hon. sir B. Eyres

    Brown, Rt. Hon. Ernest (Lelth)

    Gunston, Captain D. W.

    Moore, Lt.-Col. Thomas C. R. (Ayr)

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

    Guy, J. C. Morrison

    Moore-Brabazon, Lieut.-Col. J. T. C.

    Burghley, Lord

    Hacking, Rt. Hon. Douglas H.

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

    Burgin, Dr. Edward Leslie

    Hales, Harold K.

    Moss, Captain H. J.

    Burnett, John George

    Hamilton, Sir George (Ilford)

    Munro, Patrick

    Cadogan, Hon. Edward

    Hanbury, Sir Cecil

    O'Neill, Rt. Hon. Sir Hugh

    Campbell, Sir Edward Taswell (Brmly)

    Hannon, Patrick Joseph Henry

    Orr Ewing, I. L.

    Campbell, Vice-Admiral G. (Burnley)

    Harbord, Arthur

    Peat, Charles U.

    Campbell-Johnston, Malcolm

    Harvey, George (Lambeth, Kenningt'n)

    Penny, Sir George

    Cassels, James Dale

    Haslam, Henry (Horncastle)

    Percy, Lord Eustace

    Cautley, Sir Henry S.

    Haslam, Sir John (Bolton)

    Perkins, Walter R. D.

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

    Hellgers, Captain F. F. A.

    Peters, Dr. Sidney John

    Cazalet, Thelma (Islington, E.)

    Herbert, Capt. S. (Abbey Division)

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

    Chamberlain, Rt. Hon. N. (Edgbaston)

    Hills, Major Rt. Hon. John Waller

    Pickthorn, K. W. M.

    Clayton, Sir Christopher

    Hore-Belisha, Rt. Hon. Leslie

    Pike, Cecil F.

    Cobb, Sir Cyril

    Hornby, Frank

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

    Cochrane, Commander Hon. A. D.

    Horsbrugh, Florence

    Pownall, Sir Assheton

    Conant, R. J. E.

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

    Procter, Major Henry Adam

    Cook, Thomas A.

    Jackson, J. C. (Heywood & Radcliffe)

    Ramsay T. B. W. (Western Isles)

    Cooke, Douglas

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

    Ramsbotham, Herwald

    Cooper, A. Duff

    Jamleson, Rt. Hon. Douglas

    Ramsden, Sir Eugene

    Cooper, T. M. (Edinburgh, W.)

    Joel, Dudley J. Barnato

    Reed, Arthur C. (Exeter)

    Courtauld, Major John Sewell

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

    Reid, David D. (County Down)

    Courthope, Colonel Sir George L.

    Kerr, Hamilton W.

    Reid, William Allan (Derby)

    Craddock, Sir Reginald Henry

    Lamb, Sir Joseph Quinton

    Remer, John R.

    Cranborne, Viscount

    Leigh, Sir John

    Rickards, George William

    Crookshank, Col. C. de Windt (Bootle)

    Leighton, Major B. E. P.

    Ropner, Colonel L.

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

    Lennox-Boyd, A. T.

    Rosbotham, Sir Thomas

    Croom-Johnson, R. P.

    Lewis, Oswald

    Ross, Ronald D.

    Cross, R. H.

    Liddall, Walter S.

    Ross Taylor, Walter (Woodbridge)

    Ruggies-Brise, Colonel Sir Edward

    Smithers, Sir Waldron

    Wallace, Captain D. E. (Hornsey)

    Russell, Albert (Kirkcaldy)

    Somervell, Sir Donald

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

    Russell, Alexander West (Tynemouth)

    Southby, Commander Archibald R. J.

    Ward, Sarah Adelaide (Cannock)

    Russell, Hamer Field (Sheffield, B'tside)

    Spencer, Captain Richard A.

    Warrender, Sir Victor A. G.

    Russell, R. J. (Eddisbury)

    Spens, William Patrick

    Waterhouse, Captain Charles

    Rutherford, John (Edmonton)

    Stanley, Rt. Hon. Lord (Fylde)

    Wedderburn, Henry James Scrymgeour

    Rutherford, Sir John Hugo (Liverp'l)

    Stevenson, James

    Wells, Sidney Richard

    Salt, Edward W.

    Stones, James

    Williams, Herbert G. (Croydon, S.)

    Samuel, M. R. A. (W'ds'wth, Putney)

    Strickland, Captain W. F.

    Wills, Wilfrid D.

    Selley, Harry R.

    Sueter, Rear-Admiral Sir Murray F.

    Windsor-Clive, Lieut.-Colonel George

    Shaw, Helen B. (Lanark, Bothwell)

    Thompson, Sir Luke

    Winterton, Rt. Hon. Earl

    Shaw, Captain William T. (Forfar)

    Thomson, Sir James D. W.

    Womersley, Sir Walter

    Shute, Colonel Sir John

    Thorp, Linton Theodore

    Wragg, Herbert

    Smites, Lieut.-Col. sir Walter D.

    Titchfield, Major the Marquess of

    Smith, Bracewell (Dulwich)

    Todd, A. L. S. (Kingswinford)

    TELLERS FOR THE AYES.—

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

    Touche, Gordon Cosmo

    Mr. James Stuart and Captain Hope.

    Smith, Louis W. (Sheffield, Hallam)

    Tufnell, Lieut.-Commander R. L.

    NOES.

    Adams, D. M. (Poplar, South)

    Grundy, Thomas W.

    Moreing, Adrian C.

    Addison, Rt. Hon. Dr. Christopher

    Hall, George H. (Merthyr Tydvll)

    Morris, John Patrick (Salford, N.)

    Attlee, Rt. Hon. Clement R.

    Harris, Sir Percy

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

    Banfield, John William

    Holdsworth, Herbert

    Nathan, Major H. L.

    Barrie, Sir Charles Coupar

    Jenkins, Sir William

    Nation, Brigadier-General J. J. H.

    Batey, Joseph

    John, William

    Owen, Major Goronwy

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

    Jones, Henry Haydn (Merioneth)

    Rathbone, Eleanor

    Carver, Major William H.

    Kirkwood, David

    Roberts, Aled (Wrexham)

    Cleary, J. J.

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

    Rothschild, James A. de

    Cripps, Sir Stafford

    Lawton, John James

    Salter, Dr. Alfred

    Curry, A. C.

    Leonard, William

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

    Daggar, George

    Llewellyn-Jones, Frederick

    Smith, Tom (Normanton)

    Davies, Edward C. (Montgomery)

    Logan, David Gilbert

    Stewart, J. Henderson (Fife, E.)

    Dobble, William

    Lunn, William

    Tinker, John Joseph

    Edwards, Sir Charles

    Macdonald, Gordon (Ince)

    West, F. R.

    Evans, David Owen (Cardigan)

    McEntee, Valentine L.

    White, Henry Graham

    Gardner, Benjamin Walter

    Maclean, Nell (Glasgow, Govan)

    Williams, Edward John (Ogmore)

    Greenwood, Rt. Hon. Arthur

    Mainwaring, William Henry

    Williams, Thomas (York, Don Valley)

    Grenfell, David Rees (Glamorgan)

    Mallalieu, Edward Lancelot

    Wilmot, John

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

    Mason, David M. (Edinburgh. E.)

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

    Mills, Major J. D. (New Forest)

    TELLERS FOR THE NOES—

    Groves, Thomas E.

    Milner, Major James

    Mr. Paling and Mr. D. Graham.

    Question, "That the Clause stand part of the Bill," put, and agreed to.

    CLAUSE 10.—(Valuation of goods for purpose of ad valorem duties.)
    9.52 p.m.
    Major NATHAN: I beg to move, in page 10, line 5, to leave out "they would fetch on a sale," and to insert:
    "an importer would give for the goods on a purchase."
    Before I open the discussion upon this Amendment, I should like to ask your guidance, Captain Bourne, upon this matter. You will observe that there are a number of Amendments standing in my name upon this Clause which are in fact Amendments of a verbal character, though very important points of principle are involved. I would ask whether you would consider it convenient, and if so would permit, that I should open a general discussion on this Clause on this Amendment, on the footing that I either do not move or merely move formally any other Amendments standing in my name upon this Clause.
    9.53 p.m.
    The DEPUTY-CHAIRMAN: I have closely studied the Amendments to this Clause standing on the Order Paper, and
    298
    it appears to me that the Amendments in the name of the hon. and gallant Member for North-East Bethnal Green (Major Nathan) really form, with perhaps two exceptions, part of a scheme, and that scheme would cover the Amendment standing in the name of the hon. and gallant Member for the City of London (Sir V. Bowater)—in page 10, line 5, after "sale," to insert "to an importer"—and the Amendment in the name of the hon. Member for South-West Bethnal Green (Sir P. Harris)—in line 6, after "importation," to insert:
    "less an allowance in respect of duties of customs and reasonable merchanting expenses and profits incidental to the marketing of the goods after importation."
    I think it would be for the convenience of the Committee if we took a general discussion on this scheme on this first Amendment. The two Amendments that I should select otherwise are those standing in the names of the hon. Member for Cardigan (Mr. D. Evans)—in line 23, to leave out "and will not be"—and the hon. Member for Huddersfield (Mr. Mabane)—in page 11, line 26, to leave out "a get-up," and to insert "style of

    299
    production or finish"—which raise separate points not, so far as I can ascertain, covered by the other Amendments.
    9.54 p.m.
    Major NATHAN: I am greatly obliged for the guidance which you have given me. There is no doubt that the provisions of this Clause have inspired a widespread feeling of alarm in the minds of the commercial community of this country. Association after association of manufacturers and merchants without any special political bias have addressed communications to the Chancellor of the Exchequer upon this subject. I have with me copies of some of those communications, and also the answer given by the Chancellor, to which I may have occasion, with his permission, to refer. Hon. Members may perhaps remember that when the matter of Import Duties was under discussion in this House I was one of those who took a part in opposition to the whole policy underlying the Bill. I have nothing to say about that to-day. The policy is part of the law of the land, and this Bill merely deals with the question of the administration of that policy. It is to that point of view alone, as a matter of business administration and the effective carrying out, to the satisfaction of the business community, of the provisions of the Statute, that I would limit myself this evening.
    It is a matter of great complexity to arrive at what is the open market value of any product which is subject to an ad valorem duty, and I do not minimise it in the least. It is a common misapprehension that the price which is paid by an importer to a foreign exporter is the criterion by which is to be judged the value of the goods for the purposes of duty. That, of course, is entirely erroneous. It was not so under Section 15 of the 1932 Act, nor is it so under the Clause now under discussion. Although open market value was to be the test in each case, I do not think I am exaggerating if I say that the Clause now before the Committee in effect repeals, and is designed to repeal, the central, effective, operative provision of the Act of 1932 upon which the whole fabric created by that Act depends, and creates something entirely new. The definition of the values which are to be assessed
    300
    by the Commissioners of Customs and Excise is entirely new. Let us compare the old section with the new Clause. They both depend upon open market value. The point is how open market value is to be defined. In the Act of 1932 it was defined as being
    "the price which an importer would give for the goods on a purchase in the open market."
    In Clause 10 of this Bill it is to be defined as
    "the price which they would fetch on a sale in the open market."
    There is a world of difference between the two; there is the whole of the spread between the prime cost and the profit value of the goods. What the commercial community is anxious about is lest the duty will in future be charged, not upon the buying price, but upon the selling price of the goods and that an importer will have to pay, not upon the cost of the goods to him, but on the cost of the goods plus some element of profit. I say "some element of profit" because it has never yet been defined, either by law or in practice—and it is high time it was defined—at what stage of the journey from the place of importation to the ultimate consumer the valuation is to take place. The Bill is entirely silent on that point, as the Act was silent.
    There are various categories in the process of importation. There is the wholesale manufacturer who imports his raw materials; there is the wholesale merchant and there is the retailer; and there is a long list of categories of those through whose hands the goods may pass from the moment they arrive at these shores, which is the time at which the value ought to be ascertained, till they reach the hands of the ultimate consumer, which, for all this Bill says, may be the place at which the value is to be ascertained. There is not really very much doubt about the matter under the Act of 1932. That Act provided that the value was to be the price which an importer would give. An importer giving a price naturally gives the lowest price at which he can get the goods. As a result of the haggle of the market in this notional open market he gets the goods at the lowest price at which he can get them. When, however, we come to the phraseology of this Bill, the whole bias, twist and temper is entirely altered.

    301
    Now it is to be the price which the goods will fetch, which means, of course, the highest price which can be obtained for the goods. I think it has been defined by the court of appeal in a recent case that open market value is the price at which goods will be offered to all and sundry. "All and sundry" may begin with the importer and end with the ultimate consumer. It is important to know at what point the value is to be assessed.
    Let me put the matter in a practical form as the result of some day-to-day experience in dealing with these matters with the Customs authorities. I quote concrete cases, because I hope to get in answer to them an indication from the Chancellor of what is really meant by these provisions. In doing so, let me say that it has fallen to my lot since the Finance Act of 1932 was passed to come in contact a great deal with the authorities at the Customs office, and I have nothing but admiration for the ability, courtesy and skill with which they have undertaken new and arduous tasks. I do not agree with their procedure in many cases. I think it is entirely wrong, and I have been successful in proving it is wrong. Nevertheless, I would like to take this opportunity of expressing, not only my own feeling, but that of the commercial community, as to their courtesy and ability. They are the most charming pirates who ever scuttled trade.
    Let me give practical examples that have fallen within my knowledge and ask the Chancellor how this Bill will operate in such instances. There is a case of boots and shoes arriving by the same ship, consigned from the same manufacturer upon the same terms except as to price, contained in the same crate, and delivered at the same port in equal quantities. One parcel of the goods, let us say, 100 gross, is consigned to a wholesaler in London, and the other parcel of 100 gross is to be delivered to a retailer. What, in the view of the Chancellor of the Exchequer, is the value to be attributed to either or both of these importations? This is an actual case which occurred in practice. The Customs authorities contended that because in one case the goods were consigned to a wholesaler and in the other to a retailer, although the goods were precisely the same, the same quantities, the same
    302
    deliveries and the same crate, nevertheless import duty was to be paid in the case of one parcel of these goods at one value and in the case of the other parcel at the other value. One parcel bore duty at the wholesaler's price and the other was designed to bear duty at the retailer's price. It was contended, as I think it must be obvious is the case, that the same goods imported on the same terms to the same place at the same time can have only one market value for all purposes whatsoever, and, of course, that was the view which ultimately the Customs conceded. I want to know what view they will take under this Bill in such an instance as that?
    Let me give another case. Let me assume, as is the fact, that fancy goods, let us say ash trays, are bought by an English importer at 4½d. and sold in the ordinary retail shop at 1s. They are sold by the importer to Woolworths at 6d., by the importer to Selfridges at 8½d., and sold by Selfridges at 1s. I want to know from the Chancellor of the Exchequer at what point in that chain from the 4½d. importation to the ultimate destination at a shilling the value of these goods is to be ascertained. They are the same goods. I would like to know the answer to that very practical question which affects every trader in this country. At the present time he does not know in the least what his obligations are to be. I said a few moments ago that he did have some opportunity under the 1932 Act of knowing what his obligations were to be, for the reason that at least the 1932 Act did prescribe certain criteria by which the market value for the purposes of the Statute might be ascertained. It did lay down certain criteria to which regard might be had by the Commissioners of Customs and Excise in assessing the value. But there are no criteria in this Bill. They are specifically repealed. On page 11, line 27, the Bill says:
    "Sub-sections (1) and (2) of Section fifteen of the Import Duties Act, 1932, shall cease to have effect."
    Sub-section (2) is the only provision in the 1932 Act which provides any criteria by which the Commissioners of Customs and Excise may be guided in assessing the ad valorem value of goods for the purpose of the Act. That is all

    303
    gone, and we are left with this. It is the open market value at the time of importation, and the duties shall be paid on that value as fixed by the Commissioners. Surely it is one of the first principles of every tax law that the subject shall know what it is. I daresay that I shall be told that these words, "as fixed by the Commissioners" appear in the Act of 1932. It is true that they do, but they are qualified by Subsection (2).
    Mr. DENMAN: There is Subsection (2).
    Major NATHAN: I have not come to Sub-section (2). I am still on Subsection (1) of this Bill. What were the criteria laid down in the Act of 1932? In some cases they have not worked extraordinarily well, but they were capable of adaptation, with mutual good will, to the circumstances of most cases. I am not speaking theoretically; I am speaking as the result of practical experience. In the first place, the Commissioners were to have regard not only to the invoice price but to all relevant circumstances and in particular—and then a whole code is set out. Parliament was so careful in 1932 to protect the taxpayer that it did not give the Commissioners of Customs and Excise even the choice of alternatives, and the Commissioners had to pass through each of three ways if necessary before they could assess the value. Parliament said that the Commissioners may have regard—and "may" of course here means "shall"—to the price which at the time of importation of the goods other importers are paying for the like goods. That was one way of ascertaining what the open market was. The present Bill uses the term "open market," but it repeals the definition of open market. It is silent as to what "open market" means. If there were an open market, if other importers were importing the like goods, the price which other importers were paying was, until this Bill, the value on which importers of like goods were assessable for duties. If there were no market value, if the goods were so unlike other goods that they were not comparable with other goods, then, and only then, another criterion was set up by the 1932 Act. Then the Commissioners were entitled to look at the price which
    304
    was fetched by the goods. I am using the phrase of Clause 10. They were entitled to look at the price fetched by the goods, and that price was the assessable value, but after making a deduction for profit and merchanting expenses. That is all gone. In this Bill the deduction for profit and merchanting expenses has disappeared, just the same as the criteria have disappeared. The Act of 1932 went still further. It said that if there was no market in these goods if they were not to be sold on importation from abroad, then you should take another criterion; but there, again, provision was made for an allowance for merchanting expenses, for profit, and the rest of it. All that has gone from this Bill. I think I may refer to a letter from the Chancellor of the Exchequer to the London Chamber of Commerce?
    Mr. CHAMBERLAIN: Certainly.
    Major NATHAN: The Chancellor of the Exchequer, in a letter written for communication to the London Chamber of Commerce, said:
    "The London Chamber of Commerce has suggested that this Clause 10 proposes a new basis of value of imported goods for duty purposes. This, however, is not the case."
    I ask the Chancellor of the Exchequer to read the Act of 1932, for which he was responsible, and Clause 10 of this Bill. To say that there is no new basis for the value of imported goods is something which, I am sure, on reflection, he will realise cannot be substantiated. He may say that it is not the intention of the Customs' authorities to make any change, but if that is so why make a change in the Bill, why repeal those Sections? Then the Chancellor goes on to say:
    "The value is still to be the open market import price."
    There is nothing about that in the Bill. It says the open market price, but the word "import," upon which a good deal depends, is absent from the terms of the Bill; and I may say that those trade associations to whom this letter, and others like it, have been circulated are in the greatest alarm as to what may be meant by those words, and in the greatest doubt as to how it came to be that the Chancellor of the Exchequer should define the terms of the Bill in his letter in a different form from that in which the words appear in the Bill itself. The Chan-

    305
    cellor of the Exchequer goes on to say—I am paraphrasing his words, but I will quote where necessary—that it is essential that some machinery should be created so as to ensure that imported goods
    "shall not be undervalued on the basis of a special price to a nominee of the supplier abroad."
    We shall all agree about that. The assessable value for the purposes of duty should be the proper value, if you like the open market value, but do not take away the definition of the open market value, do not allow the British subject to be left entirely in the hands of the executive. He was not left entirely in their hands by the Act of 1932, and the courts have come to the rescue of the subject in cases arising in this context, and have themselves stated what is the value and how this Section of the 1932 Act was to be operated by the Commissioners.
    I want the Committee to understand that I am only speaking once on the whole series of Amendments, and therefore they will perhaps allow me to deal with what my hon. Friend the Member for Central Leeds (Mr. Denman) referred to as Sub-section (2). Perhaps the Chancellor of the Exchequer can answer this question. He has the advantage of my right hon. Friend the Home Secretary at his side. It has puzzled lawyers and commercial men, who are unable to understand what this Sub-clause (2) is doing in the Bill at all having regard to the provisions of Sub-section (1). There is no definition of open market value, but by this Bill as it stands the subject is entirely in the hands of the Commissioners. Perhaps I ought to qualify that. In certain cases, the subject has a right of appeal to a referee appointed under the Bill, but that right of appeal is somewhat illusory. Very few taxpayers are keen on embarking upon litigation against the Crown. They do not like starting it, even though they know that they are being unlawfully overtaxed, and often admittedly so. They say, "We do not want to get up against the Customs. If we make a protest, or if we take this matter to the referee, there will be a black mark against us." I am speaking as a result of day-to-day experience of dealing with taxpayers whose operations bring them within the scope of the Clause, and I know that there is not merely a feeling that they do not want to get up against
    306
    the Customs, but an objection to the expense and delay that are involved.
    Let me give the Committee an actual instance involving a large sum of money and raising an important question of principle. The subject was a taxpayer who thought that the principle involved was so important that it ought to be taken to the referee. The dispute arose on 18th April, 1932, and notice of reference was given in July, 1932. The subject had been made to pay on deposit more money than he was liable to pay. The case came on for hearing in September, 1933, and took four days to hear. It was not heard day by day. The first hearing was on 29th September and the last on 17th October, 1933, 18 months after the dispute arose. The decision was not given till 13th December, two months later. When the decision was given, it seemed so open to criticism that notice of appeal was given. The appeal was regarded as of great importance. It was the last case that Sir Boyd Merriman fought, and when it went to the Divisional Court the Solicitor-General represented the Crown. The case took two days to hear before the Divisional Court, and came to an end with judgment in May, 1934, two years from the time when the dispute arose. The judgment was in favour of the subject, but during those two years the Customs authorities had, under the authority of the Act, been collecting thousands of pounds in duty to which they had no right, and which they had to repay. So great was the amount, and so onerous in its burden, that it almost smashed the business to get the duty back, and it cost the taxpayer in the case upwards of £2,000 to fight it.
    It is said that the subject is not in the hands of the Commissioners, but who, in the face of facts like these, is going, except in the direst extremity, to take the matter to the courts? It is eyewash to suggest that the subject has any outlet for airing his grievance. The market value will have to be fixed at the discretion of the Commissioners, who are now reinforced by the fact that the old limitations upon the exercise of their discretion have been repealed by the active act of the House of Commons, or will have been when the Bill is passed. I cannot understand why Sub-section (2) is in the Bill. Market value is a question of fact, to be ascertained by evidence. It does not depend upon the price which

    307
    the imported goods have fetched; it depends upon the price which other goods of the same kind fetch. The scheme of Sub-section (1) is not what the goods have been sold for, but what the goods might be sold for in the open market, and you can only test what a particular parcel of goods might be sold for by reference to what an actual parcel has been sold for. Therefore, as I have said, I fail to understand why Sub-section (2) is in the Bill. It says that certain assumptions are to be made, but you do not want assumptions if you are to be guided by market value, because market value is a fact; it is objective evidence.
    Market value is ascertained without reference to any assumptions at all, except that there is a market value; and, where there is not a market value, the Bill provides no mchinery for valuing the goods, and the goods will be free of duty, because the only Section of the Act of 1932 under which goods without a market value could be assessed for duty is being repealed. There are vast quantities of goods which within the meaning of the Bill have no open market value at all, and, presumably, probably owing to an oversight, they are to escape duty altogether. The Commissioners have to assume the price, but the price as between the importer and the foreign exporter is irrelevant to the market value. Then they are to assume that neither the seller nor any person associated with him has any interest in the goods; but that also is irrelevant in dealing with open market value, because open market value is a fact, capable of evidence. If it is not, there is no open market value, and then there is no machinery under the Bill for assessing the value.
    The whole of the assumptions which are to be made under Sub-section (2) are irrelevant to the scheme of the Bill as set out in Sub-section (1). I say nothing of Sub-sections (3) and (4), which deal with minor and technical matters, but I come to sub-section (5), which is really related to Sub-section (2). On the footing of the Bill as drawn, certain assumptions are to be made, but there is nothing in the Bill to say what happens if those assumptions are false. The Bill is entirely silent as to what must be done in that case. Subject to a later Sub-section, the Commissioners cannot inquire, or are not concerned to inquire,
    308
    as to the facts, because they are told to assume the facts, and, therefore, whether they exist or not is a completely irrelevant matter.
    I must draw the attention of the Committee to what must be one of the most humorous provisions that ever appeared in a Bill, though it is not humorous at first sight. It is provided that two persons are deemed to be associated with one another in business if either of them, directly or indirectly, has any interest in the business or property of the other—nothing is said about a controlling interest, but any interest in the business or property of the other; or if both of them have a common interest in any business or property; or—and here is the gem—if some third person has an interest in the business or property of both of them. What a gem! It is marvellous. In the first place, neither the buyer nor the seller may know whether a third party has an interest in the business of either or of both of them. Assume that I am a shareholder in the International Nickel Company and in the Austin Motor Company. Let us assume that the Austin Motor Company buys nickel from the International Nickel Company. They are associated in business together for the purposes of this Bill because I, a third person, have an interest in the business or property of both of them. That is what this Bill says, but the Bill does not say what happens if that is the case. In Subsection (2) the Commissioners are told to assume that that is not the case, and in Sub-section 5 we are told that it may be the case, but in neither event are we told what is to happen if it is the case. I am justified in saying, with a sense of responsibility, that lawyers who have studied it and business men who will have to operate the Act say that it is unintelligible nonsense. Sub-section (2) of Section 15 is to be repealed by this Bill, yet Sub-section (2), as I pointed out before, alone qualifies the powers of the Commissioners.
    I have not gone into details of any of the Amendments which I have put on the Paper. I think that it would be for the convenience of the Committee that rather than do that I should leave the matter on the basis of a general discussion, but I would say to the Chancellor of the Exchequer that this is not a question of

    309
    politics but of business. There is a real anxiety pervading the whole commercial community, and I know that many communications have been addressed by troubled public bodies to the Chancellor of the Exchequer on this subject. It may be that the valuation provisions under the administrative provisions of the Act of 1932 require amendment in the light of experience, but I most seriously say to the Chancellor of the Exchequer—and I should say it equally well if I were standing behind him instead of in front of him—that the Clause ought to be withdrawn and reconsidered. It really is not a Clause which has received that grave and careful consideration either in its content or in its drafting that provisions should receive when incorporated in an Act of Parliament affecting every trader in this country.
    10.34 p.m.
    Mr. COOPER: The hon. and gallant Member has taken advantage, though not an unfair advantage, of your Ruling, Captain Bourne, in order to range very widely over this subject, and a great deal of his speech, which was intended to deal with introducing reforms and alterations in the present system, was devoted to an attack upon the system as it has worked in the past, and to show absurdities which have in the past arisen. He began by saying that he was against the principle of the taxation of imports. That is a view which a good many Members share, but we are not discussing that principle this evening. I am, however, sure that all those who take that view are anxious that once the principle has been introduced it should be fairly applied. Listening to the hon. and gallant Member anyone who did not know the facts would not realise that this Clause is solely designed to carry out the intention of Parliament and the intention of the law as it stands to-day, and to try and defeat the devices of those who are at present successfully cheating and breaking the law.
    The speech of the hon. and gallant Member has not shown that this Clause will in any way fail in its endeavours, nor has he made much attempt to support his Amendment in favour of reintroducing the word "importer." He has not made any case out at all for that. He gave us a picture of a lot of timorous taxpayers trying to import their goods
    310
    according to law, but frightened by the powerful and unscrupulous Customs, who would brow-beat them and who if they took them to court would have a grudge against them for the rest of their existence and would inevitably do them down. The facts are exactly the opposite. The hon. and gallant Member himself paid tribute to the courtesy and efficiency of the Customs. The truth is that the Customs are not able to carry out their duties owing to the series of devices which have been introduced since this taxation became law, for the sole purpose of defeating the law and cheating the community. The Committee is probably well aware of the kind of device adopted by so-called groups of foreign importers who consign these goods at false values, on which they are taxed.
    In many cases an agent or a traveller of a foreign firm puts a brass plate on his door and becomes an independent business, to whom the goods are consigned. The goods are valued at very much below their real value. There was a case recently where an agency of this sort was set up and in the lease of the office that they had taken they made it a condition that should they be obliged by any legislation subsequently passed to declare the real value of the goods consigned to them their tenancy was to come to an end. That is the kind of thing that we are trying to defeat, and, if the hon. and gallant Member were aware of that kind of thing, I feel sure that he would be as anxious as we are to defeat it. The real object is to find out the true value of the goods that are imported. It is not an easy thing. The hon. and gallant Member from his long experience showed us how difficult it is and how easy difficulties may arise.
    He put two conundrums for me to answer. When he first said that he was going to ask me a riddle I was extremely nervous, but I must say that I was surprised that with all his ingenuity he could not find a more difficult riddle than the two that he set. The first was this. There were two crates of boots and shoes of equal value, one consigned to a wholesale dealer and one to a retail dealer. Under the present system they would have different values—
    Major NATHAN: They do not in fact pay on the price, but on the market value.
    Mr. COOPER: In the case of the crates to which the hon. and gallant Member referred they would pay on the same value. In the past officially we have had to take into account the invoice value, and the invoice value given by some importers has been considerably less than the market value. Then there was the case of the ashtrays consigned to wholesale firms, which the hon. and gallant Member traced through different hands and were sold much more cheaply by one firm than by another. He asked what is their value. I should say that provided the Customs officials were satisfied that the wholesale importer was really paying the right price of 4½d. that that value would be assessed for Customs duty.
    Major NATHAN: Will the hon. Member put that in the Bill?
    Mr. COOPER: That is the object of the Clause. The whole object is to bring that about, and it certainly would not be secured by the hon. and gallant Member's Amendment to insert the word "importer" instead of the word "buyer." The object of the Clause is that goods shall pay on the value they possess at the time and place of their importation, that is if they were sold there. The hon. and gallant Member made a point about market value. The whole object of the Clause is to find out the value they would have if they were sold at the time of importation in open market. The wholesale importer would then pay on their true value. The hon. and gallant Member referred to Sub-section (2) of Section 15 of the Import Duties Act, and said that it was a great pity it was being repealed as it provided the Commissioners with the only guide they had for coming to a decision. In a case which recently appeared in the courts, a very distinguished judge said that he considered the Section otiose and unnecessary; there was no point in it. It merely gave the Commissioners the right to say that they might take into consideration all various considerations before arriving at their decision, and that they were things which the Commissioners would always and must take into consideration. It makes therefore little difference whether that particular Section remains in force or not. The hon. and gallant Member made some play with regard to Sub-section (5) and Sub-section (2). They
    312
    must be read in conjunction with the rest of the Clause. Sub-section (2, c) says that
    "neither the seller nor any person associated in business with him has any interest, direct or indirect, in the subsequent re-sale or disposal of the said goods,'
    That must be taken into consideration with paragraphs (a) and (b) of Subsection (5) as the object for which the whole Clause is designed. The hon. and gallant Members says that the object is not achieved. In that case it can be easily altered before the Bill is passed, and I will certainly take advice as to whether it is achieved or not. There is no doubt as to the intention of the Clause. The hon. and gallant Member also said that the whole commercial community is profoundly disturbed. That is not the evidence which we have received. We have learned, on the contrary, that those firms which indulge in honest business are extremely glad that this Clause has been introduced, as it is designed to catch out those who unfairly compete with them by breaking the law. Both the foreign importers and the British importers are glad of this assistance to them to prevent unfair competition by law-breakers. We could not have stronger evidence of that fact than a letter which my right hon. Friend the Chancellor of the Exchequer has received from the Federation of British Industries. It is dated 12th June, and signed by the President:
    "It has been brought to my notice that attempts are being made in certain quarters to organise opposition to the new valuation clause 10 of the Finance Bill. I think you may be interested to know that copies of this clause have been circulated both to the members of our Tariff and Commercial Treaties Committee and to our leading trade associations, and their replies reveal an almost overwhelming con-census of industrial opinion in favour of the new clause."
    10.47 p.m.
    Mr. MABANE: I am sure the Committee will agree entirely with the purpose of this Clause. The Financial Secretary referred to certain evasions of the Customs and referred to certain cases before the courts—cases with which I have some acquaintance. It certainly has been a mystery to some of us engaged in certain industries as to how certain foreign importers have been able to sell goods in this country at the price at which they have sold them. In the case

    313
    which was referred to they had been able to sell the goods at that price by an evasion of the intentions of Parliament. So far I am in entire agreement with the purpose of the Clause. But I do want to ask that one of the points raised, which is of some concern to people interested in buying goods from abroad, might be dealt with. One sees in the first part of this Clause:
    "The value of any imported goods shall be taken to be the price which they would fetch on a sale in the open market at the time of importation."
    That does raise an important point, as the Financial Secretary knows. It is often necessary to buy goods from abroad nine months in advance, and between the time of the goods being bought and the time of their importation into this country the value may have changed substantially. I am sure that the Financial Secretary would not desire to discourage the enterprise of importers in this country who buy goods from abroad for the purpose of trade and who take advantage of a good price, say in March, and then when November or December comes along and the price is altered, to compel them to pay duty on the higher price that may be prevailing in one of those later months. I do wish that he would deal with that particular point. The Financial Secretary did not deal with the further point raised by the hon. and gallant Member for North-East Bethnal Green (Major Nathan) regarding Sub-section (2, d) of this Clause, which says:
    "For the purposes of computing the price aforesaid it shall be assumed—
    That there has not been and will not be any commercial relationship between the seller and the buyer."
    The DEPUTY-CHAIRMAN: There is an Amendment on the paper to leave out the words "and will not be," which I propose to call.
    Mr. MABANE: I thought that we were dealing with all the Amendments to the Clause now, for convenience sake.
    The DEPUTY-CHAIRMAN: Perhaps I should state that there are two Amendments that I propose to select. One is in the name of the hon. Member for Cardigan, in line 23, to leave out the words "and will not be," and the other in the name of the hon. Member himself.
    Mr. MABANE: Then perhaps I shall have an opportunity of dealing with the
    314
    point when my Amendment is called. The principal point is that which I raised first and which is a matter of substance, and I should be glad if we could have an explanation on it.
    10.50 p.m.
    Mr. WILMOT: I think that the reply of the Financial Secretary to the Treasury to some of the points raised was somewhat unsatisfactory. It did not meet the main point of the objection to this Clause as drafted. It appears to me as a layman fairly clear that the Act of 1932 fixes the value for the purpose of the duty as the value any importer would pay; but the value as fixed by the Bill is the value which the goods would fetch if sold by the importer on the open market, so that there is a very wide difference in the meaning and in the change from the 1932 Act to this Bill. One levies duty on the value which the importer pays, or, in the words of the 1932 Act, "which any importer would pay;" that is to say, the generally accepted import price; and this Bill levies duty on the price at which an importer would sell. Therefore, you have the difference between the buying price and the selling price, and that is a very material consideration. It seems to me that the answer which the Financial Secretary has given is not satisfactory and is not sufficiently clear. The commercial community have a right to know whether they are expected to pay duty on the price they paid for their goods or whether they are expected to pay duty on the price at which those goods would be sold by them in the open market. The next point, to which there was no answer at all, is the introduction of the words "as fixed by the Commissioners." That seems to me to be a somewhat dangerous innovation in the Finance Act, in that the power of the Commissioners to fix a price is greatly strengthened and widened.
    I am sure that every Member of the Committee would, in devising such provisions, desire to make them watertight so that some dishonest persons do not by various devices escape duty which honest people pay. It is necessary for the Financial Secretary not only to maintain that attitude, but to show the Committee that he has in fact designed a Clause which will have that effect and no other effect. If, as appears, this Clause does something else then the Clause should be amended in conformity

    315
    with the intention. It seems to me that it cannot be intended in seeking to define people who are interested, in the sense that the importer is also the exporter, to introduce a definition which brings into that category two companies where the only relation between them is that they have common shareholders. I think it would be very difficult to find large importers who were not connected with other people to whom they were selling by common shareholdings. This Clause seems to be so loosely drawn as to be not only absurd but as to defeat its very purpose; because in interpreting it the mesh is bound to be drawn so wide that the very fish it is designed to catch will slip through.
    There seems to be one other point to which no answer was given, and that is that having determined in the first Subsection of Clause 10 the price upon which duty shall be paid as the open market price at which the importer will sell his goods—a thing which can be determined by reference to fact—there then follow a quite unnecessary set of rules for determining what is already determinable. Secondly, in applying these rules, it is assumed that neither the seller nor any person associated in business with him has any interest, direct or indirect, in the subsequent resale and that there is no commercial relationship between the buyer and the seller. Yet Sub-section (5) provides that two persons shall be deemed to be associated if there are common shareholders. I suggest that on a matter of first-class importance such as this, the Committee should not be satisfied merely by the statement that the Clause is directed against dishonest importers, but should have the assurance that it will achieve the declared intention.
    Amendment negatived.
    10.57 p.m.
    Mr. DAVID EVANS: I beg to move, in page 10, line 23, to leave out "and will not be."
    I confess I was not satisfied with the reply of the Financial Secretary when he endeavoured to explain these words:
    "It shall be assumed … that there has not been and will not be any commercial relationship between the seller and the buyer."
    I cannot conceive how it will be possible to make any such assumption as to the
    316
    future. It is very important that the honest importer should be protected, and I understand that there are some people in this country and elsewhere who have no conscience when it is a matter of defeating the tax collector, just as there are some who adopt that attitude towards the railway ticket collector. But I want the Chancellor of the Exchequer to believe that the object of most of us is to see that the bulk of the importers get fair play. Reading this Clause I cannot understand its object. It seems to me rather sinister that consideration should be given to what is to happen in the future, regarding the relation of the buyer and the seller, and I am confirmed in that view, as I think the Committee will be confirmed in it, by reference to Clause 15. Under that Clause an officer of Customs and Excise may at any time within three years after delivery of goods require any person concerned to give information and produce books and documents. These words relating to the future relations of buyer and seller ought to be omitted.
    11.0 p.m.
    Mr. CHAMBERLAIN: The hon. Member has, I think, unnecessary suspicions about the wording of this Sub-section. It is one of the assumptions which has to be made for the purpose of eliciting the price at which the goods are to be valued, and it is designed lest there should be a commercial relationship between the foreign seller and the importer of a kind which would enable the importer to value his goods below their real value. We have put in words securing that the assumption is to be not only that there is not now such a relationship, but that there will not be in future. The hon. Member seems to think there is something sinister about that, but surely it must occur to him that if there is a desire to make an arrangement of that kind between the seller and the importer, it is not necessary for their purpose that there should now be such a commercial relationship. All that has to happen is that the importer says, "If you will invoice to me at a lower price than the real price, I will undertake to render you certain services this day week or this day year." Therefore, we must assume—it is only an assumption for the purpose of fixing the value—not only that there is no existing relationship between the

    317
    two persons of that kind, but also that there will not be in the future.
    11.2 p.m.
    Mr. JANNER: Is it not possible, by words of a different nature, to cover the point which the Chancellor of the Exchequer has in mind? It is obvious that if a declaration has to be made in order to get a payment of Customs duty at a certain rate or on a certain valuation, the person making that declaration may, quite innocently at the time, say that he will not have any commercial relationship with the person with whom he is making a contract, but at a subsequent date such a relationship may arise. I see that the Chancellor is smiling, but I think this creates a very difficult position and that words could easily be found whereby any future business relationship which was dependent upon this particular contract might be covered, and therefore any sinister motive on the part of the person who is importing the goods might easily be covered, whereas the Clause at present covers all future relationships of any nature. I would ask the right hon. Gentleman to consider before the Report stage whether this Sub-section could not be amended in this way.
    Mr. WILMOT: How is it possible to modify the open market price by taking account of any relations between buyer and seller? An open market price is a price ascertainable without any reference to the particular buyer or seller.
    11.3 p.m.
    Mr. CHAMBERLAIN: It means that the open market price has to be dependent on certain assumptions, and this is one of them. The hon. Member for Whitechapel (Mr. Janner) has missed the point. The Commissioner, in fixing the value, has to make this assumption. It makes no difference whatever whether subsequently there is proved to have been a relationship of this kind, provided the price has not been thereby falsified.
    Amendment negatived.
    11.4 p.m.
    Mr. MABANE: I beg to move, in page 11, line 26, to leave out "get-up," and to insert "style of production or finish."
    I sincerely hope my hon. Friend the Financial Secretary to the Treasury will reply to this Amendment, because I am certain that the Committee will unite on
    318
    one thing, and that is on admiration of his literary skill. I want to hear his defence of the insertion of the word "get-up" in a Statute. It may seem just an incident in the word war, but it has really a bigger significance. It is important that we should put into Acts of Parliament words that have a meaning. I suggest that "get-up" has no meaning whatever. I have searched the dictionaries, and I can find no definition of it. I have searched Murray, and I find that "get-up" in certain combinations—such as "of cricket balls, to rise sharply from the pitch"—has certain meanings, but I cannot find any real meaning of the word save a colloquial meaning. I therefore turned to a judicial dictionary, and I found that while it was prepared to define almost every word one could think of, when it came to the word "get-up," it said:
    "as to what is meant by the 'get-up of an article by the manufacturer,' see certain leading cases."
    I turned to the only leading case that I could find in the Library of the House of Commons, and I found that that was a case between the Dental Manufacturing Company and the firm of C. de Frey in 1912. It appeared that one firm produced the Clark Double Bowl Fountain Spittoon, and that the other firm produced the Twentieth Century Double Bowl Crystal Fountain Spittoon. It was suggested by one of the firms that the "get-up" of the second spittoon was a copy of the "get-up" of the first. After many days in Court it appeared that the judge was really unable to discover what the meaning of the word "get-up" was. I seriously suggest, therefore, that we ought not to put in the Statute—although I know that the hon. and learned Gentleman the Member for East Bristol (Sir S. Cripps) would argue that this is a legal phrase—a word which has no meaning. If my hon. Friend the Financial Secretary will tell the Committee what he means by the word "get-up," then I and 30 or 40 of my hon. Friends who put their names to this Amendment will put what he means into English instead of letting this word get into an Act.
    11.7 p.m.
    Mr. COOPER: I am grateful to my hon. Friend for his kind references to myself, and I am sure we all appreciate his deep reverence for the English lan-

    319
    guage. Unfortunately, the Finance Bill does not aim at literary grace, but rather at exact definition. I think that my hon. Friend was rather unfortunate in his inquiries in the Library, and I must say that when I read the Amendment I thought he had gone a little further than he told us he did go. He did not consult the Oxford Dictionary, which is the ultimate authority. I thought, however, that he must have consulted the Oxford Dictionary, because one of the definitions of "get-up"in that dictionary is "style of production or finish."
    Mr. MABANE: My hon. Friend is not correct. It is "style of production or finish especially applied to books."
    Mr. COOPER: That is the reason why we are unable to accept the Amendment, because, for the purposes of this Clause, it would not be so definite or clear as the word which we are using. He said that this word means nothing, but he was not very successful in his further researches into leading cases, or he would have found that in 1897 Lord Justice Chitty used the following words:
    "The defendants have imitated what is commonly termed 'get-up'—and after all, I do not know a better term than the popular one of 'get-up.'"
    Lord Justice Chitty in 1897 did not know a better term, and I do not know a better term for the purpose of this Clause. I can further reassure my hon. Friend, as he is one who respects authority, that this word has since occurred in reported judgments of the following judges: Lord Macnaghten, Lord Cozens Hardy, Lord Swinfen, Lord Moulton, Lord Russell of Killowen, Lord Justice Romer, and Lord Justice Vaughan Williams. All these authorities give the literary cachet which my hon. Friend would like to see. Perhaps, as Polonius said, it is "a vile phrase," but it is the best, especially in the particular context, and I am unable to accept the Amendment because I can think of no other phrase to take its place.
    Amendment negatived.
    Clause ordered to stand part of the Bill.
    Clauses 11 to 13 ordered to stand part of the Bill.

    CLAUSE 14.—(Amendment of penalty under 39 and 40 Vict., c. 36, s. 186.)
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    11.13 p.m.
    Sir S. CRIPPS: May I ask the right hon. Gentleman how far he proposes to go to-night? I understood a little earlier that if we got as far as Clause 10 that would be satisfactory, and the Committee would not be asked to sit any later. It is now a quarter-past 11, and we have got as far as Clause 14. We are now coming to a Clause where there are further amendments and I understood there was an arrangement through the usual channels that we should not go any further to-night.
    The CHAIRMAN: Perhaps the hon. Gentleman will put himself in order by moving to report Progress.
    Sir S. CRIPPS: I beg to move, "That the Chairman do report Progress, and ask leave to sit again."
    As we are now reaching Clause 15, and embarking on another series of Amendments which will occupy a considerable period of time, I would ask the right hon. Gentleman whether it would not be satisfactory to stop for the night?
    Mr. CHAMBERLAIN: The hon. and learned Gentleman must be under some misapprehension as to an understanding. I am informed through the usual channels that no such arrangement was made, and this is certainly the first I have heard of it. I never suggested that we should stop at any particular Clause, and if it be a fact that there is going to be a long discussion on the Amendments to Clause 15, which I did not myself expect, that seems all the more reason why we should go on a little further to-night. We have a long way to go before we reach the new Clauses, and there is a very large number of new Clauses on the Paper. I hope the Committee will be able to make rather more rapid progress, and in that case we need not sit much longer.
    11.14 p.m.
    Mr. TINKER: Can the right hon. Gentleman give some indication as to how long we shall be here? The hour is late, and he knows what the Opposition is. There were some Amendments which were

    321
    allowed to go without a Division. I was told by our people that we wanted to get on, and not to press to a Division, but if we had known that we were going on late, we should have gone to a Division.
    11.15 p.m.
    Mr. C. WILLIAMS: May I suggest that if we get to the end of Part I we shall have made fairly good progress, and the Chancellor will have made a very considerable impression on his Bill? May I humbly and respectfully suggest that we should end there?
    Mr. CHAMBERLAIN: Yes, if we can finish Part I, we might then adjourn.
    Motion, by leave, withdrawn.

    CLAUSE 15.—(Power to require production of documents relating to imported goods.)
    11.16 p.m.
    Major NATHAN: I beg to move, in page 14, line 1, to leave out from the beginning, to the second "to," in line 7, and to insert:
    "If a judge of the High Court is satisfied by information on oath by an officer of customs and excise that there is reasonable ground for suspecting that an offence under any Act relating to the customs has been committed in respect of any goods whereof an entry has been delivered for the purposes of any of such Acts he may on application made by an officer of customs and excise at any time within three years after the delivery by order require the importer of the goods and his agents."
    The purpose of this Amendment is to ensure that certain investigations shall only be made if there is reason to believe that there is something to be found out. This Clause really raises the same point as created so much public agitation, and so much alarm in all quarters of this House, on the Incitement to Disaffection Act. In that Act the House qualified the right of public authorities to make a search. In this Clause the same powers of search mutatis mutandis are claimed by the Customs authorities, but without the qualifications which have now become statutory in the other case. Hon. Members may at first sight be a little surprised to hear how far reaching this Clause is, but I do not think they will be so surprised if they read it, and still less surprised when they know the history of it. For what purpose do the Commissioners seek this power, which
    322
    is a new power? It is true that they have certain rights of a limited character under the Revenue Act, 1909, but those powers were given for a very limited and specific purpose, as the result of a report of a Departmental Committee—merely for the purpose of collecting statistics of imports and exports for the trade figures. For what purposes do the Commissioners want these entirely new powers? By Clause 10 they preserve the right to make regulations for the purpose of giving effect to Clause 15 of the Act of 1932, as to valuation, and once a valuation has been made there is nothing in the Import Duties Act or in any other Customs Act which empowers the Commissioners to reopen the valuation or to vary the charge of duty as distinct from taking criminal proceedings or proceedings for penalties if they consider themselves to have been misled by incorrect information. Once they have made their valuation, they are functus officio, as far as requiring further information is concerned, under the law as it stands.
    On the Second Reading Debate, the Financial Secretary to the Treasury said that these Clauses were included, because there was a legal doubt as to the rights of the Commissioners, under Section 15 of the Act of 1932. It is within my knowledge that that doubt has been created, because, under advice, I created it myself. It has now been accepted that the Commissioners have had no right hitherto to make many of the investigations which they have made. I do not know whether hon. Members know what happens in the conduct of the Customs authorities. It might interest them, and to a certain extent shock them. It is all done with charm and courtesy. The officials appear, at any hour of the morning or afternoon at the premises of a firm, and say: "We have called to look at your books," without any reference to the particular books, or to the goods in respect of which the inquiry is being made. It is just a roving commission into the books, records, letters, balance-sheets and other documents of the firm. The Customs authorities are now alive to the fact that, under the law, that was completely unauthorised, once they had made the valuation, and that nobody was under an obligation then to expose his books or documents, or to give information to the Customs authorities. The only purpos

    323
    for which this Clause has been inserted is to enable the Customs authorities to find out whether a crime has been committed. They claim the right to go into the premises of anybody connected with the importation of goods, however distant his connection may be, and persons have to furnish, in such form as the officer may require, any information relating to the goods, and to produce any books or documents, of whatever nature, relating to them. That is much too wide a power, in such an unqualified form, to be put into the hands of any public official, however honourable and able he may be, for the purpose of finding out whether a criminal prosecution can be taken. It is also contrary to the spirit of the law in this country that any man should be made to incriminate himself.
    When the officer goes into a large firm, the first thing that happens is that the employés say: "There is something wrong here, because somebody has been sent here to make an inquiry into their affairs." That creates a great deal of disturbance, and does not tend to the peaceful and harmonious carrying on of business. It does not happen with the Income Tax authorities. They cannot go into premises, or ask for documents, and, although balance sheets are often provided for them, they have no right to them. Consequently, they get voluntarily information which they cannot call for under compulsion. The Customs authorities, however, not only inspect documents, but take them away—borrow them—and they photograph them and keep permanent records of the private documents and affairs of, it may be, and most often is, perfectly innocent subjects against whom no charge has been or can be or ever is made. They ask questions, and, although the subject is not cautioned, he is liable to have anything he says brought up in evidence against him. All this is done because the business men to whose offices and warehouses the Customs authorities send representatives do not know that the Customs authorities have no legal sanction for the attitude they are adopting.
    It is also very important that one man's business should not be known to another man, but there is great alarm and fear that very often that is not the case. I myself know of a case in which a Customs official went to a man's office, made an
    324
    inspection, and then said, "I am not satisfied with this; I am going to X.Y.'s office to make further inquiries." He went to X.Y., and said, "I have been to A.B. and found out certain things, and I want now to verify them or find that they are not accurate." That is an intolerable position. The subject as a rule thinks that there is a lawful sanction for it, and that he is under a legal obligation to give information, but there is no such obligation, and it is because the Customs authorities are aware of that that Clause 15 has been inserted, which would make statutory that which, according to the common law of this country, ought never to be made statutory.
    The sole object of the Clause, as the law stands at present, is to find out whether or not the person of whom the inquiry is made—who is asked to furnish information and give disclosure of his books—has been guilty of an offence punishable by either fine or imprisonment or both. It is for that reason that I have put down an Amendment which would put the Customs authorities in exactly the same position in relation to this Bill as the police are in in connection with the Incitement to Disaffection Act. I am not suggesting that, where there is reason to suspect that a crime has been committed, the Customs authorities should be excluded from the possibility of discovering evidence of it. If a crime has been committed, let the crime be punished. That will be the view of every hon. Member of the House. But do not give what is in effect a general right of search without a warrant. Therefore, I suggest in my Amendment that the powers which the Customs authorities seek under Clause 15 of the Bill, as far as inspection of documents is concerned shall be conferred upon them, but with this qualification, that, just as in the case of the Incitement to Disaffection Act, they shall first satisfy a judge of the High Court that there is reasonable ground for suspecting that an offence has been committed. If they once establish that primâ facie position, by all means let them have available to them books and documents, but do not even then let them be entitled to go and ask questions of the taxpayer which can afterwards be used in evidence against him. It is very necessary, as day by day experience with the growing obligation of our Customs

    325
    system shows, that the rights of the subject, and also of the Crown, should be carefully defined and protected. It is wrong—and it is against that wrong that this Amendment is directed—that the powers of the Crown should be unlimited and be exercised against the subject, who has no remedy and no recourse.
    11.31 p.m.
    Mr. CHAMBERLAIN: The hon. and gallant Member has made very heavy weather of what is a perfectly straightforward affair in dealing with very straightforward people. The present law is that the Commissioners may make regulations in particular for requiring any person concerned with the importation of goods into the United Kingdom to furnish the Commissioners with such information as is necessary for a proper valuation of the goods, and to produce any books of account or other documents of whatever nature relating to goods imported by that person. It goes on to say that if any person contravenes or fails to comply with any regulation of the Section he is liable to a penalty of £50. It is obvious that there must be some sort of check upon the declaration of those entries to make certain that the Customs are not defrauded, and the practice on the part of the Customs has been to accept the declarations and invoices which are handed in at the time, to fix the duty on the value as determined at the time, and subsequently to make sure that the Customs are not being misled.
    The reason for the alteration in the law is that the legality has been questioned of an alteration in the value when once the value has been fixed, and it infers that, as the law stands now, it would not be right or possible for a revaluation to be made if it were discovered that, in fact, the information given to the Customs at the time the declaration was first made was not correct. Therefore, this new Clause is proposed which gives that legality to the present practice of the Customs and allows them to make tests up to a period of three years. Anyone who has been honest in his dealings has nothing to fear from this Clause. The Customs will not be continually going and raking round to see whether there is any possibility of some error having been made, but, if they have reason to suppose that they have been given false informa-
    326
    tion, then they ought to have the right to investigate the case, and I do not think that three years is any too long. The only other alternative would be to do what they have every right to do, and that is to make a test at the time, before they accept the goods, and fix the duty; but that would involve intolerable delay. It is very much to the interest of the traders that this system should be adopted, under which there is occasionally a test to make sure that everything is all right. To suggest that it should require the sanction of a Judge of the High Court for every test of this kind would obviously mean that the trader would be put to inconvenience and delay, which would congest all our docks and cause great inconvenience, annoyance and loss to trade. Therefore, I hope the Committee will pass the Clause.
    11.36 p.m.
    Sir S. CRIPPS: All these matters of convenience for administration always have a perfectly simple explanation. As the right hon. Gentleman says, anybody who is honest and straightforward has nothing to fear. In one's own house there is no reason why the police should not come in at any moment and if one is honest and straightforward one has nothing to fear, but it has always been held hitherto that there is a certain amount of privacy both in business premises and private premises which the ordinary subject is entitled to. Honest though he may be there is no reason why his premises should be invaded from time to time by people who want to make inquiries, when there is no particular reason except administrative convenience for making those invasions.
    The right hon. Gentleman said that this Clause has something to do with revaluation. It does not authorise revaluation or deal with it: what it does is to extend the power which exists in the Clause which the right hon. Gentleman read. The power is extended over a period of three years after delivery of the goods, and under it any Customs officer is entitled, without consulting the Commissioners—it is not a case of the Commissioners ordering an inquiry and saying that they would send an officer to make the inquiry—for a period of three years to come, to go into the premises, not the premises of the importer only; not only the premises of the man who may have committed a

    327
    crime, but the premises of the person or company with whom he has dealt; the premises of the railway company, the carriers of the goods; the stevedore company who helped to land the goods; the shipping company who shipped the goods. In fact, any person concerned with the importer for a period of three years is liable to an inquiry for information relating to goods, whether the information be in books or not, whether verbally or in writing. His office may be turned upside down for the sake of something which may be mere suspicion.
    Mr. CHAMBERLAIN: There is power to do it now.
    Sir S. CRIPPS: He cannot do it for a period of three years after delivery. There is a very important difference. At the moment he suspects that something is happening, he can go and make an investigation, but once the goods are off the premises and the matter has been cleared up there is no further power. Under this Clause, however, for a period of three years after delivery he can go and turn up old records, with all the inconvenience, expense and waste of time that is attached to such inquiries, without any authority from any superior officer of any sort or kind. It is left entirely and absolutely at his discretion and, however convenient that may be administratively, I am surprised at the right hon. Gentleman encouraging these inquisitorial methods which I should have thought he would have been one of the last persons in the world to encourage. If a similar provision was made in the Income Tax field hon. Members would be up in arms against the suggestion that people could walk into their house and demand all sorts of facts and figures from their staff, their acquaintances and friends.
    Mr. GLUCKSTEIN: In the case of Income Tax, you can go back six years.
    Sir S. CRIPPS: Yes, but they cannot walk into your premises and make inquiries. They can assess you, and you can appeal. If you do not produce your reports you may suffer, but they cannot go into your premises and demand information. It is a very different thing using the pressure of an assessment to make a person disclose documents and going on to his premises and taking what you want.
    Mr. CHAMBERLAIN: Would the hon. and learned Member prefer the other method?
    Sir S. CRIPPS: I think it would be far better. You can assess them at a higher figure if the Customs people think there is something wrong. The Commissioners are attempting to arrive at the open market value, and, if they say that £50 is a ridiculous sum, they can put it at £100, and then the people who are responsible for the importation will have to produce figures and documents to show that they are wrong. That is more preferable than giving a roving right of entry over a period of three years, not only to the premises of the importer but to the premises of everybody else who has dealt with the goods. There is no precedent for this in law. When searches of this sort are carried out a search warrant must be obtained and in criminal matters the search is carried out by the police who are trained. In this case, you are authorising a general right of search by persons who are not trained and without any power of control in the hands of the Chief Commissioner, or the Minister or a judge. The right hon. Gentleman is creating an extremely dangerous precedent.
    11.44 p.m.
    Sir P. HARRIS: The hon. and learned Member has made out a strong case against the Clause. The Amendment may be too drastic and go too far, but to give this power to hundreds of Customs officers, who are, of course, most efficient, but who still are comparatively minor officials, is going far beyond the necessities of the case. I suggest that the right hon. Gentleman should devise some machinery which would protect the ordinary business man from the rather nosey Parker Customs officer, who occasionally does exist. There are many ports concerned; not only London, but Liverpool and Hull and Glasgow. The quality of the officials must vary; their ability cannot be of one common standard. If this machinery is to work justly to all concerned some more protection of the trader should be devised.
    11.46 p.m.
    Major MILNER: My hon. Friend has rendered a distinct service in bringing this matter to the notice of the Committee. There are two or three features about this Clause which, I feel confident,

    329
    many Members do not appreciate. In the first place the Clause does not state the purpose for which this action may be taken. It is all very well for the Chancellor of the Exchequer to say that this action would be taken when the officials had reason to believe that a false statement had been made. The Clause does not say that; it does not indicate in any way the purpose for which this entry and this demand can be made. It seems intolerable that we should pass such a Clause. Surely it is incumbent on the Government to state in the Clause the purpose for which this action is required to be taken, and also to state some grounds for the action. At present the entry and demand may be entirely at large and may be made on any person who is concerned with or engaged in the importation of the goods. "Any person" may be a perfectly innocent person. This power may be used against a perfectly innocent person against whom there is no suggestion that he had conspired, or in any way is concerned with, a suspected crime.
    The action can be taken at any time of day or night, and no man or woman who has had anything to do with the importation of goods will be safe. It will be competent for a Customs officer to go to a house or office at midnight, or at any hour of the day or night, and make this demand. Apparently this power is not in derogation of any powers under any other Act. Yet the powers that already exist seem to be very comprehensive. Are they not sufficient for the right hon. Gentleman? The powers given here are an addition to those which already exist in the legislation of the country. The Chancellor has not made out his case. He told us that the purpose was to effect revaluation. Where in this Bill is there power to revalue, supposing that the information required justifies such a revaluation? Clearly, unless that power exists under this Bill or under some other Act it falls to the ground. It is intolerable that these powers should be granted without a word being said about them previously. Had it not been for the fact that attention was directed to this by my hon. and learned Friend the whole thing might have passed without protest.
    11.51 p.m.
    Mr. TINKER: I think that many other Members who have heard this discussion
    330
    will, like myself, wonder whether the Government's explanation is one that can be accepted. The argument has been used that the honest man has nothing to fear if the policeman visits his house; but I think an honest man would be thoroughly justified in protesting that his house is not a place which may be entered at any time unless there is some reasonable suspicion that something is wrong there. That ought to appeal to every Member. I have no doubt that there are many Members like myself who had not gone into this matter very fully before, but who since hearing this discussion are much concerned at the wording of this Clause. When I heard the Chancellor of the Exchequer talk about the honest man having nothing to fear it struck me as a very fine phrase, but I do not think that we should do this in this way. The Amendment suggests that if certain information is laid which would justify a search—
    Mr. GLUCKSTEIN: Can the hon. Member point out where there is under this Section any right of search at all?
    Mr. TINKER: No, I cannot. I am only going on the discussion and the Chancellor of the Exchequer, as I understood his reply, did not deny that the right of search existed. It was because of that that I was led to intervene. The Chancellor admitted that it was quite open to go into anybody's premises. If the Chancellor will assure me that that is not so and that there is some protection against any high-handed method of entering anybody's premises to search for documents I shall be relieved. If we cannot have such an assurance, I think it is questionable whether we should allow this Clause to pass.
    11.54 p.m.
    Mr. WILMOT: I wonder whether the Chancellor of the Exchequer could explain a point which to some of us is obscure? He said that these powers are being taken because it had been found by experience that it was not possible to re-value goods after a certain time. This Clause, he said, was put down for no other reason than to give the Customs authorities the right to re-value. But as I read the Clause there is no mention of re-valuation. If my reading of the Clause is right, then the justification which the Chancellor advances is not the right justification, and we are entitled

    331
    to know for what reason the Clause really has been put in.
    11.55 p.m.
    Mr. CHAMBERLAIN: I am sorry if I used a word which was perhaps not entirely appropriate. If the Customs wish to prove that an importer has committed fraud, they have to show that the value which he has declared on goods is not the true value. In that sense, they have to prove a "revaluation"—in other words, that the value placed on the goods by
    the importer is the wrong value and some other value is the right value. That is all I meant by "revaluation." If they succeed in proving that a person has been guilty of making a false declaration then there can be a prosecution and the person concerned will become liable to the provisions of Clause 14.
    Question put, "That the words proposed to be left out stand part of the Clause."
    The Committee divided: Ayes, 163; Noes, 28.

    Division No. 237.]

    AYES.

    [11.55 p.m.

    Acland-Troyte, Lieut.-Colonel

    Fraser, Captain Sir Ian

    Peake, Osbert

    Agnew, Lieut.-Com. P. G.

    Fremantle, Sir Francis

    Peat, Charles U.

    Albery, Irving James

    Fuller, Captain A. G.

    Peters, Dr. Sidney John

    Apsley, Lord

    Gledhill, Gilbert

    Pickthorn, K. W. M.

    Aske, Sir Robert William

    Gluckstein, Louis Halle

    Pike, Cecil F.

    Assheton, Ralph

    Graves, Marjorie

    Procter, Major Henry Adam

    Balley, Eric Alfred George

    Gretton, Colonel Rt. Hon. John

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

    Baldwin-Webb, Colonel J.

    Grimston, R. V.

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

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

    Gunston, Captain D. W.

    Ramsden, Sir Eugene

    Beit, Sir Alfred L.

    Guy, J. C. Morrison

    Rea, Sir Walter

    Blindell, James

    Hannon, Patrick Joseph Henry

    Reed, Arthur C. (Exeter)

    Boulton, W. W.

    Harbord, Arthur

    Reid, William Allan (Derby)

    Bowyer, Capt. Sir George E. W.

    Harvey, Major Sir Samuel (Totnes)

    Roberts, Alec (Wrexham)

    Boyce, H. Lesile

    Haslam, Sir John (Bolton)

    Ross Taylor, Walter (Woodbridge)

    Braithwaite, Maj. A. N. (Yorks, E. R.)

    Hellgers, Captain F. F. A.

    Ruggles-Brise, Colonel Sir Edward

    Braithwaite, J. G. (Hillsborough)

    Herbert, Capt. S. (Abbey Division)

    Russell, Albert (Kirkcaldy)

    Broadbent, Colonel John

    Holdsworth, Herbert

    Rutherford, John (Edmonton)

    Brocklebank, C. E. R.

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

    Rutherford, Sir John Hugo (Liverp'l)

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

    Hornby, Frank

    Salt, Edward W.

    Brown, Rt. Hon. Ernest (Leith)

    Horsbrugh, Florence

    Samuel, M. R. A. (W'ds'wth, Putney).

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

    Howard, Tom Forrest

    Shakespeare, Geoffrey H.

    Browne, Captain A. C.

    Hudson, Robert Spear (Southport)

    Shaw, Helen B. (Lanark, Bothwell)

    Burghley, Lord

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

    Simon, Rt. Hon. Sir John

    Burnett, John George

    Jamleson, Rt. Hon. Douglas

    Smiles, Lieut.-Col. Sir Walter D.

    Campbell, Vice-Admiral G. (Burnley)

    Joel, Dudley J. Barnato

    Smith, Bracewell (Dulwich)

    Carver, Major William H.

    Jones, Lewis (Swansea, West)

    Smith, Louis W. (Sheffield, Hallam)

    Castlereagh, Viscount

    Kerr, Hamilton W.

    Southby, Commander Archibald R. J.

    Chamberlain, Rt. Hon. N. (Edgbaston)

    Lamb, Sir Joseph Qulnton

    Spencer, Captain Richard A.

    Cochrane, Commander Hon. A. D.

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

    Stevenson, James

    Colman, N. C. D.

    Lelghton, Major B. E. P.

    Stones, James

    Colville, Lieut.-Colonel J.

    Lennox-Boyd, A. T.

    Stourton, Hon. John J.

    Conant, R. J. E.

    Liddall, Walter S.

    Strickland, Captain W. F.

    Cooper, A. Duff

    Llewellin, Major John J.

    Stuart, Hon. J. (Moray and Nairn)

    Courtauld, Major John Sewell

    Lloyd, Geoffrey

    Stuart, Lord C. Crichton-

    Courthope, Colonel Sir George L.

    Lockwood, John C. (Hackney, C.)

    Sugden, Sir Wilfrid Hart

    Cranborne, Viscount

    Loder, Captain J. de Vere

    Thomas, James P. L. (Hereford)

    Craven-Ellis, William

    Loftus, Pierce C.

    Thomson, Sir James D. W.

    Critchley, Brig.-General A. C.

    Mabane, William

    Thorp, Linton Theodore

    Crookshank, Col. C. de Windt (Bootle)

    MacAndrew, Lieut.-Col. Sir Charles

    Todd, A. L. S. (Kingswinford)

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

    McConnell, Sir Joseph

    Tufnell, Lieut.-Commander R. L.

    Cross, R. H.

    McCorquodale, M. S.

    Wallace, Captain D. E. (Hornsey)

    Cruddas, Lieut-Colonel Bernard

    McKie, John Hamilton

    Ward, Irene Mary Bewick (Wallsend)

    Culverwell, Cyril Tom

    Mallalieu, Edward Lancelot

    Ward, Sarah Adelaide (Cannock)

    Davies, Edward C. (Montgomery)

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

    Warrender, Sir Victor A. G.

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

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

    Wedderburn, Henry James Scrymgeour-

    Danville, Alfred

    Martin, Thomas B.

    Wells, Sydney Richard

    Drewe, Cedric

    Mayhew, Lieut.-Colonel John

    Williams, Charles (Devon, Torquay)

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

    Mellor, Sir J. S. P.

    Wills, Wilfrid D.

    Eastwood, John Francis

    Mills, Major J. D. (New Forest)

    Wise, Alfred R.

    Ellis, Sir R. Geoffrey

    Morris, John Patrick (Salford, N.)

    Womersley, Sir Walter

    Emmott, Charles E. G. C.

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

    Wragg, Herbert

    Emrys-Evans, P. V.

    Morrison, William Shepherd

    Entwistle, Cyril Fullard

    Moss, Captain H. J.

    TELLERS FOR THE AYES.—

    Evans, David Owen (Cardigan)

    Muirhead, Lieut.-Colonel A. J.

    Sir George Penny and Lieut.-Colonel

    Fleming, Edward Lascelles

    Nail, Sir Joseph

    Sir A. Lambert Ward.

    Ford, Sir Patrick J.

    O'Donovan, Dr. William James

    NOES

    Adams, D. M. (Poplar, South)

    Davies, David L. (Pontypridd)

    Grundy, Thomas W.

    Banfield, John William.

    Dobble, William

    Hall, George H. (Merthyr Tydvll)

    Cleary, J. J.

    Edwards, Sir Charles

    Jenkins, Sir William

    Cripps, Sir Stafford

    Greenwood, Rt. Hon. Arthur

    Leonard, William

    Daggar, George

    Grenfell, David Rees (Glamorgan)

    Logan, David Gilbert

    Lunn, William

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

    Williams, Edward John (Ogmore)

    McEntee, Valentine L.

    Smith, Tom (Normanton)

    Williams, Thomas (York, Don Valley)

    Milner, Major James

    Strauss, G. R. (Lambeth, North)

    Wilmot, John

    Nathan, Major H. L.

    Tinker, John Joseph

    Paling, Wilfred

    White, Henry Graham

    TELLERS FOR THE NOES.—

    Mr. John and Mr. Duncan Graham.

    Resolution agreed to.

    Clause ordered to stand part of the Bill.
    Ordered, "That the Chairman do report Progress, and ask leave to sit again."—[Captain Margesson.]
    Committee report Progress; to sit again To-morrow.

  NATIONAL HEALTH INSURANCE AND CONTRIBUTORY PENSIONS [MONEY].
  Resolution reported,
  "That, for the purposes of any Act of the present Session to amend the enactments relating to National Health Insurance and Contributory Pensions, it is expedient to authorise—

  (a) the payment in respect of each contribution year out of moneys provided by Parliament to an unemployment arrears fund of a sum which will, together with so much of any disposable surplus certified as a result of any valuation made after the first day of January, nineteen hundred and thirty-two, to exist in the Navy, Army and Air Force insurance fund (after providing for the cost of maintaining the prescribed additional benefits) as may in pursuance of directions by the Treasury be transferred to that arrears fund, be equal to the total sum to be paid to that fund in respect of that year out of amounts retained from the weekly contributions in respect of members of approved societies;

  (b) the payment out of moneys provided by Parliament of such increases in the sums payable out of moneys so provided under the said enactments and the enactments relating to Old Age Pensions as are attributable to—

  (i) the treating of all moneys credited to approved societies out of the said Unemployment Arrears Fund as wholly derived from contributions made by or in respect of contributors;

  (ii) the extension of the period of free insurance allowable in cases of unemployment to persons who at the beginning of their free insurance period are employed contributors who have been continuously insured for at least ten years;

  334

  (iii) the extension to officers of the reserve forces, with or without adaptations, modifications, or conditions of sub-section (3) of section sixty-one and sub-section (2) of section one hundred and eight of the National Health Insurance Act, 1924;

  (iv) the conferring on the Minister, where the High Court has given a decision inconsistent with, or the Minister has on new facts revised, a previous determination of the Minister, of a power to direct that persons by or in respect of whom contributions have been paid by reason of the previous determination or in the reasonable belief that the previous determination was applicable, should be treated as though they had been in insurable employment during any week in respect of which those contributions were paid;

  (v) the extension of paragraph (e) of Part I of the First Schedule to the National Health Insurance Act, 1924, to cases where the use of a vessel or vehicle is obtained from a person who is not the owner thereof;

  (vi) the enabling of persons who, while insured as voluntary contributors, become insured as employed contributors again to become voluntary contributors on ceasing to be employed;

  (c) the repayment to the Exchequer of so much of any sum paid under section seventeen of the National Health Insurance Act, 1924, to the Central Fund as is derived from moneys provided by Parliament."

  The remaining Orders were read, and postponed.
  It being after Half-past Eleven of the Clock upon Tuesday evening, Mr. SPEAKER adjourned the House, without Question put, pursuant to the Standing Order.
  Adjourned at Eight Minutes after Twelve o'Clock.