Commons Sitting of 21 May 1935

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

PRIVATE BUSINESS.
Provisional Order Bills (No Standing Orders applicable).
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, no Standing Orders are applicable, namely:
Land Drainage (Great Ouse) Provisional Order Bill.
Bill to be read a Second time Tomorrow.
Exeter Corporation Bill [Lords] (by Order),
Gloucester Corporation Bill [Lords] (by Order),
Read a Second time, and committed.
Stoke-on-Trent Corporation Bill[Lords](by Order),
Second Reading deferred till Thursday.
Urmston Urban District Council Bill[Lords](by Order),
Second Reading deferred till To-morrow.

ORAL ANSWERS TO QUESTIONS.
  TRADE AND COMMERCE.

    IMPORT DUTIES (MARBLE AND MARBLE PRODUCTS).
    Mr. LIDDALLasked the President of the Board of Trade whether he is aware of the continued loss of employment in the monumental marble industry through the continued importation of manufactured marble from Italy; and whether, as a decision on a recommendation from the Import Duties Advisory Committee regarding marble and marble products was deferred from last July while discussions on commercial matters were taking place with the Italian
    162
    Government, he will now state what steps he is proposing to take in the matter.
    The PRESIDENT of the BOARD of TRADE (Mr. Runciman)I am informed that an order based on this recommendation will be made shortly by the Treasury.

    ANGLO-RUMANIAN REPAYMENTS AGREEMENT.
    Sir EUGENE RAMSDENI asked the President of the Board of Trade whether the first monthly instalment of 60,000, payable in accordance with the terms of the recent Anglo-Rumanian debt, was received on the date on which it was due?
    Mr. RUNCIMAN: The payment referred to was not effected on the due date, but I am glad to say that it has now been received.
    Sir E. RAMSDENI May I ask whether the second instalment, which is now due, has also been paid?
    Mr. RUNCIMANI I could not say without notice.

    ANGLO-BRAZILIAN PAYMENTS AGREEMENT.
    Sir E. RAMSDENasked the President of the Board of Trade whether the Brazilian Government has taken steps to ensure that the terms of the recently concluded Anglo-Brazilian debt agreement shall be fulfilled by them?
    Mr. RUNCIMAN: The necessary steps are being arranged in consultation with the Brazilian authorities, and it is hoped to make a communication to the creditors concerned in the course of a few days.

    MOTOR CARS (IMPORTS).
    Mr. HALESasked the Chancellor of the Exchequer whether he is aware that in the first quarter of 1934 622 motor cars were imported into Great Britain from America at a cost of £81,491, and in the same quarter of 1935 2,163 at a cost of £338,383; and, having regard to the injury to the British motor industry by this increased importation of foreign cars and the increase in the number of unemployed, will he take immediate steps to raise the duty to a minimum of 50 per cent.?
    The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain): I am aware of the figures quoted by my hon. Friend. The available statistics as to the home production of motor cars and the

    163
    returns of employment in the motor industry do not, however, suggest that the industry has been seriously affected by the increased imports of foreign cars, which are still very small in comparison with the output of British cars. But the position will be kept under review.
    Mr. HALES: Is my right hon. Friend satisfied that we Britishers should sit down tamely and allow foreigners to dump their surplus production of cars into this country, putting over 8,000 men permanently out of work and involving the expenditure of over £600,000 per annum for dole payments? Will he not follow the example of Mussolini who has protected the Italian motor industry by an import duty of 250 per cent.

    COKE AND COALITE SALES (BY-LAWS).
    Mr. GROVESasked the President of the Board of Trade what regulations are enforced governing the sale and price of coke and coalite in the streets; and whether he is aware that coalite is at present being retailed at 8d. per 14 lbs. in bags and that hundredweights are not available.
    Mr. RUNCIMAN: By-laws regulating the sale of coke and coalite are generally in operation in the areas of such local authorities as have obtained powers by local legislation to regulate the sale of such fuels. These by-laws usually prescribe the quantities in which the fuels shall be sold and in some cases stipulate that the maximum price shall be exhibited. As regards the second part of the question I am informed that the general practice in London is for coal merchants to sell coalite from vans by the cwt., in the same way as coal.
    Mr. GROVES: May I ask the right hon. Gentleman whether his reply means that in areas where the local authorities have not applied for the powers to which he refers, these sellers of coalite can charge what prices they like and his Department have no power to interfere?
    Mr. RUNCIMAN: I would not like to say that, but it certainly would appear to be advisable for the local authority to have by-laws on the subject.

    MANCHESTER DEVELOPMENT COMMITTEE.
    Mr. FLEMING(for Mr. CHORLTON)asked the President of the Board
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    of Trade whether the Government will consider making a grant to the Manchester development committee to assist them specifically in connection with the setting up of new industries in the area they are seeking to develop.
    Mr. RUNCIMAN: There are no funds from which such a grant as my hon. Friend suggests could be made.

  FIXED TRUSTS.
  Mr. REMERasked the President of the Board of Trade whether he can now report what result has developed from consultations by the Board of Trade with the committee of the Stock Exchange, designed to prevent concealment under the title of a limited liability company of the names of persons who receive fees and/or profits as managers of fixed trusts in respect of which subscriptions are invited by them from the public.
  Mr. RUNCIMAN: I am informed that the matter is still engaging the attention of the committee of the Stock Exchange.

  GERMANY.

    REARMAMENT.
    Mr. ANEURIN BEVANasked the President of the Board of Trade the amount and the value of nickel imported into Germany from Canada for the years 1933 and 1934, respectively, and for the first three months of 1935 as compared with the first quarters of 1933 and 1934, and the amount and value which was exported direct to Germany and exported via Rotterdam, respectively; and whether, in view of the large proportion of capital held by British nationals in the firms involved, he will consider taking steps, in conjunction with His Majesty's Government in Canada, to prevent the continued participation of British firms in the rearmament of Germany.
    Mr. RUNCIMAN: As regards the first part of the question, I am circulating in the OFFICIAL REPORT a statement giving such information as is available. I am not aware of the proportion of the capital of nickel-producing firms that is held by British subjects. For the rest I can only refer the hon. Member to the reply given to the hon. Member for Dumbarton Burghs (Mr. Kirkwood) by my right hon. Friend the Lord Privy Seal on 14th May.
    Mr. COCKS: Is the right hon. Gentleman aware that by refusing to take any steps in this direction he is playing into the hands of Herr Hitler.
    Mr. RUNCIMAN: I am not aware of that.
    Following is the statement:
    STATEMENT showing the total quantity and value of crude and scrap nickel (and nickel coin) imported into Germany during the periods stated and recorded as of Canadian origin.

    —

    100 kg.

    1,000 R.M.

    Year—

    1933

    …

    6,885

    2,131

    1934

    …

    11,037

    3,441

    January-March—

    1933

    …

    612

    (a)

    1934

    …

    3,893

    1,312

    1935

    …

    —

    —

    Not available

    NoTE.—It is not possible to state the proportions imported direct and via Rotterdam, but a considerable proportion of the imports is not consigned direct from Canada to Germany.
    Mr. BEVANasked the First Lord of the Admiralty whether he has any information as to the designs or patents under which the submarines now under construction in Germany are being built; and whether such designs or patents are exclusively of German origin or obtained by agreement or licence from any other country.
    The FIRST LORD of the ADMIRALTY (Sir Bolton Eyres Monsell): The Admiralty has no information concerning these German submarines except that their displacement has been officially reported by Germany as 250 tons.
    Mr. MACQUISTENWould you not ask Hitler for the plans?

    EXPORTS (WAGE COSTS).
    Mr. LOUIS SMITHasked the Secretary to the Overseas Trade Department whether he will instruct the British commercial representative in Germany to compile a statement showing the rates of pay of German workers in connection with manufactured products which are exported to this country for competition with our own.
    Lieut.-Colonel J. COLVILLE (Secretary, Overseas Trade Department): No, Sir. The published information in Germany is insufficient to enable the Commercial Counsellor to compile an adequate statement of the kind suggested. Summaries of official German statistics on this subject have, however, been given from time to time in the "Ministry of Labour Gazette."

  BRITISH ARMY (EDUCATIONAL CORPS).
  Mr. OSWALD LEWISasked the Financial Secretary to the War Office whether the Army Council have yet come to any decision as to the recommendations of the committee appointed to examine the promotion situation in the Army educational corps.
  Lieut.-Colonel Sir A. LAMBERT WARD (Vice-Chamberlain of the Household): I have been asked to reply. The answer is in the negative.
  Mr. LEWIS: Can the hon. and gallant Member give any idea how soon we shall have these recommendations.
  Sir A. LAMBERT WARD: Perhaps the hon. Member will put down another question in a fortnight's time.

  SCOTLAND.

    POLICE PENSION FUNDS.
    Mr. KIRKWOODasked the Secretary of State for Scotland whether he is aware that under Section 22 of the Police Pensions Act, 1921, the police pension funds were abolished; whether any list has ever been prepared showing the assets of the police pension funds so abolished; is he aware that the assets of the Glasgow police pension fund so abolished now amount to £363,337 and await directions for application; and whether he proposes to give any directions as to the utilisation of these assets, either towards meeting present police pensions payable in Glasgow or otherwise in meeting the heavy expenditure in Glasgow on account of unemployed and other social schemes.
    The LORD ADVOCATE (Mr. Jamieson): I would refer the hon. Member to the reply given to the question which he addressed to my right hon. Friend on this subject on the 12th March.
    Mr. KIRKWOOD: Have no new circumstances arisen since the last reply was given in March.
    The LORD ADVOCATENo rrew circumstances have arisen.

    UNEMPLOYMENT ASSISTANCE (GLASGOW).
    H. Mr. NEIL MACLEANasked the Secretary of State for Scotland whether he can state the basis on which he calculates that the expenditure on able-bodied unemployed borne by the local authority in Glasgow is 5 per cent. of the total expenditure for this purpose;

    £

    (1) Expenditure by local authority on able-bodied relief to be transferred to the Unemployment Assistance Board (or until second appointed day met by new grant)

    1,379,000

    (2) Unemployment assistance to persons already transferred to Board

    2,400,000

    (3) Contribution by local authority under Section 45 of Unemployment Assistance Act, 1934

    3,779,000

    (4) Amount of block grant under Local Government (Scotland) Act, 1929, appropriate to the £1,379,000 of expenditure to be transferred. (In Glasgow the block grant represents 15.18 per cent. of the total rate and grant borne expenditure for the year 1934–35)

    209,332

    (5) Net future charge to local authority—difference between (3) and (4)

    189,668

    (6) Future charge to Exchequer:

    £

    (i)Unemployment Assistance

    2,400,000

    (ii)Transferred expenditure less local authority's contribution (£1,379,000–£399,000

    980,000

    (iii)Block grant appropriate to transferred expenditure

    209,332

    3,589,332

    (7)£3,589,332 = 95 per cent. of £3,779,000.

    £189,668 = 5 per cent. of £3,779,000.

    The cost of relieving able-bodied persons who are outwith the scope of the Unemployment Assistance Act, 1934, is not included in the above calculations. The estimated expenditure (£190,000) on relief of such persons of less the block grant (£28,842) appropriate to such expenditure gives a net figure of £161,158 and if this be added to the £189,668 shown above, the future charge to the ratepayers would be £350,826. The relative proportion of the expenditure to be borne by the Exchequer and by the local authority would then be as follows:
    Exchequer, 91·2 per cent.
    Local Authority,8·8 per cent.

    MENTAL PATIENT, LOCHGILPHEAD.
    Mr. THORNEasked the Secretary of State for Scotland whether he is in a position to state the result of his inquiries into the case of Mr. John Mulholland, who is an inmate of the Argyll and Bute district asylum at Lochgilphead; and what action he intends taking in the matter?
    The LORD ADVOCATE: I find that on the 10th April Mr. Mulholland's sister applied for his discharge to the Glasgow public assistance authority, the authority responsible for his maintenance in the Argyll and Bute district asylum. As Mr. Mulholland had not then recovered, the public assistance committee refused the application as they were not satisfied
    and whether the cost to the local authority for those able-bodied unemployed who are outwith the scope of the Unemployment Assistance Board is included in this 5 per cent.?
    The LORD ADVOCATE: As the answer involves a number of figures my right hon. Friend proposes, with the hon. Member's permission, to circulate a statement in the OFFICIAL REPORT.
    Following is the answer:
    The following is the information asked for, the figures being estimates of the annual amount of the different items.
    that the sister would properly supervise him. The medical superintendent of the asylum considers that recovery has now taken place, and is in communication with the sister with a view to arranging for Mr. Mulholland's discharge.
    Mr. THORNE: If I put down another question later shall I be able to get a definite answer as to whether he is going to be allowed out or not?
    The LORD ADVOCATE: If the lion. Member will put down another question, he will receive an answer according to the circumstances at the time.

    SCHOOLS (MILK SUPPLY SCHEME).
    Lieut.-Colonel MOOREasked the Secretary of State for Scotland what is

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    the approximate number of children in Scottish schools who are now receiving free milk; what proportion of the whole this number represents; what is the annual cost of the distribution; and whether he is aware of the difficulties which have arisen owing to the fact that free milk can only be given to medically necessitous children and not to children who are necessitous in the ordinary sense of the word?
    The LORD ADVOCATE: Under the milk schemes in operation in Scottish schools 60,500 children are now receiving free milk. This is about 14 per cent. of the total number receiving milk under these schemes and 7 per cent. of the total number in the schools. The annual cost to education authorities of distribution is estimated at about 00A3;3,000. With regard to the last part of the question, Section 6 of the Education (Scotland) Act, 1908, which governs this matter, provides that before free food can be supplied an education authority must inter alia be satisfied that the child is unable by reason of lack of food to take full advantage of the education provided. The method of ascertainment of this condition is left to the discretion of the education authority. All but three of the education authorities concerned report that no difficulty such as is suggested in the question has arisen and steps are being taken to clarify the position in these cases. I am sending my hon. and gallant Friend a copy of the Department's circular which sets out the general requirements under the milk scheme.
    Lieut.-Colonel MOORE: Will my right hon. and learned Friend consider when sending out this circular stressing the fact that economic necessity should be taken into consideration as well as physican necessity?
    The LORD ADVOCATE: Perhaps my hon. and gallant Friend will see me later upon that matter.

  COAL INDUSTRY.

    PITHEAD BATHS.
    Mr. LUNNasked the Secretary for Mines how many pithead baths have been opened at mines in Great Britain; how many men and boys are already catered for by them; how many baths are under
    170
    construction; and what is the capital amount which has been allocated from the Miners' Welfare Fund for this purpose?
    The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Dr. Burgin): I have been asked to reply. There are at present 194 pithead baths in Great Britain providing accommodation for about 236,000 wage earners. This number includes 12 baths provided wholly at the expense of the colliery owners and four partly at their expense. Nineteen more baths are under construction. The total amount allocated out of the Miners' Welfare Fund to date for the construction of pithead baths is approximately £3,401,000.
    Mr. LUNN: Can the hon. Member say how long it will be before we have provided bath accommodation for all miners in the industry?
    Dr. BURGIN: Not without notice.

    OUTPUT, YORKSHIRE.
    Mr. LUNNasked the Secretary for Mines whether he can give the average daily output of coal per man working at the coal face in Yorkshire in the years 1913 and 1934?
    Dr. BURGIN: During the year 1934, the average output per manshift worked at the coal face in Yorkshire was 67.62 cwt. Similar information for a prewar period is not available but in June, 1914, the average output per manshift worked by all persons employed below-ground was 31.24 cwt. while the corresponding figure for the year 1934 was 33.73 cwt.
    Mr. PIKE: Can the Parliamentary Secretary say to what extent South Yorkshire is carrying West Yorkshire on its back in this matter?
    Mr. LUNNasked the Secretary for Mines the total quantity and percentage of coal cut by machinery in Yorkshire in 1913 and for each year from 1920 to 1934, inclusive?
    Dr. BURGIN: As the reply involves a statistical table I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.
    following is the table:

    Year.

    Coal cut by machinery.

    Quantity.

    Percentage of Total Output.

    Tons.

    Per cent.

    1913

    …

    …

    4,492,822

    10.3

    1920

    …

    …

    4,120,338

    11.4

    1921*

    …

    …

    3,506,753

    12.3

    1922

    …

    …

    5,277,341

    12.5

    1923

    …

    …

    6,667,138

    14.3

    1924

    …

    …

    7,305,145

    15.7

    1925

    …

    …

    7,068,631

    15.6

    1926*

    …

    …

    3,682,805

    17.0

    1927

    …

    …

    7,716,671

    16.8

    1928

    …

    …

    7,596,260

    17.5

    1929

    …

    …

    8,371,718

    18.0

    1930

    …

    …

    9,114,948

    20.5

    1931

    …

    …

    9,717,541

    23.9

    1932

    …

    …

    10,066,411

    26.4

    1933

    …

    …

    11,236,521

    30.2

    1934

    …

    …

    15,041,860

    37.7

    * In these years work at coal mines was reduced by protracted disputes.

  PETROLEUM PRODUCTION ACT.
  Captain STRICKLANDasked the Secretary for Mines what steps have been, or will be, taken to guarantee that the undertaking to be given by the Treasury to licensees, under the Petroleum Production Act, that the royalties will never be more than Os. per ton, will be honoured for any period longer than that occupied by the present Government, or whether the undertaking is subject to possible variation in future?
  Dr. BURGIN: The provision regarding the maximum rate of royalty on crude oil to which my hon. Friend refers is contained in the clause entitled "Provision for Periodical Revision of Royalties" which is on page 16 of the Model Clauses scheduled to the Petroleum (Production) Regulations, 1935. A clause of this kind incorporated in any oil-mining licence granted under the Regulations will represent a firm contract as between the Board of Trade and the licensee. If at any future time new or modified regulations are made, their provisions will, of course, apply to any new licences granted after the date such regulations come into force, but will not affect the terms of any licence previously granted.

  SUGAR-BEET INDUSTRY.
  Mr. L. SMITHasked the Minister of Agriculture whether any estimate has been made showing the number of people who would, in the case of the cessation of support to the sugar-beet industry, be thrown out of work, and what the charge of such people would be on the public assistance of the country; and, if not, whether he will instruct his advisers to make an investigation on these lines?
  The MINISTER of AGRICULTURE (Mr. Elliot):The United Kingdom Sugar Industry Inquiry Committee made a careful survey of the employment value of the industry and their observations are given in Chapter IV of the Majority Report, and in paragraphs 53 to 57 of the Minority Report. As the Committee found, it is impossible to indicate, in precise figures, the aggregate number of people to whom the sugar-beet industry gives employment, directly and indirectly, whole-time and part-time, but the number is obviously considerable. I do not think, therefore, that further investigation would serve any useful purpose, but I can assure my hon. Friend that full account will be taken of this aspect of the problem in the consideration which is now being given to the question of future policy.
  Mr. SMITH: May I ask whether the Minister realises that it is almost impossible for farmers to grow alternative crops and, therefore, if the sugar-beet crop is done away with, practically all those now employed in the industry will be thrown out of work?
  Mr. ELLIOT:I know that the difficulty of finding alternative crops is considerable, and that is one of the factors I have to keep in mind.
  Mr. T. WILLIAMS: Has the right hon. Gentleman made any estimate of how many people will be thrown out of work if he withdraws his milk subsidy, his beef subsidy, and his other subsidies?
  Mr. ELLIOT:I think the number would be 1,100,000 as far as I can calculate at the moment. Neither my hon. Friend nor I would wish to see that.
  Mr. THORNE: Has the right hon. Gentleman made any calculation as to the number of people who could be put on small holdings if he spent the same amount of money on small holdings?

  UNEMPLOYMENT (GLASGOW AND BIRMINGHAM).
  Mr. MACLEANasked the Minister of Labour whether he can state for a convenient date in the month of October, 1930, 1931, 1932, 1933, and 1934, the total number of registered unemployed for the Labour Exchange areas of Birmingham and Glasgow, showing, respectively, the number in receipt of standard benefit, the

  Date.

  Numbers of Unemployed aged 14 years and over on the Register.

  Insured Persons aged 16-64 included in previous column.

  Uninsured Persons aged 14 years and over.

  Claims admitted for Insurance Benefit.

  Applications authorised for Transitional Payments.*

  Claims under Consideration.

  Not entitled to Insurance Benefit or Transitional Payments.

  Glasgow Area.†

  27th October, 1930

  95,268

  56,918

  23,188

  3,703

  7,263

  4,196

  26th October,1931

  125,933

  75,735

  31,733

  2,774

  10,305

  5,386

  24th October,1932

  127,356

  35,463

  60,365

  2,181

  21,606

  7,741

  23rd October,1933

  119,991

  28,159

  55,666

  2,225

  23,286

  10,655

  22nd October,1934

  107,227

  27,557

  41,255

  1,882

  23,702

  12,831‡

  Birmingham Area.†

  27th October, 1930

  52,190

  40,058

  7,323

  2,715

  946

  1,148

  26th October,1931

  69,642

  52,543

  11,675

  2,021

  1,753

  1,650

  24th October,1932

  53,790

  24,581

  16,105

  1,762

  9,512

  1,830

  23rd October,1933

  37,016

  14,668

  13,512

  1,425

  6,229

  1,182

  22nd October,1934

  29,067

  16,334

  7,021

  1,306

  3,326

  1,078‡

  * For October 1930 and 1931 the figures relate to standard benefit and transitional benefit respectively, The comparability of the figures for the different dates given in the Table is affected by changes, in November, 1931, and July, 1934, in the conditions for the receipt of insurance benefit.

  † The Employment Exchanges included are:—Glasgow Area—Glasgow Central, Glasgow South Side, Bridgeton, Finnieston, Govan, ginning Park, Maryhill, Parkhead, Partick, Rutherglen and Springburn; Birmingham Area—Aston, Birmingham, Handsworth, Selly Oak, Sparkhill, Washwood Heath and Birmingham Juvenile Employment Bureau.

  ‡ Including insured jnveniles aged 14 and 15.

  BREACH OF PROMISE ACTIONS.
  Mr. LIDDALLasked the Attorney-General whether in 'view of the fact that it is not in the public interest that any action should lie for breach of promise alone, he will consider the reform of the breach of promise law in order that in future the onus will be placed on the complainant of proving, not only that a breach has occurred but that it has inflicted specific damage other than mere disappointment of expectations or loss of affection?
  number in receipt of transitional benefit, and the number not in receipt of either benefit?
  The MINISTER of LABOUR (Mr. Oliver Stanley): As the reply includes a table of figures, I will, if I may, circulate a statement in the OFFICIAL REPORT.
  Following is the statement:
  The Table below gives the information desired.
  Mr. GOLDIEasked the Attorney-General whether he is prepared to introduce legislation with a view to the abolition of actions for breach of promise of marriage other than cases in which it is alleged that there has been seduction in reliance on such promise or where a period of not less than 10 years has elapsed between the date of the alleged promise and the date of the alleged breach?
  The ATTORNEY - GENERAL (Sir Thomas Inskip): In the present state of

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  Parliamentary business, I regret there is no possibility of passing into law any proposals with regard to this matter, as to which there are sharp differences of opinion.
  Mr. LIDDALL: Having regard to the fact that many breach of promise actions are nothing more nor less than blackmail actions, will he not take the necessary steps to prohibit the publication of the evidence in breach of promise cases as is done in divorce cases?
  Mr. GROVES: Is it not true that the state of Parliamentary business is due to many cases of breach of promise?
  Mr. GOLDIE: Does my right hon. and learned Friend not regard the matter as of sufficient importance to refer it to the Select Committee on Law Reform which is now sitting?
  The ATTORNEY-GENERAL: I will call the attention of my Noble Friend the Lord Chancellor to my hon. and learned Friend's suggestion.
  Mr. PIKE: Is it not a fact that second marriages always prove to be the happiest?
  Mr. MACQUISTEN: Does my right hon. and learned Friend say that it is not in the public interest to publish reports of cases Surely girls who may have been trifled with over a long series of years should have some remedy?

  EDUCATION (EVENING INSTITUTES).
  Mr. MALLALIEUasked the Parliamentary Secretary to the Board of Education whether he is aware of the falling off in the number of students which the insistence of the Board of Education on the raising of fees in evening institutes may have; and whether the Board will reconsider this matter?
  The PARLIAMENTARY SECRETARY to the BOARD of EDUCATION (Mr. Ramsbotham): The numbers of students in evening institutes, which fell in 1932–33, largely owing to the low birthrate in the War, but also because of trade depression, increased in 1933–34 and, as far as can be judged, will increase again in the present session. I am glad to have this opportunity of pointing out
  176
  that throughout their review of the arrangements of the Local Education Authorities the Board have aimed not merely at securing a larger income from fees, where this could reasonably be expected, but also at securing a more coherent system of fees, which would help the co-ordination and development of Technical Education. As their policy includes the remission of fees in cases of poverty and the adjustment or remission of fees to encourage the attendance of young students there is no reason for anticipating any adverse effects on enrolment.
  Mr. MALLALIEU: Is the Parliamentary Secretary aware that in some instances a fee of 2s. 6d., which is supposed to cover all the courses taken at these Institutes, has now been changed to a fee which may be 10s. per course at the same Institute, and that it is likely to prove a very heavy burden on some of the lower-paid workers, in view of the fact also that some of their material costs as much as £2 or £3 in the season?
  Mr. RAMSBOTHAM: If the hon. Member will give me any instance where enrolment has been discouraged by increased fees I will look into it.

  ROYAL NAVY (SHIPBUILDING CONTRACTS).
  Mr. A. BEVANasked the First Lord of the Admiralty whether any firms which are at present building ships for His Majesty's Navy pay royalties and/or commission to foreign firms or Governments on the construction of those ships; and, if so, whether he will state the nature of such agreements, the firms or Governments concerned in England and abroad, and the amount which which has been paid in each year during the past five years?
  Sir B. EYRES MONSELL: Contracts for the construction of ships for the Royal Navy invariably place upon the shipbuilders the responsibility for settling their own cost any claims which may arise on account of the use of patented inventions. Any royalties, etc., would be included in the total price, and the information desired is therefore not available.

  IRISH IMMIGRANTS.
  Mr. L. SMITHasked the Secretary of State for the Home Department

  177
  whether any regulations are in existence to control the influx of cheap Irish Free State labour into this country through the Ulster ports?
  The SECRETARY of STATE for the HOME DEPARTMENT (Sir John Gilmour): There is no power to restrict the entry of British subjects into the United Kingdom, but the census reports show that there were fewer Irish-born persons in Great Britain in 1931 than in 1921.
  Mr. SMITH: Is my right hon. Friend aware that many of the Irish immigrants are receiving public assistance at the ports to which they come, some of these being in depressed areas, and can he take any steps to prevent numbers more coming over?
  Sir J. GILMOUR: As I have explained, not under the existing statutes.
  Mr. RHYS DAVIES: Is the right hon. Gentleman aware that some of these Irish labourers are employed in this country by English, Scottish and Welsh employers because they are cheaper than native labour?
  Mr. T. WILLIAMS: Does the right hon. Gentleman agree that Irish labour is cheaper labour?
  Mr. MACQUISTEN: They work harder than the Welsh.

  MATERNAL MORTALITY (INQUESTS).
  Colonel CLIFTON BROWNasked the Minister of Health whether he has considered the suggestion made at the annual meeting of the Carlisle and District Nursing Association, to which his attention has been drawn, that inquests should be held on every maternal death in order to draw public attention to the many avoidable causes of these fatalities; and whether he will state what action he proposes to take in the matter?
  The PARLIAMENTARY SECRETARY to the MINISTRY of HEALTH (Mr. Shakespeare)This suggestion was considered by the Departmental Committee on Maternal Mortality and Morbidity, who did not advocate its adoption (Final Report., pages 26–27). The committee advised that local authorities should be urged to continue the arrangements by
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  which Medical Officers of Health make inquiries into maternal deaths and furnish confidential reports to the Chief Medical Officer of my Department. My right hon. Friend has taken action accordingly.

  HEALTH AND UNEMPLOYMENT INSURANCE CONTRIBUTIONS (PROSECUTION).
  Mr. THORNEasked the Minister of Health whether he has received a report from one of his national health insurance inspectors in connection with the case of George Pennington, who was formerly in business at Penrhyn Bay as a builder and contractor, who was fined 00A3;30 and costs at Llandudno on the 13th instant for failing to pay health insurance and unemployment insurance in respect of 15 of his workmen; if he is aware that out of £48 collected £23 of this money was taken from the workmen; and whether the workpeople involved will lose any benefit rights?
  Mr. SHAKESPEARE: The facts are substantially as stated in the question, except that the sum of 00A3;48 is the approximate total of the insurance contributions which the employer should have paid. My right hon. Friend is informed that the Court has ordered that the contributions due shall be paid by the 13th June. If the employer complies with this order, the benefit position under National Health Insurance of any employe concerned will be revised as from the date of payment. If in the meantime any loss of benefit has resulted from the non-payment of the contributions the employe has a statutory right of recovering the loss from the employer.
  Mr. THORNE: Can the Minister assure the House that, if all the cards have been properly made up by the workman in question, he will lose neither unemployment nor health insurance benefits?
  Mr. SHAKESPEARE: I require notice of that question.
  Captain STRICKLAND: Does the Parliamentary Secretary not realise the difficulty of the workpeople in instituting proceedings in cases like this, as they have neither the funds nor the ability to do so, and, as in these cases the Government insist on a workman paying at the time and he has no alternative but to pay, does the Parliamentary Secretary not think

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  that there ought to be some regulation by which the workmen would not be deprived of benefits?
  Mr. RHYS DAVIES: Will the Parliamentary Secretary bear this very important point in mind when drafting the Bill that is now under discussion?

  HOUSING.

    STATISTICS.
    Sir JOHN POWERasked the Minister of Health whether he can state the number of houses built in the six months ended 31st March, 1935, and, for comparison, the figures for the corresponding period a year ago?
    Mr. SHAKESPEARE: I would ask my hon. Friend to await the housing return for the half-year ended 31st March last, which will be published very shortly and will give the information he desires.

    BUILDING SOCIETY ADVANCES (INTEREST).
    Mr. T. WILLIAMSasked the Financial Secretary to the Treasury whether he is aware of the recent decision of several large building societies which have agreed to demand a minimum of 5 per cent. interest on all advances to house purchasers, and that. this rate of interest is excessive and is likely to militate against house building: and whether he will make representations to the leaders of the building societies to reduce the rate of interest to would-be house purchasers?
    The FINANCIAL SECRETARY to the TREASURY (Mr. Duff Cooper): The hon. Member seems to be under a misapprehension. I have no official information on the subject of the rates of interest charged by building societies on mortgage advances, but I understand that a number of large societies have recently announced a reduction in their rates for such advances below 5 per cent.
    Mr. WILLIAMS: Can the hon. Gentleman say whether that will apply to existing contracts?
    Mr. COOPER:I cannot say. I understand that it is under consideration.
    Mr. WILLIAMS: Will the hon. Gentleman use his influence with the building societies to include existing mortgages?
    Mr. ISAAC FOOT: Are not these societies generally run by the members themselves, and is it not a question for them?

  SCUNTHORPE CO-OPERATIVE SOCIETY.
  Mr. PIKEasked the Financial Secretary to the Treasury whether his attention has been drawn to the prosecution at the Scunthorpe Police Court, on 10th May, 1935, of two employes of the Scunthorpe Co-operative Society for stealing a wireless set, the property of the society; and whether he is aware that during the course of the proceedings it was disclosed that there was no proper book-keeping, checking of accounts, or audit; and whether he will institute an inquiry into the management of this society, in order to protect the interest of its 18,000 members, most of whom are drawn from the working classes?
  Mr. COOPERhave seen a newspaper account of these proceedings and I understand that the auditor's attention has already been drawn to the matter by the society. The Chief Registrar of Friendly Societies has no power to institute an inquiry except on the request of members of the society, supported by evidence on the matters which, they think, warrant an inquiry.
  Mr. PIKE: Do I understand that my hon. Friend is satisfied that an inquiry should take place, and, if so, does he not consider the matter of such vital importance as to call for his making such overtures himself as will result in an automatic inquiry into the whole of the proceedings of this case, together with others which are nothing more or less than a pernicious system of public robbery?
  Mr. COOPER: No, Sir. I am not satisfied that an inquiry should take place, and, if I were, it is no part of my duty to take any action.
  Mr. PIKE: Will my hon. Friend not consult the Home Secretary to ensure that papers are called for to ascertain whether or not the case merits a public inquiry?
  Mr. RHYS DAVIES: Is the hon. Gentleman aware that this type of theft is not peculiar to co-operative societies?
  Mr. MACQUISTEN: Are not the cooperative societies the only people who plead custom of trade when charged with irregularities?
  Mr. PIKE: In view of the very unsatisfactory nature of the reply, I beg to give notice that. I shall raise this matter on the Adjournment.

  TREASURY BILLS (INTEREST).
  Mr. MABANEasked the Financial Secretary to the Treasury what is the average rate of interest on Treasury bills for the current financial year up to the latest available date?
  Mr. COOPER: The average rate is 10s. 1½d. per cent.

  TRANSPORT (OMNIBUS STOPS, LONDON).
  Captain CUNNINGHAM-REIDasked the Minister of Transport whether he will indicate to the London Passenger Transport Board that the convenience of the public would best be served, when omnibus stops are changed, by the display of some form of notice at the previous omnibus stop?
  The PARLIAMENTARY SECRETARY to the MINISTRY of TRANSPORT (Captain Austin Hudson): At points where stopping place notices are erected, alterations are indicated by notices fixed to existing posts. At points where no signs are provided the board, so far as possible, arrange for representatives to be stationed at the old stopping places to advise the public of the changes made.

  INTERNATIONAL BOUNDARY COMMISSIONS.
  Captain CUNNINGHAM - REIDasked the Secretary of State for Foreign Affairs whether the appointment by the President of the Council of the League of Nations of the chairman of the SinoBritish Commission to determine the southern section of the boundary between Yunnan and Burma marks any new departure in British policy with regard to boundary commissions.
  The SECRETARY of STATE for FOREIGN AFFAIRS (Sir John Simon): There is no fixed rule in regard to the
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  method of appointing the President of an International Boundary Commission, and the method to be adopted in the case mentioned by my hon. and gallant Friend is one which has been applied with success in previous instances.
  Captain CUNNINGHAM-REID: Is this the first time the League has been asked to provide a chairman for a Boundary Commission?
  Sir J. SIMON: No, Sir. The latter part of my original answer states that it is not the first time that this method has been applied with success. I can give the hon. and gallant Member one instance. The International Arbitration which settled the boundary between Iraq and Syria was presided over by a chairman nominated in this way.

  NYASALAND (HUT TAX).
  Sir ROBERT HAMILTON (for Mr. GRAHAM WHITE)asked the Secretary of State for the Colonies whether he has received a report from the Governor of Nyasaland with regard to the administration of the hut tax?
  The SECRETARY of STATE for the COLONIES (Sir Philip Cunliffe-Lister): Not yet, Sir. Some local investigation may doubtless be necessary before the Governor is in a position to submit a full report. I will communicate with the hon. Member as soon as the report arrives.

  NEW HEBRIDES (LIQUOR TRAFFIC).
  Mr. ISAAC FOOT (for Viscountess ASTOR)asked the Secretary of State for the Colonies whether he is aware that cases have recently occurred where intoxicating liquor has been supplied to natives of the New Hebrides at Epi, Ambrim, South Malekula, Tautu, East Malekula, Santo, Tanna, and other places, and at South-West Bay bush natives have been imprisoned for being in possession of alcoholic liquor, while so far the Europeans alleged to have supplied the liquor have not been tried; and whether, as Article No. LIX of the Condominium in the New Hebrides prohibits the selling or supplying of intoxicating liquors to the natives under severe penalty, he will see that the necessary action is taken to deal with the offenders?
  Sir P. CUNLIFFE-LISTER: The allegations were brought to the notice of the British Resident Commissioner who reported to the effect that the question of the illegal sale of intoxicating liquor to natives of the New Hebrides has received the close attention of the joint administration, and that, while it may not be possible to obliterate the traffic entirely, a marked improvement in the situation has been effected during recent years. I have not so far been informed what action the Resident Commissioner has been able to take with regard to the cases referred to.
  Mr. FOOT: When the light hon. Gentleman receives the information which is asked for, will he communicate with my Noble Friend?
  Sir P. CUNLIFFE-LISTER: Yes, I will, but that cannot be for some time because the New Hebrides are so far away.

  CIVIL ESTIMATES (SUPPLEMENTARY ESTIMATES, 1935).
  Estimate presented,—of a further sum required to, be voted for the service of the year ending 31st March, 1936 [by Command]
  Referred to the Committee of Supply, and to be printed.

MESSAGE FROM THE LORDS.
That they have agreed to,—.
Glasgow Corporation Order Confirmation Bill, without Amendment.
That they have passed a Bill, intituled, "An Act to confirm a Provisional Order under the Private Legislation Procedure (Scotland) Acts, 1899 and 1933, relating to Renfrewshire County Council (Lochwinnoch, etc.) Water." [Renfrewshire County Council (Lochwinnoch, etc.) Water Order Confirmation Bill [Lords.]
And also a Bill, intituled, "An Act to confirm a Provisional Order under the Private Legislation Procedure (Scotland) Acts, 1899 and 1933, relating to Stirling-shire and Falkirk Water." [Stirlingshire and Falkirk Water Order Confirmation Bill[Lords.]

RENFREWSHIRE COUNTY COUNCIL (LOCHWINNOCH, ETC.) WATER ORDER CONFIRMATION BILL [Lords].
Ordered (under Section 7 of the Private Legislation Procedure (Scotland) Act, 1899) to be considered To-morrow.
STIRLINGSHIRE AND FALKIRK WATER ORDER CONFIRMATION BILL [Lords].
Ordered (under Section 7 of the Private Legislation Procedure (Scotland) Act, 1899) to be considered To-morrow.
ORDERS OF THE DAY.

  FINANCE BILL.
  Order for Second Reading read.
  Motion made, and Question proposed, "That the Bill be now read a Second time."
  3.17 p.m.
  Mr. PALING: I beg to move, to leave out from "That" to the end of the Question, and to add instead thereof:
  "this House cannot assent to the Second Reading of a Bill which continues to cast an unfair burden of taxation upon the indirect taxpayer, encourages the limitation of production, and embodies no provisions for securing to the people that improvement in their standard of life which the increased productive capacity of the nation has made available."
  The Chancellor of the Exchequer has received the usual congratulations upon the production of his Budget and I think I am right in saying that on this occasion the right hon. Gentleman has received rather more than the ordinary congratulations. I do not think that is because he has done anything very imaginative or brave or anything which is likely to affect the prosperity of the people of this country. Generally speaking, I think it is because he has distributed whatever surplus he had more or less in accordance with the expectations of most people in this House and in the country. In any event, he has not imposed any fresh taxation and whatever he had to give away has been given—in accordance with the practice usual in the last few years—to his friends in the Tory party. I am bound to say that one thing which he did really surprised me and I think it also surprised a great many hon. Members on his own side. That was the increase in the duty on heavy oils. I have read the various speeches made on this matter with great care and also the memorandum which has been sent to us by the people affected. Without going into details, it appears to me that those people are suffering from very heavy taxation today. It has been said, I do not know with what truth, that there is a desire on the part of some people to drive heavy traffic off the roads. Some people, it appears, hold the view that the railways are the right means of dealing with such traffic and it is suggested that this kind of heavy taxation is an indirect way of
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  achieving that object. I do not know. whether that is the intention or not but, if it is, I doubt whether this method of taxation is the best method or is the honest method. If the object of the Government is as I have described, it would be better for them to say so and to deal with the matter accordingly instead of trying to deal with it by this indirect method.
  Everybody will admit that the Diesel oil engine has proved a very necessary and desirable thing. It has been for a good many years in the experimental stage—for a longer period than most other things of that kind. Tremendous difficulties have had to be overcome in connection with it. The worst of those difficulties I understand have been overcome. I do not think anybody would say that all the difficulties and troubles connected with this engine have yet been surmounted. A tremendous amount of research works still remains to be done. In view of that, it was a rather cruel blow to impose this 7d. tax on heavy oil, for it must hit the production of these engines very seriously. The Chancellor has said that his revenue was being interfered with and that he was bound to take some steps. I dare say that was true to some extent, but he will be the first to admit that if people find that business directed into one particular channel costs a tremendous lot, and if directed into another channel costs less, they are showing business enterprise if they change the channel—an enterprise which hon. Members opposite laud to the skies. In the present instance, the people who have shown individual enterprise by directing their labours into another channel which gave them better profits and by carrying out the principles with which hon. Members agree have received a blow which seemed very hard, particularly as it came from the present Chancellor.
  I do not know the first thing about engineering, but I watch with some interest the development of these new things. I have watched the development of the Diesel engine from two or three points of view, and one of the things which appeals to me as a man in the street is the fact that, if this engine were developed and became of general use, it would mitigate the risk of fire which occurs with the petrol engine. When a crash occurs one of the greatest

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  risks is the danger of fire, due, in the main, to the inflammatory nature of the petrol. That risk is almost entirely eliminated in the case of the heavy oil engine. That appears to be a tremendous advantage, and it ought to be encouraged from that point of view alone. Another factor which I should have thought would have been present in the mind of the Chancellor was the carrying capacity of heavy oil engines as compared with petrol engines. When we are looking forward to long-distance flights and know that one of the chief handicaps of the aeroplane is the fact that on long flights a. heavy load of fuel has to be carried, that is a factor which the Chancellor should have taken into consideration. As hon. Members opposite are supposed to encourage enterprise of this description, it seems to me that this is an entirely unnecessary tax to place on industry.
  Our Amendment refers to the question of direct and indirect taxation. I have been in the House 10 or 11 years and for some years this question cropped up in connection with the Budgets. There was always a difference of opinion as to how much should be raised by direct taxation and indirect taxation respectively. The people who paid direct taxation were in the main firm in their belief that they paid too much, and the people who paid indirect taxation were firm in their belief that they also paid too much. I remember the right hon. Gentleman the Member for Epping (Mr. Churchill) speaking on this question about 1925, and he said that the balance as between indirect and direct taxes had been disturbed, that it had lost its equilibrium, and that it was his duty to restore it. Other Chancellors have also spoken in the same terms. I have always wondered what the equilibrium was and where it would be reached, and I have made it my business to go through the Budgets from that time. I find that the percentage of direct taxation in 1924–25 was 66.9 per cent, and of indirect 33.1 per cent. That was about the time when the right hon. Gentleman the Member for Epping said that the equilibrium had been disturbed, that direct taxation was bearing too much, and that some must be put on indirect taxation. In 1931–32 direct taxation had come down to 65.8 and indirect taxation had gone up to 34.2. In 1934–35 direct taxation had dropped to 58.8 and indirect had gone up to 41.2. I have calculated that this year, 1935–36, direct taxation will again go down to 57.3 and
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  indirect up to 42.7. I would like to ask the Chancellor whether in his opinion we have yet reached a state of equilibrium
  We had a series of Budgets under Conservative Governments, we had two under a Labour Government, and we have had four under this National Government, which is again a Conservative Government; and the Conservatives have used their power all the time in the direction of increasing indirect taxation, which, in the main, is borne by the poorer people of the country. In view of what has been said so often about the necessity of reaching a state of equilibrium, it is due to the House that the Chancellor should tell us whether this state has yet been reached or whether he intends to continue to act on the principle that the proportion of indirect taxation should be increased. Looking at it in terms of pounds, the amount raised from Customs and Excise in 1931–32, was £255,000,000, and in 1935–36 £295,000,000. The biggest contribution to this amount would probably be from the import duties, and the people who make the biggest contribution to those duties are the working-class. A question was asked in the House yesterday as to how much in taxes on food was raised this year as compared with three or four years ago, and the reply was that the amount had increased from £14,000,000 to £234,000,000. Most of this was raised from the poor. Does the Chancellor desire to go on with this process, or have we reached equilibrium'? Will he endeavour to keep the proportion of direct and indirect taxation as it is now?
  When this question is discussed most Members take refuge in the statement that the worker has got the benefit. For instance, the social services are always mentioned, and we are told to look at the increase in those services since the War. That is true, but there has been little or no increase, rather, indeed, a reduction, in the amount spent on the social services since 1931–32, in spite of the fact that the indirect taxation upon the workers has increased so heavily. If we look a little further we see that so far from the workers having benefited from these Budgets they have probably lost tremendously.
  Sir BASIL PETO: I thank the hon. Member for so courteously giving way to me to allow me to put one question. In his investigation, will he go far enough to include the increase in employment? Surely that is of benefit to the workers.
  Mr. PALING: I shall have a few things to say about employment before I sit down, and I am sure that the hon. Baronet will hear as much about it as he wants to hear from me. Money has been spent in subsidies—on milk, on marketing schemes, shipping, sugar beet, and £9,000,000 for the Cunarder; but none of this money has gone to the working class directly and very little of it indirectly. We are told that subsidies percolate from the people who get them to the working class in the form of wages, but since 1931 the wages of the working class people have not increased but, in the aggregate, have decreased, so the working people have not got it from that source. Not only are they paying more in indirect taxation but other impositions have been put on them. I would ask the Chancellor of the Exchequer whether it is his intention to take off the 2d. a week extra which was put on to the premiums under unemployment insurance. There was a cut in the benefits, and that has been restored, but the increased contribution remains and so far as I know there has never been a word said as to whether he has any intention of taking it off.
  The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain): Surely the hon. Member is aware that any increase in the contributions in respect of unemployment insurance would not be a matter for the Budget at all, but the Unemployment Insurance Fund?
  Mr. PALING: I did not say it came out of the Budget.
  Mr. CHAMBERLAIN: You said that the Chancellor of the Exchequer had never said whether he was going to reduce that contribution.
  Mr. PALING: I beg pardon, I am making the point that in addition to the increased taxation put upon the workers this was another, shall I say, imposition which they still have to pay. Since 1931 the whole tendency has been for the working classes to pay more and get less,
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  whereas in the case of the friends of the right hon. Gentleman the tendency has been for them to pay less and receive more. It has been said that a Tory Government always looks after its friends, and this National Government is in the main a Tory Government, and any one who studies the Budgets from 1931 to the present time will admit that this Government has lived up to that standard. Now I turn to Clause 24 of the Bill, which introduces a new principle. I think I am right in saying that no mention of it was made by the Chancellor in his Budget speech. Clause 24 is evidently intended to bring into operation a system of rationalisation. Sub-section (2, a) reads: "that the primary object of the scheme is the elimination of redundant works or machinery or plant from use in an industry in the United Kingdom."
  During Budget Debates I have frequently heard the argument put forward, mainly from the Liberal Benches, that money which was put back into an industry with the object of developing it and increasing production should not be subject to Income Tax, and I think one can agree that it is a fairly good logical argument, though I do not think it has ever met with much response. Though everybody agreed that it was desirable, nothing has been done. Now we are going to the opposite extreme. Now we are going to relieve of Income Tax employers in an industry who will agree that so much of their plant is redundant and who will scrap it, not necessarily because the plant is inefficient or old but merely because it is redundant. If employers in an industry can agree, as an industry, that there is a certain amount of redundant machinery and make a contribution towards compensation for those who scrap that redundant machinery, the amount they pay as a contribution is not to be subject to Income Tax. In other words, there is to be a subsidy of 4s. 6d. in the £, in the main, to people scrapping what, I think, would mostly be efficient plant.
  The argument in the past has been in favour of an allowance to employers who put back money into an industry in order to develop it, but now they are to have the equivalent of a subsidy for the destruction of machinery and the restriction -of production, a very curious thing indeed. I should like to ask whether this Clause is based upon the

  193
  experience of a scheme which has been before the country for some time now concerning redundant spindles in Lancashire. The President of the Board of Trade has intimated time after time that redundant spindles must go, and has been doing his best to encourage the industry to get rid of them, but they have been a long time in coming to an agreement. Evidently there were a great many difficulties, and those in the industry could not reach an agreement. Now, in order to help them to reach an agreement, they are to have a subsidy, as I put it, of 4s. 6d. in the £, which may help them to reach an agreement sooner. Further, I should like to know whether, when redundant plant or machinery is scrapped, any compensation is to be paid to the workers who will be displaced. When cattle which are diseased are ordered to be destroyed compensation is paid to the owner of the cattle, and it has been argued here time after time that compensation ought also to be paid to the workers who lose their jobs when the cattle are destroyed, but nothing has been done to meet that claim. Compensation is still paid only to the owners of property and not to the men who lose their jobs. If a subsidy is to be paid to those who scrap what is called redundant machinery will the workers who are necessarily displaced get any compensation? Is the decision as to the redundancy and the scrapping of machinery to be left entirely with the employers, or are the trade unions to have any say in the matter Who is to decide which workers shall be declared redundant and be consequently thrown out of work Are the trade unions to be consulted in that respect?
  What is likely to be the effect of this movement, and what are the Government driving at? It appears to me to be almost certain to cut down the number of people working in productive industry. There have been several cases of rationalisation applied to industry, and in nearly every case the result has been workers thrown out of employment. Have the Government taken that into consideration, and are they prepared to displace workers in that way A certain amount of rationalisation has been attempted in the agricultural industry, which has received subsidies of almost every description to help it. Nobody would say that the policy pursued has been a success, but last year
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  between 28,000 and 29,000 workers lost their jobs in that industry. In the mining industry, in which there has been a certain amount of rationalisation, the number of workers employed has dropped by hundreds of thousands. If the proposal in Clause 24 be carried out, it is certain that a number of men and women will lose their jobs as a result.
  I wonder whether the Government have considered the present state of productive industry. In 1930, the census of production provided us with a lot of information as to the state of production in this country. I remember it showed that at that time 8,400,000 people were engaged in productive industry. Included in that figure were 700,000 people engaged in administrative, clerical, technical and advertising services. There are in this country about 21,000,000 people engaged in gainful occupations. In other words, out of 21,000,000, only just over 8,000,000 people are engaged in productive industry, or little more than one in three. Nearly two people are engaged in dealing with and transporting one worker's output. I want the Government to consider that position, because the present tendency is for the disproportion between productive and unproductive workers to increase. I am informed from the same source that the number of people engaged in the distributive industries since the War has increased by over 2,000,000. You cannot go on indefinitely in that direction, and some attempt must be made to bring about an equilibrium between productive and unproductive industry. The tendency is all in one direction, and, instead of helping to restore the balance, Clause 24 may produce an even greater disproportion.
  Are the Government seeking to decrease production by that means We hear a great deal about over production and of poverty in the midst of plenty; is it the Government's view that there is too much over production and that the sooner over production is reduced the better, and is the policy of restriction which is indicated in the Clause intended to achieve that result? If so, I would refer the Government once again to the census of production in which I find that the value of the aggregate industrial output of Britain in 1930 was £1,500,000,000. There are 45,000,000 people in this country, and dividing the production figure by the

  195
  figure of population reveals that we produce in this country at the present time £34 worth of products per head of the population. Can anybody say that that is over production Are we really producing more goods than we can consume, and is the problem not rather one of under consumption If the Government hold the view that there is redundancy and over production, do they expect to correct the situation by reducing the number of machines and cutting down production instead of spending their energy in the opposite direction and trying to find out how people may consume more?
  In my own industry, what might be done in that direction were the Government to apply their brains to the question of under consumption rather than to the giving of subsidies for the restriction of production and the cutting down of redundant machinery and redundant workers. I know a bit about coal. We are supposed to suffer from over production in the coal industry, but I doubt whether that is actually true. We live in a cold, wet climate; will anybody say that if our people, in their 11,000,000 homes, were given sufficient warmth, light, heat and power, there would not be a tremendous demand in the coal industry, and that the amount which we are producing at the present, so far from being too much, would not soon prove too little? Is it not the case that we do not allow people the purchasing power to buy these things, and that we go to the other extreme and endeavour to cut down production in order to equalise the market I am told in the census of production that in the woollen trade we produce a very small amount in proportion to what the people can consume, and that observation applies to every product; too little is produced rather than too much, and yet the Government are endeavouring to restrict production rather than to increase it.
  I want to turn to the question of the national debt. The Chancellor referred in his Budget speech to the fact that we have made a large to-do and a lot of shouting about the question of the national debt. I read with a certain amount of alarm that he stated that we had said a lot about balanced budgets and about the fact that we have paid the
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  American debt while the present Government did not pay it. He went on to say that the Government had actually paid as much as we had paid in that direction. I would like to ask whether it is the intention of the Chancellor to restore the payment at any time in the future. The Lord President of the Council a few years ago, having made a settlement with regard to that debt, which some people thought was a bad settlement, came back to this country and indicated that it must be paid: and the right hon. Gentleman the Member for Epping, in 1928, said:
  "No country has ever made the exertions which this country has made since the War to pay its debts and meet its obligations with strictness and punctuality, and few countries have reaped a more tangible reward."
  Now we are told by the Chancellor of the Exchequer that that debt cannot be regarded in the same light as a commercial debt, which seems to indicate that he is not going to pay it in the future. Does that difference between commercial debts and war debts only apply internationally, or does it apply at home also At home we have achieved a debt of between £7,000,000,000 and £8,000,000,000, which also was contracted in war-time. If this differentiation between war debts and commercial debts is to apply internationally, is there also to be the same differentiation between debts in this country which have been accumulated or contracted during a time of war and debts contracted in times of peace If so, it may be that this country will have to apply the same methods to its internal debt which the Chancellor at the present time is applying to outside debts, and to the American debt in particular.
  I have seen some rather alarming figures with regard to our debt. In the Budget of March, 1919, the first after the War, our debt stood at £7,434,000,000; now it is £7,800,000,000. I read that we have paid £4,000,000,000 in interest, but, in spite of that fact, we owe £400,000,000 more than we did in 1919. The Chancellor of the Exchequer, attending a bankers' function a week or two ago, said something about the fact that we dared to be happy. I should think the bankers did dare to be happy in face of the fact that we had a debt in 1919 £400,000,000 less than we have at the present time, in spite of the fact that we have paid £4,000,000,000 in interest. Is it because of these facts that the

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  right hon. Gentleman boasts about our having reached 80 per cent. of prosperity We have, first, a tremendous increase in indirect as compared with direct taxation. Secondly, we have the attitude which the Government are now taking up towards rationalisation, which means the giving of something equivalent to a subsidy for the purpose of destroying machinery and contracting production. Thirdly, with regard to our debt in this country, which has actually increased since 1919, will the right hon. Gentleman in the future apply the same considerations to our internal debt as he is applying to external debts, and admit that internal debt in this country which has been contracted during the War can in no circumstances be considered in the same light as commercial debts or debts for development purposes?
  3.55 p.m.
  Sir ROBERT HAMILTON: By the custom of the House, the Second Reading of the Finance Bill offers an occasion on which we pass in review the general financial position of the country. It is a sort of annual stocktaking. We have the Measure before us: we see the accounts of the past year: and we have the Estimates for the year that is ahead of us. At the present time, however, I think it is of particular importance that we should try to look, so to speak, below the figures and find out what they represent, because there is no doubt that there is a great feeling of optimism abroad, due in part to the wonderful success of the Jubilee. There is what we might call the Jubilee spirit abroad, which may possibly give rise to an undue idea of the state of the country, and to the thought that everything is well and prosperous, whereas, if we look more closely into the position, we may find ground for serious consideration. I would, therefore, ask the indulgence of the House for a short time while I try to bring before it certain aspects of the situation which I consider deserve its serious consideration at the present time, and more particularly since the appointment of the right hon. Gentleman the Member for West Woolwich (Sir B. Wood) as minister for propaganda in the National Government. I must say I regret, and I think many other people in the country regret, that a Cabinet Minister should
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  have been appointed to this position. It is rather foreign to our traditions and ideas in this country. We all of us distrust and discount propaganda. We know its tendentious character, and we also know that the short sentences of its slogans so often represent what are really half-truths. Half-truths are the last things that we want when we are considering the financial position of the country: we want the truth, the whole truth, and nothing but the truth. Be that as it may, the right hon. Gentleman the Member for West Woolwich has thrown himself into his task con amore,and I see he is preparing for the information and delight of the public a screen representation of the Cabinet, in which, of course, the Chancellor of the Exchequer takes a leading part. I understand that a private view has already been given. I have not had the opportunity- and pleasure of seeing it myself, but I take from a London evening paper a short account of what its representative saw when he was invited to this first presentation. The Chancellor of the Exchequer evidently took the bouquet that night. The reviewer says:
  "Mr. Neville Chamberlain was the best screen figure of the Cabinet."
  He goes on to say:
  "Mr. Chamberlain was almost ebullient. The first sight of him was as he threw himself back in his chair, smiled broadly, and exclaimed, What another surplus?"
  The right hon. Gentleman undoubtedly is a consummate actor. He is surprised at finding another surplus. After all the Supplementary Estimates he has had to meet, after all the subsidies he has been paying away, and the way he has made his surplus appear by putting his hand into the Road Fund, he is surprised to find that there is another surplus. The notice goes on:
  "He spoke of reduced Income Tax and cheaper beer."
  It is a poor heart that never rejoices, with beer at 4d. a glass and Income Tax at 4s. in the £. [HON. MEMBERS: "4s. 6d."] Yes, 4s. 6d. That was the Chancellor in lighter vein.
  I would now refer to some statements of the right hon. Gentleman on a far more serious occasion. Only last week, I think it was, speaking to the Association of British Bankers, in the course of his speech he propounded a very serious

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  And very proper question that a Chancellor should ask himself. He said:
  "Is the present appearance of prosperity solid and genuine? Is it possible that we are living in a fool's paradise, and that presently we shall wake up to find that we are deceiving ourselves with convictions which have no solid basis in fact?
  Having said that, he laid himself out to put before his audience those indications which showed that there was an improvement in the state of the nation's affairs. I do not think that the instances he quoted were really very serious proofs of improvement. The instances which he quoted were the building trade, pig iron output, rayon and electricity. We all know that the building trade is receiving enormous subsidies at the present time; it is being pushed with great financial assistance. Electricity and building are both what we might call sheltered industries, as they are not in competition with the rest of the world. Pig iron and rayon have also undoubtedly improved, we are all delighted to know, but improved very largely behind sheltering tariff walls. [HON. MEMBERS: "Hear, hear!"] Hon. Members who cheer will realise that I was about to say that the improvement those industries show is entirely within our own country, and does not affect our export trade. It was only what we might call internal domestic improvement to which the Chancellor was able to point.
  Another instance he quoted was that of the advances which bankers have been able to make during last year. There was an improvement over the previous year, but when you look at his figures, although they undoubtedly show some improvement, it only amounted to one and a-half per cent. I do not think that the Chancellor could have been altogether happy if those were the only instances he could quote as showing improvement in the national state of affairs. Then he went on to say that our tariff system had been successful in securing us an entry into the markets of other nations. Now we all know that Protectionists are very fond of arguing that tariffs are a weapon by which they can obtain entry into foreign markets, but I would like to remind the House of an answer given on this question a couple of months ago by the President of the Board of Trade. He was asked what alterations had been
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  made in the tariffs of foreign countries affecting United Kingdom goods, and he gave a long list of the countries which had made alterations—I will not read them all, but they began with Belgium, Bulgaria, China and Estonia—and he added:
  "In most cases the general tendency was in an upward direction."—[0FFICIAL REPORT, 12th March, 1935; col. 177, Vol. 299.]
  I am afraid that that rather knocks the bottom out of the argument that by means of tariffs you can secure a more satisfactory entry into foreign markets. As the Chancellor, on the occasion to which I have referred, was talking to the Association of Bankers, well knowing the free trade inclinations of the bankers all over the world, especially in this country, he was bound to say he was "not a fanatical protectionist." When a protectionist says he is not a fanatical protectionist, I think I understand what he means. He means that he is not fanatical about the protectionist duties of the foreigner. He wants to see them come down, but not his own. In fact, I have a recollection of the Chancellor saying, not very long ago, that if the whole world went free trade, Great Britain would still remain protectionist. If the Chancellor can say that, it is a little difficult to make it agree with his statement that he is not a fanatical protectionist.
  Another argument which he put forward as showing that the country had advanced during the last year were the advantages which had been obtained from cheap money. We all know that the Chancellor is very well satisfied with his policy of cheap money, and what it has been able to achieve. The great advantage of cheap money, of course, is in the service of the national debt. What I should like to ask him is, what other uses has he made of cheap money? As the House knows, there are a great many important works which need to be done in the country at the present time, and one would have thought that the present time was most suitable when there are lots of idle hands and lots of cheap money about. Many of us regret that a policy has not been adopted of making a better use of this cheap money by equipping the country and making it more efficient for the time, to which we all look forward, when there will be a far more complete recovery than anything we have seen at

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  present, or perhaps are able to dream of at present. Of course, money is cheap at the present time because trade is bad. When trade is good, money is dear, and when trade is bad, money becomes cheap. But it is when money becomes cheap through bad trade that it gives the Government the opportunity of putting it into the best use in equipping the country for better times ahead.
  The Chancellor, admittedly, said that the advantages of cheap money were not to be compared with an international trade revival. He must know, as well as anybody, that it is on the trade revival, and through the trade revival, that this country must look for any real improvement. We, the greatest trading nation in the world, have been most hit by the chaotic conditions of world trade. A very interesting answer was given in this House to an hon. Friend of mine two days ago on this very question of world trade, showing the figures, in 1929, 1931 and 1934, of exports of United Kingdom goods and of re-exports of imported merchandise. The answer was given by the President of the Board of Trade, who said that the declared value of the exports and re-exports of merchandise from the United Kingdom during the years I have mentioned was—I will give only round figures—in 1929, £839,000,000; in 1931, £454,000,000; and in 1934, £447,000,000. That is to say, as hon. Members will note, 1934 was considerably below 1931.
  Sir WALDRON SMITHERS: The hon. Member leaves out the intervening two years.
  Sir R. HAMILTON: I am giving the answer to the question that was put, showing the difference between 1929, 1931 and 1934. There has been considerable satisfaction expressed on all sides that last year showed a considerable improvement over the preceding year. That is exactly one of the half-truths to which I object in the propaganda to which I have referred. It is in taking only a single year like that which may be so misleading. In order to get a proper perspective of the whole position we must go back over a series of years, and what I am trying to bring to the notice of the House is, that our export trade at the present. time is not only very considerably less—about half what it was in 1929—but that it has not yet
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  regained the position in which it was in 1931. That is a very serious item on what we may call the debit side of the national account, and inter-related with that are our large figures of unemployment.
  Everybody, I think, in the House and in the country to-day realises that the only method by which those large figures of unemployment can really be brought down is by a revival of international trade. You may have palliatives applied. By the expenditure of money in one direction or another you may be able to reduce the figure to some extent, but there will be no real, solid reduction in those figures of unemployment until we get an improvement in our international trade. We have our depressed areas in Wales, in Scotland and in England, in the coalfields and in the shipping areas on the Tyne and the Clyde, and I am sure that when the time comes, as we all hope it will—and the sooner it comes the better—when international trade does improve, we shall see that solid core of unemployment beginning at last to give way.
  I will not refer particularly at the moment to what one might call the human side of unemployment, the loss in character and in vigour to the nation as a whole, because I am dealing with the hard ledger side of it. We have this large number of people unproductive, a dead weight carried on the backs of the other industries which are striving to get along. It makes it extremely difficult, as everyone realises, for the industries that are struggling to have to carry on their backs this dead weight of unproductive unemployment. Added to that, as the hon. Member who preceded me said, they have the lowest powers of consumption that it is possible to imagine—a large body of people who are being kept alive, but who have very little margin of expenditure. If that margin could be increased; if those people were earning money which they could spend, we should see a very vast improvement in the country in a very short time. Any delay in remedying the present situation is particularly serious for us.
  I referred just now to our own position, and that any delay in the recovery of international trade hits us more than anybody else. It is due, of course, to that unfortunate and widespread policy of economic nationalism which has seized

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  on so many countries like a disease. It is impossible to say to what extent that economic nationalism acts and reacts on national fears and jealousies. The greater the freedom of trade the less causes there are of friction, and the greater the peace of the world. That is an axiom which, I think, is pretty well admitted, though it is often forgotten. There is nothing which causes more ill-will between nations than economic disputes, and the more you can get rid of economic disputes, and the more easy you can make the interchange of international trade, the greater are your chances of international peace. The world to-day is undoubtedly in a state of economic warfare. In addition to that, we are threatened in the Estimates with increased expenditure on armaments. It was only the other day that Sir Percy Bates, the Chairman of the Cunard Company, made a very striking reference to the position in which the world finds itself. He said:
  "There is war to-day, a universal war, and the weapons are not navies, armies, or aeroplanes, but tariffs, quotas, and shifted currencies.
  There is no authorised standard of international money exchange, and each change in a tariff, a quota or currency is nothing other than a move—a hostile move—in this war.
  The worst of it is that the situation is not officially recognised as a war."
  In my humble opinion, the greatest help that could be given to-day to the cause of international peace would he to put an end to the present economic war, and for that purpose action is required. It is not enough to sit still and wait for something to turn up. I am afraid that there has been too much waiting for an opportunity. The world now is coming to the conclusion—one sees indications on every side—that the time has come when some action should be taken. Here we are with our pound with no secure anchorage, at the mercy of every wind that blows, and even an unexpected little breeze will make the ship heel over to a most dangerous extent. The advantages of going off gold that we had originally are very quickly countered as the Chancellor knows, and our dangers and difficulties, which must exist with an unstable pound are likely to increase rather than diminish.
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  In the meantime we are pouring out a costly set of subsidies. I do not know what is to be the future of the beet subsidy. We are subsidising beef, shipping—a terrible thought that we in this country should have to subsidise our shipping—paying large sums for what is called deficiency payments on wheat, and other subsidies. What hope is there of decreasing taxation in present circumstances? I hope that when the Chancellor replies he will be able to give us some indication of the lines on which he thinks that it is possible that he may be able to reduce taxation in the near future. The time is not very long past since the people of this country held up their hands in horror at the idea of a possible 2s. 6d. Income Tax. Are we going to be absolutely hardened to a 4s. 6d. one; have we to live and die with a 4s. 6d. Income Tax? Do we not know that the greatest fillip that this country could receive, and the greatest benefit to our hard-working courageous, and patient industrialists would be a reduction of the Income Tax? I hope that the Chancellor of the Exchequer will be able to say something in that respect.
  I was sorry to see the other day an unfortunate indication that the cost of living is beginning to go up. I am not putting very much stress upon it, but this is the time of the year when one expects the cost of living to show a downward tendency rather than an upward tendency. The figures which were given the other day were that the all-in cost is 2 per cent. over that of May, 1934, and food 3 per cent. over that of the same date of last year. One hopes that that will not continue. A rise in the cost of living and food will be a serious thing for a great many people in the country to-day. In these circumstances, I ask what is the real answer to the Chancellor's question: "Is the present appearance of prosperity solid and genuine?" The Chancellor himself has remedies; he knows the remedies. He told the audience at the meeting to which I have referred what those remedies were. Iagree with every one of them; they are perfectly sound. The first essential, he said, was that there should be a rise in the price of primary commodities. But how is that to be done? Are we to obtain that rise by a policy of restriction and causing a scarcity and forcing up prices.

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  His second essential was the lowering of excessive tariffs, the removal of quotas and exchange controls. Is the Chancellor of the Exchequer lowering any of our tariffs; is he removing the quotas, and is he still working the exchange control? The third essential was the stabilisation of currency on an international gold standard. That, he said, was his ultimate objective. It is a perfectly sound one, and I ask: What steps he is taking towards it now? His fourth objective was the resumption of international lending. There again we are all agreed that the best use to which we can put our money now that we can make money would be to lend it abroad, but, if we lend it abroad, we must take the return in goods. If we take the return in goods, we must see what the tariffs are in order to let those goods come in. Has not the time for action come? We see in different parts of the world signs that sanity is returning. In some rather unexpected quarters people are beginning to see the need for doing something. The Prime Minister of France the other day declared that it was time that nations began again to exchange their goods, and said that the present state of affairs should not continue. The quotations which I am going to give to the House are all from statements which have been made within the last few weeks. The Chairman of.11a,mbro's Bank last week said that:
  "The chief concern of all should and must be so to arrange the commercial relations between countries that trade harriers and exchange restrictions can be gradually obliterated."
  The report of the Bank of International Settlement at Basle on 13th May concluded with the statement that
  "slowly and painfully some little progress is being made towards the restoration of economic equilibrium, but the world is still waiting for a Courageous move in the shape of a return to an international monetary system based on gold. The International Bank claims to be a common centre of counsel and collaboration and stands ready to play its role in assisting the resumption and maintenance of a sound monetary system between nations."
  The last quotation I am going to give to the House is from a review that was made by Dr. Anderson, of the Chase National Bank in the United States, which appeared in "Lloyds Bank Monthly" the other day. He made a
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  very close analysis of the position, and ended with these words:
  "The lowering of tariffs by important countries, with or without reciprocity, would help currency stabilisation everywhere in the world. Steps toward the adjustment of any of these problems"
  that is, the problems to which he had referred—
  "will help to solve all of them. No forward step is premature'."
  That is a statement that we may well take to heart—no forward step in the right direction is premature. Does the hon. Gentleman who laughs think that it is premature to take a step in the right direction? Last of all and perhaps most important are the statements recently made by Mr. Morgenthau and Mr. Cordell Hull in the United States of America, where they definitely held out what might be called an invitation to co-operate in some system of stabilisation. The Chancellor of the Exchequer shakes his head. I hope that he has been in close consultation with these gentlemen to find out exactly what they meant. Perhaps when he answers he will give us the result of the conference he has held with them, and, if he has not held any such conference with them, it would he desirable to find out definitely what they did mean. I take it that the Secretary of the Treasury of the United States, and the Secretary of State, Mr. Cordell Hull, did not make statements of that sort without having some reason behind them.
  It would be impertinent for me to suggest that the Chancellor of the Exchequer is art keeping the world situation under review. I am sure he is. He said in the speech to which I have been referring that he was watching things, but that the time had not yet come for action. There are a great many people in this House and outside who think that the time for action has come. [An HON. MEMBER: "What action"] Taking a step in the right direction. The step in the right direction which I would humbly suggest that he might take would be to consult in the first instance with the representatives of the United States to see if they are ready to join with us in leading the world to a stabilisation of monetary currency. I am afraid that if that step is delayed it will be more difficult to take it later on. Events may take charge of us, and then the answer

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  to the question of the Chancellor of the Exchequer will be disastrously clear.
  4.26 p.m.
  Captain WATERHOUSE: The House will not be surprised that the hon. Member for Orkney and Shetland (Sir R. Hamilton) dwelt on the task of propaganda. Anybody who has had to deal with the propaganda of any party knows that the task is a very difficult one, and one can well realise that propaganda on behalf of the group of which he is a member would need greater brains than theirs. The Postmaster-General is happily not faced by such difficulties. Quite by mistake the hon. Member let out that the improvement in the pig-iron trade was due to the policy of His Majesty's Government, and quite by accident he happened to mention that, although we were the hardest hit of any country in the world, to-day we are the most prosperous. Finally, he went on to say that the greatest necessity was a reduction of Income Tax, probably having forgotten the fact that my right hon. Friend the Chancellor of the Exchequer was the only man to reduce the Income Tax in this country during the past five or six years.
  Sir R. HAMILTON: I was not referring to putting back part of the cuts. I was referring, when I said reduction of Income Tax, to a reduction below 4s. 6d.
  Captain WATERHOUSE: The hon. Member will remember that there was a rise which was necessitated largely owing to the action of the hon. Member's friends during the calamitous years of 1929 and 1930 and that the Chancellor of the Exchequer reduced the tax by 6d. last year. The hon. Gentleman the Member for Wentworth (Mr. Paling) spoke of the fact that the Chancellor of the Exchequer had done much for his friends. Of course he has clone much for his friends because he realises that anything he might do for taxpayers or others in the country would be action taken for his friends. The Chancellor of the Exchequer has so many friends in so many parts of the country that he is bound to help his friends. I am not surprised that the hon. Member should be rather upset in thinking of the number of friends that we have, when he realises how soon we are going to appeal to those friends to send us back again here. I am sure too that among the many congratulations which the Chan-
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  cellor of the Exchequer has had he will not for a moment have forgotten that the success of his Budget is due primarily to the efforts of the individuals in this country in trade and industry. It is only because of the steps and the great efforts that they have made in the last two or three years that the policy of real value which he and the National Government have put forward has been as successful as it is. He has taken a further step in the right direction in this Finance Bill.
  Clause 24, which was so ruthlessly and superficially criticised by the hon. Member opposite, is to me one of the most important innovations in the Bill. Governments in the past, Liberal, Labour and Conservative, have all advocated reorganisation for many years. They have given much lip-service to it, but they have not really taken steps to help reorganisation. They have said: "Let us get rationalisation," but as soon as it came to finding tangible assistance nothing was done. That is true of old Conservative Governments, old Liberal Governments and the Labour Governments. For the first time the Chancellor of the Exchequer has had the courage and the foresight to make this most useful innovation. The safeguards are laid down in the Clause itself. The hon. Member may not have read paragraph (b) which stipulates that one of the conditions on which the Board of Trade must satisfy itself is that any scheme certified is
  "in the national interest and in the interest of the said industry as a whole."
  No one, surely, will imagine that the interests of "the said industry as a whole" are exclusive of the interests of the workers. Therefore, the hon. Member has got the very point he wants. If he could induce his trade union friends to get together in their industries and confer with the employers with a, view to rationalisation and reorganisation inside the industry, no one would be more pleased than the employers.
  If we are right in thinking that reorganisation is necessary and if we are satisfied that provision such as that embodied in this Finance Bill is sufficiently safeguarded under the Board of Trade, then is it not right and natural that we should give relief from taxation in respect of contributions paid to rationalise industry. That has been called a subsidy, but it is a stretching of the meaning of words to refer to

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  it as a, subsidy. It is remission of taxation. When the co-operative societies were not taxed the hon. Member would have been very much annoyed if he had been told that they were subsidised. In the same way, it would be wrong to say of the smaller Income Tax payers who have had a remission of taxation this year that they have had a subsidy from the Government. We must keep within the ordinary meaning of terms, and the use of the word "subsidy" in such a, connection seems to me to be, to say the least of it, misleading. I do not know when the Treasury were first approached in regard to this matter. I approached Mr. Snowden with a similar suggestion in 1930, and he replied in a very courteous letter in which he said that probably the least said would be the soonest mended, because if we were not careful we might not only have the levy taxed but it might be taxed again in the hands of those who were receiving the levy. That was the help given to industry by the Socialist Chancellor of the Exchequer and industries, whether they have enjoyed the "Pleasures of Planning" or not, will bear in mind the two attitudes when they come to weigh up the matter at the next election, which is not very Liar away.
  While thanking the Chancellor of the Exchequer for having dealt with this particular need of industry we are sorry that he has not felt able or willing to deal with the almost equally desirable point, at which the hon. Member opposite sneered, that of the reserves set aside for replacement of machinery. On machinery under the present system per cent. is allowed for depreciation and 64 per cent. on fixed motive plant, but that has always to be calculated on the reduced value. If the Chancellor of the Exchequer would make a small change and allow the depreciation to be taken on the cost value so that this machinery could be renewed every 14 or 16 years as the case might be, it would be of tremendous value. If he would do this second thing as he has done the first I do not think that it would mean a total loss of revenue, because the revenue lost would itself be expended in finding fresh work and in reducing the cost of production, thereby increasing competitive power and enabling the Chancellor of the Exchequer to draw upon increased profits, so that in casting his bread upon
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  the water it would in due course return to him again. I hailed Clause 2 with surprise when it was introduced in) the Budget Resolutions, but I am not quite so sure now that the motives of my right hon. Friend were quite so pure as I, as an admirer of his, would have wished. I have noticed in some organs of the Press that there is a great deal of reference to prospecting for oil, and I wonder whether this is the first manifestation of the Government as a royalty owner and whether he is starting to rig the market in favour of prospective concessionaires. Perhaps my right hon. Friend can assure us that such a thing was far from his mind.
  As the hon. Member for Orkney and Shetland said, this Debate gives an opportunity for a general survey of the finances of the country, and it is impossible to divorce employment and trade from finance, because they are the very essence of each other. I am not going to be bold enough to enter into a discussion of the theory of money or high finance. I will leave my hon. Friend the Member for East Aberdeen (Mr. Boothby) and the hon. Member for East Edinburgh (Mr. D. Mason) to argue this matter at their leisure My brain is not perhaps sufficiently astute to take in all these nice points. Although I read the speech of the hon. Member for East Edinburgh with the greatest care I was not quite clear as to the exact meaning of the definition of inflation that he put before the House. The point that I want the House to consider on the general question of national finance is that the Treasury in arriving at a fair basis of taxation must divide the country into many divisions and sub-divisions, and I should be surprised if they did not make a division between those who by not spending all their incomes produce capital goods demands and those who by their expenditure produce consumption goods demands; in other words, the savers, mainly payers of high direct taxation, and those who by their expenditure produce consumable demands—the lower classes of Income Tax payers and the payers of indirect taxation. If we allow ourselves to forget in this connection the extraordinary change which has taken place in direct and indirect taxation in the last three years we shall fall into the error which the hon. Member for Wentworth has fallen into in his comparisons.

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  In making comparisons between direct and indirect taxation we must not forget that until two years ago indirect taxes were raised for revenue purposes, and now they are raised for industrial purposes, and the payers of the indirect taxes reap very material advantage in the protective nature of that indirect taxation and in the fact that they thereby get higher wages and wages for longer periods than they otherwise would have done. It seems to me that if the taxation of either of these sections of the community, either the section which is the saving section or the section which is the spending section, mostly goes back to that same section, it does not make very much difference to the nation as a whole. That is to say, if the Super-tax payers, the large Income Tax payers and those who pay Estate Duties have their contributions to the National Exchequer coming back to them in interest on the National Debt, then the money is just re-allocated among that same section, and if on the other hand those who pay indirect taxes receive in return benefits in the form of educational grants and in social service benefits, there is not any great change taking place in the national balance. I believe that the real interests of both these sections are identical.
  Mr. PALING: The wage-earners pay for their own benefits.
  Captain WATERHOUSE: I do not for one moment agree with the hon. Member opposite that the wage-earner has to pay for any benefit that the wage-earner gets. Both these sections thrive or fall together.
  The Chancellor of the Exchequer must always bear in mind that during the last 10 years about £130,000,000 a year has been saved in the service of the debt and at the same time the higher grades of the taxation have increased. Therefore the balance has been altered more in the last 10 years than in any other period of our history with the exception of the period of war. We have to realise that this process is not over by any means. We know that we shall have to face a largely increased charge for the Defence Services, and that there are other great demands coming to the Government from various sources. For example, we have the demand of the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) for
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  a large increase in national expenditure on what he calls his new deal. I was not clear whether the hon. Member for Orkney and Shetland was in favour of the new deal or not. At one moment he referred to it as a palliative and the next moment he referred to it as a desideratum. Whichever way we look at it, it is going to cost the nation a tremendous sum of money and we must make sure that the spending of that money would accrue to the benefit of the nation as a whole. I do not feel that it will do much good.
  The right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) has based his argument on the fact that there are over 2,000,000 of unemployed and that our problem is to deal with rather over 2,000,000 unemployed. On that fundamental point I join issue with him. Take London and the South Eastern areas. Is there much unemployment in those areas Is there any unemployment Is it not a, fact that those two areas are undergoing to-day a virtual boom? In the last couple of years about 100,000 men and women from other industries have been brought into London and the South Eastern areas, yet unemployment has not increased. The number of the unemployed has never got below 8½ per cent. and never above 11 per cent. I believe that that represents the amount of unemployment which we would have in this country however prosperous trade was. It is made up of three or four various categories: Those mentally or physically incapable of going into jobs and holding them down at all, those in casual employment, and those who leave their jobs in the ordinary course of a life's work. It also includes those who are played off for a few days. None of these would, I think the House will agree, have been represented as unemployed in the trade union returns of pre-war days. If trade in pre-war days had been as it is now in that area the trade union returns would have shown a negligible amount of unemployment.
  The trades of the London area are not essentially seasonal trades as some north of the Trent are seasonal. This is a fresh element of unemployment which we find in Lancashire and Yorkshire which we do not find in the Southern Counties. However prosperous trade becomes we are going to have about 10 per cent. unemployed shown in our

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  figures in the way that the figures are at present calculated. Thus the Chancellor of the Exchequer's problem is not to deal with 2,150,000, but something under 1,000,000, and about half of these are mainly concentrated in the depressed areas. What we want are not great lavish schemes embracing the whole of the country and pouring out money, but much less ambitious ad hoc schemes designed to deal with the needs of a particular locality or a particular section in a particular locality, schemes of transference for example, which are by far the most promising of any way of dealing with this problem. In comparatively small ways of that sort should this problem be approached, and not on the broad and costly lines such as my hon. Friend the Member for Stockton-on-Tees (Mr. Macmillan) and the right hon. Member for Carnarvon Boroughs would have the House adopt. I beg my right hon. Friend to remember—and in so doing I am not assuming that he has forgotten—that he is the traditional guardian of the nation's purse, and that he should furnish himself with the heaviest cudgels he can find to guard this purse against the many attacks which are being made upon it. We ask him to be very cautious in dealing with any scheme for fresh expenditure which is put before him, and to cut down expenditure wherever possible.
  Mr. THORNE: Expenditure on armaments.
  Captain WATERHOUSE: I suggest he should start off by abolishing the Road Fund which is merely an invitation to any Minister and to any local authority to spend. The May Committee said that the fund should be abolished, and, if he would take his courage in his hands and brave the indignation of the Minister of Transport, I think he would receive the thanks of the House as a. whole.
  Mr. THORNE: Highway robbery.
  Captain WATERHOUSE: It is better to risk a little highway robbery than to have the taxpayer annually robbed for the benefit of the highways. Finally, may I suggest that he should consider the possibility most seriously of replacing subsidies—because none of us like subsidies—with a good straight honest duty. Do not let us be misled into the idea that these subsidies are wholly for the
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  benefit of the people in the industries. That on beet sugar, for example, is to a large extent a subsidy to sugar consumers necessitated by an entirely uneconomic world price. Exactly the same thing is happening in regard to beef to-day. If he removed these subsidies and replaced them by duties he would be attacked by parties opposite, but on grounds of such attacks we would have far more pleasure and confidence in fighting for him than in the defence of subsidies which we do not like. I hope that at no very distant date he will be able to announce some further remission of taxation to this overburdened country. I agree with the hon. Member for Orkney and Shetland when he said that it was only by a reduction of taxation that we could get back to that industrial well-being which is the first essential of prosperity.
  4.51 p.m.
  Mr. TINKER: In my criticism of this Finance Bill, I am bound to admit at once that there are certain features with which I agree. Clauses 18, 19, 20 and 21 are on the lines I would have advocated. I would also agree with the reduction of the Entertainments Duty up to 6d. I think that is a step in the right direction. Those are points one can agree with, and it makes our task difficult in criticising this Bill. There are, however, a number of other things of which the House ought to be warned. In our Amendment we have down three features to which we think the attention of the House should be called. The last one states that the Bill.
  "embodies no provisions for securing to the people that improvement in their standard of life which the increased productive capacity of the nation has made available."
  That to my mind is a most important feature that this country will have to face. I did expect some years ago that the warning given by the Lord President of the Council might have been considered. Speaking on 23rd June, 1932, the Lord President of the Council, dealing with the question of trade and unemployment, said.
  "I may say here—and possibly the right hon. Gentleman may have something to say upon this later on—that you have the rather curious phenomenon that the figures show that, in spite of what is happening in the world, upon which I will give one or two figures later, the actual volume of production in this country is holding its own or is slightly increasing, and yet at

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  the same time you have an increase in the unemployment figures. That is probably due to the appalling condition of the export coal trade and to the fact that in a great many industries which are getting to work now, they have been getting greater production with fewer men at work."—[0FFICIAl. REPORT, 23rd June, 1932; col. 1297, Vol. 267.]
  That is taking place all over the country—increased productive capacity with a consequent reduction of a large number of workers. Nothing is done by the Government of the day to meet that situation. Until this country starts on those lines we shall always be faced with the appalling difficulties of extreme poverty, and no solution for it. That is the most fundamental feature of our Amendment. It calls the attention of the country to the need of doing something to provide employment for those who are being cast out of work. We are faced with this constantly in the mining industry. Improvements in the technique of the production of coal are said to benefit the community, and yet at the same time we realise that in every mine, whenever those improvements come along, a number of men are thrown out of work. It is very difficult to say to the people, "Inventions are for the benefit of mankind," when the poor man is thrown out of work and asks you, "What is the benefit to me?" The Government have not attempted to do anything in that direction. It is true that the Minister of Labour is getting employers together to see if he can bring about any reduction of the hours of labour by agreement. But that is not sufficient. The House of Commons ought to set itself to try to meet the position by regulating hours of labour so that everybody can be brought into employment.
  We want to increase consuming power, and unless you do that by giving decent wages we shall always be faced with this difficulty. I appeal to the House of Commons to watch that point of view. I would like to refer to the propaganda of the Government. They are putting to the people what they have done while they have been in office. I have always found that if you are doing a good action there is no need to shout it from the housetops. People will hear of it. If the work of the Government is such that it is felt all over the land, why is there any need for all this intense propaganda
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  work? Last week there appeared some pictures in a newspaper, under one of which it said, "An appreciative audience." At the top was the picture of the Prime Minister beaming on the people, and in a second picture was the right hon. Gentleman whom I see opposite, and he was actually smiling. That is a thing which he does not often do. The Chancellor of the Exchequer was really smiling in that picture. The tragedy of it is that in the same paper on the same page and in the next column appears a statement about conditions in South Wales. It stated that a university conference has been held in South Wales, and went on to say:
  "Half the population of Wales, which numbers at the present time something over 2,000,000, live in the county of Glamorgan, and practically half of the insured population in the special area 'are without work, while in some of the villages the figure is as high as 90 per cent. To study this problem, and to inquiry into the means being taken to alleviate it, the International Student Service organised a conference at Cardiff just before Easter."
  I would ask the Conservative Members who are doing all this propaganda work, if they really have anything to say, why do they not go to the distressed areas and tell them there what they have done? Ask them if they are satisfied with the work of the Government and with this Finance Bill. That is the real test, not to go before a well-fed audience at the Carlton Theatre, well-fed and well-clothed people who have never known what poverty means, but who have all the best that life can give. Naturally they will believe what the Government tell them. To get the real sense of the people, go down where they are unemployed and tell them there about the benefits of the Government. They will say to the Government, "Does this mean prosperity? Is this the great work you are doing—vast numbers of unemployed, and no hope of work in the future?" You have a majority behind you that has never been known in history before. With the means at your disposal, cannot you increase productive capacity? What have you done for these people? There are 2,000,000 unemployed. People are not suffering from unemployment here in London and the South as the people are suffering in Durham, South Wales and other parts of the country. It is to those people that Ministers should go to tell what the Government have done. They

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  would quickly get their answer—as they will get it when an election comes.
  These are the matters in the Finance Bill to which the Government ought to pay great attention. They should realise that a great number of people are in want and are looking to them to alleviate their distress. Our Amendment also deals with the question of indirect and direct taxation. I was somewhat puzzled by the argument of the Liberal speaker. He referred to cutting down expenditure, and I should like him to tell me where expenditure could be cut down. He also talked about the reduction of Income Tax. It is all very well to talk about that, but the money has to be found from somewhere; and, when people talk about cutting down the Income Tax, I should like them to say from what other source the money is to be found. When Income Tax is cut down extra money has to be raised by indirect taxation and that is what is being done under this Budget, as I shall proceed to show. In 1931 direct taxation accounted for 65.77 per cent. of the whole, and indirect taxation for 34.23 per cent. That meant that out of each £100 then raised in taxation just over £65 was raised by indirect taxation and just over £34 by indirect taxation. But when we come to the year 1935–36 we find that direct taxation has fallen to 59.77 per cent. while indirect taxation has increased to 40.23 per cent. These figures were given to me by the Financial Secretary to the Treasury. This means that of every £100 now raised in taxation the indirect taxpayer has to pay £6 more while the direct taxpayer pays £6 less.
  The estimated receipt from taxes under this year's budget is £697,000,000 If we had been raising this amount in taxation in 1931 the direct taxpayer would have had to pay £460,000,000 and the indirect taxpayer £237,000,000. This year owing to the increase of indirect taxation 2418,000,000 will be raised by direct taxation and £279,000,000 by indirect taxation. Following up that line of argument, I would point out that the indirect taxpayer has to pay £42,000,000 extra because of this turnover from direct to indirect taxation, and most of that has been put on to Customs duties. A question was asked, in the House yesterday by an hon. Friend of mine as to the approximate amount of Customs duties collected on foodstuffs in 1931 and in 1934. From the
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  answer given by the Financial Secretary to the Treasury, we find that in 1931 the amount of taxation collected on foodstuffs was £14,460,000 while in 1934 the amount had gone up to £32,590,000 which is an increase of £18,000,000 to the indirect taxpayer through the taxation of his foodstuffs. That is the trend of the policy of the Government. They are throwing more of the burden of taxation on to the indirect taxpayer, and we on these benches do not like that method.
  I agree that money will have to be found to carry on the work of Government. I am not in favour of cutting down any useful services. Whether for defence purposes or anything else once the House of Commons has decided on the need for expenditure the money has to be found. But I do argue that the only fair way to the electorate and the public is to do it by the method of direct taxation. Let people know that they have to pay for all the services they get and do not provide for these services by taxing the food of the poor. When you tax food poor people bear a proportionately higher burden of that taxation than other classes. The richer people have money to spend on many other things than foodstuffs, but in the poor household nearly all the money is required for foodstuffs, and for that reason the poor person pays a greater proportion of taxes on foodstuffs than the rich person. Therefore, the rich person does not have to bear the same burden of indirect taxation as does the poor person.
  Captain STRICKLAND: I take it that the hon. Member includes among the rich people all those who pay Income Tax? If so, I should hesitate to describe the lower grades of Income Tax payers as rich people.
  Mr. TINKER: No, I do not include among the rich all those who pay Income Tax. I am referring to the higher grades of Income Tax payers. I think that to put direct taxation on a proper basis the lower grades of Income Tax payers should be eliminated. I would exempt from taxation altogether an income of the amount that might be regarded as necessary to maintain an ordinary household. That amount might be put at £250 or £300 a year, and that would be outside the field of taxation altogether. When I had provided for what would be regarded as the needs of the ordinary household, direct taxation would then commence on a

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  graded scale on all higher incomes. When I got to the very rich it would be very hard for them for I should make the taxation very heavy. I claim that in doing that I should be doing the rich a good service; for the very rich have so much money that they are tempted to spend it in all kinds of wrong directions and by taxing them more heavily I should be helping them to a more useful turn in life. I cannot hope that my arguments will prevail much in this House of Commons, but we are putting forward our arguments in the hope that they will make some impression in the country, so that people may feel that the work of Parliament can be conducted in a more efficient manner than it is being done at present. These arguments on the broad issues of this Bill are submitted for the purpose of getting before the public our views as to what we should do if we were in power. I hope it will not be long before the chance comes for us to show people what we can do when we are in power.
  5.9 p.m.
  Mr. LAMBERT: When I listened to my non. Friend the Member for Orkney and Shetland (Sir R. Hamilton) I wished that he could have been with me to see the film that he described. He would not then have been in such a gloomy frame of mind. There is one point about references to the film with which I heartily agree and that is the admirable presentation of the Chancellor of the Exchequer. He seemed to be quite a film actor, and I was very much astonished at his ability in that direction. I understand there are some rumours going about to the effect that there is to be a reconstruction of the Government. Before my right hon. Friend goes to Hollywood I hope he will introduce another Budget in this Government, for that is the greatest compliment we can pay to him. He has introduced four Budgets now: they have been devoid of all fireworks, but they have been substantial contributions to the national welfare. My right hon. Friend said in his Budget statement what I more humbly have been endeavouring to impress upon the community, that "confidence is the mother of enterprise." And I would say to the hon. Gentleman opposite that unless you have confidence in the country you will not have enterprise, and unless you have
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  enterprise you will not have employment. The Budget is balanced, as all the right hon. Gentleman's previous Budgets have been balanced, and yet there have been remissions of taxation.
  I think it is perfectly marvellous how the country has been able to respond to a period of settled government. I hope that my right hon. Friend will go on with his policy of cheap money. After all the Government must be the directors of national finance; they cannot leave this to the Bank of England or to any group of men. My hon. Friend the Member for Orkney and Shetland talked about the unsafe pound, but the pound is safer than any currency in the world to-day, and it is more stable in terms of commodities. No one could envy France or America their great stores of gold; they might as well have great stores of lead in their vaults. I am glad that this fetish of worshipping gold is passing. The Amendment submitted by the Members opposite talks about the failure to secure to the people.
  "that improvement in their standard of life which the increased productive capacity of the nation has made available."
  When I first entered the House public expenditure was very much less than it is to-day, and I am amazed that the country is able to spend so much on what I would call unproductive expenditure. Take widows' and old age pensions. I am not condemning them because I was a member of the Government which helped to pass the Old Age Pensions Act. We are paying £81,000,000 a year in widow's and old age pensions.
  Mr. BATEY: Absurd.
  Mr. LAMBERT: If the hon. Member wants the figures I have them here.
  Mr. BATEY: Let us have them.
  Mr. LAMBERT: I have given them, and I have taken them from the Return dealing with Public Social Services, issued by the Government, Command Paper 4749.
  Mr. BATEY: It is not the fact that the expenditure on old age pensions is £43,000,000 and the expenditure on widows' and orphans pensions £14,000,000.
  Mr. LAMBERT: The figures are:Widows, Orphans and Old Age Contributory Pensions,40,844,000; and

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  Old Age Pensions,240,448,000;total of£81,000,000 as I said. My hon. Friend had better examine these figures again for himself. Unemployment insurance, £154,000,000. Excluding education, which costs £100,000,000 a year, the country is providing £390,000,000 a year in social services; an amazing total. The Debt charges amount to £224,000,000 a year. Altogether the country in pensions, insurance, social services and Debt charges is providing £614,000,000 a year. These are staggering figures, but these large sums of money are distributed throughout the country, and they increase the consumptive capacity of the people. Therefore, it cannot be said that the Budget embodies no provision for improving the standards of life of the people. The amount. of 2600,000,000 is distributed; it represents consuming power, and probably there are consumed by the recipients of this £600,000,000 about £200,000,000 of foreign imports, food, clothing and the like. In my early days one always considered that an import was balanced by an export, but here imports are not balanced by a single export. The producers of the country are penalised and, therefore, I regard tariffs as inevitable. That is where I differ from my Liberal friends. You have to regulate imports seeing that you have increased the consumptive capacity of large masses of our population by this enormous distribution of public money.
  The hon. Member for Wentworth (Mr. Paling), who made such an admirable speech, will agree that were it not for the regulation of the production of coal the prices of coal would drop. I have calculated that the coal industry to-day is getting an indirect subsidy of something like £30,000,000 by the restriction of output. A great deal has been done for the coal industry. In the case of iron and steel there is an import duty of 33⅓ per cent., and that helps the coal industry.
  I come to an industry in which my constituents are interested, agriculture, which has probably suffered more titian any other. I want the Chancellor of the Exchequer to direct his attention to this point. I have had to deal with some trustee securities and among them was the Conversion Loan, 32 per cent., issued in 1921
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  at a price of £65. To-day it is worth £108, an increase of about 60 or 70 per cent. If anyone had invested £100 in Conversion Loan in 1921 it would be worth to-day £165. Suppose you had invested that amount of money in agricultural land in 1921, I doubt whether it would be worth £70 to-day. I ask the Chancellor of the Exchequer to consider this: On the one hand are holders of Conversion Loans. All they have done is to draw dividends, they have not lifted a finger. On the other hand are owners of land, and one-third of the land is owned by owner-occupiers, who have cared for the land, cultivated it, produced food for the people, working 10 and 12 hours a day on weekdays and six and seven hours on Sunday—you have to work seven days a week on the land. They have had a reduction in their capital value of 30 per cent., whereas others have had an increase in their capital value of 65 per cent. It is very much like feeding the drones and starving the bees. Hon. Members opposite complain of unemployment. Plenty of men could be employed on the land provided it was profitable to employ them. They will not come there unless conditions are as good as they are in the towns. I agree that if you like to make it profitable people will live on the land—
  Mr. G. GRIFFITHS: I thought one had to rest on the Sabbath day.
  Mr. LAMBERT: The hon. Member must realise that we are dealing with nature. Animals have to be attended on Sundays just as the hon. Member eats on Sundays. I have often said that it would be a great asset to the agricultural industry if some Government would produce a national cow which did not have to be milked on Saturday afternoons and Sunday mornings. We have to take the world as it is. In addition to the risks of falling prices there is also the risk of uncertain seasons. - In his Budgets the Chancellor of the Exchequer has taxed agricultural necessities which every farmer has to use. Super-phosphates of lime 10s. a ton duty; sulphate of ammonia 20 per cent. duty; sodium nitrate 20 per cent.; churns 15 per cent. ad valorem; ploughs 15 per cent. ad valorem; wire 33⅓ per cent.; wire nails £3 a ton; galvanised wire netting £8 a ton; vegetable oils 15 per cent. ad valorem; linseed oil £3 10s. a ton.

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  These are articles and commodities which agriculturists must use.
  The question I ask is why, as all other industries have tariffs, they are denied to the agricultural industry? Agriculture has been sacrificed on the altar of Imperial trade. The Secretary of State for the Colonies made a defence the other day of the soya bean duty, and asked the House to approve it as a great piece of Imperial policy in return for the tremendous benefit which was being given by the Colonies to the textile trade of this country. Agriculturists are to be taxed in order that the textile trade of the country may benefit. I only ask that agriculture shall receive the same treatment as other industries. We have to carry a good many things, but we cannot carry on our backs the textile industry. The Chancellor of the Exchequer, I am sure, knows that livestock is the backbone of the agricultural industry. Our feeding stuffs are taxed in order, as we are told, to benefit the textile trade of Lancashire. This is not fair, and agriculturists do not think it is fair. At Ottawa the Government bound themselves not to impose certain duties. I beg them at the earliest moment to resume their fiscal liberty and let us do what we please here.
  At the moment we are bound by agreements and cannot do this and that. I should like the Government to get into a position that they can impose tariffs. Our competitors abroad are not too scrupulous in the methods by which they assist their products getting here. They have depreciated currencies: Denmark, Argentine, Australia and New Zealand all have depreciated currencies. What would the iron and steel industry say if they were faced with a competition from a depreciated currency? Our competitors subsidise their products. Butter in Australia is sold dearer than it is in London. As agriculturists we say that this is not fair. We are told that unless Australia and New Zealand can send their products here they will not be able to pay their debts. You cannot expect the agricultural industry to shoulder not only the textile trade of Lancashire but the debts of Australian bondholders. I was in the House of Commons when the Chancellor of the Exchequer's distinguished father initiated the idea of
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  Imperial trade, and I say to my right hon. Friend that unless we can get fair play there will be a great sense of hostility to Imperial trade in the country districts. I hope we shall get it and that there will not be any hostility, but I would point out to the Government and to the House that no farmer will hoist the Union Jack or sing "Rule Britannia" if the bailiffs are in his backyard.
  In the agricultural industry we have been fobbed off with marketing boards. I am not a great believer in marketing boards [Interruption] The first marketing Act was set up by the Socialist Government in 1931. Ottawa was a product of the Socialist Government. I would try to keep the Government away from Socialist legislation; I am not at all enamoured of it. At some time when hon. Members opposite have had more experience they may become competent to govern the country, but at the moment they are not really competent. These marketing schemes I regard as emanations from the fertile brains of unpractical theorists—emanations from Whitehall. I have no faith whatever in Whitehall, I have never believed in Government interfering with industry. We have had these marketing schemes thrust upon us. They have failed. Then the marketing boards have to come to the Chancellor for a subsidy—the milk subsidy and other subsidies. As the hon. and gallant Member for South Leicester (Captain Waterhouse) said, we do not like subsidies. I do not like them. This idea of so-called doles for the agricultural industry is very objectionable indeed. We do not want doles; we want fair play. I say that emphatically. I hope that my right hon. Friend will not be asked for any more doles to boost up impracticable schemes. They, too, are temporary schemes. They depend on the whim of a Chancellor of the Exchequer. They cannot give that confidence which my right hon. Friend wishes; and more than that they weaken the Exchequer.
  Let us take import duties. There were meat imports in 1934 to the amount of 30,000,000 cwts. Ten shilling a cwt. would have brought in £15,000,000. By that means the Chancellor could give a preference to the Dominions and would be strengthening the Exchequer. Take the Case of eggs. The other day I was

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  astounded when my hon. Friend the Financial Secretary told us that the Government had collected nearly £1,000,000 in duty on eggs last year. Eggs were never cheaper in this country. I must admit that my political philosophy has been turned upside down. Eggs were never cheaper, and yet the Chancellor collected £1,000,000 in dty. If you really propose to make tariffs a reality you must use them for extorting concessions from other countries. I am in cordial agreement with the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George), when he said "Use your tariff ruthlessly." This is the only food market in the world. The food comes in. The Government should say to the Dominions and to Denmark, or whoever it may be, "Reduce your tariffs: otherwise you will be penalised in this market." Thereby you will contribute to freer trade.
  There is one other aspect which I put to the Chancellor, and that is in encouraging agriculture he will add greatly to the security of the country. The Financial Secretary told us the other day that in the last 40 years we had spent on armaments £1,122,000,000. That is an amazing sum. It is £112,000,000 a year for 10 years. Yet we are told that our defences are insecure. There is something wrong. All Governments are responsible. I am not responsible. I have not been in a Government for about 20 years. I cannot be called to account. I understand that there is to be a large increase in the Air Force. I put it to the Government—and I speak with some experience in this matter, having studied the problem and having had it studied while I was at the Admiralty—that the greatest security for this country would be to provision it by the production of more home-grown foodstuffs. In April, 1917, 850,000 tons of shipping were sunk, and as Lord Tweedsmuir has said in "The King's Grace," one in four of every merchant ship that left these shores never returned, our western approaches were cemeteries for merchant ships, and there were only six weeks' supply of corn in the country. Therefore, I say to the Government that one of the greatest securities for the country would he to increase the agricultural production.
  To-morrow we shall have a Debate on defence. There will be too many experts present for me to take part in that
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  Debate, but undoubtedly the advent of aircraft has rendered this country infinitely more vulnerable. The advent of aircraft may paralyse the Port of London. I ask hon. Friends who represent London whether, if anything should happen to dislocate the food supplies of the people of London, it would not be a very serious thing indeed. Aircraft would damage seriously the transport of our food supplies and would make it almost impossible for supply ships to come up the Channel. Then there is the Navy. Aircraft could paralyse the Navy by destroying its fuel supplies. I do not want to be too gloomy, for I hope and pray and believe that war will not come in my time or in the time of any Member of this House, but I do ask my right hon. Friend the Chancellor of the Exchequer to think of these problems for dealing with the agricultural industry. I do assure him that to provision this country would be the greatest asset for its security. I am not asking for any favours for the agricultural industry, but I am asking for fair play, and I hope that the policy of the Government will terminate what are called doles for agriculture.
  5.37 p.m.
  Mr. GARDNER: I wish to support the Amendment, and in doing so to ask the Chancellor of the Exchequer to take out of the Finance Bill the increased duty on heavy oils. It means only £800,000 this year, and £1,200,000 in a full year. It is therefore a small thing for which to ask. Man will ride. There is an anecdote of a small boy who went to work on a farm. One of the jobs done in midwinter was the taking of a horse down to the farrier. The boy insisted on being hoisted on the horse's back. When he had got some way down the road a farm labourer met him, and found that the boy was crying. The man asked, "What is the matter?" and the boy blubbered, "I am cold." The man said, "Get down and lead the horse," to which the boy answered, "I will freeze first." That is the attitude of mankind towards riding. It was said by an American writer who amused me a great deal in my youth, that a man who has travelled fast once never wants to go slow again. He said that in the days when a trotting horse that could cover one mile in two minutes was reckoned to be a very good horse.

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  Of course that is not speed in these days. As men will ride and will ride fast, and we cannot change human nature, our task is to coax human nature's activities into the least harmful channels. I do not think that the Chancellor is aware of the full implication of this tax on heavy oil, nor do I think that the House was aware of its implications when it passed the Budget Resolution. The duty on oil has been treated wholly as a revenue matter, but I want to introduce other considerations. The right hon. Gentleman said on 15th April.
  "I certainly have no desire to cramp the development of the Diesel engine."—[OFFICIAL REPORT, 15th April, 1935; col. 1627; Vol. 300.]
  From the Exchequer's standpoint all engines and all oils are taxable. I ask the House to approach the matter from the standpoint of the comparative safety and danger of the two forms of liquid fuel. Petrol is highly dangerous. Our regulations for storage, our general safeguards for using it, are so effective that we are hardly aware how dangerous petrol is. It is specially dangerous in aircraft. The Air Minister informed me that 96 accidents occurred to civil aircraft in 1934, and in nine cases fire followed. I have not asked for Army and Navy figures, but there was a military plane burned only yesterday. The danger of fire in such accidents would be almost negligible if heavy oil were used. I know that the Minister is only withdrawing the rebate in case of road transport, but that withdrawal may act as a check on the development of the Diesel engine. Every check on the Diesel engine postpones the day when additional safety will be given to flying. A faulty petrol pipe may cause fire; so will a forced landing or a faulty landing.
  In war, a bullet through a petrol tank means the end of the flier and the machine. In Iraq on 9th May an aeroplane was shot down in flames. Nothing should be put in the way of added safety for these bravest of young men who pilot our flying machines. In the case of road transport the danger of fire and explosion is always present. We have tanks on wheels running about our business streets, some of them carrying probably as much as 500 gallons of spirit. There is always the danger of collision and fire, and if, as may happen, a tank turns over as a
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  result of an accident, you may not only have the trouble caused by the petrol running about the street, but also the danger of vaporised spirit in drains and sewers. We have been very fortunate in not having any serious fires of this character in built-up areas, but I remember a case in East Ham in which a lorry loaded with tins of petrol caught fire. Nothing could be done except allow it to burn out. Luckily, it happened to catch fire at a point where there was vacant land on each side of the road. I also know of one case of a tank catching fire, and I think that supplies another reason why the use of heavy oils should be encouraged.
  My third reason for allowing the rebate to remain is a stronger one. We think we have tamed petrol because we have caged it. It is still untamed and in an emergency it, may get loose. If it does, our regulations and precautions will look ridiculous. There has been a tremendous increase in motor traction. In August, 1922, the number of licences for vehicles was 975,783, and in 1933 there were no fewer than 2,271,699 licences in existence. There were not many licences for Diesel engine vehicles among those. I understand that it is a later development. Motor spirit imports rose from 100,858,000 gallons in 1913 to 1,073,114,000 gallons in 1933. That is to say, the imports increased 10 times. Motor vehicles are everywhere, garages are everywhere and petrol storage is everywhere. Most petrol pumps have a 500-gallon tank somewhere near, often buried in the ground. I may be asked what is the point of all this. We read nowadays about gas masks, about the possibility of air raids, about bomb-proof shelters, and experiments in the darkening of towns. But one bomb in a petrol tank would provide a beacon to light destruction on, because if hostile aeroplanes ever come here at all, they will not come singly but in numbers.
  I asked the Home Secretary recently for certain figures about petrol storage. He could only give me the figures for the London County Council area and those figures disclosed the fact that there are in that area 3,594 licences to store petrol up to 1,000 gallons. Nearly every one of those covers a danger point. There are 1,162 licences for storing over 1,000 gallons and I would say that every one of these licences covers a special danger point. The London County Council area

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  does not contain all the danger spots. Every city and every town has its danger spots. The people of West Ham live in exceptional danger but then we have always done so. Our district was part of the air raid area during the war and suffered the Silvertown explosion. I saw that explosion and I saw the wreckage which it caused. In the very last air raid which was made on this country, four bombs fell in West Ham—and we have licences there to store petroleum.
  In West Ham there are 197 licences to store petroleum up to 500 gallons. That is quite ordinary and represents petrol pumps and so forth. But there are 45 licences to store from 500 to 1,000 gallons. There are 45 licences to store from 1,000 to 10,000 gallons. There are eight licences to store tens of thousands of gallons up to 100,000 there are six licences to store from 125,000 gallons up to 950,000 gallons and there is one licence to store 1,900,500 gallons. We are living with magazines of potential disaster all round us. It can be said that we could set the Thames on fire because some of this storage is alongside the river and with what is contained in our area we could illuminate from Beckton's gasometers and the Royal Arsenal at Woolwich up to the Tower Bridge, and the dome of St. Paul's. This is a very real danger. I am not scare-mongering, and I do not exaggerate the possibilities.
  I ask the Chancellor to make inquiries at the War Office as to what happened at a base munition stores camp on the Somme on Whit Tuesday of 1918—the day following the last raid on London. The Germans used their aeroplanes there to some advantage. About 10 o'clock at night an exploratory bomb found this stores camp which was so well camouflaged that it was not visible from the air in the day time. The bomb fell into a hangar filled with small arms ammunition and set it on fire, and the fire disclosed what could not be seen from the air during the day time. From the time when the first bomb took effect until 4 o'clock next morning there was a regular service of German aeroplanes every 10 or 15 minutes, dropping bombs on that store camp. They blew up the shell dumps, and the shells exploded from the bombs and from sympathetic concussion until in the places where the shell dumps had been there were only holes in the ground, and all the shells were gone.
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  Tremendous damage was done, and it all resulted from the fact that one bomb caused a fire.
  I use that as an illustration of what might happen in London or any other large town in this country. I have seen petrol alight. It burns mostly with very little smoke and a bright clear flame. I have seen heavy oil alight. It burns with a heavy woolly pall of smoke. Foam fire appliances have some chance with it. When petrol is alight in bulk there is no chance of dealing with it. It has to burn out. Only last Saturday a factory caught fire in Somerset and one of the factors which prevented that fire being dealt with was the existence of petrol tanks on the premises. The streets round about had to be cleared by the police. The people had to be moved out of their houses in the vicinity and the fire brigade were quite helpless. They had to keep away from the fire because of the danger of explosion. I ask the Chancellor not to do anything to check the development of the Diesel engine but to do all he can to encourage the use of heavy oil. It is important for the national well-being and safety that this should be done. I do not ask him to go in for anything extraordinary. I do not believe that we are going to have war to-morrow or next week. But while things are as they are, war is always possible, and if we could get rid of petrol from our midst it would be a tremendous advantage.
  5.55 p.m.
  Sir ARTHUR MICHAEL SAMUEL: I hope the hon. Member for West Ham (Mr. Gardner) will forgive me if I do not follow him into a discussion on the subject of which he spoke. I was very much attracted by the earlier speech of the hon. Member for Orkney and Shetland (Sir R. Hamilton). He spoke airily about stabilisation, and about a recent speech on it made by Mr. Morgenthau. It seemed to me that he spun himself into a cocoon of stabilisation mumbo jumbo, but gave no thread which we could get hold of which would lead us to any definite conclusion as to what he thought should be done or to any solution of the problem. With an ambiguity worthy of a priestess, of Apollo the hon. Member said that we must take the right course. May I, for a moment, survey the dollar-sterling exchange stabilisation problem We know that the merchant in doing business must have certain knowledge

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  of what is represented by a yard, or a ton, or a gallon or a kilogramme or a litre in order that he may know exactly the weight or measure of what he is buying or selling. Equally he must know for certain what value in money he will have to pay or what value in money he may have to receive.
  Without stabilisation of exchange-money values full restoration of international trade is, of course, impossible. It is a trite truism, and it does not require the hon. Member for Orkney and Shetland to tell us, that we can never rehabilitate our international trade without a stabilisation of money or currency. But the hon. Member now comes along and tells us that we must take the initiative with the United States because Mr. Morgenthau has made some public statement which may mean something or may mean nothing. We know that our friends the Americans are really children in the matter of pure economics. They do riot know what they are doing, what they have done, or what they are going to do. They are merely reeds shaken by the wind of political pressure. It is true that we must eventually stabilise, but I would put this question to my hon. Friends and ask them to consider the answer to it. Dare the President of the United States stabilise at the present moment? I say that he dare not. He is faced to-day with the prospect of inflationist pressure such as would not permit him to stabilise.
  It is no good Mr. Morgenthau saying that he is ready to shake hands with our Chancellor of the Exchequer over some arrangements for stabilisation until we know whether the pressure in the United States in favour of heavy Government expenditure, which must be of an inflationary nature, is going to succeed or not, and whether proposals of that kind are going to be put through by the legislature of the United States or not. If that pressure is to succeed, the President of the United States cannot stabilise for the present, whatever arrangement Mr. Morgenthau may advocate. The inflationists will not let him. Neither can he withdraw now from the silver-buying policy, while it is part and parcel of his political programme. Is he going to give up the silver policy which hat wrecked Chinese trade and injured us so
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  greatly oontrary to the forecasts of those people who said that if one only put up the value of silver it would make the teeming millions of China so prosperous that they would buy more from us. That very silver policy which is part of American recovery or monetary policy is directly or indirectly concerned with the question whether to stabilise or not to stabilise. It is wrecking the power of China to come into the markets.
  Mr. DAVID MASON: For exports, not for imports.
  Sir A. M. SAMUEL: It is difficult for us to buy Chinese products if silver is dear. If China cannot sell her products, it is difficult for China to buy of us and others. It is making it very dear for us and others to buy of China, and it is injuring China. China has already protested to the United States Government against their action in putting up the price of silver, and has put an export tax on silver to stop China being drained of currency. It is not for.me to discuss the silver question at any length now. I merely say that the silver problem in America with the pressure of the silver votes behind it is so great on the Government of the United States, that the President cannot think of stabilising unless he has satisfied the silver people and the inflationist. I do not know what is in the Chancellor's mind. He may have the same view as I have, which is that it is no good thinking of stabilizing until the time is fully opportune. We had better wait until after 1936 or 1937 when the President has been re-elected or defeated. We shall have to wait until the United States have had an electoral clean slate and a President who will not serve a third term or a new President with no pledges to fulfil to inflationists or silver mine owners. If he stabilised now, what would happen? He would at once break the European gold bloc or break the finances of France, Holland and Switzerland. The mere fact of America stabilising now would render it possible and probable that gold would at once pour from France, Holland and Switzerland into the United States for investment and throw those three European countries off the Gold Standard with the risk of revolution.

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  Stabilisation in any case ought not to take place between us and the United States as the two protagonists until and unless some de-valuation has taken place in France, Switzerland and Holland similar to that which has taken place in Belgium. It would be a very unfriendly act on our part if we did anything by stabilisation to upset the currency arrangements of those three friendly countries. It is all very well Mr. Morgenthau saying in a nebulous way that we should stabilise. Has he taken that proposal to its logical conclusion? If we stabilise, is he prepared on behalf of his Government to say that they will lend abroad? Is he prepared to do what is the duty of every creditor country and lend to creditworthy customers some of the overseas trade credit balance? The next thing we have to ask is, if Mr. Morgenthau stabilises, will he allow the world to send goods to the United States? They are three pre-requisite points that must be put to Mr. Morganthau before we can talk about stabilisation. I do not want to attribute any unworthy conduct to the United States, but they are like children playing with fire; they are injuring themselves and are injurying the rest of their neighbours. The President to-day is like Joshua trying to make the sun stand still, and he is failing to do so. John Law tried to do the same thing in the time of Louis XV that the President of the United States is doing now, and he failed. We are gravely interested in the recovery of the United States, for a prosperous United States means everything to us. We are deeply interested that they should prosper. Unfortunately the monetary schemes of the United States Brain-storm Trust have failed and are hindering recovery in the United States. We must not forget that at the time of the World Economic Conference of 1933, while our Prime Minister was on the way to America to talk about things and the United States delegates were conferring with us here, Mr. Roosevelt deliberately went off the Gold Standard and destroyed the Conference.
  Something has happened in the last few months which has made me chary of supporting proposals about coming to any stabilisation decision with the United States Government while the President is in his present frame of mind. Think of the foolish things that
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  are being pressed on the President by his supporters. There is the silver pressure; then, for example, the pressure of the Louisiana senator and of the radio priest; they will get hold of many votes at the next election. Then there is the war veterans' bonus; then the inflationists. You may one day find that the greatest industry in America, the motor industry, will say to the United States Government: "If you want to increase employment in America, we shall not vote for you unless you provide five billion dollars to buy out all the worn-out Motor cars and put them in store like you put gold and silver. This is a good recovery scheme and will increase employment." We are dealing with people who are like children in the handling of monetary problems.
  The decision of the United States judges on the gold question is merely that words in a contract have no meaning. What a position 1 The verdict destroyed the terms of every contract expressed in explicit language and operative in the United States. That verdict altered contracts which were expressed in explicit terms relating to gold payment. United States judges have decided that definite words and terms of a contract do not mean what is stated in writing. It makes us pause a moment. If any proposal should be made by Mr. Morgenthau to our Chancellor about stabilising, the decision on the gold clause destroys for me any reliance upon any contract of the United States Government upon which to base that stabilisation of exchange, which is essential to the restoration of international trade. That gold clause decision has done a great deal of harm to commercial morality in the United States and shaken confidence in whatever arrangement may be come to between the United States and England.
  My view is that, anxious as I am to: see stabilisation of currency so that we may know the nett result of what we are buying and selling, we should certainly wait until after the Presidential election in 1936 or 1937 before we can hope for a mutually satisfactory arrangement. When the time does come to make some advance towards Mr. Morgenthau or his successor, we must also lay down two or three pre-requisite conditions. The United States must be prepared to lend abroad and play the

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  game with credit-worthy countries and customers, and they must be prepared to take a proper amount of the goods of other people who buy from them. I do not know how this further safeguard can be obtained, but we must be put in such a position that the world shall have a guarantee that no change of electoral opinion or political pressure in the United States will again compel the Government of that country to do to other nations what Mr. Roosevelt has done with his monetary experiments. They have not only failed, but have injured the whole world. We must be put in a position to see that whatever arrangement is made between us and the United States it shall be of such a kind that good faith in the stabilisation contract shall be kept and the agreed working secured against every risk. But in no case while the United States legislature is in its present mood should we enter into any stabilisation contract as hinted by Mr. Morgenthau. Let us wait perhaps a couple of years, much as we need and desire a dollar-sterling stabilisation. The ground will be safer.
  6.9 p.m.
  Mr. CHAMBERLAIN: I believe that I shall be only speaking the simple truth when I say that no Budget in recent years has won such immediate and general acceptance as that which is embodied in the present Finance Bill. So much is that the case that the Opposition must have found themselves in considerable difficulties in choosing the ground on which, as they were bound to do, they could find their opportunity of attacking it. It will be seen on examination of the Amendment which they have put down that they are not attacking the Finance Bill for anything that it contains, but that they are obliged to suggest that it is worthy of condemnation because it does not contain a number of things. Of course, the difficulties of the Opposition are now reflected in myself. There is so little criticism that there is very little for me to say in reply. Although I think that there is general satisfaction with the Finance Bill, 1 will try to make one or two observations on some of the comments which have fallen from hon. Members in the course of the discussion. Two hon. Members have dealt with individual items, although they seem to have very little
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  relevance to the Amendment. We have, in fact, had rather a discursive discussion. We have discussed agriculture, tariffs, cinemas and cinema stars, but I found very little to which I can reply.
  I am sorry that the hon. Member for Orkney and Shetland (Sir R. Hamilton) is not in his place at this moment, because I should have liked to congratulate him upon the three resounding platitudes which he put before the House in substitution for anything more substantial. The first was that unemployment was a regrettable phase in the life of any nation, and a considerable disadvantage to the person who is unemployed. The second was that the way to establish peace was to put an end to war, and he added to that the observation that general peace was good for trade. His third and supreme platitude was that a step forward in the right direction was never premature. The hon. Member was trying to keep up the reputation of the Liberal party for introducing a note of gloom into a situation in which cheerfulness will, keep breaking in. It seems to be so much pain and distress to them to hear these constant references to the prosperity or the well-being or the improvement of the country that they feel it their duty, like the skeleton at the Egyptian feast, to remind us that we are all mortal, and that if we only took pains to look round we should find some indication somewhere in the country that things were not so good as they might be. They are having a difficult task just now, but they are doing their best, and I hope we may hear some further contributions from them in the course of the Debate, when they may make a better case for melancholy and gloom than was made by the hon. Member for Orkney and Shetland.
  Now I come to one or two more detailed matters. We had a speech from the hon. Member for Upton (Mr. Gardner) which was entirely devoted to the duty on heavy oil, and in his endeavour to bring a little fire into a somewhat lethargic discussion, he went to France and spoke of bombs and fires in hangars and a great many other things which I should never have thought were connected with the duty on heavy oil. That duty is a matter which we shall be discussing in Committee, when, no doubt, the hon. Member and others who object to it will have an opportunity of putting

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  before us in full and extended detail, and with such geographical additions as may occur to them, the difficulties to which they take exception. On the Second Reading of the Finance Bill, I venture to think, it is hardly necessary for me to do more than repeat what I said when we were discussing the Budget Resolutions and the subject came up. I then pointed out that in this case the revenue was beginning to suffer from, the competition of heavy oil with a light duty with light oil with a heavy duty, and that that loss of revenue was beginning to take on dimensions which were formidable and which I could not, out of consideration for the revenue, allow to grow. That was the reason, and the sole reason, why I proposed to equalise the duty on heavy oil with that on light oil; and the House will recollect that I have at the same time equalised the vehicle licence duties, seeing that this increase in taxation is confined to oil which is used for vehicles on the road. Moreover, the heavy oil engine still has an advantage of greater mileage per gallon..
  The hon. Member for Wentworth (Mr. Paling) singled out Clause 24 for special attention. He appeared to find in it some new principle, and certainly founded upon it a series of questions which seem to me to be entirely irrelevant to the Finance Bill, because this is not a Bill for the rationalisation of industry. This is a Clause which has reference to the Income Tax, and it is only as the process of rationalisation, or incidents which may proceed from rationalisation, are connected with Income Tax that the subject has any relevance at all for us. What is the position with regard to Clause 24? The hon. Member, rather fantastically I thought, described the provisions of Clause 24 as a subsidy to the Tory friends of the Government. In fact, we are considering a possibility that we may, after certain conditions have been fulfilled, impose by statute upon an industry the necessity of contributing by means of a levy to a fund to be used for the purpose of buying up redundant plant and machinery in the industry. That is a process which is to be carried through for the benefit of that industry.
  Sir STAFFORD CRIPPS: There is nothing in the Clause, that I can see, which makes it necessary to have any
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  statutory arrangement. It authorises the allowance in the case of voluntary arrangements.
  Mr. CHAMBERLAIN: I am sorry, but I had not completed my argument or my exposition. The hon. and learned Gentleman is perfectly right. There is nothing in this Clause which limits it to cases where there is a statutory imposition, but I want first to take the case of a statutory provision by which an industry may be compelled to pay a levy towards a fund for this particular purpose. I do not know whether that is what is referred to in the parenthesis in the Opposition Amendment which speaks of a "limitation of production." If that is so, as I gather, I am sorry that I did not appreciate earlier what the point was as to the limitation of production. That being so, I pause for a moment in my exposition of the processes which have led to the production of Clause 24 to point out that that contention is a complete misapprehension on the part of the Opposition. There is no question of limitation of production here, but a limitation of productive capacity, which is quite a different thing. It does not mean, taking the cotton trade as an example, that where there are a large number of redundant spindles and you buy up some of those spindles, you are going to reduce the production of the cotton trade. It merely means that you concentrate the production of the cotton trade on a smaller number of spindles or a smaller number of factories and thereby reduce the cost of production. There is no limitation of production at all.
  I return, then, to my proposition and ask the House to consider this: In the computation of profits in a business for the purpose of the Income Tax we allow a deduction of certain expenses necessarily incurred in making those profits. Is a levy of this kind such an expense In the case that I have suggested it is obviously an expense which is imposed upon the industry by Government action by statute. It would obviously be unfair to say to the industry, "You must pay Income Tax upon this as if it were a profit," when it is an expense which they cannot avoid because it has been imposed by Parliament. That is the case of the statutory provision. Now take the case of another industry which does exactly the same thing by agreement; because

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  the House will remember that in the hypothetical case which I have mentioned the reason for the Government intervening is that the majority of the industry agree that this reduction of redundant plant ought to be made, but a minority stand out, and thereupon the Government come in and put compulsion upon the minority. But suppose there is no minority. Suppose there is universal agreement. Can it possibly be said that it is equitable to say that that which is a trade expense in the one case is not a trade expense in the other? How can you possibly distinguish between the two cases? The second case is, if anything, that of an industry which is more virtuous than in the first case. The first industry had a minority who were not virtuous, but the second industry is unanimous. I say that there is obviously and in equity a case, and an unanswerable case in my opinion, for allowing this levy to be treated as a trade expense which can be deducted from profits for the purpose of assessment for Income Tax. The case is amply safeguarded by other paragraphs in the Clause. The removal of the redundant plant must be in the interests of the industry, and the national interest, too—there must be a certificate from the Board of Trade that it is in that interest—and in the circumstances I think the House will be prepared to agree that it is really stretching words far beyond their possible meaning to describe that as a subsidy.
  We are told once again in this Amendment that the Bill continues to cast an unfair burden of taxation upon indirect taxpayers. The hon. Member for Wentworth told us that he had taken the trouble to go through a large number of Budgets and to work out What were the percentages of direct and indirect taxation. I tell the hon. Member that he has wasted his time. It has been an investigation which is futile and a comparison of things which is impossible. The comparison of these percentages of direct and indirect taxation used to be of interest, and, indeed, may be said to have been of some importance, in the old days of so-called free trade, when indirect taxation was practically confined to a few articles of general use, things like tea, tobacco and so forth. Now we have changed the whole situation. We have a tax now upon nearly every import into
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  this country. That has completely altered the significance of the figures, and it is no longer possible to take the product of taxes upon imports and to think that indirect taxation on that scale is in any way to be compared with the indirect taxation of the pre-protectionist system.
  Sir HERBERT SAMUEL: What is the difference.
  Mr. CHAMBERLAIN: I am sorry that the right hon. Gentleman should ask that question, but I will try to point out the difference to him. In the first place, these are taxes not merely on those things which everybody uses or which are articles of household consumption and form, therefore, so large a proportion of the expenditure of certain classes of the community. These taxes are now attached to every article which each of us uses, if it is imported from overseas. In the second place, these taxes were not put on solely for revenue. Certainly there was a revenue element in them, but, as will be remembered, when the import duties were first imposed a variety of reasons were given, the first being that we wished to check our imports. In the third place—and this is perhaps the most important point of all—you have only got to look at the cast-of-living figures to see that the fact of imposing these taxes has not added to the cost of living, but that the tax has been very largely paid by those who have imported goods into this country.
  Sir H. SAMUEL: If the tax were abolished, would not the prices be reduced?
  Mr. CHAMBERLAIN: In a great many cases they certainly would not, and ultimately they would be increased. Take motor cars as an example. There is a heavy duty on motor cars, considerably above the average level of the duties in this country, and yet compare the prices of motor cars to-day with what they were before the duties were imposed. But I do not want to be drawn into a discussion of the old arguments, because I know that nothing one can say, and nothing in the way of facts which one can produce, will in any way alter the right hon. Gentleman's conviction of his theoretical correctness. But he has, in fact, accepted the position, and it is not the slightest use his kicking against the pricks, because if he were Prime Minister tomorrow, with a majority behind him, he

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  would not propose to go back to the old system of free imports. That being so, I say again that the whole question of the proportion between direct and indirect taxation has ceased to have any significance. It is purely of academic interest, and contains no principle which should or, indeed, can govern the national fiscal proposals of any Chancellor of the Exchequer to-day.
  No allusion has been made to-day by hon. Members opposite to the fact that I have clearly announced the principles which have influenced me in framing the last two Budgets. Just as I have been satisfied, whatever hon. Members and right hon. Members may say about indirect taxation, that they would not, if they were returned to office, be prepared to abolish those duties, so, too, I doubt very much whether they would care to declare that they are opposed to those principles, which, I may once again say, were to recognise that the new taxes and the cuts imposed in 1931 were special emergency measures—
  Mr. EDWARD WILLIAMS: And the means test.
  Mr. CHAMBERLAIN: I am confining myself to my own statement, and not to that of hon. Members opposite—devised for the purpose of meeting a special crisis, and that when that crisis was over I thought that the people of this country would expect that the first to receive relief should be those upon whom those special burdens had been then imposed. I was fortified in that view by the fact that it was expressed by Lord Snowden who was, in fact, the Chancellor who imposed those burdens. The success of those general principles, to which I have just alluded, of the present Budget, is, I believe, largely to be ascribed to the fact that they are in accordance with the general sense of fairness on the part of the public, and that I have coupled with them the other principle that, having taken something off the standard rate of Income Tax last year because I believed that in that way one could best stimulate the revival of trade, this year it was the -turn of the poorer classes of taxpayer to have some relief.
  A further point to which the hon. Member for Wentworth made allusion in his -opening speech was in regard to the American debt. As to that, I would like to remind him once again, for he seemed -to have forgotten it, that the debts are
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  not all on one side, and that we in this country, in our treatment of the war debts, always said that while we did not want to make a profit out of war debts, at the same time we did expect that so much of the debts due to us would be paid as would relieve us of any liabilities in respect of the debts that we in turn owed. Before we began to reduce the amount of our payment to the United States to a token payment which, as the President at the time said, he did not regard as a repudiation, we had already suspended the payment of the debts clue to us. We could not contemplate again resuming the payment of the debts that we owe to others unless, at the same time, we could find provision for the resumption of the payment of the debts due to us which would leave us without any debit.
  The hon. Member expressed a concern at the growth of the National Debt. I am delighted that any Member of the Opposition should remember that there is such a thing, and should go so far as to express concern at its growth, which no doubt means that when they come back they will devote special attention to the reduction of our burden in the shape of the National Debt. I have had occasion to say before that the burden on the taxpayer does not depend on the nominal amount of the debt, but upon the interest and management charges. If you apply that test to what has happened to the interest and management charges on the National Debt, the National Government have no reason to be ashamed of their policy.
  What is the last part of the Amendment of the Opposition? They say that the Bill
  "embodies no provisions for securing to the people that improvement in their standard of life which the increased productive capacity of the nation has made available."
  Take this Finance Bill. It might perhaps be examined and analysed, and it might be difficult to point to a particular Clause on which you might say that it has improved the purchasing power of the people, to use a phrase employed by the hon. Member for Leigh (Mr. Tinker).
  Sir FRANCIS FREMANTLE: Cinemas.
  Mr. CHAMBERLAIN: I am not going to depend for what I have to say upon any Clause in the Finance Bill. I rather

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  take the general policy of the Government in finance since we have been in office. I say that the effect of the Government's policy since we have been in office has been most definitely to increase the purchasing power of the people. I do not know whether hon. Members happened to read, as I did, the speech by the chairman of a company owning a well-known series of distributing stores throughout the country. As with many other stores this year, I am glad to say there has been a record profit. In his speech he pointed out that, owing to the fall in the cost of living, the people of to-day had a great deal more to spend than they had only a few years ago. I am not going to make myself responsible for the figures which he used, but I have no doubt that the broad principle that he stated was correct. What he said was that the people of this country spent every year in consumable goods and services £1,900,000,000. He said that in 1934 they could buy the same amount of consumable goods and services as they bought in 1929, and still have over £190,000,000 to spend on something else. That is the answer to the. hon. Member for Leigh. The standard of life of the people has improved. They may not spend all their £190,000,000, if that be the correct figure; they may save some of it. In fact we know that the savings of the working class have increased during the last few years. If they choose to put something by for a rainy day in case the opposite party ever gets into office, I can only applaud their wisdom and their prudence. So far as we are concerned, we are glad that we have been able to give them the opportunity.
  There is no question that when the hon. Member for Orkney and Shetland told us that trade was bad he was saying something which would not obtain acceptance in any part of the country. Trade is not bad. In many cases it is booming, and in many districts the great difficulty of the employer is not to find work for the unemployed, but to find unemployed who have the qualifications necessary to do the work which he has to offer [Interruption.] I do not say that there is a shortage of unemployed, but that there is a shortage of skilled men. [An HON. MEMBER: "Where"] The hon. Member ought to know. There is a shortage in many trades throughout
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  the country, and I am certain that that will be one of the difficulties which this Government will have to face in the coming year.
  We are still in the middle of our debates upon the Finance Bill, and I do not know whether anything more damaging to the Bill will be found later in the evening than has been found up to now. Up to the present, the Bill remains in all the glory of its fresh plumage, without having lost a single feather. I would thank the House generally for the kindly reception which has been given to it, and in the course of the Debate which we shall have I can assure hon. Members that we shall give that attention which is always given by this Government to any observation or suggestion that may come from any quarter.
  6.43 p.m.
  Mr. DAVID MASON: The right hon. Gentleman has spoken this afternoon with a complacency that has never been equalled from that bench. He has replied to various points that have been submitted, but he has not replied to the very admirable survey of my hon. Friend the Member for Orkney and Shetland (Sir R. Hamilton), whose speech he referred to as a series of platitudes. I will recall to the House the points made in that speech, so that hon. Members may judge for themselves whether they were platitudes or points of real substance. My hon. Friend first referred to the right hon. Gentleman's speech at the banker's dinner and what be said in regard to stabilisation. Does the right hon. Gentleman consider that as a platitude I My hon. Friend went on to say what was confirmed by the right hon. Gentleman himself, that the improvement in trade has been largely internal and has not been in our export trade. Does the right hon. Gentleman suggest that trade is booming in shipping, in the cotton industry or in Durham, where there are 25,000 unemployed skilled craftsmen, including shipwrights and others.
  The right hon. Gentleman said that the trouble to-day was not to find men seeking employment but to get men to do skilled jobs. Everybody knows—and I appeal to Opposition hon. Members—that there are many unemployed skilled engineers in this country who are perhaps the finest in the world, and who are

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  anxious for jobs if the right hon. Gentleman would produce them. Then the hon. Member for Orkney and Shetland spoke of trade and unemployment, and the relationship between free trade and peace. I think it will be admitted that if we could have universal free trade—many tariff reformers would agree, although they may subscribe to tariff reform—it would undoubtedly lead to more peaceful relations and less animosity between the governments as the Chancellor has admitted. He has admitted that he is not a fanatical protectionist. He must recognise the effect of quotas, restrictions and rivalries between nations, and of retaliation as a weapon. The very term "retaliation" suggests something other than amity among the nations. Of course, even the most extreme tariff reformer would agree that, if we had universal free trade, it would be likely to lead to amity and good feeling throughout the nations of the world.
  My hon. Friend also alluded, in connection with the subject of currency, to a speech of Sir Percy Bates, the chairman of the Cunard Company, who referred to a currency war among the nations of the world. Does the right hon. Gentleman regard that as a platitude? It is, perhaps, the most important question that is before the world at the present time, and, if the House will allow me, I should like to say something a little later with reference to it. My hon. Friend also spoke of the unsafe pound, which, of course, is a part of the question of stabilisation. I venture to suggest that the right hon. Gentleman was hardly fair in his references to us on these benches. While we may be small numbers, it is not the size of the man or the size of his party that ought to carry weight, or does carry weight, in this House. In the case of my hon. Friends who sit on the bench below me, and who have only a party of three, if any one of them contributes in debate anything worthy of consideration the House is always prepared to give their speeches due audience and, if they make any points, to appreciate them. The way in which the right hon. Gentleman has treated us has been, if I may say so, hardly in accordance with the dignity of the position which he occupies.
  I would like to refer to the speech of the hon. Baronet the Member for Farnham (Sir A. M. Samuel), who raised the question of stabilisation; but before I do
  246
  so I might perhaps refer to some of the other speeches. Mention was made in a number of them, including that of the Chancellor of the Exchequer, of the enormous increase in our taxation, and on this occasion I would like to raise again the tattered banner of economy—I am sorry that the right hon. Gentleman the Member for Epping (Mr. Churchill), who, I think, was the author of that phrase, is not here at the moment. Apparently no one to-day subscribes to the doctrine of economy, but, in view of certain figures which the Chancellor was kind enough to supply to my hon. Friend the Member for South Kensington (Sir W. Davison) and myself, I think that this most important question of the enormous increase in our taxation is worthy of the consideration of every Member of the House, to whatever party he may belong.
  Hon. Members above the Gangway ought to be, and I think are, equally interested with us in this matter. I think one of them said that, if a reduction of the Income Tax were possible, he would welcome it, but he did not know where the money could be obtained. It is very difficult to know where the money could be obtained, but there is one way, and that is by avoidance of waste and reduction of expenditure, which is a much better way of getting it than seeking for further sources of taxation. Cicero wrote, a long time ago, Magnum vectigal est parsimonia—economy is a great revenue. In America there is an idea on all sides that you can spend your way back to prosperity, but a more insane or ridiculous remark made by men who are not bereft of their senses I have never heard. Is it possible for an individual to live beyond his income and still retain his prosperity? Is it possible for him to show a surplus if he spends freely in every direction and finally indulges in a veritable orgy of expenditure? Are nations really any different in this respect from individuals? Nations are merely aggregates of individuals. Apparently, however, in these days no one believes in economy; no one believes that it is a great revenue. The United States have incurred expenditure to the extent of £1,000,000,000, but what is the last report? It appeared in the "Times" of the 6th of this month:
  "Business activity continues to decline. The downward movement was accelerated recently by a sharp decline in car loadings

  247
  when a rise is customary. In the week ended April 27 they decreased 52,019 to 558,886, the loss being due partly to a previous rush to ship goods and materials before a rate rise went into effect. Steel production has declined to 46 per cent. Motor car output is still high, but strikes of a serious character are reducing it, and any way the seasonal peak has been passed."
  Apparently the forward movement has disappeared. That is one example. It is not necessary to argue that you cannot go on with this vast expenditure. The Chancellor has to meet an expenditure of £729,000,000 this year, and for that purpose he has drawn up a financial statement providing for £735,000,000; and, in addition to that expenditure, we have to carry a debt of between £7,000,000,000 and £8,000,000,000. There is no doubt that some people made money as a result of the War: nobody denies it; but does anybody outside an asylum believe that a country which formerly had a National Debt of £700,000,000, and now has a National Debt of £7,000,000,000 is richer We have certainly an accumulation of debt and of paper money, but has £7,000,000,000 of wealth sprung into existence during these intervening years? What does it represent? No doubt it was necessary in our own interest to contract this debt, but it went off in shot and shell. There is nothing to show for it. We are poorer to-day than we were, and the world is poorer: but the world to-day is engaged in an orgy of expenditure and high taxation. This is confirmed by some figures which, through the courtesy of the right hon. Gentleman and his Department, I am able to submit to the House. On the 16th May last, I asked the right hon. Gentleman:
  "whether he can inform the House of the taxation per head in the United Kingdom for 1913–14 and that for 1933–34; also the corresponding figures for France, Germany. Italy, and the United States of America."—[OFFICIAL REPORT, 16th May, 1935; col. 1870, Vol 301.].
  The figures are amazing. I am bound to say that the right hon. Gentleman pointed out that one must not be too severe in drawing deductions from these figures, because of the confusion which now exists in the world, the depreciation of currency, inflation, and so forth; but nevertheless one gets from these figures an idea of the trend. What is the trend? I will only deal with the taxa-
  248
  tion of the central governments, because these large expenditures obviously involve high taxation. In this country, in 1913–14, the taxation of the central government amounted to £3 11s. 5d. per head of the population. It rose last year, 1933–34, to no less a sum than £15 4s. 8d, per head. That taxation has fallen upon 45,000,000 people who are impoverished by the fact that they have to carry a debt of £7,000,000,000. In the case of France, the taxation amounted to Frs.100.36 which last year had risen to Frs.958.5. I am reminded that at the present day we have to deal, of course, with a different franc from that of 1913–14, but my object in bringing these figures before the House is to show the trend. I do not for a moment desire to mislead the House in any way, and I quite agree that the value of the franc to-day is very different from what it used to be. It is, indeed,. very difficult to calculate the exact state of affairs as it exists to-day. In Germany the taxation per head in 1913–14 amounted to 24.34 Rentenmarks, and it has now risen to 105.44. In Italy, in 1913-14, it was 56.32 lire, and has now risen to 369.3 lire; while in the United States it has risen from 6.96 dollars to 23.50 dollars. I will now give the figures showing the central government taxation per head for the year 1933–34 in the various countries, stated in our own currency, which the Treasury have been good enough to calculate for me at the current exchange rates of the day.

  £

  s.

  d.

  United Kingdom

  …

  15

  4

  8

  United States

  …

  4

  15

  3

  Germany

  …

  7

  14

  4

  France

  …

  12

  9

  10

  Italy

  …

  6

  2

  2

  Therefore, this country is the heaviest-taxed country in the world at the present time. I am no pedant. I have supported hon. Gentlemen above the Gangway, perhaps more often than many of my hon. Friends, in any movement for a palliative in the shape of public works, the assistance in the construction of the new Cunard steamer, and so on, because it is no use talking about economy when men are in need of work. I supported the Chancellor of the Exchequer in his proposal to assist the Cunard Company to the extent of £9,500,000, because we have to deal with things as they are, and cannot be too extreme. But there is

  249
  no power on earth, in this House or out of it, that will enable a country to continue with impunity to pursue a profligate course in finance. If the British manufacturer has to contend with a taxation of £15 per head in addition to his overheads and other charges, that handicaps him in the markets of the world. This excessive and heavy taxation is one of the causes which cripples us in competing as regards manufactured goods in other countries throughout the world.
  All parties desire to get out of the present impasse. We all desire to restore our foreign trade. The Chancellor of the Exchequer asked my right hon. Friend (Sir H. Samuel) whether, if he came to power, he would bring in free trade to-morrow. Everybody, whether he is a free trader or not, knows that if a progressive Government, a combined Labour-Liberal or Liberal-Labour Government came into power to-morrow any reduction of tariffs would be gradual, believing as we do that in getting rid of restrictions, quotas and tariffs we should restore our trade. It is only necessary to read the history of our country. If you go back to the period after the Napoleonic Wars, Peel and Gladstone were also faced with a tariff system. Free trade was not brought in with the first budget Mr. Gladstone introduced. Tariffs were gradually reduced. If it should be our good fortune, or the good fortune of others who may follow us, that a free trade Government comes into power the reduction in tariffs will be gradual
  Mr. MAGNAY: As a free trader myself, may I call the hon. Gentleman's attention to the fact that 100 years ago we were then the workshop of the world. Is not the position entirely different to-day?
  Mr. MASON: I do not want to be drawn into a long discussion on what has happened during the last hundred years. What I was discussing was the remark of the Chancellor of the Exchequer to my right hon. Friend as to what he would do if returned to power to-morrow. The answer is that of course he would not bring in a free trade system at once. No one, having regard to the investment of capital and to the fact that we have a protective system, could do other than recognise this fact, and, although we may have our ideals and desires for the future and live and hope
  250
  for a reduction of quotas and restrictions, nobody in his senses would suggest that we could bring in free trade to-morrow. I have shown what Peel and Gladstone did 100 years ago. Let me also point the analogy between the conditions that existed after the Napoleonic Wars and conditions to-day. The same distress, the same problems, were before Members of this House then, and there was great disappointment at the non-realisation of what many people looked forward to—just as we did—an enormous demand after the War arising on the Continent. There was no such demand. Obviously the impoverishment of the Continent is reflected in the lessened demand for our export trade. Whig and Tory vied with one another in advocating economy after economy. They had tried in their way expenditure on public works, and they were driven back to this old deal. We hear a great deal about a new deal. Let the right hon. Gentleman the Member for Carnarvon (Mr. Lloyd George) bring any scheme before this House, and it will receive consideration arid be welcomed by all. As I say, Whig and Tory vied with each other in advocating economy. There is a particularly interesting quotation from Sydney Buxton on "Finance in Politics" in which he said.
  "The years between 1825 and 1840 were the halcyon days of economy in finance—a period to which Mr. Gladstone has more than once adverted in fond reminiscence, to point a moral against modern extravagance, as the time when Tory and Whig alike strove and strove successfully to reduce public expenditure and to maintain a balance on the right side."
  We are suffering to-day from the same malady. Two years ago I drew the attention of the House to the extravagance in administration, which I do not suppose has been altered since, and, although it is a very bold thing to do, I would like to quote from my own speech. I said that I had given some study to this question recently, with reference to administration costs, and I found that the the Treasury had two and a-half times as many people employed then than before the War and cost the public three times as much; the Foreign Office had a staff four times as large and cost three times as much; the Home Office had a staff twice as large and cost the country twice as much; and the Scottish Office expense was three and a-half times more. That is just an indication. Hon. Mem-

  251
  bers may say what trifling things these are—the salaries of a few clerks in the Foreign Office—but if you have the spirit of economy running through your administration in the Foreign Office, the Home Office and the Scottish Office, it will run through your whole administration. There was a case of a clerk at the Foreign Office who had died. It was a sinecure post, and it was not necessary to fill it. Mr. Gladstone, and I commend this again to the Chancellor of the Exchequer—if the right hon. Gentleman the Secretary of State for the Dominions wishes to continue to talk to the Chancellor of the Exchequer, who is doing his best to listen to us, perhaps he might have his conference at some other time—Mr. Gladstone, as showing how possessed he was with the spirit of economy, wrote four pages to Lord Palmerston to impress upon him that if he could save £250 a year it was worth doing. That should be impressed on the Chancellor of the Exchequer and on the House. It is not a joke. If we have in our administration this spirit of trying to save, if we can pursue that policy in the Foreign Office, the Home Office, the Scottish and in the Dominions Office, it will enter into our national finance. We will then appreciate the fact that this spirit of complacency that all is well cannot continue. Nobody who has come into contact with the poverty and with the terrible struggle in the North of England among the women particularly, who are carrying on hoping against hope for a revival of trade when there is no revival, can be complacent. There is no revival of trade in shipping. We have still 2,000,000 unemployed and the aggregate figures of world trade, and of this country's foreign trade, in the last few years have fallen by something like £199,000,000. It is childish for the right hon. Gentleman to come here and complacently to tell us, who after all have some element of common sense and are able to put two and two together, that all is well and to assail our speaker as a mere speaker of platitudes [Interruption.] I have tried not to get angry with the right hon. Gentleman because he is so very courteous, and it is refreshing to see the way he prances at that Box and tells everyone that we are going ahead and that everything is well. It is not the case.
  252
  I may be asked, how do you make out that economy is a revenue? I have supported anything that will give employment. I do not think for a moment that the Labour party, as against the Conservative party or my own friends, have a monopoly in representing the working classes. We all make claim to represent them. You may ask how can economy be a revenue? It is a revenue in this way. First you have a reduction of the burden on industry. That will stimulate industry. To-morrow we are going to have a great debate on defence. If we should be faced with war on the Continent, there is nothing more important to armaments than maintaining a financial reserve. When you know that the pound is worth only 11s. or 12s. in Paris, how could you finance an army on the Continent What position are you in, with this enormous debt and with this vast expenditure, to incur another European war? It is essential that you should bear in mind economy, the building up of financial reserves and the reduction of taxation, so that you may have some margin should you be faced with trouble on the Continent
  Then there is the vast and general increase in the national wealth in human happiness which results from a large amount of loanable capital. There is a difference between loanable capital and cheap credit. There is not such a vast amount of capital seeking investment as people imagine. There are many people who have suffered a reduction of income who are by no means with capital to invest. There is cheap money in the City of London because of the restriction of trade. If we had economy, and if we accumulated capital, and that was then used, as it might be, for various industries that would widen the area of employment.
  Stabilisation is, perhaps, the most important question, and I know that it is appreciated by the Chancellor of the Exchequer. He said it was the objective of his Government, but there have been a number of speeches made to-day which seemed to indicate that you must first find out what the United States of America are going to do. Why should we take account of them? When we stabilised in 1821 and came back to gold we did not consult Hamburg or France as to what we should stabilise the pound at. If the right hon. Gentleman, the

  253
  Treasury, and the Bank of England believe that the time has come, having regard to the state of the exchanges, to Lave, say, a de facto stabilisation—I am riot in a hurry and it is obvious you must move very cautiously—it has nothing to do with Mr. Morgenthau or any other human being outside this country. All the Chancellor of the Exchequer has to consider is the state of the exchanges and whether, in his estimation and in that of those whom he may consult at the Bank of England and the Treasury, the time has arrived to take this step. It is not necessary to see what Mr. Morgenthau says, although I was very pleased to see that he stated.
  "The world should know that when it is ready to seek stabilisation Washington will not be an obstacle."
  Washington cannot be an obstacle as to whether the right hon. Gentleman and the Bank of England want to stabilise. It can only be an obstacle if it were to engage in vagaries of finance and an inflationary policy, and other things which the right hon. Gentleman and his colleagues in consultation might not think advisable for Great Britain to stabilise at that particular time. But Great Britain decides for herself what measure she is going to have, and what standard she shall have.
  I do not think that there is a publicist at the head of a great concern, who, in snaking his speech as chairman of the meeting, does not refer to this outstanding fact that, if we wish to restore foreign trade, the time has arrived to take some such action as that which I suggest. If the United States are unwilling to take the lead, what an opportunity for Great Britain and for the right hon. Gentleman. The opportunity might not occur again. We are at the parting of the ways. On the one side you have the pathway of acquiescence and of letting things alone and of drift, the backward path which may lead to poverty and decay. On the other side you have the pathway which requires skill, knowledge and courage, but if we take that path I believe that other nations will follow. To this country has come a call from the rest of the world, and the people of this country look to the right hon. Gentleman and to the Treasury to give them such a, lead. At first it may be like the summer breeze that ruffles the surface of the lake, but
  254
  I believe that it will grow in intensity. Whereas in this House my voice has been like a voice crying in the wilderness, I now find that in the Lobby Members in all parts of the House say to me, "It is all going your way." They are kind enough to say that stabilisation, which formerly was looked upon as the act of a madman, has now entered the sphere of practical politics. Therefore, 1 believe that if the right hon. Gentleman has the courage and skill to go forward with this movement, he will find, both in this House and in the country, a support which will redound to his honour and also to the credit of the whole country.
  7.18 p.m.
  Lord APSLEY: I am sure that the Chancellor of the Exchequer will be horrified at the thought that anything that he said should be considered as an insult to Scotland or to the Liberal party, or to reflect adversely on the weight of any of the arguments which have been put forward by their champions on these benches. But it would appear that the main weight of the arguments of the hon. Member for East Edinburgh (Mr. D. Mason), like those of the right hon. Member for South Molton (Mr. Lambert), who is or was a Liberal too, lay not so much in what he said but in what he omitted to say. The hon. Member urged economy. We have often heard economy urged before on both sides, but we have not had anything clearly laid down as to the exact lines upon which economy should be urged. The hon. Member, it is true, confined himself principally, not to the question of economy in public works or to any other form of the liberal spending of money, but to economy in administration. I should have been glad if he had gone a little further and had given us more detailed suggestions. I believe that there is a great deal that could be done in that direction.
  We hear a great deal about co-ordination and rationalisation in industry, and are told how marketing boards and organisation, whether of primary or secondary industries, will help to bring us back to prosperity. I wonder if there is not an opportunity for more co-ordination of Government Departments, and whether a May Committee, or even a Geddes Committee, could not be brought into being in the near future to consider

  255
  whether there could still be very considerable economies in Government administration. It appears to an ordinary private Member to be anomalous that, for instance, the Minister of Agriculture should be responsible for some and not all of the Fisheries, and that he should also administer buildings and be responsible for, and in fact the owner of, buildings in Regent Street. There are a great many other Departments which are in an equally anomalous position. The Postmaster-General had the courage to call in an independent firm of auditors to go into matters of the Post Office. He was wise and bold enough to take the decision, and he acted a great deal on their advice with the most remarkable results. A really well constituted committee might be brought into being in the near future to see whether similar results could not be obtained in the saving of expenditure in a great many, if not all, Government Departments.
  The Chancellor of the Exchequer complained—and I think that his complaint was very justified, although from the brilliant reply that he made, it did not seem to upset him in any way—that his trouble was that the Finance Bill had not given sufficient scope for criticism to the Opposition or to anybody else. That is quite true, but I wonder whether the real cause is not that many hon. Members who have spoken this afternoon have failed to understand the main characteristic of the Finance Bill, though curiously enough that characteristic has been embodied in the Amendment moved by the Opposition The main characteristic of the Finance Bill as I make it is the beginning of what I hope is to be a continued programme of taxation reduction starting from the bottom. The relief of the poor people in this country and of the small taxpayer. This would appear to render nugatory the Amendment put forward by the Opposition, unless, indeed, it be the case that the Opposition are urging that it is not so much the fact that the Chancellor of the Exchequer is relieving the small taxpayer as that the effect of these reliefs are not showing the true result on the life of our people. That indeed, as a purely economic contention, might well be urged.
  I should like to make a comparison in that respect on the economic side alone, for I am dealing here neither with politics
  256
  nor sentiment. Not very long ago Mr. Lyons, the Prime Minister of Australia, came down to this House and made a most interesting speech to Members of the Empire Parliamentary Association, and he told us how Australia met her troubles in the depression, and how, having taken probably more severe economic measures than we took and balanced her Budget, she proceeded to return to prosperity. What interested me in his speech was that Mr. Lyons had taken exactly the opposite economic course to that which the Chancellor of the Exchequer has taken. He did not relieve taxation from the bottom, but started from the top. The first relief he gave—he did not mention the fact at the meeting of the Empire Parliamentary Association—was in respect of the salaries of Members of Parliament. There was, of course, an outcry and an uproar—I was in Australia at the time that that was done—but Mr. Lyons seemed to know very well what he was doing. Possibly he knew that the restoration of the cut would immediately be transferred to the very poorest members of the constituencies of the members concerned. Anyway, be that as it may, when the election came only a year after, Mr. Lyons was returned to power, having lost very few seats. The measure which no statesman in this country would dare contemplate taking, proved actually to have remarkably little effect on the electorate.
  The next measure he took, and it impressed me enormously, was that he reduced the land tax by 50 per cent., a pretty severe reduction. The land tax was a tax, like some of the taxes which we still have in this country, imposed in ancient days. It was not an economic tax but was put on largely for political reasons. Mr. Lyons decided that the tax should be reduced by 50 per cent. at once in order to assist agriculture to recover from the slump. We have no tax analogous to that very heavy land tax in this country, but the burden which agriculture has to bear, consisting of tithes, rates on buildings, land tax, Income Tax, Schedule A, and Schedule B, Surtax and Death Duties amount, with-any doubt, to a very much more considerable burden than anything that is imposed in Australia by means of the direct land tax.

  257
  The right hon. Member for South Molton (Mr. Lambert) made a most eloquent appeal and one which we have often heard from all sides of the House on behalf of agriculture, but he did not tell us a word as to how he would restore agriculture. He begged the Government to do it, but he said nothing that would give them an indication of the methods he wished them to pursue. He disliked subsidies and marketing boards, but all that he could produce as far as I could gather was that he wanted the import duty on nails, barbed wire and corrugated iron to be reduced. You cannot restore agriculture by reducing the duty on corrugated iron. Far greater measures must be taken. The first of these is to remove something of the considerable burden which agriculture bears. An hon. Member on these benches mentioned that butter was being sold in Australia cheaper than it could be sold in this country. Why? Because of the enormous burden which land in England still has to bear. If hon. Members could go round the country—and it is not sufficient to go round in a closed motor car where you only see the country beside the roads, but you must go either on horseback or fly low in an aeroplane—to see what developments are taking place, they would see the results of the present policy which was introduced originally almost entirely for political reasons.
  The whole of the question of ribbon development—in respect of which a Bill has been introduced in another place, which I do not think will have any effect at all on the particular subject—is bound up with the problem of agricultural land in this country. Ribbon development is caused by landowners having to sell their land. Land near a road has greater value for building purposes. Land speculators come along and buy the land from the landowner whose economic position compels him to sell, and houses are built along the roads. Landowners have had to get rid of land in some way or another in order to pay debts with probably Death Duties still owing, and perhaps Surtax as well. Large areas of land have been bought by speculators and resold in small plots. Yesterday I was in Wiltshire, but if really thought that I was in Northern Australia in the midst of an aboriginal camp. There were humpies, as they are called in Australia, built all over the place, and shacks so badly built that the wind might almost blow them over. There
  258
  were old railway carriages and waggons with wheels off, and almost any form of house which could not possibly conform to any health regulations, growing up almost haphazard surrounded by barbed wire. The inhabitants eke out a slender existence by farming pigs and chickens. Land had been bought by the speculator and cut up into small patches and disposed of to anyone who cared to take it on without any control. No landlord would be allowed to house tenants in such conditions but these were freeholders now. Doubtless the Minister of Health will in future try to deal with them.
  But that is not the way to deal with the problem of the land. The only people who can administer land properly and see that it is properly farmed are the landowners. You can work through the tenants and the landlords and keep the land in a proper state, and in no other way. That is well witnessed by what is happening with regard to farmers who bought their farms some years ago. Some are still buying their farms, although there are not many of them who can afford now to raise the money. During the last 10 or 15 years we have seen a continual falling back in the maintenance and repair of these freehold farms. They have been compelled to save labour; they have had to do it. One finds gates tied up with wire, wire put into fences, no proper drainage, no cutting of hedgerow timber where necessary. All these things which it is the duty of the landlord to look after are not done in the case of many small farmers, who find it sufficiently difficult to make a living at all, even though they and their families are the only people working on the farms. Very considerable relief could be given in this respect, and I hope that that will be done.
  There is a further effect of this very heavy taxation, which was mentioned by the hon. Member for East Edinburgh and that is the effect on industry. The effect of taxation, particularly of the Surtax, on industry, is much greater than is commonly understood. I advance this further argument which I think is cogent, and that is that the Surtax has a particularly bad moral effect because it has to be paid in cash, in a lump sum and between certain dates. Hon. Members will notice that every year the unemployment figures go up heavily from January to March. That is a season when in-

  259
  dustry ought to be going at full swing but it is the time when unemployment is at its worst, and that is the time when Surtax is being paid. Apart from the very considerable economic effect of this great mass of money flowing from the Surtax payers to the Treasury, there is the very considerable moral effect that from the 1st January private individuals, purchasers, who are the mainstay of production, say: "We cannot afford to buy." The distributors, the salesmen, in turn say: "Nobody is buying, and therefore we cannot give any orders." The producer, whether he has a big factory or a small one, says: "It is no use producing at the present time because no orders are coming in." Consequently, the works are half closed down and large numbers of men and women are turned out of employment and have to receive benefit for two or three months.
  That happens every year and a great deal of good could be done if there was some mitigation of this heavy taxation. If these heavy burdens cannot be reduced owing to the financial condition of the Treasury and until further economy has been made, if some other relief could be given or a greater length of time could be allowed in which the taxpayer has to pay the Surtax, it would be very helpful. That might be done by making the payment date as between January and October instead of January and March. That would give the taxpayers two more quarterly dividends out of which to pay their Surtax. By spreading it over through the summer the moral effect would be very considerable and we should not be faced with this continual and regular annual resurgence of unemployment during the months of January to March. Personally I do not care about graduated Surtax from the economic point of view. When it was first introduced by Sir William Harcourt no doubt it had its value, but it was very small in size. I do not believe that any of the old Liberal statesmen of those days visualised the heights to which Surtax would be raised, and I do not believe that the people of the country to-day are really conscious of the effect and the dangers of heavy Surtax so far as unemployment is concerned. The saying that the taxes of the rich are paid by the poor is so old that it is trite to repeat it and very few people pay any attention to
  260
  it. I believe that it has been attributed to the days of ancient Greece and that Solon was the first to discover it. He left behind him a reputation of being the wisest of men but modern historians in the process of what is called "debunking" have found that he was not the wisest of men; he was in fact a Liberal politician. He had one of those meteoric careers which from time to time flash across the pages of history.
  He might well be compared to his modern compatriot M. Venizelos, or Mr. Theodore, or Mr. Hughes in Australia or the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George), while in South America and the United States their numbers are legion. Suffice it to say that among his many popular reforms was the establishment of the first graduated Surtax. After a time, however, when the Athenians realised that their vineyards and cornfields were wasting, when the artisans in the bazaars realised that trade was failing, when the workmen in the shipyards realised that the shipping trade had gone to bits, they acted with quicker political conception than the people of this country and rose in their wrath and drove him from the city. Whereupon he went into exile for 10 years, most of which time he spent writing his memoirs. It was from the material afforded by these memoirs doubtless that the historians, who were mostly Liberals, not only in Greece but in Rome, France and this country, came to the conclusion that Solon was the wisest of men. The effect of a graduated Surtax was, however, proved by trial and error. In this country any Chancellor of the Exchequer would be afraid to put on a flat rate of Surtax because it would entail such a gigantic loss that it could not be entertained. The only way of getting nearer to the economic truth of the matter would be as time goes on to reduce the actual scale and weight of Surtax and to allow more generous time in which it can be paid.
  There is one further question. The Chancellor of the Exchequer mentioned that in making provision with respect to the contributions paid for the removal of redundant plant the Government thought that it would be fair to allow the amount to be charged against profits for the purpose of reducing the amount of Income Tax to be paid. Is this not analogous to the amount paid by the owners of

  261
  mineral royalties on Mineral Rights Duty and miners' welfare levy? If industries are given the right to put in the amount paid towards the reduction of redundant plant as a return in order to get a reduction of Income Tax, I do not see how it can be refused to any other companies who may own mineral rights and pay the miners' welfare levy. I should be glad if that question could be considered in order that these things could be put on a level. The Chancellor of the Exchequer mentioned last year that the Government were considering the matter. It is only equitable that what a, company or a private individual has to pay in the form of a levy should be allowed to be deducted as a necessary expenditure claim for the purposes of Income Tax and Surtax. I should be glad if the Chancellor of the Exchequer would look into these matters.
  7.40 p.m.
  Mr. E. WILLIAMS: The Chancellor of the Exchequer must be delighted with the variety of speeches we have had on the Finance Bil, and particularly for the depth of historical knowledge which has been displayed by speakers in trying to prove their particular point. The Noble Lord who has just spoken will excuse me from following him in his arguments. On these benches we are not accustomed to paying Super-tax and we cannot claim to have much detailed knowledge of the subject. I desire to raise a matter to which I should like the Chancellor of the Exchequer to give consideration. He made a delightful and breezy speech and said that he had very little to reply to in the first half of the Debate. He would be correct in saying that the sting has been taken out of the Debate in that most hon. Members were delighted to find that in his Budget speech he had restored the cuts to a very large number of people who had made great sacrifices since 1931. But in restoring the cuts to the teachers, the civil servants and other persons he left outside a category of people who have suffered most and who could least sustain the burden that was placed upon them. I refer to the unemployed persons who were in receipt of transitional payment when the National Government came in.
  I think I am correct in saying, from the answers which the Chancellor of the Exchequer has given to questions, that
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  the application of the means test to persons in receipt of transitional payment has yielded about £14,000,000 to £15,000,000 a year. Therefore, the right hon. Gentleman has something for which to thank the unemployed because they have helped to balance his Budget. The amount of money that he got in this way was one of the means of preventing a certain amount of expenditure. In addition, there was the 10 per cent. cut that was applied to the unemployed generally, which was estimated to represent over £60,000,000, It should not be difficult for any man—I am not casting any reflection upon the Chancellor of the Exchequer's business capacity and acumen —to balance his Budget if expenditure is reduced in that way by £60,000,000 from the unemployed in receipt of unemployment benefit and £15,000,000 a year from those in receipt of transitional payment. It is by those means that the National Government have been able to balance their Budget and ultimately to obtain sufficient revenue to restore the cuts on teachers and civil servants and on the unemployed who were and are in receipt of unemployment benefit. To be just and equitable the cuts ought to be restored to those who were in receipt of transitional payment, the persons to whom the means test applies to-day.
  One cannot make reference at any length to Part II of the Unemployment Act of last year and the standstill order that operates in the country. One can only make a passing reference. It is true that this present day standstill order has prevented a out of many shillings per week in counties like Glamorgan and Monmouthshire. It is true that the application of a standstill order may have meant in one county here and there a little more than was paid to those persons when the public assistance committees were administering assistance. But throughout the country it certainly means on the average a reduction below that which they would receive if they were in receipt of unemployment benefit. The Government have benefited greatly by the millions of pounds gained by the application of the means test to some hundreds of thousands of persons in this country who have suffered far more greatly than any other members of the community. In the first place, they have to be idle for a very long period before the means test applies to them. They

  263
  have already used up all their savings. They have to a large extent depended upon the rest of their family who may have been working in order to attain some measure of relief beyond the mere destitution level. All that has taken place during the time that they have been living upon the means test.
  Surely at this stage the Chancellor of the Exchequer ought to wipe that out. The Government ought to be prepared to remove the whole of the cuts so long as the means test applies to a substantial number who are unemployed owing to circumstances admitted by every Member in this House. The last speaker, the Member for one of the Edinburgh Divisions, and most of the speakers in this Debate, have been stressing such factors as inflation, deflation, world prices and things of that kind. The fact that those factors are mentioned of itself proves that unemployment in this country cannot be attributable to the man that is unemployed. He cannot be charged with having caused his unemployment. Surely therefore he ought not to be made to bear the burden of his unemployment. That ought really to be a State obligation. I am therefore hoping that the Chancellor of the Exchequer will do what he can to wipe out this very grievous wrong that is perpetrated upon the unemployed in the continued application of the means test.
  When I listened to the Chancellor making that very happy speech an hour or so ago I was obliged to reflect on the state of things in my own constituency. Except for the teachers and some members of the Civil Service, there is no evidence that this Budget has brought prosperity to my constituency. It is true that the annual wage paid to the miner this year is about £4 more than last year. It is about £3 to £4 less than it was in 1929. It is still at the very low figure of about £115 a year. That is the annual wage paid to the miner in this country. That is what the miner receives for working underground seven and a-half hours per day, on top of which he has his walking time and the winding time that is allowed to lift the miners from the bowels of the earth. That is what he is paid for the risk to life and limb involved in winning the coal. You cannot expect such a person, receiving such a miserable wage for such an ardu-
  264
  ous occupation, to feel very happy when such a Budget speech or such a financial statement is made by the Chancellor from time to time. What we, representing constituencies of that kind, are anxious to know, is when will this prosperity that may be like the tail of a comet, touching a large number of people all over the country, when is that to reach the South Wales coalfields? When is it to reach Durham? When will it reach the distressed areas? When is it to reach South Yorkshire and the mining community for whom the annual wage to-day is £115 a year? I am reminded that that question would equally apply to the agricultural labourer who is in receipt on the average of less than 30s. a week. When is it going to reach him.
  I should like to meet the point that the right hon. Gentleman stressed in reply to my hon. Friend the Member for Wentworth (Mr. Paling). I think he was very clever and scored a good debating point, although I suspect he endeavoured to skim over the point entirely when he referred to the American debt. He said that the President is quite prepared to accept whatever was paid as a token payment. What my hon. Friend had in mind when he referred to the American debt was this. If it was morally right to ignore the debt to America, would the creditors in this country to whom we owe our national debt be prepared also to accept a token payment.
  I would like to pass on a word to the hon. Member for East Edinburgh (Mr. D. Mason). We are also concerned, of course, about reducing taxation. But I would have the hon. Member remember that £224,000,000, I think, of the present Budget is for the repayment of interest upon war debt. It is true there has been a substantial reduction since the Chancellor's conversion scheme from £355,000,000 to £224,000,000. But will the Chancellor and the hon. Member bear this in mind? When those loans were contracted the cost-of-living figures were well over 100 per cent. If you took the average cost-of-living figure for the period of the War it would be well over 100 per cent. When the money was borrowed the commodity value of that money would not be more than about half of what they are now paying, and since post-war years the rentiers have received practically 200 per cent. in commodity values more than the actual investment during

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  the War time. The cost of living stands to-day at about 42 to 44 per cent. [An HON. MEMBER: "It is 39 !"] Thirty-nine. It means, of course, that the persons who advanced money during the War have been able during the post-war years to receive in commodity prices, owing to the fall in the cost of living, practically 200 per cent. more than its former value. 1 submit to the Chancellor of the Exchequer that that was one of the main causes of the crisis in 1929 and in 1928 in the -United States. It is still one of the problems that this Government should face. I put it to the hon. Member for Edinburgh, East, that that is the way to reduce taxation, and surely the Chancellor of the Exchequer should have met the point, because it represents about 30 per cent. of the present Budget. I should think every Member in this House would be prepared to agree to this if he would face up to the real commodity prices, the real value of the money that is now paid to the rentier in this country.
  Mr. DINGLE, FOOT: May we know if this is the policy of the party above the Gangway?
  Mr. WILLIAMS: I am speaking for myself. I do not think I differ from any person who speaks from the Liberal Benches on this point. I wonder if the hon. Member who puts the question would endorse the opinion expressed in the speech of his colleague. The rentier in this country has had a very good time indeed, because the cost of living has been falling. We can understand why there has been a policy in this country of reducing prices all the time. We think it has been substantially done to increase the interest and the values to the rentier.
  In our Motion, we have a, reference to direct and indirect taxation. I do not know whether these figures will be correct, but they are used from time to time. It is said that the national income is £4,000,000,000, of which about 38 per cent. is paid in wages. However much we may analyse this Budget, certainly substantially more than 38 per cent. of the revenue coming into the Budget is paid by way of indirect taxation. Certainly upon any principle that may be applied, the poor of this country are paying substantially more than they were years ago in proportion to the amount that is paid in direct taxation by the wealthier classes. I think that was clearly stated
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  by the hon. Member for Wentworth. The Chancellor never endeavoured to face up to that statement at all. He said that through the import duties you have a greater variety of articles being taxed. It is equally true that a greater variety of articles are being consumed by the working classes, and they consume the cheaper articles. The Chancellor never endeavoured to meet the case that was put up by the hon. Member for Wentworth, who stressed the heavier burden by way of taxation that is falling by indirect means upon the working classes.
  The main thing which I should like to put to the Chancellor of the Exchequer and to the Financial Secretary is a. plea to remove the means test which applies to the unemployed. That is my main plea. I do not want to follow other Members in mere debating points. I want to plead for my own constituency and for the constituencies of my colleagues in the depressed areas. I want the Government to endeavour to be as generous to these persons as they seem to be to their own friends. They have taken from the mass of poor people enormous sums of money. They have taken £15,000,000 a year through imposing a means test for the unemployed, and they have handed those millions in subsidies to shipowners, sugar-beet growers and other persons who, with proper organisation, can carry on very well without any subsidies at all. That is certainly iniquitous, and I trust the Government will face up to that and remove the means test as quickly as possible, so that the distressed areas of South Wales and elsewhere may see some semblance of prosperity.
  8.2 p.m.
  Lieut.-Colonel MOORE-BRABAZON: I will not follow the hon. Member who has just spoken—that is obviously the duty of the Financial Secretary—but I wish to raise one point though not in criticism of the Chancellor of the Exchequer, because he is a pillar of rectitude in finance. If he has made any error, it is an error of omission rather than one of commission. I have always regretted that in the Budget speech he did not make one word of reference to the American debt. I think that when we are owing a sum of £1,000,000,000 you cannot ignore that liability in a speech which has the importance of the Budget statement. I am one of those who think

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  that the relationship between the United Kingdom and the United States of America is far more important than the relationship between any one country and another in Europe. And on this particular question there is the very grossest misunderstanding on the other side of the Atlantic. We in this country, I think, understand the position better than the Americans do, but we have got to realise what is their state of mind. They are in very grave difficulties, and they have had to raise £1,000,000,000 in order to finance works for relieving unemployment—a sum of money just about equal to that which we owe them. Of course, it is natural for the ordinary American to ask repeatedly why that money is not and cannot be paid.
  In this country we know perfectly well why it is. We know that we never were lent money; we were supplied with goods. As a matter of fact, we were not supplied with goods but goods were supplied to the Allies, and we stood as guarantor for them. We know that there is no way of repaying that debt except by way of goods again, and that it is impossible to pay such a sum of money. The method of paying by goods is refused by America. She has undermined the world structure of trade by indulging in unilateral trade, in which she is allowed to export and never to import. That has spoiled world trade and has ruined such countries as South America. She will not accept services either. The only way, apparently, in which she thinks she ought to get repayment of this debt is in money, and we know perfectly well—and this should be stressed at every opportunity—that there is not the money in the world that could go over to America to pay this debt. I think we must not miss opportunities of letting the citizens of America know the position we are in, because we in this country do not want to be dubbed defaulters throughout the whole of North America. It is not that we are not willing to pay, but that it is a physical impossibility to do it.
  To-day we have a National Government of tremendous power; and in America there is a President who is almost omnipotent and who has the whole country behind him. Surely there never was a more favourable opportunity of doing something to settle this question once and for all. I believe that if
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  America still wants this gold that we could make a gesture and offer her a certain sum. I believe that even now we could pay her £100,000,000 or so in gold. It would be a great strain on the resources of the world, but, if it is a benefit for America and she thinks this payment would be welcome, let us do it; and in return let us get a cancellation of all the debts of all the countries throughout the world. That would have a curious effect on the gold bloc; and I believe it would have a fundamental effect on stabilising those exchanges which we are told upset world trade to-day. I think it is time for a gesture of some sort in an attempt to settle this difficulty once and for all. It is a growing sore on the other side of the Atlantic. If you talk to anybody up and down that country, they say, "Why don't you pay us?" and it is difficult to explain in a few words why we do not. I think it is the duty of the Chancellor whenever he is making a national statement of the importance of the Budget always to put our point of view and our difficulties. If before another general election this Government could come to grips with this problem and come to an arrangement with the President of the United States to settle this debt question once and for all, I believe that settlement would be of enormous benefit to these two great countries and to the world.
  8.8 p.m.
  Mr. BATEY: When the right hon. Member for South Molton (Mr. Lambert) was speaking earlier in the evening he reminded Members on these benches of the amount of money paid out in old age pensions. He mentioned a figure with which at the moment I disagreed. He asked me to go and look at a Command Paper so that I might have the correct figures. Instead I went and obtained a copy of the Financial Statement for this year, and I have taken out the figures. It is there shown that this year the amount to be paid for old age pensions is £43,000,000, and that the amount to be paid this year on the Widows', Orphans' and Old Age Contributory Pensions Account is £14,000,000. That makes a total of £57,000,000. The right hon. Gentleman implied that we should be satisfied with the amount of money which is being paid out in these pensions. But we are not satisfied. We believe

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  that the working-classes are entitled to a far larger share of the national income than they are receiving at the present time. This year, according to the Financial Statement, the Government budgets for a total expenditure of £730,000,000. Of that sum £57,000,000 is to be paid in respect of widows', orphans' and contributory pensions and in old age pensions, while there is to be paid for past wars and in preparation for future wars no less than £390,000,000. A sum of £224,000,000 is provided for interest on the National Debt, while £124,000,000 is the cost of armaments this year, and £42,000,000 is to be provided for war pensions. I rather gathered that the right hon. Gentleman was adding the war pensions figure to that for old age pensions, and that is not fair. The war pensions figure, in my opinion, ought to be placed to the proper account. When this figure of £42,000,000 for war pensions is added to the £224,000,000 for interest on the National Debt and the £124,000,000 for armaments, that makes up a total of expenditure for this year of no less than £390,000,000. When the country can afford to pay for past wars or in preparation for future wars no less than £390,000,000, we are entitled to complain in the name of the working-classes that they are only receiving £57,000,000 for pensions.
  I think that we are also entitled to complain that the working-classes are paying far more than they are receiving. The Financial Statement shows that this year there is to be raised as a tax upon beer £58,000,000, as a tax upon spirits £33,000,000, as a tax upon tea £4,000,000, as a tax on sugar £12,000,000, as a tax on tobacco £67,000,000, and as a tax on matches £4,000,000, a total of £178,000,000. If you add £57,000,000 for pensions, £6,000,000 for national health insurance and £75,000,000 for unemployment, that only brings the total to a little over £130,000,000, so I consider that we are entitled to complain that the working-classes are not being given their fair share out of the revenue of this country.
  When the Chancellor of the Exchequer has money to give away then the working classes have a claim upon him before he repeats the benefits that have been given to the capitalist class. The Chancellor seemed very happy to-night, even more happy, I thought, than he was when in-
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  troducing his Budget. He seems abundantly satisfied with the Budget. I am prepared to admit that after the Budget was delivered it was described generally as "a prosperity Budget." The sun of prosperity may have been shining ore various parts of this country, but it has not been shining on the North of England. In the county of Durham we are no better off for the past Budgets of the Chancellor of the Exchequer or for the four years of National Government. So far as we can judge from what the National Government is proposing to do for the distressed areas, it seems that we shall be no better off when the lifetime of this Government has expired. When the Budget was introduced there was no mention of some things that we find in this Finance Bill. We find in this Bill a further proposal to help capitalists. The Chancellor to-night tried to treat this as if it were a small matter, but to some of us it is an important matter, because it is a new way in which the Chancellor is seeking to help the capitalists of this country. After all is said and done the Government has been a real friend to the capitalists and it has been an enemy to the working classes. Somebody says "No." Well, the Government have taken from the working classes by the means test £15,000,000 or £20,000,000 a year_ The figure of £20,000,000 was given by the late Minister of Labour. The Government have taken this £15,000,000 or £20,000,000 a year from the working classes by the imposition of the means test and have given it to their own friends.
  Mr. BUCHANAN: That is not all.
  Mr. BATEY: I agree with my hon. Friend, but it is sufficient to be going on with. In this Finance Bill the Government are proposing to help capitalists in a new way by making a provision for them to deduct from profits contributions paid towards the rationalisation of industries. We can understand the method of tariffs and quotas, but this way of helping the capitalist is just the limit. Rationalisation may be in the interests of the capitalists, it is certainly not in the interests of the working classes. The Government propose to encourage rationalisation, indeed, they propose to pay the capitalists to pursue it. A few years ago it was like an epidemic, it was a new idea and spread rapidly, but

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  during later years it has been dying down. Now the Government propose to revive it and make it worth the while of employers to carry rationalisation further than it has ever been carried before.
  Generally the policy of employers is to close what they consider redundant works, and in the Bill the Government propose to make it worth their while not only to close redundant works but to eliminate machinery and plant. It is to be left to the employers' organisation to decide what machinery and plant shall be scrapped. We strongly object to that. We claim that the workers should have a voice in any such decision. At the moment they are dumb, but they are the people who have to suffer. In addition we have the amusing spectacle that when it has been decided to eliminate some machinery or plant the employers are to be compensated. There is no compensation for the workers. We also strongly object to that. It seems to me that this new policy of the Government is to increase unemployment. Bad as the Government are, we thought that they did really want to increase employment, but it seems clear that they want to increase unemployment, because if machinery and plant are scrapped the workers will find it extremely difficult to get employment and will be thrown on the scrap heap. Why should the employers' organisation have the sole right to say what machinery and plant shall be scrapped I There is no justice in such a proposal.
  In addition to the question of the elimination of machinery and plant, there is the larger question of the elimination of what are called redundant works. It means that the employers are going to be encouraged not only to scrap machinery but to scrap shipyards or collieries; and again the workers are not to be consulted. This is a most important matter for the working classes. It may be that hundreds and thousands of men, women and children are dependent upon a colliery which it is proposed to scrap. Why should the employers' organisation have the right to close a colliery without any regard to the interests of these men, women and children? But in this rationalisation policy the employers claim not only the right to close a colliery or a shipyard but the right to prevent the
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  re-opening of that shipyard or colliery. Before any such process takes place the Government should hold a public inquiry into Shipbuilding Securities Limited, which was started by the shipowners for the purpose of rationalisation; for the purpose of closing shipyards. Shipbuilding Securities Limited have already close eight shipyards, only five are now working. The Government are encouraging them as though they seem to think that this is not sufficient and that five shipyards working are too many. They seem to say that they will make it worth the while of shipowners to close some of the others. The fact that eight shipyards have been closed and only five are working should have made the Government pause before they encourage any further rationalisation.
  In 1921 there were 358,000 men employed in the shipbuilding industry, now there are only 158,000; a reduction of 200,000 men. The Government, apparently, are going to encourage shipowners to close more shipyards and add more men to the number of the unemployed. Have they ever heard of Jarrow? The shipyard there has been closed by Shipbuilding Securities Limited, and they have prevented its reopening. Efforts have been made by well-intentioned gentleman in the South of England to help Jarrow and reopen the yard, but they have found it extremely difficult, and so far the yard remains closed and is likely to remain closed. If the Government had really thought the question out they would not have put this proposal in the Finance Bill. In the City of London the number of unemployed is 2.3 per cent.; the figures for Jarrow are 75 per cent. In the County of Durham the percentage is 35.
  Mr. BUCHANAN: Does that include Seaham?
  Mr. BATEY: I am giving the figures for the whole of the county; we have some exchanges with 58 per cent. unemployed. I did not take out the figures for Seaham. In my opinion, the experience that we have gained, in seeing shipyards closed by Shipbuilding Securities Limited, ought to have made the Government pause before they proposed to take this step in this Bill. But it does not mean only the closing of shipyards. It means the closing of collieries

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  We have had plenty of them closed, and we do not want the coalowners to be encouraged to close more. It would be interesting to know whether the Financial Secretary noticed last Saturday a most interesting report of the previous day's proceedings before the Railway and Canal Commission. Some of the Yorkshire collieries are appearing before the Commission, and they want amalgamation. I notice from the report that Mr. Justice MacKinnon said:
  "If you shut down a redundant mine and transfer its quota to the efficient mines, it is fairly obvious that would be to the national interest and the advantage of the mines to which it is transferred."
  I am not so sure that it would be to the national interest. If we close down a mine the miners have to be kept, and they are not kept by the coalowners, but by the community, the public. So that in my opinion it is not to the national interest to close down any mine. Then there is the statement:
  "It would be to the advantage of the mines to which it is transferred."
  It would be, or it might be, to the advantage of the mine to which the quota was transferred. But what of the mine from which it was transferred? We hold that the closing of collieries is a big responsibility. Once employers of labour sink a coal mine and bring thousands and thousands of men together and they become dependent on that coal mine, there is a public responsibility resting upon the coal owners that the mine should not be closed. It should not be closed unless it is absolutely worked out. There is another aspect of the question, and that is whether capitalists should get more relief. This Government has done much for them. The question is whether the time has not come when the Government should cease looking after their friends and stop relief to the capitalists. We cannot forget that it was the present Chancellor who passed the 1929 Act, which gave relief from local rates to the capitalists. They were relieved of three-quarters of their local rates. We have had the intervening years of experience to show whether that was beneficial or not. So far as the coal industry is concerned it cannot be said that it did any good.
  Lieut.-Colonel HENEAGE: The industry might have been much worse off without it.
  Mr. BATEY: I do not know that we could be worse off. The coal industry has received no benefit from that scheme. In 1929, when that step was taken, the output of the mines of this country was 258,000,000 tons. To-day it is 220,000,000 tons. In 1929 the men employed numbered 939,367 and in 1934 the total was only 772,831.
  Mr. LAWSON: The figure is now 768,000.
  Mr. BATEY: That makes it worse. Then the wages of the miners are less to-day by ls. ld. per week. Figures given by the Secretary for Mines on 9th May show that in 1929 the average weekly wage of the miner was £2 5s. 6d., and that now it is £2 4s. 5d. That is a reduction of ls. 1d. per week. For the County of Durham a return has just been issued which shows that the average wage is 8s., and the average number of days worked per week in 1934 was 5.05. That is £2 a week as the average weekly wage in Durham. The steps that the Government have been taking are doing no good for the industry. I have been interested in reading a pamphlet called "Planning" issued on 17th March. It is not written by Socialists, but by what I think are advanced Tories. The publication states:
  "Relationships between the State and industry are always changing, but they have rarely, if ever, changed as fast as at present. One of the more conspicuous recent developments has been the rapid growth of subsidies, rebates, loans, guarantees, levies, tariffs, quotas and indirect or direct financial assistance of various kinds. In fact a large section of British industry has become to some extent dependent for its existing equilibrium on one or more of these devices. A great part of them have originated in the past four years."
  In addition to that they state:
  "Manufacturing industry enjoys privileges which (except for the uniform three-quarters exemption from local rates) are so complicated and variable that their value seems impossible to assess.The current total of direct and indirect subsidies, rebates and levies to agriculture alone is, therefore, running to more than £15,000,000 a year, without taking into account substantial tariff and quota protection, and the complete exemption from local rates of agricultural land."
  Then they sum up by asking:
  "How much of the taxpayers' and the consumers' money is being spent directly and indirectly in these ways?
  Mr. LEES-JONES: Will the hon. Member say who is behind that organisation? Is not one of its chiefs an out-and-out Socialist.
  Mr. BATEY: I have to judge "Planning" by the men who write in it. Generally, the writers have been Members belonging to the Government. Hon. Members opposite ought not to run away from the document in that way. They ought to stand by their own. folk. If this Government really want to solve the unemployment problem they must know that they can never do so by steps such as they are taking in this Bill. They will never solve it by giving a free hand to employers of labour to close down any colliery or shipyard, any machinery or plant they care to select. The time has come when even this Government will have to consider very seriously the whole question of machinery. Even some of my own friends may not agree with me on this subject and I wish it to be understood that I am speaking for myself. I believe the time has come when we must face the question of machinery. If the machine is to supplant men and put men out of employment as it is doing to-day, then in my opinion, instead of giving relief to employers we ought to consider whether the machine could not be made to contribute some share towards the maintenance of the men whom it is supplanting.
  I would like to see an inquiry into the question. I have my own doubts whether the use of the machine is, in all cases, worth while and whether the article produced by the machine is really any cheaper, when we reckon in the capital cost of the machine and also the cost of its maintenance. I would like to see an inquiry which would cover the whole question of the installation of machinery, in the interests of the men who are being thrown out of employment. I do not think it is necessary for me to tell the Chancellor of the Exchequer of various ways in which the money at his disposal might have been better spent than in encouraging employers in what is called rationalisation. In my opinion, the working-class people of the distressed areas have an immense prior claim upon any money which the right hon. Gentleman has to spare and their claim ought to be considered, before that 'of the employers. In spite of what the Government have done in the sending of
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  Commissioners to the distressed areas, nothing has been accomplished. We are in the same position to-day as we were in before the Commissioners were sent to those areas. But the Government must recognise that they will have to deal with the distressed areas and will have to find money for the distressed areas. If they ceased giving money to their own friends and devoted it where it is so much needed they would be making a better use of the resources at their disposal.
  8.38 p.m.
  Mr. DINGLE FOOT: The discussion to-day has fallen into two parts, one dealing with what is in the Bill and the other with what is not in the Bill and the amount of discussion under the second head has greatly exceeded that under the first. Before passing to the more general issues which have been raised to-day I would like to break with precedent and address to the Financial Secretary to the Treasury one or two specific questions on particular Clauses of the Bill. First I would like to ask him a question about 'Clause 1 which deals with the reduction in the Entertainments Duty. Sub-section (2) provides that the duty shall cease to be charged on payments not exceeding 6d. Am I right in assuming that that provision applies to all entertainments, including cricket matches and the like, and not merely to stage plays?
  The FINANCIAL SECRETARY to the TREASURY (Mr. Duff Cooper)The FINANCIAL SECRETARY to the TREASURY (Mr. Duff Cooper)indicated assent.
  Mr. FOOT: I understand from the Financial Secretary that that is so and I am grateful for the information because there has been some doubt on this point especially among junior football clubs. Then Sub-section (3) of the Clause applies the lower scale of duty set out in the First Schedule to certain entertainments and in this connection I wish to put in a plea for football and cricket clubs. I have never been able to see why a distinction should be drawn between one form of entertainment and another. It does not seem to me that the man who spends his Saturday afternoon watching a football match as I frequently do, is any worse than the man who spends his Saturday evening in a music hall. I wish to ask whether the Government would consider extending the benefit of this reduced duty to football and cricket matches and athletic and

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  sporting events of all kinds. It is not a question which affects professional clubs only. It also affects a large number of amateur clubs which are not run for profit.
  My next question to the hon. Gentleman relates to Clause 10. It sets out a new way of valuing imported goods for the purpose of ascertaining import duty. Certain methods of valuing goods were laid down in the Import Duties Act of 1932. It was provided there, as it is provided here, that the first criterion was to be the open market value of the goods but a number of other tests could be applied under the 1932 Act. Here the open market value is the only test which is to be applied and on reference to the Second Schedule we find that the relevant part of the Act of 1932, namely Subsections (2) and (3) of Section 15 are being repealed. So far, we have not had any explanation of the proposed change and as it is a matter of some importance to the commercial community I should be grateful if the hon. Gentleman could tell us the reasons for it and also if he would say something as to the effects of Clause 15 which deals with the power to require the production of documents relating to imported goods.
  I am not going deeply into that question but it appears to me that this Clause gives considerable powers to customs officials—powers of search, powers of examination and powers to call for books and to require information. I think the powers here conferred are more considerable than any that have been conferred in any previous measure on customs officials and some explanation ought to be given to the House. I know that we live in times of perpetual encroachments by the Executive when more and more power is being given to Government Departments and officials of all kinds. But when a provision of this kind is inserted in an important Measure like the Finance Bill the House is entitled to know why these additional powers are considered necessary.
  During a very wide discussion to-day hon. Members have raised a variety of topics and great difference of opinion has been shown as to the state of the country at the present time. Hon. Members above the Gangway have pointed out that the recovery to which so many references have been made is only partial—that it only applies to certain parts of
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  the country. I think it is true that the recovery, such as it has been, has chiefly affected those parts that were least in need of it. The Chancellor of the Exchequer, speaking on the Budget Resolutions, referred to 80 per cent. prosperity. It is the case—and there is no use in trying to gloss over the figures—that last month there was a very substantial fall in the unemployment figures of over 100,000 as compared with the figures of 12 months previously. Members in all parts of the House rejoice that there should have been that reduction, but even if that rate of progress were maintained, it would take us practically 10 years to get back to the unemployment figures of 1929.
  When we are told of the fall in the unemployment figures, it is relevant to take into account the other side of the picture—the Poor Law figures, in which there has been a considerable increase between 1931 and the present year. I put some questions the other day to the Minister of Health and the Secretary of State for Scotland to find out what had been the increase in the Poor Law figures in the last four years. I was told that in England and Wales the number in April, 1931, was 1,022,000, and on the corresponding date this year 1,333,000, an increase of something like one-third. That is the figure of applicants and dependents as well. In Scotland there has been a much steeper rate of increase. The total figures of applicants and dependents in April, 1931, was 188,000. The com
  parable figures for April of this year is 354,000. If my arithmetic be correct, that makes an increase for the four years in the number of people receiving Poor Law relief in England and Wales of 30 per cent., and in Scotland of 88 per cent. Hon. Members above the Gangway are justified when they say that such recovery as there has been has been of a very partial and limited character. My hon. Friend the Member for Orkney and Shetland (Sir R. Hamilton) drew attention to the unemployment figures and was rebuked by the Chancellor for uttering platitudes. If we look at the state of the country, in spite of the recent improvement, and when we look at what is happening in the depressed areas, I prefer the platitudes of my hon. Friend to the beatitudes of the Chancellor of the Exchequer. The right hon. Gentleman, in speaking of the Finance Bill last

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  year, used these words in describing the policy of the Government:
  "I can claim that we have done, and are still doing, all that I believe any Government can do to assist in the stimulation of trade, and in that alone is to be found the real solution of our problem." —[0FFICAL REPORT, 16th May, 1934; col. 1833, Vol. 289.]
  The words to which I wish to call attention are "assist in the stimulation of trade." If that were a correct description of the policy of the Government, we on these benches would certainly feel much more friendly towards the Government than we do, but can it be said that the various measures which they have taken during, say, the last 12 months are measures designed to stimulate the recovery of trade? For instance, when they imposed their veto on the Red Star project and boats were allowed to be handed over to Germany to employ German seamen, was that a contribution to the stimulation of trade in this country? In this Bill they impose a tax on soya beans. We had the testimony a few days ago of various agricultural Members that there was no real substitute for soya beans. When a tax is placed on one of the raw materials of agriculture, is that a contribution to a stimulation of trade In an interesting speech to-day my right hon. Friend the Member for South Molton (Mr. Lambert) gave a long catalogue of the various raw materials of the agricultural industry upon which a tariff had been placed by the present Government. We were given to understand by the Chancellor that the consumer really only paid a small part of the import duties, but that evidently was not the opinion of my right hon. Friend the Member for South Molton, because he made the most bitter complaint of the burdens that have been placed on agriculture, which have had no corresponding tariff on the things that they had to sell. We remember also that the Government introduced the Agricultural Marketing Act of 1933, which contained the obnoxious principle of quantitative limitation of output. It is a misnomer to describe the policy of the Government as assisting in the stimulation of trade.
  In the view of the party on these benches, there are three ways in which the Government could in fact stimulate the recovery of trade. First, we believe it could be done by taking every possible
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  opportunity of restoring world trade and thereby restoring our overseas markets. Again, no doubt, we shall be accused of uttering platitudes, but we think there are a number of platitudes that ought to be constantly uttered in this House because the truth of them is not realised on the Treasury Bench or by hon. Members opposite. There has been lately a perfect avalanche of testimony to the effect that without a recovery of world trade there can be no permanent or real prosperity in this country. There was the quotation that was given earlier in the Debate by my hon. Friend the Member for Orkney and Shetland, who referred to the words used by Sir Percy Bates at the annual meeting of the Cunard Steamship Company. If I may remind the House of another famous quotation, there was the opinion given in the report of the Commissioner of the depressed areas for Scotland who said:
  "It is perhaps a platitude to say that world conditions are chiefly responsible for the position of affairs in Glasgow, and the long-term view is that reduction in tariffs and other hindrances to international trade would go far to remedy matters, and posibly that is the only real solution."
  There is an even more remarkable observation made by the President of the Board of Trade a few days ago, when he used these words in a speech reported in the "Times" of the 2nd May:
  "We, of course, realised that trade was not only mutual but also triangular and even multi-angular. It could, therefore, be fully balanced between individual countries. The purchasing power of many others of our customers outside Europe was dew-Indent on European markets, which could only be maintained if we admitted the goods of those markets."
  I have no doubt that if that had been said by my hon. Friend the Member for Orkney and Shetland, or if I had said it in this Debate, we should have been accused by the Chancellor of uttering platitudes. Whenever we raise this question we are referred to the trade agreements, and we are told how much has been done by means of the Government's trade agreements to free the channels of trade. I made an estimate some time ago in the House, and put it to the Secretary to the Overseas Trade Department on two occasions in debate, and he has never denied it. It was that even when you get the full effect of the trade agreements with foreign countries even

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  if we reckon the maximum increase of trade which can be extracted from those agreements, the maximum cannot be more than £14,000,000 increase. I am not suggesting that that amount is worthless, but surely it is a tiny contribution when we compare it with the enormous loss in our export trade that this country has suffered as compared with 1929.
  These trade agreements—and I am not criticising them as far as they go—have been made with countries who have come to us. I do not think it is a very wonderful performance because some of those countries, such as Denmark and the Scandinavian and Baltic countries, were so dependent on the British market that they practically had to take any terms that we chose to offer. Be that as it we have dealt with those countries which have come to us. Perhaps the Financial Secretary will be able to say how many countries we ourselves have approached in order to make trade agreements. Why is it—and I have never yet been able to get an answer to this question—that although more than 12 months ago. President Roosevelt took powers from Congress to reduce tariffs by 50 per cent. in making trade agreements that the British Government have made no attempt to avail themselves of that opportunity to reach a trade agreement with the United States of America? There is one of the greatest markets in the world, bigger than that of all the Baltic and Scandinavian countries put together, a market with more than 100,000,000 people with a high standard of living and, consequently, a very high purchasing power, and the executive takes power to reduce tariffs in order to make trade arrangements. Yet the British Government make no endeavour to avail themselves of that opportunity. Perhaps we may get some information as to why this chance has SO far been lost.
  Major MILNER: But would a defaulting debtor like the British Government get a second chance?
  Mr. FOOT: I think it is questionable whether we are regarded as a defaulting debtor, but, even if that were so, we are not peculiar in that respect as against the United States. If they were to refuse to make trade agreements with every country that had not paid its debts they would be confined to a trade agree-
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  ment with Finland. The second method which we believe could be adopted with advantage is that the Government might do rather more than they have to facilitate the re-equipment of British industry. I agree with the remarks uttered earlier in the Debate by the hon. and gallant Member for South Leicester (Captain Waterhouse). We are rather disappointed that the Government have not found it possible to be rather more generous in their wear and tear and obsolescence allowances. I think there is a growing opinion in this country that our present system is entirely unsuited to modern needs. In the 19th century plant and machinery lasted very much longer than they do now, they were a much more long lived asset, and industry depended a great deal more on skilled labour than at the present time. Everybody knows that the life of a machine is nowadays very much shorter than it was 50 years ago. Under our present system there is a wear and tear allowance each year, which is a matter of arrangement, and then, when the life of the machine comes to an end, and when it is given up, it is followed by an obsolescence allowance which is only payable, as every one knows, if the machine is, in fact, replaced.
  Those are two respects in which our system compares very unfavourably with that prevailing in some other countries. Firstly, the wear and tear allowance is very much less generous than that which is given in most European countries. I cited figures on this matter some time ago, and I hope hon. Members will forgive me if I repeat them. There is no fixed rate of wear and tear allowance in this country, but the average would be about 7½ per cent., arid in the Budget of 1932 an extra 10 per cent. on that was given, bringing it up to 8¼ per cent. on the declining value. France, Belgium and Italy each give 10 per cent. on the original value. Germany gives 20 per cent. in the first year, and afterwards 8 per cent. on the declining value; and I am told that within the last 12 months a special arrangement has been made in Germany with regard to loose tools and accessories so that the whole value of them can be written off in a single 12 months. Those figures are sufficient to show the enormous difference between the allowances made in Continental countries and the allowances made here.

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  With regard to obsolescence, the chief weakness has always seemed to be that unless the machine is actually replaced no obsolescence allowance is given at all. Very often it is a matter of dispute between the Inland Revenue authorities and the industrialist concerned as to whether one machine is really a replacement of another. Would it not be possible for the Government to consider the adoption of a system which prevails in a good many other countries whereby the allowance is made when the life of the machine comes to an end, whether or not it is replaced? That system prevails in Australia and, I think, in some of the other British Dominions. It may happen that plant or machinery is needed in these days in order to manufacture some specified article, and if that is so its use would naturally end when the article is made, and the plant or machinery is then left on the manufacturer's hands. He does not require to replace the machine, but is quite unable to get any advantage under the obsolescence allowance scheme.
  There are a good many people who share the views of the hon. Member for Spennymoor (Mr. Batey) when he denounced the effects of rationalisation and new machinery. I do not believe that is historically true. I think, taking it over a longer period, that it is almost always true that in the long run new machinery tends to find fresh markets, and to create further employment, and though I have not the figures to bear out this statement, if we were to take things over the last few years in this country, from 1931 to 1935, we should find that some of the industries which have been most ready to introduce new machinery are those which have been able to lead recovery in this country.
  Thirdly, we believe the Government should be ready to adopt a far bolder policy of national development. We are told that this was tried in the last Parliament. I am rather doubtful whether a policy which can be described as national development ever was adopted in this country. What was adopted in the last Parliament was a system of glorified local development, a writing-round to the local authorities to ask whether they could not find some useful or desirable work which they would like done. It does not seem to be anybody's business at the present time
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  to survey all the various projects that are put forward from a national or regional point of view. Like some other Members in the East of Scotland, I have been concerned in putting forward particular projects, the work of building road bridges over the Forth and the Tay, and other Members have no doubt put forward other projects in their districts. It all depends on how effectively one can pluck at the robe of the Minister of Transport, who has all the local authorities on his doorstep endeavouring to attract his attention. It all depends, in the first place, on the initiative of the local authority. Surely there must be a great many schemes which have not only a local but a regional and a national value, and it should not be left to one or two local authorities to determine whether or not those particular schemes should 'be carried out.
  In conclusion, I think the Chancellor of the Exchequer summed up the policy of the Government with regard to trade and unemployment the other day when he said, "Our policy is to go on as we have been doing." There are a great many people in all parts of this House who think we ought not to wait upon a trade revival, which is the policy indicated in, that statement, but that we ought to and can take active steps to bring it about.
  9.5 p.m.
  Sir A. SHIRLEY BENN: I should like, first of all, to say something about what the Chancellor of the Exchequer has done for us. Those who are engaged in carrying on the industries of the country must congratulate him on the position of the national finances. He has restored confidence, and I hope that we shall receive more and more of those benefits day by day, because our trade depends upon confidence. Manufacturers and traders are some of the largest contributors to the national revenue. There is no question that if trade is bad the conditions at home, not only for employment but for revenue, are also bad.
  As representing a large industrial centre, I know that any concessions which the Chancellor may make to trade and business will be appreciated. There is a feeling, as the hon. Member for Dundee (Mr. Dingle Foot) said a few moments ago, that more encouragement ought to

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  be given to manufacturers and producers by way of allowances and reliefs of Income Tax. The Income Tax system of this country is rather ancient, as it is over a century old, and it is not perfectly adapted to modern conditions. One of the results of the war was that countries whom we had never considered as competitors in world markets went in for manufacturing on their own account, bought plant and began to provide the goods needed in their own countries. Such goods are today competing with our own in the markets of the world. Modern machinery in the foreign factories enables those competitors to compete very seriously with us in almost everything that we export. I have no doubt that hon. Members will agree with me when I say that we should do everything we can to increase the production of our mills and our factories in order to manufacture at a reasonable price and find work for our people. That effort will be made by all of us. If there is up-to-date machinery in our factories we can compete with anybody, but if there is obsolete machinery we cannot do so.
  Several of our industries have been reorganised, and, as a result, production has been increased, profits have been good and prices have not gone up but have remained reasonable. Some of us were disappointed that the Budget contained no reference to obsolescent machinery on the lines recommended by the Royal Commission on Income Tax. In a modern factory the plant must be maintained in the highest degree of efficiency if the products are to be of first quality and reasonable in price. There must, therefore, be ruthless scrapping of plant, not only on account of age, but when it is obsolescent compared with modern machinery hope that the Chancellor will be able to afford adequate relief in that direction. I suggest that where modern machinery has been installed to enable production to be maintained, the cost of the plant should be charged against the profits earned during the life of the plant. The cost to the Exchequer of a revision of the law in that respect would be small, but the encouragement which it would give to expenditure of capital upon the re-equipment and modernisation of plant would be great, and it would have a good effect upon the problem of unemployment. I hope that the Chancellor will
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  see his way to render some assistance in this matter.
  The hon. Member for' Dundee spoke about the Norwegian, Swedish and Danish markets. I was in Scandinavia a few months ago. Before we arranged our trade agreements with those countries they burnt inferior coal, but now that the trade agreements have been made, we have a coal trade in the Scandinavian markets. The hon. Gentleman also spoke about a trade agreement with America. I know America well, and I should like very much to see a trade agreement between the two countries. But in what commodities could we have transactions with America? We buy wheat and cotton and we are quite prepared to buy what we cannot get more cheaply from other places; but what can America take of ours? I have had to send stuff to America in the old days, but to-day there is little room for selling there except at a loss. The Americans can produce in very large quantities all that they need. They have an enormously rich country. Their President is a man of energy, ability, courage and honesty. We do not know how he is going to come through, but we hope that he will bring his country back into a position as one of the great trading countries of the world, and one with which we shall be able to make trade agreements.
  9.14 p.m.
  Major MILNER: The hon. Member for the Park Division of Sheffield (Sir A. Shirley Benn) seemed to think that all that was necessary to produce 100 per cent. prosperity in this country was for manufacturers to have up-to-date machinery. I should not have thought there was a great deal of difficulty in obtaining that, in view of the amount of money in the banks and of engineering knowledge in the country, as well as the great influence which, one knows, the hon. Gentleman and his friends have in the councils of the Government. The mere introduction of up-to-date machinery, however desirable in itself, will not bring prosperity to the 2,000,0001 or so unemployed people of this country, although it may conceivably bring larger profits to the pockets of the owners of the machinery. I do not, however, propose to follow the hon. Gentleman in all that he said.

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  I want to deal with one matter in the Budget which affects my constituency to some extent, and in which possibly I may have the sympathy of the hon. Gentleman who has just spoken. I refer to the withdrawal of the rebate on heavy oil used for Diesel engines. That impost has, I think, been received with something akin to consternation by manufacturers of Diesel engines used for road transport work, and by their employes. In the first place, it is unquestionable that the withdrawal of the rebate and the substantial increase of the tax on heavy oil used for this purpose has already resulted in a falling off, if not a complete cessation, of the orders coming to engineering works which manufacture engines of that type, and I have little hesitation in saying that, if the Chancellor persists in increasing the duty, very considerable unemployment will be caused in a number of towns in this country, and not least in my own City of Leeds, where a very 'promising industry has, if not fully established, advanced very far technically, and only needs a little further advantage to enable it to reap the full fruits of the money, work and energy which have been put into the business in the last three or four years.
  We have the Chancellor of the Exchequer and other Members of the Government handing out money to the beet sugar industry, the shipbuilding industry, and so on, in order to keep these industries on their feet. In these cases it is not so much a matter of establishing new industries as of keeping existing industries on their feet. The manufacture of Diesel engines is, however, an infant industry which has hardly had time to find its feet, and yet, before even the money expanded on research, development and so on has been in any way recouped, the Government come 'along in this Budget and strangle that infant practically at its birth. The reasons given by the Chancellor in his Budget speech were, in substance, two. In the first place, he stated that, if the taxation on oil used in Diesel engines were not made equivalent to the taxation on the petrol used in. petrol engines, his revenue would be endangered. In reply to that statement I would point out that the Chancellor himself, a few Minutes previously in his Budget speech, indicated that, so far from his revenue
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  from the Oil Duty being endangered, he was budgeting for an increased revenue from that source of something like £1,000,000. Therefore, it is obviously not correct to say that, if an alteration were not made in the taxation on the oil used in Diesel engines, the revenue would be endangered. His second argument was that the Diesel engine would still have an appreciable advantage over the petrol engine. I would ask the Financial Secretary to be so good as to look into this matter, because I feel confident, from information in my possession, that the Chancellor is wrongly informed in that respect. It is true that the petrol engine road vehicle and the Diesel engine road vehicle are now taxed on approximately the same basis, but that is not the point. The point is that the Diesel engine industry, in its present state of development, is not able to stand the same taxation as the petrol vehicle, and I will indicate to the Financial Secretary how that comes about.
  In the first place, considerable funds have been expended on research and development. I know of one firm alone in this country—and I may say that, apart from having the industry in my constituency, I have no personal interest in it in any shape or form—has expended some hundreds of thousands of pounds in research and development, and has not so far been recouped to the extent of a single penny of that money. Therefore, until some opportunity has been given to the industry to recover some of the money which has been expended in that way, it is not fair to place this additional tax upon it. That state of affairs does not exist in the petrol engine industry, which has now been going for some 20 or 30 years, and has had ample opportunity to get back at any rate the capital which has been laid out. Petrol engine methods of manufacture have remained constant for many years, and there are in that industry no heavy development charges such as there are in the case of the Diesel engine. The Diesel engine, though highly developed technically in this country, is still costing very large sums for development and improvement, and it is admitted on all hands that that engine, technically, has not reached anything like finality.
  Another reason why it is not true to say, as the Chancellor did say, that the Diesel engine vehicle will, under these

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  proposals, have an advantage over the petrol engine, is that the cost of the Diesel engine is appreciably higher than that of the petrol engine. For example, the crank-shaft of a Diesel engine costs exactly double as much as that of a similar petrol engine, while the fuel injection pump on a Diesel engine is something like £20 dearer than the carburettor and coil ignition apparatus used in lieu thereof on a petrol engine. There are other reasons which I could give, if time permitted, to indicate how the capital cost of a Diesel engine considerably exceeds that of a petrol engine. I repeat in the presence of the Chancellor of the Exchequer, who is now in his place, that it is not true to say that the Diesel engine still has an advantage over the petrol engine.
  Another point is that the manufacturers of Diesel engines have been building up during the last two or three years a rather new line of road transport vehicles so far as Diesel engines are concerned. Hitherto, Diesel engines have been used largely in very heavy vehicles, but recently, by research and development carried out at considerable cost, a business has been developed in the manufacture of Diesel engine vehicles capable of carrying two or three tons weight. Those vehicles are very suitable for competing with the imported vehicles made by the General Motors Corporation and others in America, which, as one knows, are supplied at comparatively small cost in this country. The capital cost of a Diesel engine vehicle is much greater, and therefore no user of road vehicles will purchase a Diesel engine vehicle capable of carrying two or three tons when its capital cost is of necessity higher than that of the petrol engine vehicle, merely because there is no saving in running under load in such a light weight vehicle as that. There is a very small saving, I believe, on the heavier Diesel engine vehicle, but there is no saving on the smaller vehicle and, the capital cost having been greater, the result of that has been that to all intents and purposes the two or three Conner using a Diesel engine is dead in this country. This is a particular industry which is likely to have, when fully developed, a great export trade, and it is difficult to understand why the Chancellor in the period of development and research in this industry should put on this tax which, as I say, will to all intents
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  and purposes prevent these vehicles being made or being sold in the future.
  I am informed that there has been little, if any, consultation with those who are fully aware of the differences between the petrol and the Diesel engine vehicles, and, indeed, very little if any consultation with the trade on the matter of this additional duty. I should like to ask the Chancellor whether he has had or is about to have consultations with those in the industry, because if he is to consult with them I feel confident that, if he makes a fair and independent examination of the merits of the whole matter and if he remembers that he said that his revenue would be endangered if he did not increase this tax, whereas he has budgeted for his revenue going up apart from this tax, and if he finds out, as I feel confident that he will do, that the Diesel engine has not now the advantage which he thought it had over the petrol engine vehicle, he may find it possible even at this late stage to do away with or modify in some form this particular tax. It is surprising that the Chancellor, expressing as he did in his Budget speech a desire to stimulate British trade, should at this stage, before this particular industry has really got on its feet, seek to destroy it, as in effect I am assured he is likely to do, by insistence on this increased oil duty. I very much hope that even at this late hour, in view of the unemployment which is likely to be caused, the loss to the industry and the fact that it is a new industry which has not had time to justify itself fully, he may think it right to modify or adjust the tax.
  9.29 p.m.
  Mr. HALES: This is one of the rare occasions that we business men have of putting our views before the Chancellor of the Exchequer, and I very much appreciate the opportunity given me to-night of saying a few things the reply to which, I have no doubt, will clear not only the doubts in my mind but in the minds of thousands of our fellow countrymen in the industrial centres. We hear so much to-day of all sorts of experiments and expedients for improving trade and reducing unemployment, and of new deals across the Atlantic which attempt by an artificial prosperity to bring about a better state of things, but which in themselves are doomed to failure because

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  they neglect the fundamental principle of supply and demand. But I would like to ask the Chancellor, who is so intimately and closely connected with the industries of the Midlands, has he not in his hands the Aladdin's lamp which will open the cave of prosperity by the simple process of rubbing And I want to ask him to-night to rub that Aladdin's lamp and bring about prosperity in the manner which, with all deference and respect, I will put before him.
  This afternoon, in reply to my question on the tremendous increase of imports of American cars into this country, he made a reply which, I think, he knows does not answer my question. He says that he does not think that the importations of cars affect our industry seriously, as they are still very small in comparison with the output of British cars. Let us look at it. The excess of cars brought in represents a small army of 8,642 men rendered permanently out of employment through this importation of cars, which we could make equally well in this country. The importation of one article, be it ever so small, is one factor in causing unemployment, and is that small leak which tends to widen and bring about the destruction of one of our few industries which are showing a good return. Imagine this army of 8,642 men, four deep, marching through the Strand with banners saying, "We are out of employment because you will not protect our industry." That would not be received with equanimity. It would be the talk of the country; every paper would have large placards and headings: "The Cause of Unemployment." Surely it needs no great stretch of imagination to say that we will not import into this country articles which we can make for ourselves until other countries appreciate the position and buy goods from us equal to what we purchase from them. Taking the motor industry as an example, which is only one of many others, there is the possibility, and the probability, and I will go as far as to say the certainty, of putting half a million more men into employment in the next few months if we will adopt the policy of protecting industry by keeping out goods which we can make ourselves.
  The matter causes the average business man and the man-in-the-street to be in a
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  state of bewilderment as to why this obvious cure of this great problem of unemployment is not applied immediately. There may be reasons concerned with our pacts with foreign countries which prevent immediate alterations of duties which now exist. The McKenna Duties of 33 per cent. have been in existence for a considerable number of years, and have hitherto been adequate for their purpose. But a change comes over the situation. America goes off the Gold Standard and then in the last budget the horse-power tax is reduced with the obvious intention of enabling us to supply foreign countries with what they require. The Budget had the opposite effect. It allowed American cars to come here at reduced taxation, and nullified the very benefits which the Budget was supposed to have produced.
  The position is serious. We cannot afford to disregard it. It is undermining our trade, and other countries are now resorting to means of preventing this importation above the normal. In Java Japanese competition threatened to overwhelm the whole country. How did they deal with it? They could not make a direct attack on a particular country, but they did a very wise thing. They introduced a quota to date back from the year 1930, when the Japanese competition was very small. On that basis the present quota prevents the Japanese from proceeding on their onward march, and it has caused consternation among the manufacturers in Osaka and Tokio. We have to face this problem. There is no evading it. The Chancellor of the Exchequer will be confronted in the very near future with the need for a tremendous augmentation of our revenue in order to protect us. Here is an opportunity for him without always having to look elsewhere for a remedy. I hope that if he cannot see my point of view and adopt my suggestion, he will, at any rate, give the reasons why these simple expedients cannot be introduced, when the whole country is saying, "Why do you not protect us with the machinery at your disposal?
  One wonders why there has been no reduction of the death duties. When one realises how some of our greatest industries are seriously jeopardised if there should be two deaths in a family within a few years, it makes one think

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  that we are killing the goose which lays the golden eggs, and draining away the lifeblood of our industries. I endeavour as far as possible to avoid bias, but speaking as a business man—and I pride myself upon being a business man rather than a politician—we have sooner or later to face the problem, and to protect our industries from unfair competition, which like a tidal wave from the East is sweeping along. I see it because I go out to these places, but you will not realise it until a little later when the effects are felt in our own market. We are being cut out of all our foreign markets. Slowly but surely, by degrees, our trade is going. If we cannot find new markets, we must, at any rate, protect our own. I ask the Chancellor of the Exchequer to give his earnest attention to the obvious remedy which can save us, when we are faced with a world opposition and a serious state of affairs on the Continent such as we have never been confronted with in our generation.
  9.39 p.m.
  Mr. McCORQUODALE: I wish to add my word of congratulation to the Chancellor of the Exchequer on his exemplary and exceedingly dull Budget. The dullness of it is evident by what I might call the lack of ammunition which the Opposition can find to shoot at the Chancellor of the Exchequer. That same reason bears out the excellence of it. I do not think that there is any complaint from any side of the House really against the Budget which the Chancellor of the Exchequer has produced. I listened with interest to the speech of the spokesman of the Liberal party, the hon. Member for Orkney and Shetland (Sir II. Hamilton). He wound up with the remarkable suggestion to the Chancellor of the Exchequer that he must take a step forward in the right direction, but Unfortunately he did not stop to tell us which was the right direction. The right hon. Gentleman the Member for South Molton (Mr. Lambert) was led to remark that he had no faith whatever in Whitehall, but he went on to make a remark which, I hope, the Postmaster-General, who has been mocked at for becoming the propaganda Minister of the Government, will take to heart. He said—and it is very true—that confidence is the mother of enterprise, and that without enterprise there is no employment. That
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  is the banner under which we can fight and win the next election.
  I would ask the Chancellor of the Exchequer two questions on the Finance Bill. He has removed—and we are very glad of it—the tax on cinematograph seats under 6d. Has he a definite assurance from the trade that the tax remission will be passed on to the general public? I am pleased to see that the Chancellor of the Exchequer agrees with me. I dislike his raid on the Road Fund. I would much rather that he would abolish the Road Fund altogether. It is surely an, anachronism that we should have this special taxation of one kind for one specific object. All the taxation in the ideal State should go into the common pool and be used as it is required by the State, and not for one specific object. I hope that next year he will abolish the Road Fund and absorb the money into the general Exchequer, and pay it out where it is required.
  The Exchange Equalisation Fund, I believe, already amounts to something like £350,000,000. Does it pay any interest on that money? If it does not, why not? We hear many guesses as to how much profit the Exchange Equalisation Account has made. Some people put it, I am told, as high as £70,000,000, and others at more modest figures, but I have never heard anyone suggest that those who are operating the Exchange Account have made a loss. It is confidently stated in the City that the operators from this end have managed to secure a large proportion of the money which the United States put up for their equalisation fund. If that is so —and we all hope it is—then surely the Equalisation Account should pay at least 3 per cent. per annum to the Treasury for the loan of the money it has borrowed? That would bring in some £9,000,000 or 10,090,000 of useful money to the Chancellor of the Exchequer. He need not then raid the Road Fund, and he would have a little extra money which is so badly needed at the present time. I do not expect to get an answer as to how much profit has been made by the Exchange Equalisation Account, but I should like to know if anything in the way of interest is charged by the Treasury.
  We have heard to-day a good deal about the new deal of the right hon. Gentleman the Member for Carnarvon

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  Boroughs (Mr. Lloyd George), and a certain amount about public works, but it seems to be forgotten by many speakers that the Government have engaged in the last three years in one of the largest schemes of public works that any government has ever undertaken in their housing scheme, their slum clearance programme, and now their overcrowding proposals. They are making a definite and constructive effort in public works in encouraging public expenditure by local authorities in respect of housing and have made a very large inroad into unemployment in the building trade. I think that what other public works will be necessary for dealing with unemployment should be of local and not national character and should be designed to attack unemployment in the distressed areas rather than great national schemes which we understand the right hon. Gentleman for Carnarvon Boroughs is putting forward.
  Apart from public works and sound policy the methods for tackling the unemployment problem in this country are those which we understand are going on in the conversations between the Minister of Labour and industry as to the shortening of hours, schemes for raising the school-leaving age, which are supported by a great number of Members on all sides, and schemes for taking the old people out of industry by means of pensions. On those three lines I believe that the unemployment problem of the future will be solved. I should like to end as I begun by congratulating the Chancellor of the Exchequer not only on his Budget but on the financial policy which the Government and he have directed. When the history of the great recovery of Britain from the depths of 1931 is written, the chief praise will be given to the Chancellor of the Exchequer and the Treasury for the financial policy which they have steadfastly pursued and which has brought us so well on our way towards prosperity.
  9.48 p.m.
  Mr. CLEARY: I want to raise two points of importance which affect the City of Liverpool and my constituency in particular, the duty on the soya bean and the duty on rice in the husk. With regard to the first matter, it has been represented to me that the experiments to grow a crop of soya beans in Europe
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  have failed and that we are therefore dependent upon foreign imports. I should like to suggest on behalf of the various interests in the City of Liverpool who are affected from different points of view that a duty of this character which affects them and is causing in some industries grave unemployment should have come to the Import Duties Advisory Committee rather than be sprung upon the various interests in the City of Liverpool and the country generally, who feel that if it had come from that source they would have been able to make their representations in a proper manner.
  With regard to the second point, the duty on rice in the husk, it is felt in Liverpool that some hundreds and perhaps thousands of people will be thrown out of work because of this new duty. This is not the time to argue the point at great length but I am given to understand that certain representations have been made either in writing or by deputation to the Board of Trade or the Chancellor of the Exchequer. If my information is correct on that point, I should like to know the nature of the representations and the reply that can be made from the Government Bench. It was only these two points in the interests of the City of Liverpool that I wished to raise.
  9.50 p.m.
  Sir STAFFORD CRIPPS: The Chancellor of the Exchequer, in a charmingly humourous and light-hearted speech, said that he did not wonder at the fact that we were in difficulty as regards our opposition to this Budget, and therefore he had no difficulty in answering our opposition. I should like to hand the torch back. The right hon. Gentleman has really created the difficulty by producing what one of his followers has just described as an extremely dull Budget, quite un-creative, in fact a typically Conservative election Budget, one which attempts by various means, which might bring some people to the Old Bailey, to collect a surplus and then to spread it thinly over as large a proportion of the population as possible, in order that they may be deluded into the belief that the Government are doing something for them. The Chancellor of the Exchequer is, as usual, put into the unfortunate but rather comic situation of always trying to point out his failures as a reason why he ought to be congratulated. We all

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  remember that the Government announced their strong determination to remain on the Gold Standard, but they turned round a few days later and asked for applause because they had gone off the Gold Standard. In the same way they have had an avowed policy for some years of raising prices, somehow or other, and to-day the Chancellor of the Exchequer said: "Look how clever I have been. The cost of living has not risen, and because prices have not risen and my policy has failed you ought to congratulate me upon it.
  He is always urging that it is extremely desirable to get private industries to take up capital in the market and make use of it. The failure of that programme is marked by the low rate of interest which money commands at the present time. Therefore, the Chancellor of the Exchequer turns round once more and says: "Look how marvellous I am. The interest charge on the National Debt is remarkably low. My policy of getting private industry to take up capital has completely failed and therefore the rates of money have fallen to ridiculously low depths." It is a great advantage when one can always bring forward one's failures as reasons for applause and congratulation. I said that the Chancellor of the Exchequer had scraped together a fortuitous surplus in order that he might dress his window with these little packets of sweets which he proposes to distribute largely through the propaganda Minister at the time of the election. How fortuitous the surplus is one may see from an examination of what he has done.
  First of all, there is no provision in the Budget for the payment of foreign indebtedness. I do not take the view that either he or any other Chancellor of the Exchequer is ever likely to pay the American debt, but I am bound to say that when I was in America a few weeks ago and the Chancellor of the Exchequer's Budget speech came through Americans had considerable pleasure in drawing my attention to the fact that the Chancellor of the Exchequer would soon be well enough off to resume the payment of the American debt, and that the cheerful atmosphere which he was creating in this country was likely to be reflected in their own hearts as soon as they saw the gold. By so doing the right hon. Gentleman has put himself in an advantageous position compared with the Chan-
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  cellor of the Exchequer in previous Governments. He has not been loaded with the payment of £40,000,000 or £50,000,000 a year which other Chancellors of the Exchequer had to meet before they balanced their Budget. To that extent he is able either to give remissions or to increase expenditure. He is continuing to make no provision for the payment of the statutory sinking fund which he has done on former occasions by taking powers to borrow in order to meet the payments if necessary. Again, I should have thought, a thoroughly unsound form of finance for so orthodox a financier as the Chancellor of the Exchequer. Of course a disreputable Socialist might be able to do that sort of thing and be excused, but the Chancellor of the Exchequer surely not.
  Then he makes a raid on the Road Fund. Raids are also all right for disreputable Chancellors of the Exchequer, but one also has to recollect that raids are generally non-recurring items of revenue, and when you set off against a casual raid a recurring concession, it does not seem to be a very sound basis of finance. I do not think there is any harm in an unbalanced Budget if it is desirable or wise for the country to have it, but I do think it is better to be honest about it wihen it is not balanced, and instead of making great professions of financial rectitude and orthodoxy, just to say, "I am not going to balance the Budget." But the Chancellor of the Exchequer does not balance it, and then makes the profession, and for that we venture to criticise him if we may criticise anyone who is so obviously right-minded financially. Those concessions which have been made we naturally welcome, as anybody always welcomes any concession.
  If the Chancellor of the Exchequer would continue in his principle—the only principle, apparently, which he has as regards the Budget, that is, to try to get back to the pre-1931 position as soon as possible, no doubt if he is still there next year we shall be welcoming the remission of the means test and other matters which still have to be put back in order to reach the levl of 1931. But there remain, over and above any concessions that have been made in this Budget, certain burdens which have been imposed since 1931, and which this Bill, as we say in the Motion which I am supporting, does nothing to relieve. I am

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  not going to enter into the details of the Income Tax concessions. That is a matter which may be dealt with better on the Committee stage. I do not desire to call attention to the growing injustice as regards the incidence of direct and indirect taxation. The Chancellor of the Exchequer told us this evening that it was now purely an academic question. I do not follow why, and I wonder if he really thinks that the direct taxpayer thinks it a purely academic question that £290,000,000 should be raised by indirect taxation. If one were to say, "We will not have any more indirect taxation. We will put the £290,000,000 on the direct taxpayer," does the Chancellor of the Exchequer suggest that would be looked upon as a purely academic question? I suggest that some of the Gentlemen on the Government Benches would tell him something different. They would say it was a very important matter, and a matter of profound principle as to this enormous increase in the load of direct taxation. The Chancellor of the Exchequer might just as well say what is the fact—that it is the policy of this Government to take as great a load as is practicable off the profits of industry and put it on the consumer.
  Mr. REMER: On the foreigners.
  Sir S. CRIPPS: The foreigner does not pay the wheat, the sugar beet, the beef, the milk or the bacon subsidies. Those are all revised in forwarding a policy to reduce the profit fund in order that the consumer can make a greater contribution, and whether it is done through direct or indirect taxation, or some other method, does not make any difference in carrying out the theory of the relief of the profit owner, but it does make that theory of relief a very profound difference, especially to the poorer consumer. It is no good the Chancellor of the Exchequer saying that the poorer consumer is not hit in the same way now that there is a general tariff as he was in the days when there were only a few articles taxed. If you add the subsidies, which are, of course, in a manner indirect taxation, to the tariffs, he is hit very much harder now than ever he was under any taxation, which is shown by the amount of taxation which is being raised on foodstuffs at the present time compared with what it was in the pre-
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  tariff period, leaving out of account the taxation of luxury articles or manufactured articles of all kinds. This large and growing sum which is being distributed indiscriminately among farmers, shipbuilders and others quite regardless of their needs is an added burden which is not shown in the Bill at all. It is to be added to the increased percentage of indirect taxation of which figures have been given this afternoon, and all this incidence has been gradually piling up the weight upon the shoulders of those who are less able to bear it, and for the purpose of relieving the shoulders of those who are better able to bear it
  The Finance Bill, so far from correcting that tendency which is now spreading over the life of the National Government, so far as it does anything, slightly increases the incidence of indirect taxation. I suppose the Chancellor considers he is bound so far as possible to continue with this theory, because he looks upon the individual profit owner as the real motive power of our industrial system, and all the time he is in fact encouraging the very disparity between profits and wages which is, of course, inherent in any private ownership system, and which is actually a factor that to-day is preventing the effective distribution of those products which might be manufactured in this country had we the means of distributing them from the factories.
  There is another incidence of this method of taxation, and that is the encouragement that it necessarily gives to luxury production as against necessity production. The profit boom or boomlet such as we are experiencing in this country to-day, and which they are also experiencing in America at the moment, naturally creates confidence among the people who are getting the profit. That is not very difficult to understand. It also creates an air of prosperity in those areas where the money is spent which comes from that profit boom—that is to say the west ends of the larger cities in the country and perhaps in some rural districts, but it leaves completely untouched—and that undoubtedly is the experience to-day—the hardships of the workers in those great areas where there has been substantially no improvement at all in conditions of employment or unemployment. There is, in fact, no corresponding increase in the improve-

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  ment in the conditions of the workers and that of the private owners in a boom such as we are now experiencing. Precisely the same is true as regards conditions in America.
  The means test was proposed as a temporary measure in 1931. Now it has become a permanent part of the legislation of the country, and there is no indication from the Chancellor of the Exchequer, in spite of the 80 per cent. recovery, that 80 per cent. of the people who have to take the means test are to be relieved of it. The more confidence and cash that the profit owner has as a result of the boom, the more it is liable to extend as confidence is recreated among his ranks, and as a result there is a demand, not for necessaries by the people who need them urgently, but for luxuries and semi-luxuries from those who have the money to spend. What we want to see is some device by which that productive energy that is being expended to-day in the manufacture of luxuries and semi-luxuries can be diverted into the manufacture of necessaries that on the flimsiest observation are seen to be wanted in every village and town throughout the country. We certainly are not satisfied with a Bill that does absolutely nothing towards righting the balance of production as between necessaries and luxuries.
  The condition of the distressed areas particularly has apparently completely been overlooked, except for a phrase at the end of the right hon. Gentleman's Budget speech, but I rather suspect the people of the distressed areas want something more than a phrase in a Budget speech to help them through the coming year. I realise that it is impossible to redistribute wealth by taxation. That has been tried before, and has proved a failure. Certainly you cannot cure the evils of the present economic system either by trying to spend your way or starve your way into prosperity. That also, I think, has been tried, and has proved itself a failure. If you try to increase taxation you create more difficulties for the system, and therefore it is quite logical that the right hon. Gentleman should attempt to lower taxation as far as he can. The only chance you have of increasing taxation heavily in a private profit system such as we have is just during that period of transition when you have decided to scrap it and you propose
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  to substitute something else for it. Then, of course, you can give yourself free rein with regard to taxation, and you will not do it any harm. [How. MEMBERS: "A first-class crisis !"] I am glad to hear hon. and right hon. Gentlemen opposite understand what I mean. What one hopes is that, in spite of these Budget crumbs that are being thrown from the table of the right hon. Gentleman's supporters to the people as a whole in this country, they will realise before very long that this is at the best one of those sickly booms which come, and always have come, within the system, and it is not going to prevent the depression which inevitably is bound to follow, and that they will therefore take some steps to change a system which has proved in the past, and is certain to prove in the future, highly unsatisfactory from the point of view of the standard of life of the workers of this country.
  The second part of the Amendment deals with the question of Clause 24 that has already been fairly fully explored. The importance of Clause 24 is that it links up with steps that have already been taken towards what is euphemistically called planning capitalism. Of course, you cannot plan chaos. [An How. MEMBER: "What about Russia?"] They changed the chaos first to a system that was capable of planning. You cannot plan a system which is inherently chaotic and that is what Mr. Roosevelt is discovering every day to his great distress. There is a profit boom certainly going on in America, just as there is here. The conditions in industry are equally chaotic in both. As I understand the idea behind Clause 24, it is that if you control competition and the volume of production to such a level as to give you a moderate degree of scarcity in your market, you can then maintain your price, and when you have once reached the point of being able to maintain your price by regulating production to consumption and not consumption to production, by rationalisation and further mechanisation you may be able to decrease cost, and so decrease price, and so spread the area of your distribution. That is, as I understand it, the theory which lies behind what is set forth as the desirable end of Clause 24, and for this purpose now, for the first time, Income Tax is to be used as an indirect

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  inducement to try to bring people to enter into arrangements, either voluntary or statutory, for the purpose of getting rid of redundant machinery and thereby reducing, as the right hon. Gentleman quite rightly said, the capacity for production in a particular industry or of a particular article: that is to say, limiting your production to the present demand, not to some contemplated future demand. Your criticism for redundancy is your present market, and you are therefore attempting to stabilise at your present productive level.
  That we regard as completely the wrong way of attempting to tackle the problem. The object before everybody should be to raise productive levels by raising consumption levels. This is an attempt to reduce productive capacity to existing consumption level, and, if that is carried out, as far as we can see it is bound to lead to a further degree of unemployment and to a general lowering of the standard throughout the whole country. Then, of course, in a typical way which is common with all the actions of this Government, there is absolutely no provision of any sort or kind for dealing with those people who are displaced and thrown on the industrial scrap-heap by this process. One would have thought that experience in the shipbuilding industry would have been sufficient to induce even this Government to incorporate some device for compensating people who were put in that position. You compensate a spindle which is thrown out of work. There is nothing more for it to do, so you buy it out; but when a man who is working the spindle is thrown out of work—well, he can just go on unemployment benefit until he has exhausted that, and then he can go to tie Unemployment Assistance Board.
  It is only typical of the attitude of this Government to property on the one side and human life and endeavour on the other side, that they deal fully with the compensation of property and completely ignore the compensation of the human element. This actually now is not only being allowed to happen, as in the case of shipbuilding and Jarrow, but it is being encouraged to happen by the Government. We shall certainly most strenuously oppose this system of using remissions of Income Tax for the purpose of organising a diminution of productive capacity and
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  the consequent suffering which inevitably will come upon men associated with different productive units. If the Government want to plan as they should the great industries of the country, let them take them over and plan them as one organised whole. Then they can accept the responsibilities, which the private owner refuses to accept, for the man displaced. The private owner is ready enough to run to this House hat in hand for some subsidy or remission of taxation, for tariffs, to increase his profits, and ready enough to disown his obligations to society when it comes to a question of the people who are thrown out of employment; when it is a matter of putting this or that factory out of business in order that the profits of a particular industry may be increased.
  This is the line of policy disclosed in Clause 24, the only constructive thing in the Budget, and it is not a step forward but a step backward; it is, however, the only step that is being taken. The various attempts which have been made by remissions of taxation and subsidies to bribe the private owner to continue production is the wrong way of going about it. Nominally a small amount of control is taken by the Government in cases where subsidies are given or remissions of taxation made, but as soon as that feeling of confidence returns, to which reference has been made, it has always been the experience that this control is thrown off lightly by the people upon whom it has been imposed and there is a tendency to return to laisser faire; the capitalist much prefers it except when he wants to dip his hand into the communal pocket. The only thing which survives is the monopolistic features of this control, that is the creation of corporations, or combines or cartels in particular industries, which bring about all those undesirable features which were at one time aimed at by the Trust Act in America. There is no progress in a policy of that kind, and it can only be entered upon by people who believe that they are going to carry through some temporary emergency and will find themselves back again in the good old capitalist pre-war trade cycle, and they will continue to rotate in that cycle for ever.
  We believe that the Bill contains no attempt at all to deal with what is admittedly the underlying economic problem of to-day; the problem of combining pro-

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  duction and distribution under such a system that you are not obliged to keep large numbers of your population unemployed and others making goods which are pure waste, since they are luxury goods, while necessaries are still required. Perhaps the most dangerous feature of all which faces us in this situation is that we are creating an apparent prosperity by entering upon more war preparations. Everyone will agree that that would be a grave misfortune and a way in which nobody would desire to create apparent prosperity in this or any other country. That describes, I hope, the objections that we have to this Bill, its complete lack of any plan which could deal with the basic troubles of to-day, its objectionable approach to the matter of redundant business, and the continuance of the unfair distribution of taxation as between consumer taxation and direct taxation. We believe that none of these expedients which are being tried by the Government can do anything but bring some temporary relief to the system, and we are day by day, from the experience in this and other countries, becoming more and more convinced that the only solution is to scrap the system and substitute a new one.
  10.21 p.m.
  Mr. COOPER: The hon. and learned Gentleman compared the Chancellor of the Exchequer's speech to that of a cinema star. In so far as it was well received, entertaining and commanded almost universal applause, that was no doubt an accurate description of my right hon. Friend's speech. The hon. and learned Gentleman's own speech, I thought, resembled the production of a gentleman, an extremely intelligent gentleman, who sitting for an examination, and finding a question which he cannot answer, and having time and paper to spend, fills up the paper with some interesting and illuminating remarks upon an entirely different subject. In the course of his speech the hon. and learned Gentleman made one or two admissions which really constituted and reaffirmed the case for this Finance Bill. He gave us a foretaste of the kind of finance that any Government to which he is likely to belong will treat the nation to, and he confessed that. short of such drastic measures as he proposed, sweeping away the whole system—that was one of his phrases—there was very
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  little that could be done better than the present Finance Bill. He said it was folly to suppose that you could redistribute wealth by taxation. The Finance Bill is an instrument of taxation, and, if there was any complaint against it, it was that it failed to redistribute wealth, which the hon. and learned Gentleman himself admits to be impossible. He said that you cannot plan chaos. It was in the first Book of Genesis that that was done.
  Sir S. CRIPPS: The hon. Member is not suggesting that he is the Lord God Almighty.
  Mr. COOPER: I would not he so irreverent; but it is our duty to try to emulate the example that we are set in that Book. The hon. and learned Gentleman was shocked at some of the irregularities of my right hon. Friend's finance. He referred to the fact that we are paying nothing to the American debt this year, and said that that was a great advantage which previous Chancellors of the Exchequer did not possess. I suppose he was referring to those who were Chancellors in the Governments in which he served. That statement made me think that he had not really learned his lesson and had not attended to previous debates on this question.
  My right hon. Friend the Chancellor of the Exchequer who replied to that point when he wound up the first Debate on this subject, pointed out that so far from that being the case previous Governments and previous Chancellors of the Exchequer, in 1929 and in 1930, received large sums in payment of international debt—sums greater than they were paying out. Exactly the reverse has happened in this case. The present Government have received nothing from abroad and have paid out a considerable amount. In that respect, therefore, we have been worse off than the Government of which the hon. and learned Gentleman was a member. He complains that there is nothing in this Finance Bill about the means test. There is no reason why there should be. In fact, there could be nothing in the Finance Bill about the means test. That test has been imposed in connection with the policy which is being pursued in dealing with the relief of unemployment. I am not here to defend or argue that policy now. I should be out of order if I were to do so. It may be right or wrong to apply

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  a test as to the means possessed by people who apply for unemployment relief, but if it were possible to remove that test it would not be done by a Finance Bill because it was not imposed by a Finance Bill. Therefore, I suggest that to raise that point is to seek to drive us into a discussion which is really out of order on this occasion.
  The hon. Member for Dundee (Mr. Dingle Foot), in the course of an interesting and suggestive speech, asked me some direct questions. First, he asked whether the abolition of the Entertainments Duty on 6d. seats applied to all forms of entertainment. The answer is in the affirmative. He asked me also why the relief which is being accorded in the case of the higher-priced seats should not be extended to football and cricket clubs. My right hon. Friend in opening his Budget explained why this differentiation had been introduced. It was directly intended to benefit those people who have been most adversely affected by the new cinema industry, namely, those concerned in what we call, for want of a better phrase, "live performances"—stage plays and entertainments of that sort. They have been very hardly hit and are suffering increasingly, as the cinema industry grows. But that is not true of athletic clubs which do not come into competition with the cinemas, and I think that is a sufficient reason for maintaining this differentiation in the manner in which it has already been applied.
  Then the hon. Member asked me two questions with regard to Clauses 10 and 15. He, of course, is not in favour of duties on imported goods, but I am sure he will agree that while such duties are levied it is important that they should be fairly levied and that they should not be evaded. The real reason for both Clauses is the prevention of the unfair evasion of taxation—to prevent foreign firms setting up agencies in this country, solely with the object of invoicing goods to themselves at any values which they care to put upon those goods, far below the real values, thereby defrauding the revenue of income which is due to it. Clause 15 only makes sure that a practice which has long been in use is perfectly legal, its legality having been questioned. When goods are imported the value given by the importer is accepted at the time,
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  and inspection of books, if thought necessary, is demanded afterwards. There is some doubt as to whether that is perfectly legal and whether, once the goods have been imparted and the duty paid, the books can then be inspected. Obviously from the importers' point of view as well as the revenue point of view it is preferable to do it in that way rather than detain the goods and hold up the business while the books are inspected because the books are often not available. This Clause, therefore, is only intended to make sure that in future that custom shall continue and shall be perfectly legal.
  The hon. Member also questioned the revival in trade and asked how many countries we had approached with a view to concluding trade agreements. The information on that point is that we have already secured 17 different agreements and that there are several more now in negotiation. The question who makes the first approach in any case is one I cannot answer off-hand, and it is not one of very great importance. It really does not matter very much when a bargain is struck who is the man who first suggested it. It is probably in every case the man who thinks he has got most to gain by it.
  The hon. Member and also the hon. Member for the Park Division of Sheffield (Sir A. Shirley Benn) drew attention to the grievance which they said existed in regard to the allowance made for wear and tear and for obsolescent machinery. If that be unfairly treated, they have only to bring cases of unfairness to the notice of the necessary authorities. There has existed for many years a board of referees to hear any industry—I do not think an individual employer—but an industry which thinks it is suffering in this way through an insufficient allowance for wear and tear. In the whole time it has been in existence not a. single application has been determined by the board. Any comparison with foreign countries as to the rates given in this matter will not bear inspection because the whole system on which industry is taxed in those countries—in Germany, in particular—is so different from ours that the bearing of this particular item does not stand comparison. The hon. and gallant Member for South-East Leeds (Major Milner) returned to the question of the Diesel oil tax and raised points

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  which, I think, have all been raised before and have been answered. Diesel oil still enjoys considerable advantage over petrol, as has been shown again and again, and so far from orders for Diesel engines having ceased all over the country, I have information to the opposite effect, that many large orders have recently been given and tenders asked for.
  The hon. Member for Spennymoor (Mr. Batey) is, I think, the most reactionary Member of the House. I always listen to his speeches with satisfaction on that account. They remind me of my youthful days when I was less progressive than I am now. Not only is he against rationalisation, but he is extremely suspicious of machinery. Yet is not his own county of Durham a tragic monument to the lack of rationalisation, and a moving and living appeal for more He again dealt with Clause 24, as did the hon. and learned Member for East Bristol (Sir S. Cripps). The hon. Member for Spennymoor misrepresented that Clause, no doubt unintentionally. He said we were giving to the employers a free hand, so that they could scrap anything they liked and then demand benefit for it. We are doing nothing of the kind. The whole thing is in the hands of the Board of Trade, which has to be satisfied, not only that it is in the interests of the industry, but that it is in the interests of the State. Can the hon. Member, if he be a Socialist—and I suggest he is nothing of the sort—suggest any other tribunal than a Government Department? Socialists wish to put the whole world under Government departments and to put every movement of our daily lives under the control of the bureaucracy. Here we are introducing this reform to put the Board of Trade in command. I have not the Clause before me, but there are four or five tests which they have to satisfy before they can obtain permission from the Board of Trade to close down a mine.
  Mr. BATEY: The Board of Trade certify the scheme, but once they have certified it the employers have a free hand.
  Mr. COOPER: When the employers have shown to the satisfaction of the Board of Trade that the primary object of the scheme is the elimination of redundant works, that the scheme is in the national interest and in the interest
  310
  of the said industry as a whole, and that such number of people engaged in the said industry as are substantially representative of the industry are liable to pay contributions in furtherance of the primary object of the scheme—when they have satisfied the Board of Trade about all that, surely we must allow the employers to go on with the work; or would the hon. Member then insist on a Board of Trade official standing at their elbow and saying "Stop, that is far enough"?
  Mr. BATEY: Oh, that is begging the question. Once the Board of Trade have certified the scheme have not the employers a free hand to close redundant works as they like?
  Mr. COOPER: Not even that, because if the hon. Member reads the Clause ho will see the statement that the Board of Trade shall cancel any certificate granted if they cease to be satisfied as to any of the matters referred to in the previous paragraphs. Does the hon. Member call that begging the question? One of the things shown in the report drawn up by my hon. and gallant Friend who had charge of the inquiry in the County of Durham was the haphazard way in which one mine was allowed to go out of use and another retained in use, and one of the pleas he put forward was that it should be regulated and done according to plan, which is the very thing we are endeavouring to encourage by this Clause. I really was surprised to find the hon. Member for Spennymoor and the hon. and learned Member for East Bristol criticising that scheme. Then the hon. Member for Spennymoor went on to say that he is extremely doubtful whether machinery ought to be introduced at all, whether we should not set up a board of inquiry to find out whether, in the long run, any new machinery that is introduced is going to prove profitable. Surely he will agree that the people who manage those businesses, the employers and owners, of whom he perhaps takes a less favourable view than I do in some respects, can be left to judge in their own interests whether a certain procedure in their own business is going to be of benefit.
  Mr. BATEY: An employer simply considers whether it will be better from his point of view to put in a machine, but

  311
  does not consider the people who will be thrown out of employment.
  Mr. COOPER: I cannot think the hon. Member really believes that the interests of the employer are entirely different from those of the people whom he employs. He wants to make his business pay, granted, but to make it pay he has to make it efficient, and to make it efficient he must have the latest machinery. He is in competition with other countries. We rely upon export trade. We could not come to an agreement to abolish machinery, because we should not be able to compete with the rest of the world. It is to the interest of the employer and to the interest of the man whom he employs that the business should be as efficient as possible, so that his goods are able to compete with any produced in any other part of the world.
  The hon. and learned Member for East Bristol sneered bitterly at the Government because in this Clause they make no proper provision for the people whom such improvements in industry may throw out of work. We must all agree that when an improvement in machinery is introduced it is very likely, at first, for a short time, to cause unemployment, by substituting machinery for human hands. That has been so since the first machine was introduced. Surely we all agree that, in the long run, machinery also benefits the worker as much as it benefits the employer. How could even the hon. and learned Member praise a Clause which should put people who are proved to have lost their work owing to the introduction of machinery, into a different category from the rest of the unemployed How is one to define them, and if one did define them, where would be the fairness or the justice of it? A man who has been in work, perhaps taking home good wages for several years, falls out of work, owing to the introduction of machinery. The hon. and learned Member suggests that he should be put into a better category and treated far more generously than some unfortunate man who has been out of work for a number of years.
  Sir S. CRIPPS: The hon. Member will recognise that that is done in many cases, such as in electricity Acts and in railway Acts, where people who have been displaced are specially provided for.
  Mr. COOPER: It would lead to great confusion and to considerable injustice. Hon. Members have spoken about the incidence of direct as opposed to indirect taxation. They fail—even the right hon. Gentleman the Member for Darwen (Sir H. Samuel) seemed to fail—to appreciate the point made by the Chancellor of the Exchequer that in the past, when we were a free trade country, indirect taxation represented the contribution of the poorer people to the revenue through the tea, sugar and tobacco and other duties. Those duties were levied with one object. It was not considered that the consumption of tea, tobacco or sugar was reprehensible, and that it was desirable to decrease the consumption of them; the taxes were levied solely for the purposes of revenue. The whole situation was changed when we ceased to be a free trade country and were no longer wedded to the fetish of free imports. We then introduced duties on imported goods, with the object of restoring our balance of trade, and in order to have a means of concluding trade agreements and carrying on negotiations with foreign countries leading to the conclusion of such agreements. It is no longer true, if it was ever true, to say that direct taxation is the taxation which is paid by the rich, and that indirect taxation is that which is paid by the poor.
  Mr. D. MASON: The effects are the same.
  Mr. COOPER: In this connection I will refer to a remark made by the hon. Member for Spennymoor, because I think it is in the minds of so many people at a time when any Budget is opened, and it is the basis for many wrong conclusions and much confusion of thought. The hon. Member said that the Chancellor of the Exchequer had something to give away, and that the only question was to whom he was to give it. The Chancellor of the Exchequer does not have money to give away. He has to administer the finances of the country. All the money belongs to the people in the country, and what the Chancellor of the Exchequer has to consider is how best that money may be directed, and

  313
  how it may best be collected and expended for the benefit of the people as a whole.
  The hon. and learned Member for East Bristol said that we had done everything we could to put taxation on to shoulders least able to bear it, and to relieve those best able to bear it. There never was a Budget which gave less justification for such an untrue statement. Can the hon. and learned Member point to one Clause of the Bill which benefits the very rich? As a matter of fact, the whole problem of taxation is to find out how best you can levy the necessary money, incurring the minimum of hardship, and there is no tax of which it could be confidently asserted that in the long run it would be paid only by the rich. Part of the tragedy of taxation is that in the long run it all falls upon the poor. That is why it is, and should be, the duty of every Government to make the burden of taxation as light
  as possible. If hon. Members opposite are ever able to put into force the plans that they have sometimes foreshadowed for wiping out the rich class altogether, they will be the first to discover that, although the rich men disappear, it will be the poor who will really suffer. In framing his Finance Bill, it has been the object of the Chancellor of the Exchequer so to distribute the burden that it will bear most lightly on those least capable of bearing it, and so to distribute those benefits which have accrued as the result of four years of wise financial administration that they will confer the greatest good upon the greatest number.
  Question put, "That the words proposed to be left out stand part of the Question."
  The House divided: Ayes, 265; Noes, 47.

  Division No. 209.]

  AYES.

  [10.47 p.m.

  Acland Troyte, Lieut.-Colonel

  Cobb, Sir Cyril

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

  Agnew, Lieut. Com. P. G.

  Cochrane, Commander Hon. A. D.

  Grimston, R. V.

  Albery, Irving James

  Colman, N. C. D.

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

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

  Conant, R. J. E.

  Guinness, Thomas L. E. B

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

  Cooper, A. Duff

  Gunston, Captain D. W.

  Anstruther Gray, W. J.

  Copeland, Ida

  Hales, Harold K.

  Apsley, Lord

  Courthope, Colonel Sir George L

  Hamilton, Sir George (Ilford)

  Aske, Sir Robert William

  Craven Ellis, William

  Hanbury, Cecil

  Astor, Maj. Hn. John J. (Kent, Dover)

  Crooke, J. Smedley

  Hanley, Dennis A.

  Bailey, Eric Alfred George

  Crookshank, Col. C. de Windt (Bootle)

  Hannon, Patrick Joseph Henry

  Baillie, Sir Adrian W. M.

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

  Harbord, Arthur

  Baldwin, Rt. Hon. Stanley

  Cross, R. H.

  Hartington, Marquess of

  Baldwin-Webb, Colonel J.

  Crossley, A. C.

  Harvey, George (Lambeth, Kenningt'n)

  Barrie, sir Charles Coupar

  Cruddas, Lieut-Colonel Bernard

  Haslam, Henry (Horncastie)

  Beauchamp, Sir Brograve Campbell

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

  Haslam, sir John (Bolton)

  Beit, Sir Alfred L.

  Dawson, Sir Philip

  Henderson, Sir Vivian L. (Chelmsford)

  Benn, Sir Arthur Shirley

  Denman, Hon. R. D.

  Heneage, Lieut. -Colonel Arthur P.

  Bernays, Robert

  Denville, Alfred

  Herbert, Major J. A. (Monmouth)

  Bevan, Stuart James (Holborn)

  Dickie, John P.

  Herbert, Capt. S. (Abbey Division)

  Birchall, Major Sir John Dearman

  Duckworth, George A. V.

  Hills, Major Rt. Hon. John Waller

  Blindell, James

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

  Holdsworth, Herbert

  Boulton, W. W.

  Eady, George H.

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

  Bowater, Col. Sir T. Vansittart

  Eastwood, John Francis

  Hore Belisha, Leslie

  Bower, Commander Robert Tatton

  Ellis, Sir R. Geoffrey

  Horobin, Ian M.

  Bowyer, Capt. Sir George E. W.

  Eimley, Viscount

  Howard, Tom Forrest

  Boycs, H. Leslie

  Emrys-Evans, P. V.

  Howitt, Dr. Alfred B.

  Bracken, Brendan

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

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

  Braithwaite, J. G. (Hillsborough)

  Essenhigh, Reginald Clare

  Hudson, Robert Spear (Southport)

  Brass, Captain Sir William

  Evans, R. T. (Carmarthen)

  Hume, Sir George Hopwood

  Broadbent, Colonel John

  Fermoy, Lord

  Hunter, Dr. Joseph (Dumfries)

  Brocklebank, C. E. R.

  Fleming, Edward Lascelles

  Hunter, Capt. M. J. (Brigg)

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

  Flint, Abraham John

  Hurst, Sir Gerald B.

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

  Fox, Sir Gilford

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

  Browne, Captain A. C

  Fraser, Captain Sir Ian

  Jackson, Sir Henry (Wandsworth, C.)

  Buchan-Hepburn, P. G. T

  Fremantle, Sir Francis

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

  Burghley, Lord

  Fuller, Captain A. G.

  Johnston, J. W. (Clackmannan)

  Burgin, Dr. Edward Leslie

  Ganzoni, Sir John

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

  Butt, Sir Alfred

  Gibson, Charles Granville

  Jones, Henry Haydn (Merioneth)

  Cadogan, Hon. Edward

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

  Jones, Lewis (Swansea, West)

  Campbell, Sir Edward Taswell (Brmly)

  Glossop, C. W. H.

  Kerr, Lieut. Col. Charles (Montrose)

  Campbell, Vice-Admiral G. (Burnley)

  Glyn, Major Sir Ralph G. C

  Kerr, Hamilton W

  Caporn, Arthur Cecil

  Goff, Sir Park

  Keyes, Admiral Sir Roger

  Carver, Major William H.

  Goldie, Noel B.

  Kimball, Lawrence

  Castlereagh, Viscount

  Goodman, Colonel Albert W.

  Knox, Sir Alfred

  Cayzer, Sir Charles (Chester, City)

  Gower, Sir Robert

  Lamb, Sir Joseph Quinton

  Cazalet, Thelma (Islington, E.)

  Graves, Marjorie

  Latham, Sir Herbert Paul

  Chamberlain, Rt. Hon. N. (Edgbaston)

  Greene, William P. C.

  Law, Sir Alfred

  Churchill, Rt. Hon. Winston Spencer

  Grenfell, E. C. (City of London)

  Leckie, J. A.

  Clayton, Sir Christopher

  Gretton, Colonel Rt. Hon. John

  Leech, Dr. J. W.

  Lees-Jones, John

  Orr Ewing, I. L.

  Somerville, D. G. (Willesden, East)

  Leighton, Major B. E. P

  Patrick, Colin M.

  Soper, Richard

  Lennox-Boyd, A. T

  Peake, Osbert

  Southby, Commander Archibald R. J.

  Lewis, Oswald

  Pearson, William G.

  Spencer, Captain Richard A

  Lister, Rt. Hon. Sir Philip Cunliffe-

  Penny, Sir George

  Spender-Clay, Rt. Hon. Herbert H.

  Lloyd, Geoffrey

  Perkins, Walter R. D

  Spens, William Patrick

  Loftus, Pierce C.

  Petherick, M.

  Stanley, Rt. Hon. Lord (Fylde)

  Lovat-Frater, James Alexander

  Pickthorn, K. W. M

  Stevenson, James

  Lumley, Captain Lawrence R.

  Power, Sir John Cecil

  Stones, James

  Lyons, Abraham Montagu

  Pownall, Sir Assheton

  Storey, Samuel

  Mabane, William

  Radford, E. A.

  Strickland, Captain W. F

  McCorquodale, M. S.

  Raikes, Henry V. A. M.

  Sugden, Sir Wilfrid Hart

  Macdonald, Sir Murdoch (Inverness)

  Ramsay, Alexander (W. Bromwich)

  Sutcliffe, Harold

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

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

  Tate, Mavis Constance

  McEwen, Captain J. H. F.

  Reed, Arthur C.(Exeter)

  Taylor, C. S. (Eastbourne)

  McKie, John Hamilton

  Reid David D. (County Down)

  Thomas, James P. L.(Hereford)

  Magnay, Thomas

  Remer, John R.

  Thompson, Sir Luke

  Makins, Brigadier-General Ernest

  Rhys, Hon. Charles Arthur U.

  Thorp, Linton Theodore

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

  Rickards, George William

  Titchfield, Major the Marquess of

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

  Roberts, Sir Samuel (Ecclasall)

  Todd, A. L. S. (Kingswinford)

  Martin, Thomas B

  Ropner, Colonel L.

  Touch, Gordon Cosmo

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

  Rosbotham, Sir Thomas

  Tufnell, Lieut.-Commander R. L

  Mellor, Sir J. S. P.

  Ross, Ronald D.

  Turton, Robert Hugh

  Mills, Major J. O. (New Forest)

  Ross Taylor, Walter (Woodbridge)

  Wallace, Sir John (Dunfermilne)

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

  Ruggles-Brise, Colonel Sir Edward

  Ward, Sarah Adelaide(Cannock)

  Mitcheson, G. G

  Russell, Alexander West (Tynemouth)

  Wardlaw-Milne, Sir John S.

  Molson, A. Hugh Elsdale

  Russell, R. J. (Eddlebury)

  Warrender, Sir Victor A. G

  Monsell, Rt. Hon. Sir B. Eyres

  Rutherford, Sir John Hugo (Liverp'l)

  Waterhouse, Captain Charles

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

  salmon, Sir Isidore

  Wayland, Sir William A.

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

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

  Wells, Sydney Richard

  Moreing, Adrian C.

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

  Whiteside, Borras Noel H.

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

  Shakespeare, Geoffrey H.

  Williams, Charles (Devon, Torquay)

  Morrison, William Shephard

  Shaw, Helen B. (Lanark, Bothwell)

  Williams, Herbert G. (Croydon, S.)

  Muirhead, Lieut.-Colonel A. J.

  Shaw, Captain William T. (Forfar)

  Wills, Wilfrid D.

  Munro, Patrick

  Shute, Colonel Sir John

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

  Nail, Sir Joseph

  Simon, Rt. Hon. Sir John

  Windsor-Clive, Lieut.-Colonel George

  Nation, Brigadier-General J. J. H.

  Smiles, Lieut.-Col. Sir Walter D.

  Wise, Alfred R.

  Nicholson, Godfrey (Morpeth)

  Smith, Bracewell (Dulwich)

  O'Donovan, Dr. William James

  Smith, Louis W. (Sheffield, Hailam)

  TELLERS FOR THE AYES.—

  O'Neill, Rt. Hon. Sir Hugh

  Smith, Sir Robert (Ab'd'nK'dine, C.)

  Lieut.-Colonel Sir A. Lambert Ward and Sir Walter Womersley.

  NOES

  Adams, D. M. (Poplar, South)

  Gardner, Benjamin Walter

  McEntee, Valentine L.

  Addison, Rt. Hon. Dr. Christopher

  George, Major G. Lloyd (Pembroke)

  McGovern, John

  Attlee, Clement Richard

  George, Megan A. Lloyd (Anglesea)

  Maclean, Neil (Glasgow, Govan)

  Batey, Joseph

  Graham, D. M. (Lanark, Hamilton)

  Mainwaring, William Henry

  Bevan, Aneurin (Ebbw Vale)

  Greenwood, Rt. Hon. Arthur

  Owen, Major Goronwy

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

  Grenfell, David Rees (Glamorgan)

  Parkinson, John Allen

  Buchanan, George

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

  Salter, Dr. Alfred

  Cleary, J. J

  Griffiths, T. (Monmouth, Pontypool)

  Smith, Tom (Normanton)

  Cocks, Frederick Seymour

  Groves, Thomas E.

  Strauss, G. R. (Lambeth, North)

  Cove, William G.

  Hall, George H. (Mrthyr Tydvil)

  Tinker, John Joseph

  Cripps, Sir Stafford

  Jenkins, Sir William

  Williams, David (Swansea, East)

  Daggar, George

  Jones, Morgan (Caerphilly)

  Williams, Edward John (Ogmore)

  Davies, Rhys John (Westhoughton)

  Lansbury, Rt. Hon. George

  Williams, Thomas(York, Don Valley)

  Davies, Stephen Owen

  Lawson, John James

  Dobbie, William

  Logan, David Gilbert

  TELLERS FOR THE NOES.—

  Edwards, Charles

  Lunn, William

  Mr. John and Mr. Paling.

  Foot, Dingle(Dundee)

  Macdonald, Gordon (Ince)

  Question put, and agreed to.

FINANCE [EXPENSES OF BOARD OF EDUCATION].
Considered in Committee under Standing Order No. 69.
[Sir DENNIS HERBERT in the Chair.]
Resolved,
"That, for the purpose of any Act of the present Session relating to finance, it is expedient to authorise the payment out of moneys provided by Parliament of any expenses incurred by the Board of Educa-
316
tion in connection with the exemption of educational cinematograph films and other articles from customs duties." (King's Recommendation signified.)—[Mr. Duff Cooper.]
Resolution to be reported To-morrow.

IMPORT DUTIES (IMPORT DUTIES ACT, 1932).
10.59 p.m.
The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Dr. Burgin): I beg to move,
"That the Additional Import Duties (No. 12) Order, 1935, dated the thirtieth day

317
of April, nineteen hundred and thirty-five, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the said thirtieth day of April, nineteen hundred and thirty-five, be approved."
This Order raises the duty on dead turkeys from id. a lb. to 3d. a lb. They were originally subject to 10 per cent., and in September of 1933 the duty was increased to 3d. a lb. on fowls, ducks and geese, but turkeys were left out. In November, 1933, the 10 per cent. duty on turkeys, for convenience of sale, was altered to ld. a lb. The additional duty now brings the duty on turkeys, in common with other poultry, up to 3d. a lb. The turkey trade is a curious one. Some 70 per cent. of the consumption in the United Kingdom comes from foreign birds. These foreign birds are mainly small ones of between six and 13 lbs., whereas the British birds are mostly between 12 and 17 lbs. I have all the particulars of imports, their quantities and the countries from which they come. The United Kingdom production of turkeys is about 1,500,000, and there is no doubt that with the aid of this duty the United Kingdom turkey industry will be encouraged to produce a smaller type of bird, which is a great advantage.
11.0 p.m.
Mr. T. WILLIAMS: Will the hon. Gentleman be good enough to tell the House why he thinks that this duty will procure smaller birds in this country Merely because he says that it will, does not make it so. It may be prophetic optimism on his part, but it is so easy for the producers of turkeys in this country to get first a specific ad valorem duty, and then by simple application to get a 200 per cent. increase of the duty. I do not see why the home producer of turkeys should worry about a small bird, a large bird or an intermediate bird. All they need to do is to make another application for an increase from 3d. to 6d., promise the hon. Gentleman that they will produce smaller birds instead of larger birds, and he will agree to put on 6d. per lb. duty. I am not concerned about the duty on turkeys so much for 11 months and three weeks in the year, but I do think it is a grave imposition upon the working class people that during one week in the whole year when they may desire to purchase a. turkey
318
for a family gathering they should have to pay an increased price.
It may be that 3d. a lb. duty is not very much to the hon. Member in charge of the Order or for hon. Members opposite, but on a 10 lb. turkey it would mean a duty of 2s. 6d., which to many poor families would make the difference between having a turkey or not at Christmas. For 11 months and three weeks of the year I suppose the turkeys will be consumed in the large hotels or the large cafes. I am not interested in them. If they have to pay the main proportion of the extra amount which this duty is expected to raise one will not shed any tears about them, but when the hon. Member asks for a 200 per cent. increase in the duty, at least he ought to give some justification before he expects the House to accept his figures. It is generally understood that the foreign bird is smaller, more usable and desirable, and that the English producer has not attempted to meet the demand of a well-known market. If they continue to get increase upon increase, as has been the case in a very short space of time, two changes within about six months, I do not see that the optimism of the hon. Member about the production of smaller birds is likely to be realised.
These orders are taken late at night when hon. and right hon. Members are not really interested in what is happening, and it is simply imposing burdens upon large sections of the community without their knowing exactly what is taking place. If the hon. Member can satisfy the House that as a result of this duty home producers will try to meet a known demand for small birds it may be that there will be no hostility or opposition to the Order, but when this kind of Order keeps going through, increasing duty after duty, the matter will have to be dealt with by the Government sooner or later; otherwise, we shall find ourselves in a position where the simple process of asking for an increased duty upon any article will be so easy that there will be 10,000 applications, and we shall meet ourselves coming back.
11.5 p.m.
Sir WILLIAM WAYLAND: As one who raises turkeys I am very glad to bear the Government have been asked to come to our help. It was by an oversight that

319
the 3d. per lb. tax on turkeys was not raised to the same extent as fowls at the beginning. You cannot speak about a 200 per cent. increase as the last speaker did. It is raising the duty on all poultry to the same extent, and, if we had not this protection, I am confident that in a year or two's time, considering the competition with foreign turkeys which we have to face, the turkey industry in this country, if it had not died out, would certainly have been most severely hit. We do raise heavier turkeys than producers on the Continent, and we know that at the present day there is a demand mainly for turkeys of about 8 to 12 lbs., and I believe that the English turkey raisers intend with this protection to compete not only in weight with the foreign raiser. The small turkeys which come from the Continent contain more bone in proportion to flesh than the English and though sold at the same price are in the end much dearer.
11.7 p.m.
Mr. CHARLES WILLIAMS: I only intervene to explain why it is that the English turkey is bigger than the foreign one. Because of education carried on at shows and elsewhere we have raised turkeys of a higher standard. We have also fed them better, and they have become unduly heavy compared with the demands of the market. I have no doubt that now that the Minister has pointed out the value of small turkeys—and I hope he will draw the attention of the Minister of Agriculture to it—the English producer will be able to change the position. I would remind the House that very largely the English turkey is bigger because it has been rather too much overfed.
11.8 p.m.
Dr. BURGIN: Two points have been raised, whether the English grower can
320
be persuaded to grow something else if the market desires it and whether the price will be unduly raised against the consumer. The Import Duties Advisory Committee say that the home producers who have hitherto specialised in the larger birds are now conscious of the changing demands of the market. I can only repeat the same assurance. With regard to price, it is a delusion to think that the turkey is a universally desired article of food. The total supply of turkeys in this country would only supply about a third of the families in the country if everybody wanted one. But the fact is that there are other general demands for Christmas dinners. The price of turkeys after the increase in duty is not likely to be as high as the average December price between 1925 and 1932. There is therefore nothing in the objection either that the growers will not grow the right kind of bird or that the prices will be unduly high.
Resolved,
"That the Additional Import Duties (No. 12) Order, 1935, dated the thirtieth day of April, nineteen hundred and thirty-five, made by the Treasury under the Import Duties Act, 1932, a copy of which was presented to this House on the said thirtieth day of April, nineteen hundred and thirty-five, be approved."
The remaining Orders were read and postponed.

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

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

PRIVATE BUSINESS.
Provisional Order Bills (No Standing Orders applicable).
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, referred on the First Reading thereof, no Standing Orders are applicable, namely:
Marriages Provisional Orders Bill.
Ministry of Health Provisional Order (South Oxfordshire Water) Bill.
Ministry of Health Provisional Order (Harpenden Water)Bill.
Ministry of Health Provisional Order (East Surrey Water)Bill.
Bills to be read a Second time To-morrow.
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 Bills, referred on the First Reading thereof, the Standing Orders, which are applicable thereto, have been complied with, namely:
Ministry of Health Provisional Order (Monks and Princes Risborough Water) Bill.
Ministry of Health Provisional Order (Rainham Water)Bill.
Bills to be read a Second time To-morrow.
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 in-
928
quired into, which are applicable thereto, have been complied with, namely:
West Riding of Yorkshire Mental Hospitals Board(Superannuation, Bill [Lords].
Chichester Corporation Bill [Lords].
Gelligaer Urban District Council Bill [Lords].
Nottingham Corporation Bill [Lords].
Stourbridge Navigation Bill [Lords].
Bills to be read a Second time.
South Essex Waterworks Bill (King's Consent signified).
Bill read the Third time, and passed. London Pasenger Transport Board Bill.
As amended, considered; to be read the Third time.

ORAL ANSWERS TO QUESTIONS.
  TRADE AND COMMERCE.

    SHIPPING INDUSTRY.
    Mr. CHORLTONasked the President of the Board of Trade what steps are being taken by the committee in carrying out the policy of scrap and build to make sure that only the most efficient types of new construction receive financial assistance; and whether all such vessels have had their hull form determined by proper tank testing?
    The PRESIDENT of the BOARD of TRADE (Mr. Runciman): In considering proposals under the scheme, the Ships' Replacement Committee, which includes members with the highest technical qualifications, pays proper regard to the efficiency of the vessels to be built, but there are no requirements as to tank or other tests.
    Mr. CHORLTON: Does the right hon. Gentleman himself have any particular regard to what is recommended, or is the question left entirely to the committee?
    Mr. RUNCIMAN: The committee is an advisory committee, and so far I have found no reason to disagree with its recommendations.
    Mr. BATEYasked the President of the Board of Trade whether he can state the total number of shipyards closed by

    929
    Shipbuilding Securities, Limited, and the amount of money paid by them on the condition that the shipyards shall not be reopened, and the number of persons employed when those shipyards were working?
    Mr. RUNCIMAN: I am informed that National Shipbuilders' Security, Limited, have acquired 27 shipyards comprising 137 berths. The information asked for in the second and third parts of the question is not available, but I under stand that most of these yards were already closed at the time of their acquisition by the company.

    KERBS AND SETTS (IMPORTS).
    Major OWENasked the President of the Board of Trade the tonnage and value of kerbs and setts imported into this country from all sources during the years 1931, 1932, 1933 and 1934, respectively and if he will give the latest available figures for 1935?
    Mr. RUNCIMAN: As the Answer involves a number of figures, I am circulating it in the OFFICIAL REPORT.
    Major OWEN: Has any request been made by this industry to the Advisory Committee at any time for tariffs
    Mr. RUNCIMAN: I cannot be quite sure of that, and should like to have notice of the question, but the subject has been raised here on several occasions.
    Mr. CHARLES WILLIAMS: Cannot the right hon. Gentleman give us the figures now; there are only four or five?
    Mr. RUNCIMAN: No, it is a table which I have been asked to give. The figures cover a long period.
    Following is the answer:
    Statement showing the total quantity and declared value of granite setts and pavement kerbs imported into the United Kingdom during each of the years 1931–1934 and the first four months of 1935.

    Period.

    Quantity.

    Declared Value.

    Tons.

    £

    1931

    111,680

    304,158

    1932

    51,705

    127,802

    1933

    68,370

    159,200

    1934

    82,376

    172,038

    1935 (January to April)

    23,059

    47,755

    IMPORTS.
    Captain PETER MACDONALDasked the President of the Board of Trade whether his attention has been called to the fact that the importation of articles to this country wholly or mainly manufactured were £58,400,000 for the first four months of 1935 as against 46,100,000 for the first four months of 1933; and whether, in view of the fact that this increase is mainly due to increases in the importation of metal manufactures, machinery, chemicals and vehicles, he can state what steps have been taken in each case during the cur rent year with a view to the further restriction of such imports wherever possible?
    Mr. RUNCIMAN: The procedure for obtaining any increased duties on imports that may be considered desirable is, as my hon. and gallant Friend is aware, that provided in the Import Duties Act, and I would refer him to the series of Orders made under that Act.

    SCRAP IRON (EXPORTS, GERMANY).
    Mr. DOBBIEasked the President of the Board of Trade what steps, if any, the Government have taken to prevent the exportation of scrap iron from this country to Germany during the years 1933, 1934, 1935?
    Mr. RUNCIMAN:: There are no restrictions in force on the exportation of scrap iron from the United Kingdom to Germany or to any other country.

    JAPANESE COMPETITION (MADE-UP GARMENTS).
    Mr. CHORLTONasked the President of the Board of Trade whether he has yet received any proposals from the made-up garments manufacturers at present affected by Japanese competition with a view to regulating such imports by quota?
    Mr. RUNCIMAN: In June of last year my hon. Friend the Parliamentary Secretary to the Board of Trade received a deputation from the Shirt, Collar and Tie Manufacturers' Federation, who made a proposal of this sort. There is, how ever, no reason to think that the home market cannot be adequately protected under the existing procedure.

    TRADE COMMISSIONERS.
    Captain P. MACDONALDasked the Secretary to the Overseas Trade Department what are the present arrangements for training candidates for the position of trade commissioners; and whether arrangements can be made to appoint young men as apprentices to the existing trade commissioners, so as to ensure that in future years there will be an adequate supply of candidates for such positions with experience of the necessary work?
    The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Dr. Burgin): I have been asked to reply. It is now the accepted practice when appointing assistants to trade commissioners to select young men with experience of the Department's work at headquarters who appear likely, after experience overseas, to qualify for promotion to the higher posts in the Trade Commissioner Service. My hon. and gallant Friend will see, therefore, that the suggestion in the second part of the question is already in operation.

    DUTCH WEST INDIES
    Mr. JOELasked the President of the Board of Trade whether his attention has been drawn to the fact that imports into this country from the Dutch West Indies for the first quarter of this year amounted in value to £2,106,177, while our exports to those Islands only amounted to £61,688; and whether, in view of the fact that this abnormal adverse balance of trade has persisted for several years, any steps are now contemplated with a view to improving the position?
    Mr. RUNCIMAN: Considerations of balance of trade hardly arise in this case. Imports shown in the Trade Accounts as consigned to the United Kingdom from the Dutch West Indies consist almost exclusively of petroleum which, though refined there, originates elsewhere, and mainly in Venezuela.

  TRANSPORT

    MOTOR INSURANCE (THIRD PARTY RISKS).
    Mr. GOLDIEasked the President of the Board of Trade whether he is aware of the hardship inflicted on persons sustaining injuries and the dependants of
    932
    persons killed through the negligence of motorists insured against third party risks with insolvent insurance companies; and whether he is prepared to introduce legislation where by policies covering third party risks shall only be issued to motorists by insurance companies who have satisfied his Department as to their financial position and their ability to carry out their commitments under the policies issued?
    Mr. RUNCIMAN: I am aware of the circumstances referred to in the first part of the question. As regards the second part, I cannot at present add to the answer given on the 30th April to the hon. Member for East Birkenhead (Mr. White).
    Mr. GOLDIE: Is the right hon. Gentle man aware that on the figures of his own Department no less than 160,000 policy holders have been "defaulted" by these companies, and, in the circumstances, does he not think it is about time that something was done? Will he not consider my suggestion, which does not make his Department responsible for the financial stability of companies, but simply asks that they should say what companies should issue policies for this purpose?
    Mr. RUNCIMAN: I am well aware of the seriousness of the problem, but it is not an easy one to deal with. We must deal with it in the best possible way.
    Captain P. MACDONALD: As the Government took it on themselves to introduce legislation imposing on motorists the responsibility to insure against third party risks, should not the Government take the responsibility of seeing that the policies taken out by motorists are valid and secure?
    Mr. RUNCIMAN: No, Sir, the Government are under no obligation to do so; but it is in the public interest to see that these companies perform a proper function and are sound.

    MOTOR DRIVER'S HOURS (PROSECUTION, NOTTINGHAM).
    Mr. T.SMITH (for Mr. THORNE)asked the Minister of Transport whether he has received a report in connection with the prosecution of the Traders' Transport Company, Derby Road, Nottingham, who were charged with 11

    933
    offences, 10 against the company and one against a director of the company, for working their employés excessive hours; whether he is aware that there was a total of 65 alleged offences, and in some cases lorry drivers had worked for 7½ hours and 11½ hours without a break; whether he can state the maximum penalties of these cases; and what action he intends taking in the matter?
    The PARLIAMENTARY SECRETARY to the MINISTRY of TRANSPORT (Captain Austin Hudson): This case had not previously been brought to my hon. Friend's notice. The maximum penalty for an of fence of this nature is a fine of £20 for a first of fence and a fine of £50, or three months' imprisonment, in the case of a second or subsequent conviction. The of fender also renders himself liable to the revocation or suspension of his licence under the Road and Rail Traffic Act, 1933.

  SHIPOWNERS AND EMPLOYES (AGREEMENTS)
  Miss WARDasked the President of the Board of Trade whether, in the interests of safety at sea, he will give, consideration to giving statutory effect to voluntary agreements reached between the Federation of Shipowners and the officers' and engineers' societies?
  Mr. RUNCIMAN: I am always prepared to consider the promotion of legislation or the making of regulations which may be considered necessary to secure safety at sea. Agreements between ship owners and employés naturally take into account many factors other than safety, and though I appreciate fully the value and the desirability of such agreements I can see no sufficient justification for a proposal to give them statutory force.
  Miss WARD: Is my right hon. Friend aware that a great deal of feeling is aroused because a condition to pay the National Maritime Board scale of wages was not included in the Measure giving the subsidy to tramp steamers, and will he remember that voluntary agreements are not always effective?
  Mr. RUNCIMAN: It is quite true that voluntary agreements are sometimes not effective, but so far there has been no
  934
  failure to abide by the National Maritime Board rates under the present scheme.

  COAL INDUSTRY.

    TRADE AGREEMENTS.
    Mr. DAGGARasked the President of the Board of Trade whether he will give the names of those countries with whom an arrangement regarding coal has been entered into in a trade agreement; the date of each agreement; and the date of its operation?
    Mr. RUNCIMAN: As the answer is somewhat long I will circulate it in the OFFICIAL REPORT.
    Following is the answer:
    Specific arrangements regarding coal are contained in the following Trade Agreements with foreign countries:
    Argentina: Supplementary Agreement of 26th September, 1933inforce on 7th November, 1933.
    Denmark: Trade Agreement of 24th April, 1933—in force on 20th June, 1933.
    Estonia: Trade Agreement of 17th July, 1934—in force on8th September, 1934.
    Finland: Trade Agreement of 29th September, 1933—inforce on 23rd November, 1933.
    France: Trade Agreement of 27th June, 1934—in force on1st July, 1934.
    Germany: Agreement regarding Commercial Relations of 13thApril-3rd May, 1933—in force on 8th May, 1933:also the Anglo-German Payments Agreement of 1st November, 1934—inforce on that date.
    Iceland: Trade Agreement of 19th May, 1933—in force on28th June, 1933.
    Italy: Agreement regarding Trade and Payments of 27thApril, 1935—in force on 1st May, 1935.
    Latvia: Trade Agreement of 17th July, 1934—in force on12th October, 1934.
    Lithuania: Trade Agreement of 6th July, 1934—in force on 12th August, 1934.
    Norway and Sweden: Trade Agreements of 15thMay, 1933—in force on 7th July, 1933.
    NOTE: Coal is also covered by the general quota provisions of the Exchange of Notes between His Majesty's Government in the United Kingdom and the Netherlands Government of 20th-30th

    935
    July, 1934, which came into force on 1st August, 1934.

    PIT HEAPS.
    Mr. TINKERasked the Secretary for Mines whether he is now in a position to make a statement concerning colliery pit heaps; and whether the colliery owners have made any suggestions as to how they intend to deal with them so as to prevent them getting on fire?
    The SECRETARY for MINES (Mr. Ernest Brown): I understand from the Mining Association that they still have this matter under consideration and expect to be able to communicate with me again in the course of the next dew weeks.

    WORKING HOURS.
    Miss WARDasked the Secretary for Mines whether any conversations are in progress with the Coal Owners' Association and the Miners' Federation regarding the possibility of reducing hours to employ additional labour?
    Mr. E. BROWN: My hon. Friend will be aware that the draft Convention relating to the hours of work in coal mines is to be dealt with at the General Conference of the International Labour Organisation which opens next week. I have already had conversations on the subject with representatives of both the Mining Association and the Mineworkers' Federation.
    Miss WARD: May I ask whether, if there is no result of the conference, he will be prepared to take the same steps as are being taken by the Ministry of Labour to discuss not only the question of hours but the whole conditions in the industry
    Mr. BROWN: That is a hypothetical question.
    Mr. T.WILLIAMS: Will the hon. Gentleman state what the attitude of the Government will be when this conference meets?
    Mr. BROWN: That will be made quite clear at Geneva next week.

    REORGANISATION SCHEMES.
    Miss WARDasked the Secretary for Mines whether his attention has been called to the judgment recently given by
    936
    the Railway and Canal Commissioners against Sir Ernest Gowers;and whether he can state what steps the Government proposes to take to ensure that a minority may not hold up the reorganisation of the coal industry?
    Mr. T.WILLIAMSasked the Secretary for Mines whether he will state the attitude of his Department towards amalgamation of coal mines, in view of the decision of the Railway and Canal Commission in the case of the West York shire coalowners application; and whether this decision is likely to affect the duties of the Coal Mines Reorganisation Commission?
    Mr. MARTINasked the Secretary for Mines whether, in view of a recent decision of the Railway and Canal Commission, he has any statement to make with regard to the working of Part II of the Mines Act, 1930, and the future of the Coal Mines Reorganisation Commission?
    Mr. E.BROWN: It has not yet been possible to determine the full effect of the judgment delivered last week, and I am unable to make a statement. I understand, however, that the Coal Mines Reorganisation Commission is considering a scheme of total amalgamation for sub mission to the Court in the near future.
    Miss WARD: While I appreciate the shortness of time that has elapsed since the judgment was delivered, may I ask whether the hon. Gentleman is aware that this decision has caused great dismay among people who were hoping for re organisation, and may we not at some time have a statement about Part II of the Act?
    Mr. T.WILLIAMS: Can the hon. Gentleman make a statement as to the attitude of his Department if a question is put down?
    Mr. BROWN: We shall have to weigh over all the facts concerned. If ray hon. Friend would like a statement, I will communicate with him as to the proper time to put down a question.
    Colonel CLIFTONBROWN: Will the hon. Gentleman bear in mind that many people who are very much interested in the coal industry would like to see this Commission abolished?
    Mr. BROWN: There is also that point of view.

  GAS-GRID SCHEMES.
  Mr. CH'ORLTONasked the President of the Board of Trade when the gas-grid scheme of supply being carried out by the Sheffield Gas Company will be completed; what proportion is now in use; and if such a scheme is under consideration for South and South-East Lancashire?
  Mr. RUNCIMAN: am making inquiries as to the progress to date of the Sheffield Gas Company's grid scheme, and I will send my hon. Friend the information as soon as possible. No proposal for a gas grid in Lancashire has been brought to my notice.

  EDUCATION (ROMAN CATHOLIC SCHOOL, COLWYN BAY).
  Major OWENasked the Parliamentary Secretary to the Board of Education whether he will state what are the reasons for putting the whole cost of the Colwyn Bay Roman Catholic school upon the ratepayers?
  The PARLIAMENTARY SECRETARY to the BOARD of EDUCATION(Mr. Ramsbotham): The duty of maintaining this school as a public elementary school is placed upon the county education authority by the Education Act, 1921.Byneglecting this duty the authority have failed to fulfil the conditions of grant from the Board of Education. Consequently, the sums recovered from the county education authority under the statutory procedure, to defray the cost of maintenance, are necessarily charged by the authority wholly on the rates. The expenses properly falling on the managers of the school in respect of the school building are, of course, defrayed by them out of their own resources.
  Major OWEN: Is the hon. Gentleman aware that there has been great dissatisfaction in the county as a result of the inquiry held some time ago, and of the approval given to this school; and is it not possible to make some arrangement whereby a compromise can be arrived at?
  Mr. RAMSBOTHAM: The duty of maintaining the school lies with the local authority, and, as the local authority is not prepared to do this, the Board have no alternative but to make a reduction from the grant for the maintenance of the school.

  FACTORY ACTS (JUVENILES).
  Mr. RHYS DAVIESasked the Secretary of State for the Home Department whether he has considered amending the Factory Acts, including special provisions to cover the 300,000 young persons who are with out any legal protection; and, if so, what decision has been reached?
  The SECRETARY of STATE for the HOME DEPARTMENT (Sir John Gilmour):I would refer the hon. Member to the reply which I gave to my Noble Friend the Member for the Sutton Division of Plymouth (Viscountess Astor)on 6th March last. I am afraid that I am not in a position to announce any decision in the matter.
  Mr. DAVIES: May we take it, there fore, that it is the intention of this Government to do nothing for these 300,000 children, and nothing in the direction of extending the provisions of the Factory Acts?
  Sir J.GILMOUR: No, Sir, the hon. Gentleman must not take it that the Government are not prepared to consider this problem. I have given an under taking that we would.
  Mr. DAVIE'S: We may take it, there fore, that it is the intention of the Government to do something on the lines suggested in the question?

  HOURS OF WORK (REDUCTION).
  Captain FULLERasked the Minister of Labour whether any steps are now being taken through the International Labour Office to negotiate agreements for the shortening of hours in industry?
  The PARLIAMENTARY SECRETARY to the MINISTRY of LABOUR(Mr. R. S. Hudson): Proposals designed to secure international conventions limiting hours of work in public works under taken or subsidised by Governments, and in their on and steel, building and contracting, glass bottle and coal-mining industries, are to be considered at the International Labour Conference which opens in Geneva at the beginning of next month.

  UNEMPLOYMENT

    ALIENS (ENTRY PERMITS).
    Mr. BATEYasked the Minister of Labour the countries from which came the 12,000persons who were allowed to take up employment in this country last year, and also the principal industries in which they are employed?
    Mr. HUDSON: I would refer the hon. Member to the report of the Ministry of Labour(Cmd.4861) for the year 1934, which contains the information here quires, in pages 28-30 and Appendix X.

    TRANSFERRED MINERS
    Mr. JOELasked the Minister of Labour what is the number of miners who have been transferred from distressed areas during the last five years;and what percentage of these are absorbed into local employment?
    Mr. HUDSON: I regret that the in formation for which my hon. Friend asks is not available.

    UNEMPLOYMENT ASSISTANCE (DUMBARTON).
    Mr. NEIL MACLEAN (for Mr. KIRKWOOD)asked the Secretary of State for Scotland what contribution is to be paid by Dumbarton to the Unemployment Assistance Board under Part II of the Unemployment Assistance Act, 1934; how this compares with Oxford, which has five times the population of Dumbarton and little unemployment; and how much Dumbarton's contribution will represent in rates to the local ratepayers?
    Sir A. LAMBERT WARD (Vice-Chamberlain of the Household): I have been asked to reply. The estimated con tribution by the Burgh of Dumbarton to the Unemployment Assistance Fund under Part II of the Unemployment Act, 1934, is £6, 200 per annum, but, after taking into account the block grant appropriate to the transferred expenditure, the net charge to the local authority is£2, 492, which is equivalent to a rate of 4½d.per The estimated contribution to be made by the City of Oxford is£200.
    Mr. MACLEAN: What are the comparative rates?
    Sir A.LAMBERT WARD: I will ask my right hon. Friend the Secretary of State for Scotland to communicate with the hon. Gentleman on the subject.

  POST OFFICE (SITE PURCHASE, BUNGAY)
  Mr. LOFTUSasked the Postmaster-General whether he is aware that the Post Office is proposing to purchase the old grammar school, Bungay, at present in private hands, and that this building is housing 24boarders, pupils of the Bungay Grammar School, most of whom could not attend the school as day pupils; and whether he will direct that inquiries shall he made for another site in Bungay for use as a Post Office, in view of the fact that there is no other suitable building available for use as a boarding-house for pupils of this secondary school?
  The ASSISTANT POSTMASTER-GENERAL (Sir Ernest Bennett): The decision to purchase this site was only reached after intensive search had failed to produce any other site suitable for the pressing needs of the Post Office. I have no reason to suppose that further inquiries will be any more successful. On the other hand, I understand that suit able alternative accommodation has been offered to the tenant of the old grammar school.
  Mr. LOFTUS:Will the hon. Gentle man consider allowing the school authorities 12months' notice, so that they can arrange for new accommodation, as that would very considerably ease the situation?
  Sir E. BENNETT: Yes, Sir, I shall be glad to consider the suggestion in the supplementary question, and to look into the matter.

  TANGIER (EUROPEAN RESIDENTS).
  Sir JOHN POWERasked the Secretary of State for Foreign Affairs what is the present estimated number of British, French, Spanish, and other European residents, respectively, in Tangier?
  The LORD PRIVY SEAL (Mr. Eden): According to my information the approximate figures are as follow: British, 812;French, 2,420; Spanish, 11,700; other European residents, 1,350(including 1,000 Italians).As no census is taken at Tangier, the accuracy of these figures can not be guaranteed.

  ITALY AND ABYSSINIA.
  Mr. MANDERasked the Secretary of State for Foreign Affairs whether he

  941
  will consider the advisability, as a means of alleviating the tension between Abyssinia and Italy, of proposing to the Council of the League of Nations that certain areas between the territories of the two countries in Africa should be patrolled by an international force?
  Mr. EDEN: I would refer the hon. Member to the reply given by my right hon. Friend the Foreign Secretary to a similar question on 27th February last.
  Mr. MANDERasked the Secretary of State for Foreign Affairs, whether any communication has been received from the Italian Government with reference to the export of arms to Abyssinia; what rights Abyssinia possesses in the matter of the import of arms and whether these differ from those possessed by Italy and other countries; and whether any right is recognised for Germany to export arms to Abyssinia, and to what extent?
  Mr. EDEN: In answer to the first part of the question:No communication on this subject has been received from the Italian Government. As regards the second part, the importation of arms, munitions and implements of war by Abyssinia is regulated by the Treaty signed in Paris on 21stAugust, 1930, by Ethiopia, France, Italy and the United Kingdom. This Treaty established a special regime for Ethiopia, whose position as an arms importing country accordingly differs from that of Italy, whose rights have not been similarly defined. As regards the third part of the question, I would remind the hon. Member that Article 170 of the Treaty of Versailles pro hibits the manufacture for and export to foreign countries, from Germany, of arms, munitions and war material of every kind. This provision applies equally to Abyssinia as to all other countries.
  Mr. MANDER: Can the right hon. Gentleman say whether that provision has been observed in fact?
  Mr. EDEN: I have no information to the contrary.
  Mr. MANDERasked the Secretary of State for Foreign Affairs whether the committee appointed at the last meeting of the Council of the League of Nations to advise appropriate sanctions in the event of unilateral repudiation of treaties will expedite their work in view of the threatened breach of the Covenant
  942
  of the League of Nations by Italy in connection with Abyssinia?
  Mr. EDEN: I see no reason to link the dispute between Italy and Abyssinia with the work of the Committee to which the hon. Member refers.

  ARGENTINE RAILWAYS (BRITISH INVESTORS).
  Mr. BURNETTasked the Secretary of State for Foreign Affairs whether he will ascertain why the earlier award by the Argentine President, prior to the Ortiz-Nogues recommendations, for improving the working of the Argentine railways has not been carried out; and whether he will notify the Argentine Government that the operation of Clause 8 of the presidential award, as well as the Ortiz-Nogues recommendations, will be considered in relation to the extension of the Argentine trade agreement so as to protect British capital sunk in Argentine railways?
  Mr. EDEN: I am informed that an interpretation by the President of the Argentine Republic of the clauses of his previous award, over which there has been difficulty, is expected to be issued shortly. As regards the recommendations referred to by my hon. Friend, I under stand that they will have to be submitted to the Argentine Congress before they can take effect.

  DOMINIONS (CONSULTATION AND CO-OPERATION).
  Captain FULLERasked the Prime Minister, in view of the ease with which personal contact with representatives of the Dominions is now possible, whether the establishment of a small imperial council to discuss and suggest solutions to inter-Imperial problems is contemplated?
  The PRIME MINISTER (Mr. Ramsay MacDonald): His Majesty's Government in the United Kingdom are always ready to consider any practical suggestion for supplementing the existing arrangements for consultation and co-operation between this country and the Dominions. I doubt, however, whether the establishment of a formal permanent body on the lines suggested by my hon. and gallant Friend would be generally acceptable or

  943
  materially assist in securing the objects desired.
  Captain FULLER:Has the right hon. Gentleman obtained the views of the Dominions on this matter?
  The PRIME MINISTER:I think it is quite unnecessary to obtain their views formally, because I happen to know exactly what reactions they would show if His Majesty's Government made this proposal to them.

  CO-OPERATIVE SOCIETIES.
  Mr. MARCUS SAMUELasked the Financial Secretary to the Treasury whether in view of the numerous similarities between and the identical trading methods of co-operative societies and limited liability companies he will consider the advisability of introducing legislation to secure that the names and addresses of members of co-operative societies shall be registered and disclosed in the some way as those of members of limited liability companies?
  The FINANCIAL SECRETARY to the TREASURY (Mr. Duff Cooper): The Industrial and Provident Societies Acts, under which co-operative societies are registered, already provide for the books containing the names of the members to be open to inspection by persons interested. Disclosure of names and addresses of members, by the method laid down for limited liability companies, is not appropriate to these societies, as the holdings of the majority of members are of trivial amount, but the question of introducing some alternative method of disclosure to persons interested will be considered in connection with any suitable amending legislation.
  Mr. RHYS DAVIES: In view of the fact that about 7,000,000 names and addresses would be involved in this proposal, will the hon. Gentleman discourage any suggestion of the kind?

  SCOTLAND (MENTAL PATIENT; LOCHGILPHEAD).
  Mr. T. SMITH (for Mr. THORNE)asked the Secretary of State for Scotland whether he is in a position to state whether Mr. John Mulholland, who is an
  944
  inmate of the Argyll and Bute district asylum at Lochgilphead, has yet been discharged from that institution as sane?
  Sir A.LAMBERTWARD: Mr. Mulholland was liberated to his sister's care at Glasgow on the 23rd instant, having been granted 28 days' leave of absence. It has been arranged that his sister is to report to the medical superintendent of the asylum before expiry of the 28 days, and if Mr. Mulholland continues to keep well mentally he will then be formally discharged.

  REMAND PRISONERS.
  Captain CUNNINGHAM- REIDasked the Home Secretary whether he has considered the recommendation contained in the report of the Commissioners of Prisons for 1933 that it would be an advantage in police court cases if the usual period of remand for eight days on bail or in custody could be extended to 14 or21 days, without producing the prisoner, if the court was satisfied by a medical report that such extension was desirable to ascertain the mental condition of the prisoner; and whether he proposes to accept this recommendation and implement it by the introduction of the necessary legislation?
  Sir J.GILMOUR: This recommendation has been noted for consideration when there is an opportunity for legislation, but I cannot say whether it will be possible to give effect to it.

  ACCIDENT, PORTSMOUTH.
  Mr. T.SMITH (for Mr. THORNE)asked the Home Secretary whether he has received a report from his factory inspector in connection with the death of a casual labourer at Portsmouth who was assisting to carry an acetylene welding-plant; whether he can state the cause of the accident; and whether be has any record of similar cases?
  Sir J. GILMOUR: I have received a preliminary report from which it appears that the accident occurred in an unusual manner owing to sparks entering an acetylene generator which was not altogether cleared of gas. The case will be followed up with a view to the prevention of any similar accident.

  AVIATION.

    FLYING INSTRUCTION.
    Captain CUNNINGHAM - REIDasked the Under-Secretary of State for Air whether the Air Ministry have considered the recommendation of the Gorell Committee on Civil Aviation regarding the terms on which a pilot may give instructions in flying; and whether he is proposing to take the necessary action to implement this recommendation?
    Major GEORGE DAVIES (Lord of the Treasury): I have been asked to reply. This recommendation has been approved by my Noble Friend and effect will shortly be given to this decision by Order in Council.

    AIRCRAFT INDUSTRIES (DISTRIBUTION).
    Captain CUNNINGHAM - REIDasked the Under-Secretary of State for Air whether the Air Ministry has evolved any policy of geographic decentralisation and distribution of the aircraft industries, in order to secure a distribution of risks through out the country?
    Major DAVIES: The subject has been under comprehensive examination for some time. Much progress has been made with the inquiry, but my right hon. Friend is not in a position to make any public statement.

  CHINA (TIENTSIN).
  Mr. MOREING (for Mr. NUNN)asked the Secretary of State for Foreign Affairs whether any representations have been made through the Chinese Government to the North China River Commission that the port of Tientsin is practically closed to ocean-going ships, which are unable to proceed beyond Tangku, cargo at that point having to be transferred to lighters at heavy cost to British shippers for lighterage and unloading charges; and, if not, whether he will cause inquiries to be put in hand with a view to action being taken?
  Mr. EDEN: The reason for the conditions described in my hon. Friend's question is that the scheme for preventing silt from reaching Tientsin harbour has proved ineffective. Representations have been made in this connection to both the central and the local Chinese
  946
  authorities, and His Majesty's Ambassador and Consul-General are in close and constant touch with the situation.

BUSINESS OF THE HOUSE.
Mr. ATTLEE: May I ask the Prime Minister what business will be taken on Friday?
The PRIME MINISTER: Supply, Committee. The Foreign Office Vote is to be put down.

MESSAGE FROM THE LORDS.
That they have passed a Bill, intituled, "An Act to confer further powers on the Port of London Authority for the improvement and development of the Royal Victoria Dock and the Royal Albert Dock; and for other purposes."[Port of London Bill[Lords.]
And also a Bill, intituled, "An Act to amend the London Building Act, 1930."[London Building Act (Amendment) Bill[Lords.]

PORT OF LONDON BILL [Lords].
  LONDON BUILDING ACT (AMENDMENT) BILL [Lords].
  Read the First time and referred to the Examiners of Petitions for Private Bills.
ORDERS OF THE DAY.
  GOVERNMENT OF INDIA BILL.
  As amended, further considered [THIRD DAY].
  GOVERNMENT OF INDIA BILL.

    CLAUSE 148.—(Remission of States contributions.)
    3.11 p.m.
    The CHANCELLOR of the DUCHY of LANCASTER (Mr. Davidson): I beg to move, in page89, line 19, after "guarantees," to insert:
    "or (b) in return for the discharge of the State from obligations to provide military assistance."
    This Amendment is put down to cover a small point. It was found that the existing drafting did not cover the case of the State of Sangli, one of the five States which have ceded territory or waived guarantees. Sangli is a small State in the Deccan, which has ceded territory, and these words are necessary in order to cover the point.
    3.12 p.m.
    Mr. CHURCHILL: The House is much indebted to the Chancellor of the Duchy of Lancaster for the explanation which he has given, though it was, from some points of view, commendably brief; but I think it is a pity that we are not in formed why a point like this was not foreseen when the Bill was going through its Committee stage. It has now been found necessary, on Clause 148, to put down nearly half a page of Amendments. The point here, as stated by my right hon. Friend, appears to be a fairly simple one, but we should be very glad, as my right hon. Friend has exhausted his right to speak, if one of the other Ministers in charge of the Bill could tell us exactly what is the reason why it was not fore seen before.
    3.13 p.m.
    The SECRETARY of STATE for INDIA (Sir Samuel Hoare): The point, I think, was foreseen, but it was not covered by our original wording. In a Bill of this kind, immensely complex as it is, it is not to be wondered at that the first edition is not word perfect.
    Amendment agreed to.
    Mr. DAVIDSON: I beg to move, in page 89, line 21, to leave out from the
    952
    second "State," to "guarantees," in line 22, and to insert
    "but in the first mentioned case on condition that the said."
    Mr. CHURCHILL: Do I understand that this is covered by the explanation that has been already given?
    Sir S. HOARE Sir S. HOARE indicated assent.
    Amendment agreed to.
    The following Amendments stood upon the Order Paper:
    In page 90, line 38, to leave out "privilege," and to insert "right, privilege, advantage."
    In line 38, to leave out from "character," to "'as," in line40.
    In line 41, to leave out paragraph (a), and to insert:
    "(a) rights, privileges or advantages in respect of, or connected with, the levying of sea customs or the production and sale of untaxed salt."
    In page 91, line 14, to leave out "privilege," and to insert "right, privilege, advantage."
    In line 15, to leave out "a privilege or immunity," and to insert "one."—[Sir S. Hoare.]
    Mr. DAVIDSON: I beg to move, in page 90, line 38, to leave out "privilege," and insert" right, privilege, vantage."
    These five Amendments are purely drafting. They make no alteration of substance, but are merely for the purpose of greater accuracy of language.
    3.14 p.m.
    Mr. CHURCHILL: I think we might be told what advantage is gained by the insertion of these words "right" and "advantage "in addition to the word "privilege." I do not quite understand what their effect will be. Undoubtedly they are not mere repetition. It is true that there are some aspects of the word "privilege" which would coincide with some aspects of the word "advantage," but "right" is quite different from "privilege." It is in sharp contrast with" privilege." Privilege is favour; right is what anyone in particular, in respect of a particular case, is entitled to. How, then, can it be said that the insertion of the words "right" and "advantage" as well as "privilege" is merely repeating in more precise language what was

    953
    originally intended? There may be a perfectly good explanation, but certainly the explanation which has been given by my right hon. Friend in no way covers the point.
    3.15 p.m.
    Mr. CHARLES WILLIAMS: I wonder if I might add a short question on this matter? It seems to be a tremendously large experiment to extend the word "privilege" to cover the three words "right," "privilege" and "advantage." An advantage puts someone in a far stronger position than privilege, while, as the right hon. Gentleman the Member for Epping (Mr. Churchill) has pointed out, rights are in a very different position from privileges. If, in a rather important Clause of the Bill, the word "privilege" is to be extended to cover these other points, we ought to be told fairly clearly and, if possible, concisely, precisely why it is that these changes are being made. They are not merely verbal; the words mean entirely different things. I have no doubt that some Members of the Government have looked them up in the dictionary, and may be able to explain how the use of these three different words will affect the Bill as it stands.
    3.16 p.m.
    The SOLICITOR - GENERAL (Sir Donald Somervell): I hon. Members will look at the place in the Bill where these words occur, they will see the generality of the words already in the Bill. The Clause says:
    "In this chapter privilege or immunity 'means any such privilege or immunity of a financial character enjoyed by or under any treaty or agreement, or by usage, as is hereinafter mentioned.?
    As the House is aware, the treaties and agreements which have been made from time to time with the Indian States fill several volumes, and a variety of terminology is used in these various documents. There will not be any such difference in meaning between "privilege" and "right" as the right hon. Gentleman the Member for Epping (Mr. Churchill) suggests, but, in considering the vast variety of terminology and the number of different phrases which have been used, it has been thought that, as a matter of drafting, the words "right" and "advantage" should be added to the word "privilege," in order to cover the very varied terminology which is used in these documents. Nothing will thereby be
    954
    added to the effect of the Clause, but, purely as a matter of expression, to cover the subject-matter, it is better to use these words, which are already used in the different documents.
    Amendment agreed to.
    Mr. DAVIDSON: I beg to move, in page 90, line 38, to leave out from "character," to "as," in line 40.
    3.19 p.m.
    Mr. CHURCHILL: I suppose we shall be assured that this also is merely a draftingAmendment, but at first sight the words
    "enjoyed by or under any treaty or Agreement, or by usage,"
    which it is proposed, at this ante penultimate stage of the Bill, to delete, appear to be important words. They have been found necessary during all the years that the Bill has been in preparation, and, during all the months that it has been discussed in this House, no doubt has been cast upon the need for their presence in the Bill. Why, then, are they to be cast away as if they were of no purport? I suppose that the effect of cutting them out would greatly to broaden and widen the scope of the rights, privileges and advantages which are to be preserved, giving security not only to anything that may have arisen from any treaty or agreement or by usage, but to matters even outside those wide provisions. In no sense is it pure drafting.
    I do not say that the Government may not be right in omitting these words, but do not let us be told that they are merely drafting Amendments, when, as a matter of fact, they are obviously intended to give wider scope to the already widened privileges now to be defined as "rights, privileges or advantages" which the House has just agreed to in regard to preceding Amendments. I think that we must have some fuller explanation upon the point. May I ask, if you leave out "treaty, agreement, or by usage, "what other class of rights or privileges or ad vantages are contemplated except those derived from the words" treaty, Agreement, or by usage "I agree that it is always very difficult on the spur of the moment in handling matters like this to consider what may not be included. It is always very difficult to take an ex-

    955
    haustive view of the position, but, judging by the proposals made by the Government, it seems to me that the words they have in the Bill cover almost every thing. Why then do they wish to take them out, and what is it they wish to include which is not comprised in these words? I hope that, as we have been disappointed with the explanation of the Secretary of State, we may have an explanation from the learned Solicitor' General.
    3.22 p.m.
    Mr. C. WILLIAMS: I agree with the right hon. Gentleman the Member for Epping (Mr. Churchill) that this appears to be an enormous widening of the whole position of the Sub-section, and I can well imagine that if any private Member came down to the House with an Amendment of this kind he would be told that it would be opening the door to all sorts of things. I see my right hon. and learned Friend the Attorney-General looking at me very severely—and muttering, and I wonder whether he or anyone else will explain to the House whether the word "usage" covers the meaning which might be applied to it. One might use the word "custom" as well. Usage and custom are fairly closely allied as words, and sometimes one can be used and sometimes the other. When the Government make an Amendment of this kind and move it in such away, though we have the greatest faith in their ability to have gone into all these things, it rather gives their case away. I should like to know what influences have been at work to enable this very large and widening Amendment to be brought in. We should like to know something about the factors which suddenly caused the Government to widen the Clause in such a curious way.
    3.25 p.m.
    The SOLICITOR-GENERAL: The right hon. Gentleman and the hon. Gentleman said that the Clause has been widened, but I can assure the House that they are both wrong. As I understand the position, one can properly describe an Amendment as being a drafting Amendment if it does not alter what the ordinary person reading the Clause would take to be its original effect. It has been discovered that, owing to some detail which was overlooked, that the correct words have not been used.
    956
    I can assure the right hon. Gentle man, the hon. Gentleman and the House that we are not really widening the Clause at all by the use of the proposed words. The Clause as drafted referred to privileges or immunities
    "of a financial character enjoyed by or under any treaty, or agreement, or by usage."
    The right hon. Gentleman said that it was very difficult to imagine anything which would not fall under those three heads, and, therefore, any Member of the House reading the Bill as originally drafted would say that that was our intention, and that there was no room left for widening in any material sense words which originally appeared to be as wide as possible. There is no sinister motive in the proposed words, and the reason for their introduction is somewhat similar to that explained on the last Amendment. It has been discovered that the words previously used might be held not, to cover the origin of some of the things which are referred to in paragraphs (a), (b), (c), (d). For instance, there might be a great deal of discussion of one kind or another as to what actually the word "usage" means. It is undesirable to put into a Bill, unless you have to do so, a word as to the meaning of which there is considerable controversy. There might be an item of this kind which arose unilaterally which could not properly be called a treaty or an agreement.
    Mr. CHURCHILL: Could it not be called "usage"?
    The SOLICITOR-GENERAL: It might be. The word "usage" is one which has created controversy between the States in the past as to what exactly it covers. I am not sure that it is right to say that, if there be a definite grant by a document, the immunity enjoyed under it would be enjoyed by usage. I do not think that it is. It is enjoyed by reason of the grant. It it for these reasons that it has been thought better, as a matter of drafting, to omit the three words relating to specific objects and leave the matter at large, the limitations being in the later part of the section, which make it quite clear what are the items to be covered irrespective of their origin. That is the whole explanation of the Clause. I apologise to the House for detaining it

    957
    at such length, but I hope that the explanation meets the desires of the right hon. Gentleman.
    Amendment agreed to.
    Mr. DAVIDSON: I beg to move, in page 90, line 41, to leave out paragraph (a), and to insert:
    "(a) rights, privileges or advantages in respect of, or connected with, the levying of sea customs or the production and sale of untaxed salt."
    This Amendment is consequential.
    3.29 p.m.
    Mr. CHURCHILL: The Chancellor of the Duchy of Lancaster ejaculated the phrase that the Amendment is consequential.
    Mr. DAVIDSON: I ought to have said drafting.
    Mr. CHURCHILL: But surely it is part of the general series of Amendments which are now being inserted. They are intended as being drafting Amendments, but what is their cumulative effect? It is to make or to endeavour to make this Clause more acceptable to the Princes concerned. Far from being a drafting Amendment it is part of the attempt to make what one might describe as a new deal with the Princes. It may be a small part but, at any rate, it is a part, and to pretend that it is simply a case of the draftsman looking over the Clause in retrospect and coming to the conclusion that he had put down something that was wrong and that he wanted half a page of the Order Paper in order to make the Clause more word perfect, is surely falling short of the actual truth. I have of ten seen, especially after Questions have come to an end early, the Government endeavouring to sweep through a whole set of Amendments by the mere suggestion that they are really drafting Amendments, or purely consequential on what we have already done. Therefore, the House ought always to look rather narrowly at the legislation which is passing through the House; otherwise, some parts of the Bill may slip through with out receiving that meticulous attention which it requires.
    With regard to the proposed change, I have read and re-read the existing words and the words which it is pro posed to substitute for them, and it is clear that a greater assertion is to be made of the power of levying sea customs
    958
    and of producing and selling untaxed salt. I suppose that untaxed salt means salt which is immune from Federal taxation by the Government of India, but it does not mean that a Prince having produced this salt which is immune from the taxation of the Government of India, cannot tax it himself for his own revenue. He can. Is that not so 7 I gather from the Chancellor of the Duchy that that is so. The object is to make sure that the Prince has a more assured facility for imposing a salt tax upon his subjects. Whereas the Federal Government, the Imperial Government have a tax which runs over the whole country and whereas some of the States have, as it were, the right to produce salt without its being taxed now, the proposed wording will give a greater right and a greater facility for the Princes to impose a salt tax. That may be very desirable. No doubt it is very desirable when you want to win the assent of the Princes, but it is perfectly clear that the whole purpose of these Amendments is to secure to the native Prince a greater privilege, a more assured application for the purposes of imposing a salt tax upon his subjects. That is the intention. No doubt he has that right at the present time, but this Amendment is to make his right far more secure than it was. I have no doubt that what is called a mere drafting Amendment is the result of a long process of haggling between the advisers of the Secretary of State and the legal advisers of the Princes. Did I say the legal advisers of the Princes? There is, I should say, one legal adviser who is carrying on negotiations at the present time. I have no doubt that prolonged discussion has gone on with regard to this point, which is represented to us as a mere drafting Amendment.
    I do not see why the draftsman should have made any move if the Amendment were not the result of a bargain. I do not remember that this point was discussed in Committee. It is new to me. When our discussions reached this part of the Bill nothing was said about this matter. Therefore, it is not a question of the draftsman going through the Bill between the Committee stage and the Report stage and saying: "Let me look at the Bill; let me take note of the pledges given by Ministers; let me note the weak points which have been ex

    959
    posed; let me tighten up the armour in these respects, and let me prune away excrescencies." What has moved my right hon. Friend the Secretary of State and his right hon. colleague the Chancellor of the Duchy to bring forward this Amendment? It is, as I say, part of an attempt to sugar the pill for the Princes. I do not at all blame the right hon. Gentleman for doing that. Much of the fortunes of his Bill rest upon his being able topersuade—I will confine myself to the word "persuade," because I do not wish to get on to controversialgrounds—the Princes to accept it, but what I object to is that after he has engaged in this elaborate piece of eighteenth century diplomacy he should come down to the House and pretend that the whole series of Amendments which he has presented to us are merely drafting and con sequential.
    3.37 p.m.
    Mr. C. WILLIAMS: I notice that my right hon. Friend the Member for Epping (Mr. Churchill) is in a very suspicious mood this afternoon. He seems to see round every corner some terrible conspiracy on the part of the Minister or some of the people who are working with him to get round the Bill and to sugar the pill for the Princes, as he put it. I am not sure that this comparatively innocent Amendment, the description of which changed very quickly from consequential to drafting, is really a matter of any importance, but there is one point which might be explained by the Government, and that is why the word "retention" has been left out of paragraph (a). That word had considerable meaning and had an important bearing on the original wording of the Clause. By leaving it out we are making the matter entirely different. If we leave out the word "retention" it may be possible that we in crease the privileges. Perhaps my right hon. Friend will say whether there is any intention in, the proposed new words to extend the rights and privileges. It would not be polite to say that originally the draftsman made a mess of it, but certainly the word "retention" did have a meaning. If we are making the Bill better, I think we ought to know why this word has been left out.
    Lieut.-Colonel ACLAND-TROYTE: Would not the Bill be made very much simpler and easier and much more satis-
    960
    factory to the Princes, if we took out all these complicated words and simply said "privileges or immunities of any sort enjoyed by any Prince whatsoever"
    3.39 p.m.
    Sir S. HOARE: My right hon. Friend the Member for Epping (Mr. Churchill) his face suffused with smiles, has put to the Government a number of questions about a series of Amendments, and he appears concerned whether or not they are drafting. He said that the Government are very apt when questions come to an end before the time to try and rush Amendments through without pro per consideration. Is it not rather that my right hon. Friend's eyes were on the clock and that he thought we were going too fast? Let my right hon. Friend take it from me, if he will take anything from me.
    Mr. CHURCHILL: No.
    Sir S. HOARE: I will withdraw my appeal to him and make it to the House generally, excluding him, and will say to the House that these are definitely drafting Amendments. They are not the result of any sinister negotiations; and if accepted would not add one jot or iota to any rights and privileges at pre sent possessed by the Princes. With that explanation I ask the House to accept the Amendment. The omission of the word "retention" makes no difference whatever.
    Amendment agreed to.
    Further Amendment made: In page 91, line 14, leave out "privilege," and insert "right, privilege, advantage."—[Sir S. Hoare.]
    Sir S. HOARE: I beg to move, in page 91, line 15, to leave out "a privilege or immunity," and to insert "one."
    3.42 p.m.
    Mr. CHURCHILL: What is the point of this How is it that when the Bill was maturely considered this point was not dealt with, and that it is only now that the redundancy or tautology is deemed to be cacophonous. Why has not this been noticed before? I should have thought that it was legally necessary to repeat the words "privilege or immunity." If this is mere repetition, it is extraordinary that it has not been noticed by the draftsman before. Is there no explanation at all on the point?
    The ATTORNEY - GENERAL (Sir Thomas Inskip): The only explanation is that the draftsman has gone through the process which the right hon. Gentleman goes through in polishing up his speeches.
    Amendment agreed to.
    3.43 p.m.
    Mr. DAVIDSON: I beg to move, in page 91, line 19, to leave out sub-section (7), and to insert:
    "(7) His Majesty shall not accept the Instrument of Accession of any State, un less it contains such particulars as appear to His Majesty to be necessary to enable due effect to be given to the provisions of this and the next but one succeeding sections, and in particular provision for deter mining from time to time the value to be attributed for the purposes of those provisions to any privilege or immunity the value of which is fluctuating or uncertain.?
    This Amendment has the effect which the right hon. Member for Epping (Mr. Churchill) feared that the other Amendments had. It definitely widens the scope of the Clause, and it is moved in order to be certain that a complete balance-sheet of the debits and credits shall be inserted in the Instrument of Accession, to make the position clear and final.
    3.44 p.m.
    Mr. CHURCHILL: It appears to me to be a considerable addition to the Instrument of Accession. All the minor particulars upon which the rights, privileges and advantages are to be based must be set forth in the Instrument of Instruction. That is not unreasonable. If we are to give these privileges it should be perfectly clear and plain the basis upon which they are exercisable and enforceable. No one will object to that. I am, therefore, all the more puzzled when the right hon. Gentleman says that the Amendment is of a widening character. The effect produced on me by reading it is that it is of a narrowing character. Without this Amendment the general assertions of the Princes in regard to their rights, privileges and advantages would receive an indefinite sanction and authority, whereas the moment you put this in you say that they must be catalogued before hand and that only such rights, privileges and advantages as are catalogued will he held to be valid. How then does the right hon. Gentleman say that it is a widening Amendment? It is a narrowing Amendment, and, although it may be a proper one to make, the reasons given for its insertion are diametrically opposite to the truth.
    3.46 p.m.
    Mr. C. WILLIAMS: Can the Secretary of State give us any explanation—I am sure the right hon. Member for Epping (Mr. Churchill) cannot—as to what is meant by. the words "fluctuating or uncertain"? There are some people and some things which are fluctuating and uncertain, but I want to know what is a fluctuating or uncertain privilege. The fact that the proposal widens the whole scope of the provisions under which the Princes can come in seems to me to be of great value. We want to see the Princes come in on a fair and reasonable basis, and I take this opportunity of congratulating the Government on making things easier and fairer. I do not take the view Which some hon. Members do in regard to the Princes. I think everything should be done to allow them to come in on proper terms when they think best for their own people, and if that is what the Government are doing they should make a little more of their case and explain that they are doing something which is really valuable.
    Mr. ATTLEE: I think I can answer the question of the hon. Member for Torquay (Mr. C. Williams). We have a fluctuating and uncertain privilege in the assistance of the right hon. Member for Epping (Mr. Churchill)in these Debates.
    Mr. EMMOTT: May I point out that it is not the privilege or immunity which is fluctuating or uncertain; it is the value of the privilege or immunity which is fluctuating or uncertain.
    Mr. ATTLEE: It is the same thing.
    3.48 p.m.
    Sir BASIL PETO: The Amendment is drafted in a rather unusual form. It says:
    "His Majesty shall not accept the Instrument of Accession of any State, unless it contains such particulars as appear to His Majesty to be necessary."
    Suppose the schedule of the rights, privileges and immunities has been prepared to the best ability of the legal advisers of the Princes and is believed to be comprehensive, and that after they have joined the Federation it is found that other immemorial privileges have been omitted, what is the position then? It says that "His Majesty shall not accept the Instrument of Accession," but

    963
    it has been accepted under a misapprehension. Does it mean that no privilege which has been omitted by accident can be allowed in the future?
    Earl WINTERTON: There is one question to which I hope I shall have an answer. As far as I recollect, no Bill has ever given instructions to the Crown. In this Amendment we have the words:
    "His Majesty shall not accept the Instrument of Accession of a State.?
    The question, I think, was raised in the Joint Select Committee, and I think it is necessary that we should not create any constitutional innovation in this way. I am sorry that I have not raised The point before, but it has just occurred to me.
    3.49 p.m.
    Sir S. HOARE: I will certainly look into the point of drafting mentioned by the Noble Lord the right hon. Member for Horsham (Earl Winterton). As at present advised, I understand that the phrase would not be objectionable in this connection, but I will look into it again. The answer to the hon. Member for Barnstaple (Sir B. Peto) is that the Instrument of Accession will be final; it will not be possible to raise claims subsequently. I do not think he need feel any anxiety. I shall be very much surprised if a Prince in any part of India fails to draw attention to any special rights or privileges that he may possess.
    Amendment agreed to.

    CLAUSE 150.—(Value of privileges and immunities to be set of f against share of taxes, etc., assigned to Federated States.
    3.51 p.m.
    Mr. DAVIDSON: I beg to move, in page 92, line 2, after "made," to insert "in any year."
    This and an Amendment which follows have been put down to meet an apprehension on the part of the States that as the Clause was drafted it might be possible to bring into account arrears of immunities and not set of f those immunities against the debits on the other side. That was never the intention. As the Clause was drafted it was feared that it might have been possible to have brought in a series of years instead of one year.
    964
    Our intention was always that only one year should be taken into account.
    Amendment agreed to.
    Further Amendment made: In page 92, line 5, after "value," insert "in and for that year."—[Mr. Davidson.]
    Mr. DAVIDSON: I beg to move, in page 92, line 5, after "State," to insert:
    "in respect of any former or existing source of revenue from a similar duty or tax or from goods of the same kind, being a privilege or immunity."
    This Amendment is also moved to meet wishes expressed by the States.
    Amendment agreed to.

    CLAUSE 155.—(Exemption of certain property from taxation.)
    Amendments made: In page 93, line 19, leave out "or imposts, whether local or general."
    In line 20, after "by," insert "or by any authority within."
    In line 24, leave out "or impost."
    In line 25, leave out "or impost"—[The Solicitor-General.].

    CLAUSE 157.—(Duty of Federation and Provinces to supply Secretary of State with funds.)
    3.56 p.m.
    Sir REGINALD CRADDOCK: I beg to move, in page 94, line 23, to leave out "in the United Kingdom."
    This is a very small Amendment which I hope the Government will be able to accept. It deals with the question of pensions payable in the United Kingdom. There are certainpensioners—they number over 100 at present and there might be many more at another time—whose pensions are not paid to them in the United Kingdom. They have made arrangements through the India Office or the High Commissioner to have the pensions paid elsewhere, and as it is well to be very precise in these Clauses and it is very important to the pensioners concerned, they are anxious that the pensions which are remitted to them in various ways through the High Commissioner or the Secretary of State and through authorities accountable to him, should be definitely mentioned in the Bill. I am advised that the wording of the Amendment would meet that wish, but if the Secretary of State cannot

    965
    accept the wording, perhaps he will frame the Amendment in better form.
    3.58 p.m.
    Duchess of ATHOLL:I beg to second the Amendment.
    I need not stress the point that there are many pensioners or pensioners' wives who, after a long period of residence in India, find it difficult to face the cold of an English winter, and for that reason they live abroad in one country or another. I speak from experience of people who are in fact domiciled abroad. I feel sure that the wording of the Clause is just an unintentional omission, but the Amendment will give effect to what is desired.
    Sir S. HOARE: I am always glad when I find myself in agreement with my hon. Friend the Member for the English Universities (Sir R. Craddock). I am delighted to accept this Amendment.
    Amendment agreed to.
    Further Amendment made: In page 94, line 25, at the end, insert:
    "in the United Kingdom or through officers accounting to the Secretary of State or the HighCommissioner."—[Sir B. Craddock.]

    CLAUSE 166.—(Auditor-General of India.)
    4.0 p.m.
    The SOLICITOR-GENERAL: I beg to move, in page 98, line 3, at.the end, to insert:
    "and the salaries, allowances, and pensions payable to or in respect of members of his staff shall be paid out of those revenues."
    This is a drafting Amendment, to rectify a small omission in the original Bill. The original draft did not provide for the staff of the Auditor-General being covered by this Clause. This Amendment puts that right.
    Mr. CHURCHILL: How was it that this was forgotten? It seems to me rather an important point to be forgotten in the drafting of the Bill. Apparently when the Bill was drafted no thought was paid to the fact that the members of the staff of the Auditor-General would also be required to be paid out of the revenues of the Federation. The learned Solicitor-General represented it as a drafting Amendment, whereas, in fact, it is a slovenly omission which has been tardily made good.
    Amendment agreed to.

    CLAUSE 167.—(Provincial Auditor General.)
    The SOLICITOR-GENERAL: I beg to move, in page 98, line 21, after "Province," to insert "and his staff."
    This is a consequential Amendment to cover the staff of the Auditor-General of a Province in the same way as the staff of the Auditor-General in the previous Clause.
    4.3 p.m.
    Mr. CHURCHILL: This Amendment gives the learned Solicitor-General the opportunity of answering the question as to how this was omitted. It is a very important point. Anything more ridiculous than to provide for the payment of the chief, whoever he may be, without providing for the payment of any of his staff can hardly be imagined. How much more of this is there in the Bill? Is it imagined that the Auditor-General call act like a disembodied spirit without the slightest secretarial or official assistance It is said that it was only discovered as an after-thought. It is very right and proper that it should be discovered. Indeed, we may admire and acclaim the efficacy of our parliamentary procedure which gives time for these Amendments to be made, but it seems extra ordinary in a Bill of this kind that these important officials have been left high and dry in respect of the means of providing for the salaries of the necessary staff without whom they cannot possibly do their duty. Surely the learned Solicitor-General will give some explanation. Perhaps I used the words I did just now too hastily—I hope I did. I trust he will be able to show that there was nothing careless or slovenly in providing for the payment of ministers without pro viding for the payment of the staff in any way from the revenues. -At present I rest under the unsatisfactory impression to which I have given voice, I hope precipitately, and I trust that the learned Solicitor-General will be able to remove that impression, in which case I shall be quite willing to withdraw the word "slovenly."
    4.6 p.m.
    Mr. C. WILLIAMS: I wonder whether this Amendment is altogether consequential, because the last Amendment referred to the salaries, allowances and pensions payable to the Auditor-General's

    967
    staff and this one makes the Sub-section read:
    "The provisions of the last preceding Section shall apply in relation to the Auditor-General of a Province and his staff."
    I think we ought to be told whether the words "and his staff" axe really in tended only to be consequential on a further Amendment, or whether they are consequential on the first Amendment and the whole Clause. If they are consequential on the whole Clause, the intention of the Government ought to be made clear.
    4.7 p.m.
    The SOLICITOR-GENERAL: I think my right hon. Friend spoke, perhaps, a little severely. I cannot believe that in the course of his long and varied political career he has never made any omissions or failed to get his first draft in perfect and final form. It was thought, I believe, that the staff was covered by the Civil Service provisions. There was, of course, never any question of officials not being paid. All officials, of course, will be paid under the general powers of the Bill, but some doubt was expressed as to whether this staff was covered by the Civil Service provisions, and therefore these words are proposed in order to make it clear. As regards the point put by my hon. Friend opposite, this is clearly con sequential in the sense that it has been found necessary to make special provisions for the staff in addition to the Auditor-General for the reasons I have given; otherwise they would not be covered by the Clauses with which we are now dealing.
    Amendment agreed to.
    The SOLICITOR-GENERAL: I beg to move, in page 98, line 23, after "India," to insert "and his staff."
    4.9 p.m.
    Mr. CHURCHILL: I take advantage of this second Amendment, which relates to the topic of the conversation which has just taken place, to thank the learned Solicitor-General for the explanation which he has given. I think that that explanation fully justifies me in applying to the omission of which the Government have confessed themselves, I will not say guilty, but as having fallen into, a word less strong than "slovenly," I will, there
    968
    fore withdraw that word and substitute the word "inadvertence."
    Amendment agreed to.

    CLAUSE 172.—(Vesting of lands and buildings.)
    4.10 p.m.
    The SOLICITOR-GENERAL: I beg to move, in page 101, line 2, to leave out from "were," to the end of line 5, and to insert:
    "then used, otherwise than under a tenancy agreement between the Governor-General in Council and the Government of that Province, for purposes which there after will be purposes of the Federal Government or of His Majesty's Representative for the exercise of the functions of the Crown in its relations with Indian States."
    This Amendment raises a somewhat similar point to one which we discussed at an earlier stage of the Bill. In the Bill, as drafted, the criterion was the purposes for which buildings were being used at the appointed date. Under this Amendment we adopt the other criterion of the purposes for which they will be used under the Bill when the new Constitution comes into force.
    4.11 p.m.
    Brigadier-General CLIFTON BROWN: I assume that this Clause deals with such things as Army barracks which are taken over by the Federation. Is it implicit in the Clause that these belong to the Crown and are therefore part of the Federation, or is this Clause more to do with the exercise of the functions of the Crown in its relations with Indian States? Army land, I suppose, will be governed by this Clause, and I hope that it will not be in any way interfered with, but will be used for the same purpose as at the present day.
    4.12 p.m.
    Sir S. HOARE: I will answer my hon. and gallant Friend's question in a sentence. Barracks and military land are taken over by the Federation, defence being a Federal subject, are served department, but legally the Federation takes the mover, even although the administration and management of them remain under the direct control of the Imperial Parliament and the Secretary of State.
    Brigadier-General BROWN: Thank you.
    4.13 p.m.
    Mr. CHURCHILL: May we, then, assume from the statement of the Secretary of State and from the somewhat fuller, though I am bound to say rather complicated, statement of the learned Solicitor-General, that the new words are designed to have the effect that all these buildings, barracks, etc., State property, shall be transferred to the Federation in their completeness, and that nothing shall be left out—to give a wider scope to the Clause so as to make sure that the whole property will be transferred?
    Sir S. HOARE: It is a different way of describing it.
    Mr. CHURCHILL: A different and a longer way. Is it for the purpose of making the catalogue more exact, or the definition of the property more precise or more full Otherwise one does not see any great advantage in adding a couple of lines or so to this voluminous Bill. I am still at a loss to know what is the purpose. There must be some purpose in having these extra words. I am not suggesting that any sinister motive or deep plot has inspired the Secretary of State in making the change. I am only animated by the desire to know what is the extra advantage claimed.
    Sir S. HOARE: The purpose of the service is the test. If my right hon. Friend had been here when we were discussing one of the new Clauses the other day, he would be aware that it was generally accepted by the House that this was a very correct definition.
    Mr. CHURCHILL: Thank you very much.
    Amendment agreed to.
    4.15 p.m.
    The SOLICITOR-GENERAL: I beg to move, in page 104, line 16, to leave out "at the said date," and to insert:
    "immediately before the commencement of Part III of this Act."
    This is a drafting Amendment. The words proposed in the Amendment are considered to be more suitable.
    Amendment agreed to.
    Further Amendment made: In page 101, line 22, leave out "at this date, "and insert" immediately before the commencement of Part III of this Act."—[The Solicitor-General.]
    4.16 p.m.
    Sir HOARE: I beg to move in page 101, line 34, at the end, to insert:
    "(3) The lands and buildings vested in His Majesty by virtue of this section for the purpose of His Majesty's Government in the United Kingdom shall be under the management of the Commissioners of Works, and, subject to the provisions of sub section (2) of this section, the provisions of the Acts relating to the Commissioners of Works shall apply in relation to those lands and buildings as if they had been acquired by the Commissioners in pursuance of those Acts."
    This new Sub-section is for the purpose of making clear the destination of the buildings of the India Office.
    Mr. CHURCHILL: The destination of the India Office?
    Sir S. HOARE: It refers only to the destination of the material structure. Under the proposals in the Bill "the Secretary of State in Council," as a corporate body, comes to an end, and these buildings being at present vested in that corporate body, it is necessary to make provision for their destination. As it is contemplated that the India Office under the reforms would become what is generally described as a Treasury Office, that is to say an Office administered in the same way as other Offices in White hall, it is proposed that the building also should be treated in the same way and should be vested in the Office of Works with the condition that, although it is so vested, it should only be used for the purposes of the Government of India. The next Amendment on the Paper is part and parcel of the same proposal, and the two taken together vest the buildings in the Office of Works. As the contents are of interest both to India and Great Britain they remain 'with the Secretary of State, but the building must be vested somewhere and the Office of Works seems to be the appropriate body.
    4.18 p.m.
    Mr. C. WILLIAMS: It is clear that the Amendment as it stands is merely a matter of transference, but I should like to ask who is to pay for the upkeep of the buildings when the transfer takes place. The financial considerations involved in this Bill are very extensive, and I think it is right that we should know whether the Office of Works, that is to say the British taxpayers, are going to pay for the upkeep of these buildings. I do not raise the matter in any controversial

    971
    spirit, but unless someone asks for information of this kind and the information is given in the House, difficulties may arise in the future
    4.19 p.m.
    Sir S. HOARE: We dealt with that question upon the Financial Resolution. It was then made clear that the charge would fall upon the revenues of this country with this exception—that in respect of the comparatively wide field in which the India Office will still be acting as agent of the Government of India, a suitable contribution should be made by India to that extent. My answer to my hon. Friend, therefore, is that both the British taxpayers and the Indian tax payers will pay, according to the use which is made of the Office.
    Mr. C. WILLIAMS: In what proportion
    4.20 p.m.
    Mr. CHURCHILL: This seems to raise a matter of some material interest and it may also involve a rather serious point of financial procedure. I may betaking a wrong view and if so perhaps my doubts will be relieved by the Secretary of State but unquestionably this proposal seems to involve a new charge.
    Sir S. HOARE: We discussed this on the Financial Resolution.
    Mr. CHURCHILL: But is it not the case that it does mean a new charge thrown on the British taxpayer?
    Sir S. HOARE: It is covered by the Financial Resolution.
    Mr. CHURCHILL: As long as the right hon. Gentleman says he has covered it by the Financial Resolution that is all right, but I do not remember at what stage we dealt with the matter.
    Sir S. HOARE: At the very beginning.
    Mr. CHURCHILL: That is to say at the very beginning and before we had entered on the consideration of the Bill.
    Sir S. HOARE: Both before and in Committee.
    Mr. CHURCHILL: I am glad that it has not been overlooked because other wise it would appear that this proposal by itself would have converted the
    972
    Measure into what is virtually a money Bill. As the right hon. Gentleman assures me that the necessary steps have already been taken I do not press the matter.
    Duchess of ATHOLL: I understand from the right hon. Gentleman that this matter was considered during the Committee stage of the Financial Resolution. I have no recollection of any discussion upon it.
    Sir S. HOARE: I explained it in detail.
    4.22 p.m.
    Sir B. PETO: Sub-section(2) of this Clause provides that except with the consent of the Governor-General effect shall not be given to any proposal for the diversion of any buildings for uses not connected with the discharge of the functions of the Crown in relation to India or Burma. That may be appropriate as regards buildings in India, but surely the buildings of the India Office here in London are in a different category. Sup posing those buildings were found to be redundant or much too large for the purposes for which they were being used, and were required for some other purpose not connected either with India or Burma. Is it proposed that we should have to go to the Governor-General in India and ask his consent to their diversion?
    Amendment agreed to.
    Further Amendment made: In page 101, line 43, at the end, insert:
    "and, notwithstanding anything in sub section (31 of this section, the contents of those buildings shall be under the control of the Secretary of State."—[Sir S. Hoare.]

    CLAUSE 173.—(Provisions as to other property.)
    4.24 p.m.
    The ATTORNEY-GENERAL: I beg to move to leave out the Clause.
    The provisions included by the Amendment dealt with a few minutes ago are to be substituted for the provisions of Clause173. We have already discussed the new provisions for the destination of property other than lands and buildings being decided according to whether it is used for Federal or Provincial purposes. This is only an Amendment to leave out the existing Clause.
    Amendment agreed to.

    CLAUSE 175.—(Power to acquire property and to make contracts, etc.)
    4.25 p.m.
    'The SOLICITOR-GENERAL: I beg to move, in page 104, line 1, at the be ginning, to insert:
    ." Subject to the provisions of this Act with respect to the Federal Railway Authority.?
    Sub-section (3) of the Clause, as it appears in the Bill, provides that all contracts made in the exercise of the executive authority of the Federation or of a Province shall be expressed to be made by the Governor-General or by the Governor of the Province as the case may be, and shall be executed on behalf of the Governor-General or Governor. It is necessary to insert the words of the Amendment in order to except cases where the Federal Railway Authority make contracts in their own name.
    Amendment agreed to.

    CLAUSE 177.—(Existing contracts of Secretary of State in Council.)
    4.26 p.m.
    The SOLICITOR-GENERAL: I beg to move, in page 104, line 40, to leave out "in connection with the affairs," and insert:
    "for purposes which will after the commencement of Part III of this Act be purposes of the Government."
    This Amendment and another Amendment on the Paper to this Clause are similar to those which the House has already made in Clause 172.The Clause as drafted refers to contracts made "in connection with the affairs of a Province," and it is proposed to insert the words of the Amendment instead. The effect is to make the criterion the future purposes, instead of the past purposes.
    Amendment agreed to.
    Further Amendment made: In page 105, line 3, after "and," insert:
    "references in any such contract to the Secretary of State in Council shall be construed accordingly, and."—[The Solicitor General.]
    4.27 p.m.
    The ATTORNEY-GENERAL: I beg to move, in page 105, line 8, at the end, to insert:
    "or solely for the purposes which will after the commencement of Part III of this Act be purposes of His Majesty's Representative for the exercise of the functions of the Crown in its relations with Indian States."
    974
    "except in so far as the context otherwise requires."
    This is consequential upon the new provision which the House has already passed. These words are necessary in order to except contracts made by the Secretary of State in connection with paramountcy, for which provision has already been made.
    Amendment agreed to.

    CLAUSE 178.—(Special provisions as to existing loans, guarantees and other financial obligations.)
    4.28 p.m.
    The SOLICITOR-GENERAL: I beg to move, in page 105, line 20, after "therein," to insert:
    "except in so far as -the context otherwise requires."
    This is a comparatively small point. The Clause provides for the substitution of references to "The Secretary of State" for references to "The Secretary of State in Council." There may be cases, however, in which the context will clearly demand that the words should be "The Secretary of State in Council."
    Amendment agreed to.
    4.29 p.m.
    Sir S. HOARE: I beg to move, in page 106, line 2, at the end, to insert:
    "(6) The provisions of this Section apply to the liabilities of the Secretary of State in Council in respect of the Burma Rail ways three per cent. Debenture Stock, but, save as aforesaid, do not apply to any liability solely in connection with the affairs of Burma or Aden."
    This Amendment brings into the list of securities Burma Railways three percent. Debenture Stock. That is an obligation of the Secretary of State in Council now, and we think it should remain an obligation of the Secretary of State in Council and should not be transferred to the Government of Burma.
    Mr. CHARLES WILLIAMS: Are there any other exceptions of a financial character of this sort? I think we ought to know if this is a matter which stands alone, and does not cover any other loan of any kind.
    Sir S. HOARE: So far asI am aware, this is the only one.
    Amendment agreed to.

    CLAUSE 179.—(Legal proceedings as to certain matters.)
    4.31 p.m.
    The ATTORNEY-GENERAL: I beg to move, in page 106, line 27, after "be," to insert "deemed to be."
    This is purely formal, to provide for the automatic substitution of "the Secretary of State" for "the Secretary of State in Council" in connection with any ordinary legal proceedings.
    Amendment agreed to.
    The ATTORNEY-GENERAL: I beg to move, in page 107, line 17, at the end, to insert:
    "other than liabilities which are by this Act made liabilities of the Federation, or to contracts or liabilities for purposes which will, after the commencement of Part III of this Act, be purposes of His Majesty's Representative for the exercise of the functions of the Crown in its relations with Indian States."
    This is for the same purpose as the last Amendment but one, namely, to keep out of the scope of the Section liabilities on paramountcy contracts.
    Amendment agreed to.

    CLAUSE 180.—(Executive authority in respect of railways to be exercised by Federal Railway Authority.)
    4.32 p.m.
    The SOLICITOR-GENERAL: I beg to move, in page 107, line 21, after "the," to insert "regulation and the."
    This and the next Amendment go together. The first is purely drafting, and the second is made to cover the small point that the railways under the control of the Federal Railway Authority in some instances run outside India.
    Mr. C. WILLIAMS: This is all very well so far as India is concerned, but Burma, it maybe, or some other place is also concerned, and I think we should be told under whose authority these rail ways which run outside India will be.
    The SOLICITOR-GENERAL: There is a very small section of line affected.
    Amendment agreed to.
    Further Amendment made: In page 107, line 22, leave out "inIndia."—[The Solicitor-General.]
    The SOLICITOR-GENERAL: I beg to move, in page 107, to leave out lines 25 to 33.
    976
    This part of the Sub-section is now unnecessary. It is a purely drafting Amendment.
    Amendment agreed to.
    The SOLICITOR-GENERAL: I beg to move, in page 107, line 35, to leave out "such functions for assuring safety on railways," and to insert:
    "in regard to the construction, equipment, and operation of railways such functions for securing the safety both of members of the public and of persons operating the rail ways, including the holding of inquiries into the causes of accidents.?
    This is to meet a point which was raised on the Committee stage by hon. Members opposite that the words we are now seeking to omit were rather vague. We accepted that criticism, and we have examined the words and made their scope a little plainer.
    Amendment agreed to.

    CLAUSE 182.—(Directions and principles to be observed by Railway Authority.)
    4.35 p.m.
    Sir S. HOARE: I beg to move, in page line 30, at the end, to insert:
    "If any dispute arises under this Sub section between the Federal Government and the Authority as to whether a question is or is not a question of policy, the decision of the Governor-General in his discretion shall be final.?
    It was the general wish of the Committee to make the wording with regard to questions of policy more explicit, and that is done in this Amendment.
    Amendment agreed to.

    CLAUSE 184.—(Acquisition and sale of land by, and contracts and liabilities of, the Railway Authority.)
    Sir S. HOARE: I beg to move, in page 109, line 34, to leave out "acquire that land," and to insert "cause that land to be acquired."
    This is a drafting Amendment.
    Amendment agreed to.
    Sir S. HOARE: I beg to move, in page line 37, after "enforceable," to insert "by or."
    This and the next Amendment are genuinely drafting Amendments.
    4.36 p.m.
    Mr. C. WILLIAMS: What is the difference between a drafting Amendment and a genuinely drafting Amendment? It

    977
    is perfectly remarkable where we are getting in this Bill. Here is an entirely new phrase. I do not want it to go out to the country that the Secretary of State has been trying to get away with drafting Amendments which really are not drafting Amendments. It is my desire to look after the right hon. Gentleman's personal character that causes me to raise this point.
    Sir S. HOARE: I am much obliged to my hon. Friend, and I would like, with the permission of the House, to with draw the adverb.
    Amendment agreed to.
    Further Amendment made: In page 109, line 37, after "not," insert "by or"—[Sir S. Hoare.]
    4.37 p.m.
    The SOLICITOR-GENERAL: I beg to move, in page 110, line 6, at the end, to insert:
    "(3) The authority may make working agreements with, and carry out working agreements made with, any Indian State or person owning or operating any railway in India, or in territories adjacent to India, with respect to the persons by whom and the terms on which any of the railways with which the parties are respectively concerned shall be operated."
    This is a drafting Amendment, or not very far off a drafting Amendment. It was suggested that in the absence of specific provisions the Federal Railway Authority when it exercises its executive authority in connection with railways might not have power, in making new working agreements, to delegate any necessary functions to some other body, and, therefore, these words are inserted. There is again a reference, as the hon. Member for Torquay (Mr. C. Williams) will have noticed, to "territories adjacent to India," which covers a small set of lines in Goa.
    4.38 p.m.
    Mr. C. WILLIAMS: In answer to the hon. and learned Gentleman and to show my gratitude, I am very glad that this point has been covered here. I would like to point out that, here we have an Amendment which covers a consider able amount of ground, and we have also a beautiful new phrase, namely, "not very far of f a drafting Amendment." That makes a further new kind of drafting Amendment. The Government, if they
    978
    have done nothing else, are at any rate improving their vocabulary.
    Amendment agreed to.

    CLAUSE 185.—(Finance of the Railway Authority.)
    4.39 p.m.
    The ATTORNEY-GENERAL: I beg to move, in page 110, line 27, to leave out
    "interest and bonuses, on and.?
    This Amendment is of a technical nature. It is necessary for the purpose of securing a proper adjustment between the revenues of the Federation and the Railway Authority of the charges on those revenues attributable to service on railways in India. It is purely technical, in order to keep the accounts in proper form.
    Amendment agreed to.
    Further Amendment made In page 110, line 28, at the end, insert:
    "(d) repaying to the revenues of the Federation so much a any pensions and contributions to provident funds charged by this Act on those revenues as is attributable to service on railways in India."—[The Attorney-General.]

    CLAUSE 186.—(Provisions as to certain obligations of the Railway Authority.)
    4.41 p.m.
    The SOLICITOR-GENERAL: I beg to move, in page 111, line 38, at the end, to insert:
    "(2) It shall be an obligation of the Authority to repay to the Federation any sums defrayed out of the revenues of the Federation in respect of any debt, damages, costs or expenses in, or in connection with, any proceedings brought or continued by or against the Federation or against the Secretary of State under Part VII of this Act in respect of railways in India."
    This is a somewhat similar point to that with which my right hon. and learned Friend was dealing just now. A suit might be brought against the Secretary of State or the Federation in connection with a, railway matter and damages, if there were any, adjudged against the Federation or the Secretary of State, and this sub-section is inserted to put an obligation on the Railway Authority to repay to the Federation any damages, costs, or expenses in or in connection with proceedings brought in respect of railways in India.
    4.42 p.m.
    Mr. C. WILLIAMS: I rather welcome this Amendment. If it had not been brought in, I suppose there might have

    979
    been serious difficulties. Some of us feel that it would be very unhappy if my right hon. Friend the Secretary of State were not properly safeguarded. I am a humble individual who would not like to see a Bill go through unless the position of my right hon. Friend was adequately secured in a legal fashion.
    Amendment agreed to.
    4.43 p.m.
    The ATTORNEY-GENERAL: I beg to move, in page 111, line 40, after "Province," to insert "or Indian State."
    This and the next three Amendments go together. This sub-section relates to the financial arrangements for the railway police, and the Amendments provide for arrangements being made, not only with the Provinces, but with the States. The insertion of the word "federal" before "railway premises" makes the intention clear that the Clause affects the railways which are defined in the definition Clause as federal railways.
    Amendment agreed to.
    Three consequential Amendments made.

    CLAUSE 188.—(Special provisions as to certain funds.)
    4.45 p.m.
    The SOLICITOR-GENERAL: I beg to move, in page 112, line 22, to leave out from "and," to "at," in line 23, and to insert:
    "the Federal Government shall credit each such fund with interest on the untransferred balance thereof."
    Under the Clause, railway depreciation funds, reserve funds, or provident funds, which are at present in the hands of the Central Government, may, when the Federal Railway authority is set up, re main in the hands of the Federal Government, the beneficiaries getting sums of money as they require. All that this and the following Amendment does is to make it clear that interest shall be credited on any balances in the hands of the Federal Government, and to make clear, what was not quite clear before, that the obligation is on the Federal Government to pay that interest. It might have been thought from the Clause as originally drafted that the interest could be taken into the general revenues of the Railway Authority, whereas our intention is that the interest on the
    980
    balance in a fund should be kept for that fund. It is to make these points clear that I move these Amendments.
    Amendment agreed to.
    Further Amendment made: In page 112, line 25, to leave out "on the un transferred balances of any such fund."—[The Solicitor-General.]

    CLAUSE 192.—(Appeal by State to Rail way Tribunal from certain directions of Federal Railway Authority.)
    4.47 p.m.
    The ATTORNEY-GENERAL: I beg to move, in page 113, line 12, to leave out "State," and to insert:
    "railways of the State or imposes on the State an obligation to afford facilities which are not in the circumstances reasonable.?
    This Clause deals with a direction by the Authority in connection with unfair discrimination. The Amendment is designed to meet the criticism emanating from the States that the States might suffer serious losses owing to their railways being required to provide special facilities in times of emergency to the detriment of their traffic and the earnings of their railways. In the State of Hyderabad there are very efficient and well managed railways, and the Amendment enables a State in such a case to appeal to the Tribunal and obtain compensation or damages if they are in a position to establish their complaint. The insertion of the words "railways of the State" for State is merely for the purpose of making it plain that such unfair discrimination is in connection merely with railway traffic.
    4.48 p.m.
    Mr. ATTLEE: I was not clear about the reason which the Attorney-General gave for the possibility of a complaint of discrimination. He mentioned the movement of troops, but surely Indian States are as concerned with the defence of India, as British India is.
    The ATTORNEY - GENERAL: I referred to times of emergency. I did not say anything about troops.
    Mr. ATTLEE: Let us take the case of an emergency. Does the right hon. and learned Gentleman mean to say that it would give rise to a claim on the part of a State if it were necessary to use the railways to move troops? We should be careful not to put the States in a

    981
    position different from the rest of India in matters of common interest.
    4.49 p.m.
    Mr. WISE: I should like to supplement the remarks of the hon. Member for Limehouse (Mr. Attlee) and to put another point to the learned Attorney. Let us assume a state of famine in India. Is it not reasonable that the Federal Government should require the full services of the Railways of a State, which is, after all, part of the Federation, in order to deal with the exceptional traffic needed for the movement of food supplies, without having to pay extra compensation. Surely a State has a duty to the peoples of the Federation as British India has, and it is only reason able that the railways of a State should be as much at the disposal of the Governor-General as any other railways.
    4.50 p.m.
    The ATTORNEY-GENERAL: That is true, but I cannot think my hon. Friend has sufficiently studied the Amendment. He will see that the words proposed to be inserted refer to
    "facilities which are not in the circumstances reasonable."
    Mr. WISE: Who determines that?
    The ATTORNEY -GENERAL: The Railway Tribunal. The Clause states that any such complaint shall be determined by the Railway Tribunal. With reference to the point raised by the hon. Member for Limehouse (Mr. Attlee), the same observation will probably dispose of his difficulty. If there were what I may call an all-India emergency, which requires the railway of the State to be used for the purposes of the defence of the whole country, I have no doubt that that would not be treated as discrimination of the character for which compensation is intended to be provided by this machinery.
    Amendment agreed to.

    CLAUSE 193.—(Obligation to afford mutual traffic facilities and to avoid unfair discrimination, etc.)
    The ATTORNEY-GENERAL: I beg to move, in page 113, line 18, after "upon," to insert "and from."
    This Amendment is designed for the purpose of assimilating the phraseology to that of an identical Clause in the India Railways Act, lest it create that
    982
    old trap that a different intention is indicated by a different use of language. Amendment agreed to.

    CLAUSE 195.—(Railway Tribunal.)
    4.53 p.m.
    The SOLICITOR-GENERAL: I beg to move in page 114, line 37, to leave out "and," and to insert:
    "orders varying or discharging a direction or order of the Authority."
    It was always intended that the Railway Tribunal should have power to make an Order varying or discharging a previous direction or Order. It was felt that it might not be clear in the Bill because we have referred to interim orders and particularised to some extent the kind of orders that should be made. It was thought better therefore to be on the sale side and to include these words.
    Amendment agreed to.
    4.54 p.m.
    Mr. RAIKES: I beg to move in page 116, line 3, to leave out from "law" to the end of the sub-section.
    Sub-section (4) in its present form is somewhat unsatisfactory. It is as follows:
    "An appeal shall lie to the Federal Court from any decision of the Railway Tribunal on a question of law, but no appeal shall lie from the decision of the Federal Court on any such appeal.?
    The Amendment proposes to strike out the words after "law," because we feel that it is unsatisfactory that the Privy Council should be debarred from hearing appeals from decisions of the Railway Tribunal. I should hate to suggest to the Front Bench that there is anything sinister underlying the sub-section because there are no fewer than four Ministers present, and I feel nervous. Never the less, any weakening of the powers of the Privy Council in regard to appeals from India, unless there is a satisfactory explanation, must be looked at with grave apprehension. For years past case after case has come to the Privy Council, which has been regarded as the supreme court to which Indians can take their appeals and get a hearing without the slightest idea of bias, or of any favouritism; and it has been regarded by India as the supreme fount of justice. It seems a little hard and strange that there can only be an appeal to the Federal Court from decisions of the Railway

    983
    Tribunal, and that an aggrieved party will not be able to move up a step higher. There may be a satisfactory explanation to be given by the Government, but we feel that it is our duty to raise this matter.
    Mr. EMMOTT: I beg to second the Amendment.
    4.56 p.m.
    The ATTORNEY-GENERAL: It is very difficult for a practising lawyer to resist an appeal to prolong litigation, but I am afraid that it is my duty to do so. This Railway Tribunal will have to consider questions of purely local interest. They will be matters connected with the workings of the railways, and will not involve questions of great or far-reaching principle. It would be likely to lead to very great difficulty in administration if questions relating to railway working facilities and matters of that kind were to be held up until a decision could be obtained from the Privy Council. My hon. Friend properly spoke of the desirability of maintaining the unique position of the Privy Council in relation to litigation from the Empire. I commend my hon. Friend's enthusiasm, but it must be instructed. If he will pursue his studies, he will no doubt find that it is by no means unknown; in fact, it is a fairly familiar feature, in giving constitutions in different parts of the Empire to establish special tribunals for the purpose of dealing with certain matters having some special characteristics. It is a very familiar provision that the decision of such a tribunal should not be subject to appeal to the Privy Council. Cases have been heard in the Privy Council where special leave to appeal has been applied for, and my hon. Friend will be aware that generally there must be a right to grant special leave to appeal where there is nothing to indicate waiver on the part of the Crown of that right; but in the cases to which I refer, where Parliament in establishing a tribunal thought fit to provide that the decision of the tribunal should be final, that prevents the Judicial Committee giving special leave. That illustrates my point that this position is not an exceptional or unusual one. But I need not enlarge upon that point. The important point is that it is desirable to maintain the finality of the
    984
    decision of the Federal court, for it would lead to numerous and administrative difficulties if there were prolonged litigation.
    Amendment negatived.

    CLAUSE 196.—(Rights of railway companies in respect of arbitration under contracts.)
    5.0 p.m.
    The SOLICITOR-GENERAL: I beg to move, in page 115, line 41, to leave out from the second" the, "to the end of the Clause, and to insert: "matter in dispute is of such a nature that under the contract the company might require, or, but for some provision of this Act, might have required, it to be submitted to arbitration, the dispute shall be deemed to have arisen between the company and the Secretary of State and the provisions of the contract relating to the determination of such a dispute shall have effect with the substitution of the Secretary of State for the Secretary of State in Council.
    Any award made in an arbitration under the foregoing provisions of this section and any settlement of the dispute agreed to by the Secretary of State with the concurrence of his advisers shall be binding on the Federal Government and the Authority and any sum which the Secretary of State may become liable or may so agree to pay by way of debt, damage or costs and any costs or expenses incurred by him in connection with the matter shall be paid out of the revenues of the Federation and shall be charged on those revenues but shall be a debt due to the Federation from the Authority.?
    Clause 196 is meant to deal with the case where there is an existing contract between the railway company in India and the Secretary of State in Council, with an arbitration clause. It is necessary to adjust that position to the position as it will be under the Bill. The Amendment does what the Bill as drafted was intended to do; it makes the necessary adjustment in the simplest form. It was pointed out that difficulties might arise under the words which had been used in the Bill as originally drafted, and that it would be rather simpler to deal with the matter in the way that this Amendment does, under which the dispute is deemed to have arisen between the company and the Secretary of State, instead of the company and the Secretary of State in Council. Then the arbitration takes place between the company and the Secretary of State, and the award is binding on the Federation.
    Amendment agreed to.

    CLAUSE 198.—(Establishment and constitution of Federal Court.)
    5.2 p.m.
    The ATTORNEY-GENERAL: I beg to move, in page 117, line 19, at the end, to insert:
    "Provided that—

    (i) a person shall not be qualified for appointment as Chief Justice of India unless he is, or when first appointed to judicial Office was, a barrister, a member of the Faculty of Advocates or a pleader; and

    (ii) in relation to the Chief Justice of India, for the references in paragraphs (b) and (c) of this sub-section to ten years there shall be substituted references to fifteen years.?

    This provision is to implement a promise given on the Committee stage that nobody should be qualified for appointment to the Office of chief magistrate of India unless he was a barrister or pleader of 15 years' standing.
    Amendment agreed to.

    CLAUSE 202.—(Original jurisdiction of Federal Court.)
    The ATTORNEY-GENERAL: I beg to move, in page 118, line 21, to leave out "a matter of legal right," and to insert:
    "any question (whether of law or fact) on which the existence or extent of a legal right depends." This is to define a little more closely what was meant by words in Sub-section (1) of Clause 202, "a matter of legal right." The words are not what lawyers call exactly a term of art, and it seemed desirable to make it plain that the dispute should be a matter involving a question whether of law or fact on which a legal right might be claimed. The words I propose are merely an extension of the words that appear in the Bill at present.
    Amendment agreed to.
    5.4 p.m.
    The SOLICITOR-GENERAL: I beg to move, in page 118, line 24, to leave out from "to," to the end of the Sub section, and to insert:

    "(i) a dispute to which a State is a party, unless thedispute—

    (a) concerns the interpretation of this Act or of an Order in Council made there under, or the extent of the legislative or executive authority vested in the Federation by virtue of the Instrument of Accession of that State; or

    (b)arises under an agreement made under Part VI of this Act in relation to the administration in that State of a law of the Federal Legislature, or other-
    986
    wise concerns some matter with respect to which the Federal Legislature has power to make laws for that State; or

    (c) arises under an agreement made after the establishment of the Federation, with the approval of His Majesty's Representative for the exercise of the functions of the Crown in its relations with Indian States, between that State and the Federation or a Province, being an agreement which expressly provides that the said jurisdiction shall extend to such a dispute;

    (ii) a dispute arising -under any Agreement which expressly provides that the said jurisdiction shall not extend to such a dispute.?

    This Amendment deals with a later part of this Clause and is intended to make more explicit the categories of cases in which the States may be involved and in regard to which the Federal Court will have original jurisdiction. If the House looks at the proviso, it will be seen that all except the first line is deleted. We say what are the disputes which shall come before the courts. Then we make an express reference to the matters in which dispute may arise, namely, agreements made under a Clause which the House will remember, under which the State makes an agreement with the Governor-General for carrying on his administration of certain Federal matters. With regard to (c), we want to do nothing to discourage, but rather to encourage, the States going to the Federal Court in connection with any agreement they may have on the matter. The Amendment looks a little complicated, but it really is spreading out in rather more detail the questions in which this court will have jurisdiction so far as the States are concerned.
    Amendment agreed to.

    CLAUSE 203.—(Appellate jurisdiction of Federal Court in appeals from High Courts in British India.)
    5.8 p.m.
    The ATTORNEY-GENERAL: I beg to move, in page 118, line 38, to leave out "application or."
    This Amendment is to leave out two words which are superfluous. The Clause deals with the appellate jurisdiction of the Federal Court in appeals from the High Courts, and for the purposes of an appeal the Clause provides that a High Court must certify that the case involves a substantial question of law as to application or interpretation of this Act. The first word "application" is, I suggest,

    987
    superfluous because the word "interpretation" sufficiently covers it. Therefore, to avoid any mistake, we propose to leave out this word.
    Amendment agreed to.

    CLAUSE 205.—(Appellate jurisdiction of Federal Court in appeals from High Courts in Federated States.)
    5.9 p.m.
    The SOLICITOR-GENERAL: I beg to move, in page 119, line 40, to leave out from "law," to the end of the Sub section, and to insert:
    "has been wrongly decided, being a question which concerns the interpretation of this Act or of an Order in Council made there under or the extent of the legislative or executive authority vested in the Federation by virtue of the Instrument of Accession of that State, or arises under an agreement made under Part VI of this Act in relation to the administration in that State of a law of the Federal Legislature.?
    This is very similar to the last Amendment I moved. It arises on Clause 205, which is dealing with the appellate jurisdiction of the Federal Court on an appeal from a High Court of a Federated State. As the House will remember, appeals were allowed from the High Courts in the Federated States to the Federal Court, broadly speaking, on questions as to the interpretation of the Constitution Act, or Orders made under it. The general words, as originally drafted, are just as they were in Clause 202, and the House will see that the words which we propose to insert, where they are not split up in to sub-paragraphs, are in substance and fact the same as the words which I explained just now.
    Amendment agreed to.

    CLAUSE 206.—(Appeals to His Majesty in Council.)
    5.10 p.m.
    The ATTORNEY-GENERAL: I beg to move, in page 120, line 9, after the first "Court," to insert:

    "(a) from any judgment of the Federal Court given in the exercise of its original jurisdiction in any dispute which concerns the interpretation of this Act or of an Order in Council made there under, or the ex tent of the legislative or executive authority vested in the Federation by virtue of the Instrument of Accession of any State, or arises under an agreement made under Part VI of this Act in relation to the administration in any State of a law of the Federal Legislature, without leave; and

    988

    (b) in any other case."

    In the Committee stage my Noble Friend the Member for Hastings (Lord E. Percy) raised the criticism that the recommendation of the Joint Select Committee had been departed from in one important respect, namely, that the Bill did not make all appeals to the Privy Council appeals as of right in constitutional cases. The Bill appeared to him to be drawn so as to make appeal to the Privy Council dependent upon leave having been obtained either in the Federal Court or on petition for leave to appeal presented to the Judicial Committee. This Amendment will, I hope, remove the possibility of that criticism being made.
    Amendment agreed to.

    CLAUSE 207.—(Form of judgment on appeal.)
    5.12 p.m.
    The SOLICITOR-GENERAL: I beg to move, in page 120, line 21, at the end, to insert:
    "(2) Where the Federal Court upon any appeal makes any order as to the costs of the proceedings in the Federal Court, it shall, as soon as the amount of the costs to be paid is ascertained, transmit its order for the payment of that sum to the court from which the appeal was brought and that court shall give effect to the order.
    (3) The Federal Court may, subject to such terms or conditions as it may think fit to impose, order a stay of execution in any case under appeal to the Court, pending the hearing of the appeal, and execution shall be stayed accordingly."
    Clause207 deals with the form of judgment of an appeal, and provides that the Federal Court shall remit the case to the court from which the appeal was brought. In Clause 212 the Federal Court may, of course, make an order as to the costs of the proceedings in that court, and this new Sub-section provides that as soon as the amount of the costs to be paid is ascertained, the court transmits its order for the payment of that sum to the court from which the appeal is made, and that court must give effect to the order. It is really making an express provision so that the costs and the order as to costs are dealt with in the same way as the substantive judgment by being remitted to the court from which the appeal was brought.
    Mr. ISAAC FOOT: This point, I under stand, was not raised in Committee, but it is anew provision found necessary.
    The SOLICITOR-GENERAL: I do not think it was raised in Committee. An Amendment was made in Committee empowering the Federal Court to rule as to the costs incidental to any proceedings in the court. That may have drawn attention to the fact that it is desirable in this Clause to cover costs expressly. The other Sub-section is to carry out a suggestion made by my right hon. Friend as to a, stay of execution. It is not an unusual provision. You generally ask the court from which you are appealing for a stay of execution, and if they do not give it, it is not unusual to go to the court to which you are appealing and submit that it is a proper case for a stay.
    Amendment agreed to.

    CLAUSE 208.—(Enforcement of decrees and orders of Federal Court and orders, as to discovery, etc.)
    5.15 p.m.
    The ATTORNEY-GENERAL: I beg to move, in page 120, line 38, at the end, to insert:
    "(3) Nothing in this Section—

    (a)shall apply to any such order with respect to costs as is mentioned in Subsection (2) of the last preceding Section; or

    (b)shall, as regards a Federated State, apply in relation to any jurisdiction exercisable by the Federal Court by reason only of the making by the Federal Legislature of such provision as is mentioned in this chapter for extending the appellate jurisdiction of the Federal Court."

    Consequential on the Amendment we have just made to Clause 207 it is necessary to insert the new paragraph (3, a). Paragraph (b) is intended to provide a proper protection to the States in connection with the exercise of the jurisdiction of the Federal Court. The States, quite properly in my submission, took the view that they could not put their own courts in direct subjection to the Federal Court except in relation to matters on which they had accepted the jurisdiction of the Court. They are perfectly pre pared to assume an obligation on behalf of their courts to obey the orders of the Federal Court in relation to matters in which they themselves are parties, but they are not prepared to see the Federal Court given power in relation to the States to secure the attendance of wit nesses or the discovery of documents in cases arising under the additional
    990
    appellant jurisdiction conferrable on the Court by the Federal Legislature if it is so decided under Clause 204. That would in no case have any application to the States. It seemed to the Government reasonable to meet the objection put forward and paragraph (b) is designed for that purpose.
    Amendment agreed to.

    CLAUSE 209.—(Letters of request to federated States.)
    Amendment made: In page 120, line 41, after "to," insert "or order a stay of execution in a casefrom."—[The Attorney-General.]

    CLAUSE 212.—(Rules of Court, etc.)
    5.49 p.m.
    The SOLICITOR-GENERAL: I beg to move, in page 121, line 33, to leave out from "may" to "fix," in line 40.
    When this Clause was being considered in Committee my Noble Friend the Member for Hastings (Lord E. Percy) stressed the great importance of doing what could be done to see that constitutional issues were dealt with by a panel of the same judges. What he was afraid of was that when appellate jurisdiction was conferred on the Federal Court we might get, for example, four or five new judges appointed in order to deal with ordinary appellant work, and he was very anxious to prevent any constitutional issue being tried by four or five judges who had not had previous experience in constitutional cases instead of by those always available who had been sitting from the outset. There was great difficulty in inserting a rigid provision of that kind in the Bill. After all, the Chief Justice of the Federal Courts must be able to arrange his personnel as he likes, according to the circumstances of the daily routine, and it would be very difficult to make a statutory provision as to how he was to arrange for his judges to sit.
    On the other hand, we quite agree with the points my Noble Friend made. Speaking for myself, I think it is inconceivable that the Chief Justice of the Federal Court should not be as fully alive to them as any Member of this House, but we have gone some way to meet my Noble Friend's suggestion by slightly altering the proviso of Clause 212 and by a "pointer" in the Bill to show

    991
    the general intention of Parliament that constitutional issues should be dealt with by a special Division; it being, of course, quite obvious that the personnel of that Division would be the judges who had the greatest experience at the time in dealing with constitutional cases. We therefore provide that if the Federal Legislature should confer appellate jurisdiction on the Federal Court, the rules, which of course have to be approved by the Governor-General, shall provide for the constitution of a special Division of the Court for the purpose of deciding all constitutional cases, that is to say, all the cases which would be within the jurisdiction of the court even if its appellate jurisdiction had not been enlarged. We think it is impossible to go further in tying the hands of the Chief Justice.
    Amendment agreed to.
    Further Amendments made: In page 121 line 41, leave out "heard before," and insert "decided by."
    In line 42, at the end, insert:
    "Provided that, if the Federal Legislature makes such provision as is mentioned in this chapter for enlarging the appellate jurisdiction of the court, the rules shall provide for the constitution of a special division of the court for the purpose of deciding all cases which would have been within the jurisdiction of the court even if its jurisdiction had not been so enlarged."—[The Solicitor-General.]
    5.22 p.m.
    Mr. MOLSON: I beg to move, in page line 7, to leave out from "case," to the end of the Sub-section, and to insert:
    "unless the court direct to the contrary the judgment of the court shall be pronounced by the president of the court or such other member of the court hearing the case as the President of the court directs, and no judgment with respect to the determination of any question shall be separately pronounced by any other member of the court.?
    The purpose of this Amendment is to provide that in the Federal Court only one judgment shall be delivered. In this country, in the case of the Judicial Committee of the Privy Council, where, of course, they are advising His Majesty, only one judgment is given, which is that of the majority of the court. In the case of the House of Lords there may be as many judgments or speeches as there are Law Lords sitting, and I think the learned Solicitor-General will agree that inconvenience does frequently arise from the
    992
    fact that there are a number of speeches each of which lays down the law in a slightly different way, or, in laying down the law, defines it in different words. When some subsequent ease arises the decision on it may depend on which of the learned Law Lords had defined the law most accurately. The words of this Amendment have been taken out of the Act of 1906, which set up the Court of Criminal Appeal. If the Government should take the view that it would be desirable that dissenting judgments should be delivered I should like respectfully to suggest that they might move an Amendment in another place to give a judge who wishes to give a dissenting opinion leave to defend that dissenting opinion; but I do urge upon them that where the majority of the court are laying down the law there can be no disadvantage, and there may be a great advantage, in having only one judgment which definitely does define the law in one set of terms.
    5.24 p.m.
    Mr. C. WILLIAMS: I beg to second the Amendment.
    I have always felt that when three judges are deciding a case in the courts their judgment should seem to the public as if it were the judgment of the whole of them, because if dissenting judgments are published, as might be the case under the Clause as it stands, we raise matters of controversy, and I do not think that is a sound precedent, as a general rule, in connection with the law courts. I think the Government will probably be able to accept this Amendment, which on the whole seems to me a most suitable one, and I feel sure that if they cannot accept the whole of it or the particular words in which it is framed they will accept now the principle, which does seem to be sound.
    5.27 p.m.
    Brigadier - General Sir HENRY CROFT: I should like to put myself in the unique position of supporting the hon. Member for Doncaster (Mr. Molson) and to express the hope that his Amendment may be accepted, because I feel that it would clarify judgments in the eyes of ordinary Indian citizens. We in this country are of ten puzzled by the law, but, with that kind of "horse sense" which this country fortunately possesses, we accept the final decision in spite of the anomalies created by judgments of

    993
    different courts. I remember one case in which I was interested. Knowing very little about the law I was very pleased to find that we had won our case, as I thought, and we all had a supper that night. Then we found there was an appeal, and in the Appeal Court two judges went against us and one was for us, so that we were "all square at the turn."
    Mr. COCKS: You had no supper that night.
    Sir H. CROFT: No, we had no supper that night. We in turn appealed to the House of Lords, and of the five Lords of Appeal there were three against us and two for us. It was a very remarkable case, but we said "That is British justice," and we accepted the verdict, which had gone against us. But the Indian mind, only lately brought into touch with Western democratic ideas, might not understand the processes of mind which allowed us to think that was perfect justice. Where there is a clear judgment—and I gather that is the position in my hon. Friend's mind—it would simplify matters, especially in the eyes of a population 92 percent. of whom are illiterate, to have it stated by one judge. I have great pleasure in supporting the Amendment of my hon. Friend.
    5.29 p.m.
    The ATTORNEY-GENERAL: The views expressed by my hon. Friends would have been well worthy of attention if they had been directed to judgments given by the final court. There is a great deal to be said for the view that when a court is delivering a judgment which must be right because it cannot be wrong—because nobody can be allowed to say it is wrong—that the judgment should be given by the court as a whole through the lips of one of its members. My hon. Friend who moved the Amendment said he took it direct from the Act setting up the Court of Criminal Appeal. That Act requires the decision of the court to be expressed by one member of the court, and no other member has power to give a dissenting judgment. Perhaps I may remind hon. Members that that court is to all intents and purposes a final court of appeal. It is true that there may be an appeal to the House of Lords upon the fiat of the Attorney-General, but this is very seldom asked
    994
    for, and is still less seldom given, and then only in very exceptional circum stances when there is an important point of law.
    The reason for the Bill being drafted as it is, so as to permit the Federal Court to deliver judgments through the mouths of all its members, whether they be dissenting or concurring judgments, is that it is possible to appeal from that court to the Privy Council. It is desirable that the Privy Council should have the different points of view which have been accepted by members of the tribunal. Once that appeal is assumed, it is in the interests of justice, and of the litigant who may have been unsuccessful in the penultimate court, that he should know what is the effect of the arguments of counsel upon the tribunal. It seemed very desirable, having regard to the possibility of appeal to the Privy Council, that the Privy Council should know whether the members of the Federal Court were unanimous in their judgment, and the extent to which Members of the court accepted the arguments of an appellant to the Privy Council.
    I am not to be understood as in the least criticising the views which have been expressed as to the importance of securing as much clarity as possible in the expression of legal decisions. I sympathise very much with the hon. and gallant Member for Bournemouth in the unfortuante legal experience which he had, but I hope that he will not regret the knowledge which be derived, at some cost to himself, of British justice. On the whole, we ask the House to prefer the provision contained in the Bill to that suggested by my hon. Friend the Member for Doncaster (Mr. Molson).
    Mr. MOLSON: In view of the reply of my right hon. and learned Friend, I beg to ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.

    CLAUSE 218.—(Constitution of High Courts.)
    5.34 p.m.
    The SOLICITOR-GENERAL: I beg to move, in page 124, line 27, at the end, to insert:
    "Provided that a person shall not, unless he is, or when first appointed to judicial Office was, a barrister, a member of the Faculty of Advocates or a pleader, be

    995
    qualified for appointment as Chief Justice of any High Court constituted by letters patent until he has served for not less than three years as a judge of a High Court.?
    The House may remember that in Committee there was some discussion as to the qualification for High Court judges, and, in particular, as to whether what were called civil service judges should be eligible or ineligible for the Office of the Chief Justice. My right hon. Friend, while not ruling them out completely, having regard to the fact that they per form judicial work and have a limited jurisdiction as judges, undertook to put down an Amendment to make it clear that a civil service judge would have to have sat for three years as a judge of the High Court before he was qualified for the Office of Chief Justice. This proviso effects that, and deals also with barristers and pleaders. It is necessary to refer to them in order to deal with the position of the civil service judges.
    Amendment agreed to.

    CLAUSE 220.—(Temporary and additional judges.)
    The SOLICITOR-GENERAL: I beg to move, in page 125, line 15, to leave out "Governor of the Province," and to insert "Governor-General."
    This Amendment, and the four which follow in precisely similar terms, make an alteration in Clause 220 in regard to the appointment of temporary judges. In the Bill as it stands, temporary judges are appointed by the Governors. The Amendment secures that temporary or additional judges shall be appointed by the Governor-General, who will no doubt consult both the Governor in question and the Chief Justice. Representations were made that these appointments would have an additional dignity if put into the hands of the Governor-General. My right hon. Friend has accepted that view, and the Amendments Are intended to carry it out.
    5.36 p.m.
    Sir H. CROFT: I rise only to express the thanks of the House to the Solicitor-General. The representation which was made on this subject at an earlier stage of the Bill did not fall altogether on stony ground. It may be little concession, but it is at least one Amendment which has been embodied during this Re-
    996
    port stage, and we are grateful to the hon. and learned Gentleman. We hope that, as the days go on, the Advice to go to the higher authority in these various cases may be listened to, since it has been successful in the present case.
    5.37 p.m.
    Mr. C. WILLIAMS: The advice of the hon. and gallant Member for Bourne mouth (Sir H. Croft) is not always sound; I could not say that it is 99 percent. sound, but it is better than the 99 per cent. unsound advice of hon. Gentlemen above the Gangway. On this occasion, there is a further point which might be raised in justification of the Government's Amendment, which is that it is far better that permanent appointments, such as those of judges, should he made by one unified system through the Governor-General than by the different provincial units. From that point of view, I welcome the fact that the Government have been able to carry out this suggestion which should be helpful in the working of the Federal idea. It should strengthen the Federal idea at the present time.
    Amendment agreed to.
    Four consequential Amendments made.

    CLAUSE 221.—(Jurisdiction of existing High Courts.)
    5.40 p.m.
    The ATTORNEY-GENERAL: I beg to move, in page 126, to leave out lines 10 to 14.
    This Amendment must be considered with the first and the third Amendments to Clause 222, in page 126, line 15, to leave out "administrative," and in line 34, at the end, to insert:
    "(2) Nothing in this Section shall be construed as giving to a High Court any jurisdiction to question any judgment of any inferior court which is not otherwise subject to appeal or revision.?
    In a measure it must also be considered with the second Amendment to Clause 222, in line 20, to leave out paragraph (b). Perhaps I might, for convenience, deal with all the Amendments together, because the effect of them will be to reproduce practically the provisions of Section 107 of the present Government of India Act. As Clause 222 appears in the Bill it contains two alterations of that Section. The Clause reads:
    "Every High Court shall have administrative superintendence over all courts in India"

    997
    and so on. Section 107 of the Government of India Act says that
    "every High Court shall have superintendence over all courts in British India.?
    Objection has been taken, in a formal and proper way by the judges and others who are familiar with the proceedings of the courts, at the introduction of the new word "administrative." It was never intended that it should have the scope which some people have feared it might have, but, having regard to the representations made to them, the Government feel it better not to introduce that word lest it throw some doubt on the powers of the courts. It is better, for reasons which everybody will under stand, that, if you are going to follow the words of a Section, you should follow them without introducing words which create doubts which might not otherwise arise. We therefore propose to omit the word "administrative." That, together with the new proviso and the new Sub section at the end, which is the third of the Amendments to Clause 122, and coupled with the omission of the Proviso in Clause 221, will put the matter in order.
    The new Sub-section, which is the third Amendment to Clause 222, and which I have already read to the House, means that the fear need not be entertained that a High Court, by reason of that word "superintendence," will have power to interfere with the decisions of another court which is not subject to their jurisdiction.
    Mr. ISAAC FOOT: Did the last Clause similarly give rise to doubts, and has the last Sub-section been introduced for the same purpose?
    The ATTORNEY-GENERAL: The last Sub-section is to make plain what is the nature of superintendence. The word "administrative" was put in to make it plain that the superintendence was of a certain quality, and that it did not mean that there was power to pass judgment on those courts; but when you remove the word' "administrative" it seems desirable to put in the new Sub section. The omission of the Proviso to Clause 121 is part and parcel of the same recasting of the Clause.
    5.44 p.m.
    Mr. ATTLEE: Does the new Sub section (2) to Clause 222 do exactly the
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    same as the Proviso which is to be omitted? Does it cover the ground?
    The ATTORNEY-GENERAL: Yes, it does the same as the Proviso that we omit, but in a more workmanlike way, and without the necessity of introducing the word "administrative" in the first part of Clause 222. The second Amendment to Clause 222 is—perhaps the House will allow me to say—insertedto correct a misstatement which I made in Committee. My hon. and learned Friend the Member for Nelson and Colne (Mr. Thorp) moved an Amendment, which I hastily accepted, to put in paragraph (b), on the ground that paragraph (b) appeared in Section 107 of the Government of India Act. I had over looked the fact that the codes of criminal and civil procedure already provided for this power in connection with the ordinary jurisdiction of the Courts, that is to say, the power to direct the transfer of a suit or appeal from one court to another of equal or superior jurisdiction. It seems most undesirable to take one of the powers conferred upon the Courts by the code, and introduce it into a Clause which deals only with administrative matters. Therefore, in the absence of my hon. and learned Friend, I must move to omit the words which on his Motion I accepted. I hope the House will think that I took the proper course in acquainting him fully with my proposal to correct the mistake that I had made. I wrote him a letter. I have not had any reply, and, therefore, I take it that, so far as he is concerned, silence gives consent.
    5.46 p.m.
    Sir H. CROFT: It is indeed tragic to find that, after I have congratulated the Government on having endeavoured to give effect on Report to a proposal which was thrown out in Committee, almost the only other concession which they appear to have granted has been cutaway. That seems to be rather unfortunate, since, at the time when the concession was made, the Government apparently made it with very great pleasure. The difficult legal points in connection with this matter are rather hard for a layman to follow, but it occurred to me that it was essential that this power to transfer suits and appeals should be retained in the High Courts, in view of the fact that, as we all know, there is always local pres-

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    sure against witnesses, and even against judges. Is not this case comparable with the situation which sometimes occurs in this country, when on one circuit there is a great deal of prejudice against a case and it is transferred to another circuit? Do I understand that this matter is quite covered by the Clause which the Attorney-General mentioned I am not sure whether it is proper for me to follow up that point in discussing this Amendment, or whether I ought to wait until the other Amendment is reached, but in his omni bus and over whelming manner he has brought all the Amendments into one discussion. Could I have an assurance that in fact this procedure is absolutely covered, because we attach a great deal of importance to it?
    5.48 p.m.
    Duchess of ATHOLL: Could the Attorney-General assure the House that nothing in these two Clauses taken together will in any way lessen the power of the High Courts? We want to be assured on that point. Another point is that, although we accept the Attorney-General's assurance that paragraph (b), which it is proposed to omit, is covered in the Civil Procedure Code, is it not a fact that the Provincial Legislatures will have power to alter the Civil Procedure Code, and that, therefore, this power will not be so much, in point of law, assured to the High Courts as it would be if paragraph (b) remained in the Bill? I should like to add, on behalf of my hon. and learned Friend the Member for Nelson and Colne (Mr. Thorp), at whose request the paragraph was inserted, that he has to be away from London to-day on legal business. Otherwise, I ant quite sure that he would have answered the Attorney-General's communication.
    5.49 p.m.
    The ATTORNEY-GENERAL: In my humble and diffident manner, not in my overwhelming manner, I would assure my hon. and gallant Friend that the codes of civil and criminal procedure do make the most complete, satisfactory and clear provision for this power to transfer suits to other courts in such circumstances as my hon. and gallant Friend has mentioned. As regards the point raised by the Noble Lady, there is a paragraph in the Instrument of Instructions which directs the Governor not to assent to any Bill which:
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    "in his opinion.would, if it became law, so derogate from the powers of the High Court as to endanger the position which that Court is by the said Act designed to fill."
    That, I think, will safeguard the position. I can give the Noble Lady the same assurance that I have given to my hon. and gallant Friend that there is nothing in any of these Amendments which in any way diminishes the powers of the Courts as they exist to-day.
    Amendment agreed to.

    CLAUSE 222.—(Administrative functions of High Courts.)
    Amendments made: In page 126, line 15, leave out "administrative."
    In line 20, leave out paragraph (b).
    In line 34, at the end, insert:
    "(2) Nothing in this section shall be construed as giving to a High Court any jurisdiction to question any judgment of any inferior court which is not otherwise subject to appeal or revision."—[Sir S. Hoare.]

    CLAUSE 232.—(Control of Secretary of State with respect to conditions of service.)
    5.51 p.m.
    Sir S. HOARE: I beg to move, in page 129, line 27, to leave out "a majority of."
    This is a, drafting Amendment which does not alter the sense of the Clause. In Sub-section (7) of Clause 274 it will be seen that concurrence means a majority of the council, and, that being so, it is unnecessary to speak of a majority in connection with the word "concurrence" in this Clause.
    Major-General Sir ALFRED KNOX: Would the Secretary of State be good enough to tell me, if it is in order to do so, who would be his adviser under the new Constitution on a military matter such as this?
    Sir S. HOARE: It certainly would not be in order on this Amendment. I can give my hon. and gallant Friend an answer on some other occasion, but I could not do so now without transgressing the rules of order.
    Mr. COCKS: The only point that arises from the speech of the Secretary of State is that Sub-section (7) of Clause 274, to which he has referred, does not speak of a majority, but of "at least one-half." Fifty per cent. is not a majority, and,

    1001
    therefore, I suggest that, in omitting the words "a majority of" from Clause 232, we are altering the sense of the Bill.
    5-.52 p.m.
    Mr. C. WILLIAMS: I think it might be well if we looked into this point a little more carefully. The Secretary of State says that there is no reason for the word "majority" here, and he refers us to another Clause of the Bill where the expression used is "at least one-half." I think that probably my right hon. Friend has not got quite the right brief yet. It may come, but, while we are coming to the right brief, may I ask him why in the world these words were ever put in? After all, the concurrence of the majority is the main principle at the back of the Clause, and draftsmen do not do this kind of thing indiscriminately and then allow words like "a majority of" to be taken out. While we wish to do everything in our power to help the Secretary of State in his difficulty, I hope he is really quite certain that he can take out the words "a majority of" and be sure that the point, is covered by another Clause of the Bill. It seems clear that it is not covered by Sub-section (7) of Clause 274, unless, of course, the Secretary of State can pro duce some new definition of "one-half." If that were so, it might possibly be all right to delete the words "a majority of." I raise The point purely to explain to the House a difficulty which was not apparent when the right hon. Gentleman made his original statement.
    5.56 p.m.
    Mr. EMMOTT: I must call attention to the fact that there is another point of divergence. Clause 232 says:
    "The Secretary of State may, acting with the concurrence of a majority of his advisers "
    And so on. Sub-section(7) of Clause 274, however, says:
    "Any provision of this Act which requires that the Secretary of State shall obtain the concurrence of his advisers shall be deemed to be satisfied if at a meeting of his adviser she obtains the concurrence of at least one-half of those present at the meeting.?
    That is quite a different thing. Will not the Government look into this matter?
    5.57 p.m.
    The UNDER-SECRETARY of STATE for INDIA (Mr. Butler): The reason why we have been obliged to amend Clause
    1002
    232 in this way is that, when a previous Amendment to Clause 232was accepted, there was no opportunity to look very closely into the drafting, but when the drafting was looked into closely it was found that it did not exactly tally with the terms of Sub-section (7) of Clause 274, which lays down the procedure which shall in future rule the Secretary of State in deciding those questions which he has to decide with the concurrence of at least one-half of those present at the meeting. That is the procedure which will rule the Secretary of State in matters on which the concurrence of his advisers is necessary; and, therefore, in order to bring Clause 232 into line with the procedure which we envisage, it has been necessary to omit the words "a majority of" Naturally, we shall take note of the words that have been so usefully used on this occasion, but I am advised that the omission of these words at the present stage makes the procedure under which the Secretary of State will be governed perfectly clear in relation to Clause 274.
    Amendment agreed to.

    CLAUSE 238.—(Recruitment and conditions of service.)
    5.59 p.m.
    Mr. EMMOTT: I beg to move, in page 132, line 28, to leave out from "twenty-six," to the end of the paragraph.
    I move this Amendment in order to give the Government an opportunity of explaining—Hon. MEMBERS: "Hear, hear !"]—I am glad that I carry the House with me—thesignificance of the words which I am moving to leave out, namely:
    "or by some person empowered by the Secretary of State to give directions in that respect.?
    Their significance is not at the moment altogether plain. It would seem from the Clause as it stands that the Secretary of State can empower some quite new authority to alter rules, to the disadvantage of a person in the employment of the Crown, and there is no indication who or what that authority would be. I shall be obliged if the Minister will elucidate this matter, which remains in some obscurity.
    Sir H. CROFT: I beg to second the Amendment.
    6.0 p.m.
    Mr. BUTLER: I could have understood my hon. Friend desiring an explanation of this subject had not an explanation of it been given on the Committee stage.
    Mr. EMMOTT: It was unsatisfactory.
    Mr. BUTLER: However, I am very glad to repeat the explanation which was given, because these Service Clauses are naturally rather complicated. The reason why these two lines must, we consider, stand part of the Clause is that Clause 238 comes in the earlier portion of the Service Chapter and relates to people who are not recruited by the Secretary of State, and that is made clear by the opening lines of the Clause. These words are necessary, therefore, in order that in cases where the rule-making power which is referred to in the body of the Clause has to be delegated by the Secretary of State, it shall be delegated by him to such authorities as are empowered by him to give directions. This subject was discussed at some length in Committee, and some hon. Members expressed doubt and apprehension that the Secretary of State should in fact delegate any of this power. They considered that the safeguard would be stronger if everything were left in his hands. I appreciate the motives which actuated them and their fears on the subject, but if they look into the matter and consider that this Clause applies to people other than those recruited by the Secretary of State they will see that it would be physically impossible for the Secretary of State to keep in his hands the whole of the rule-making power and not to delegate it. The ultimate safeguard which hon. Members may desire to see preserved is, in fact, preserved in that the power to delegate this rule-making power will remain in the hands of the Secretary of State, and so the authority who actually does the distribution remains the Secretary of State.
    I have given the House an instance of delegating to an authority other than the Secretary of State, who has the rule-making power under this Clause. I gave an instance of this on the Committee stage. It might be necessary for the Secretary of State to delegate this power to the railway authority, for example, and the Federal Railway Authority would, under the
    1004
    Bill, be empowered to make rules, and these words would empower the Secretary of State to give the Railway Authority power to make rules for its own subordinate officers. Therefore, the House will see that there are definite reasons for the insertion of these lines, and, in view of the explanation which I have given, I hope that the House will allow these two lines to stand part of the Clause.
    Sir H. CROFT: Whereas it is true that the Under-Secretary of State offered some remarks on this subject on the Committee stage, the position was not quite clear. However, he has made the whole position very much clearer, and I am very grateful to him.
    Mr. C. WILLIAMS: Can the Secretary of State withdraw the power of delegation whenever he wishes? If the Under-Secretary is able to give an answer to that point, it will make the position quite clear. I take it that the Secretary of State has the power to withdraw the delegation if he wishes at any time?
    Mr. BUTLER: Yes, that is so.
    Mr. DEPUTY-SPEAKER (Sir Dennis Herbert): Does the hon. Member press his Amendment?
    Mr. EMMOTT: No, Sir. In view of the very clear and courteous explanation given by the Under-Secretary, I beg to ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.

    CLAUSE 239.—(Application, of preceding section to railway services, and officials of courts.)
    6.5 p.m.
    Sir S. HOARE: I beg to move, in page 134, line 35, after "salaries," to insert "allowances, leave."
    Under this Clause a chief justice is empowered to make rules, and certain of those rules which are connected with pensions and salaries have to be referred to the Governor-General. It has been pointed out to us that as there is great need for uniformity over the whole of India in matters of this kind, it is better to add to the rules which should be referred to the Governor-General, the rules connected with allowances and leave as well. The object is to ensure, as far as possible, uniformity in these matters over the whole of India.
    Amendment agreed to.

    CLAUSE 241.—(Services recruited by Secretary of State.)
    Sir S. HOARE: I beg to move, in page 135, line 8, after "shall," to insert "until Parliament otherwise determines."
    This Amendment and the two following Amendments on the Order Paper in my name are proposed as the result of the discussion which we had on the Committee stage as to the future inquiry into the conditions of the Secretary of State's ser vices. The House will remember that, under the original proposal of the Bill, it was proposed that changes, if changes take place in the future, should be made by Order-in-Council. The view was then expressed from a good many hon. Members that changes of that kind should be made by an amending Act rather than by an Order-in-Council. I undertook to accept the spirit of these proposals, and the proposed Amendments to this Clause are the result of my undertaking. In these Amendments, I make it clear that existing conditions continue with the Secretary of State's services until Parliament otherwise determines, and I make clear in Sub-section (4), which I propose to move to add to the Clause, that:
    "It shall be the duty of the Governor-General to keep the Secretary of State in formed as to the operation of this Section, and he may after the expiration of such period as he thinks fit make recommendations for the modification thereof.
    In discharging his functions under this Sub-section, the Governor-General shall act in his discretion.?
    The object of this further Sub-section is this. The Joint Select Committee accepted the view that, at some time in the future, an inquiry would be necessary into the changed conditions of service. It is very important, from every point of view, that we should make it clear that we have not abandoned the attitude that, at some time in the future, we have to have an inquiry. The conditions of service are bound to change in the nature of things. How far those changes should react upon the actual position of the civil servants is a question for Parliament to decide in the future. We, however, desire to make it clear that we contemplate an inquiry at some time in the future, and that it is very important that the Secretary of State should be kept regularly informed by the Governor-General as to the conditions in existence, and as to any changes that are taking place. It is on that
    1006
    account that I regard Sub-section (4) as an integral part of the proposal that I am making. The proposal is, in the first place, that existing conditions go on until Parliament otherwisedetermines—and that carries out the undertaking which Igave—and, secondly, that the Secretary of State here should be kept regularly informed as to how the constitutional changes are reacting on service conditions, and that the Governor-General should be empowered to make recommendations to the Secretary of State upon the subject. The position of Parliament is not compromised. At the same time, we make it clear, both to the House and to Indians in India, that we have not abandoned the position maintained in the Joint Select Committee, that, in the nature of things, the constitutional changes must react upon service conditions in the future, and that that reaction must, at some time in the future, involve an inquiry. I, therefore, move the first Amendment standing in my name, and point out that the other two Amendments are integral parts of it.
    6.11 p.m.
    Mr. MORGAN JONES: I am sorry that the Secretary of State has found it necessary to make this alteration at this stage. He made reference to our discussions on the Joint Select Committee. It is well known, at least to those who have taken the trouble to read our Minority Report, that in our discussion of the problem we—I mean my hon. Friends and I who represented this side of the House on the Committee—committed ourselves to the proposition that a greater Indianisation of the Civil Service should take place than that contemplated in the White Paper of the Government. We were not able to convince our colleagues on the Committee of the virtue of that proposal, but the Bill originally presented to us provided that any alteration which circumstances justified in this matter could be made by means of Order in Council with out special and specific recourse to Parliament. The right hon. Gentleman, in response to pressure put upon him during the Committee stage, has felt it necessary to add further limiting words, and now, so far from it being a change made possible merely by reference to an Order in Council, a change can only take place after Parliament has so deter mined. I am sorry that he has to make

    1007
    that change, apart altogether from the general situation which we had in our minds when we drafted our alternative report.
    There is no doubt that as years go by and the Indian people acquire a greater knowledge of the business of self-Government, and so on, there will be greater pressure for Indians in the Civil Service in India among Indians themselves. I think that a wise Government in this country would be disposed to provide facilities for a more rapid entry of Indians into the Civil Service than has hitherto been possible, but if it is to remain the law of the Medes and Persians, so to speak, until Parliament other wise determines, then clearly we are in the presence of a condition which becomes more hard and fast. It would be governed, too, not merely by conditions in India as they will exist some years hence, but it will be conditioned by other circumstances which have nothing at all to do with India. It will depend largely upon the state of Parliamentary business here, how the particular business of the Government is proceeding, whether there is Parliamentary time for it, is the whole of it mortgaged, and so on, whether internal British problems are so pressing that no time can be afforded for the discussion of Indian problems. The consequence may be that, while the case may be ample and strong, and indeed overwhelming, for a change in the conditions of the Service in India, conditions here in Britain may prevent the Government of the day from meeting that situation as it might otherwise desire to do.
    The Secretary of State said that there is no departure from the intention that there should be an inquiry at some future date; but even if such an inquiry took place and the result favoured what we ourselves suggested in the alternative Draft Report, the Secretary of State would not be able to do anything—noteven by Order in Council. Under the present proposal he must have recourse to Parliament, with all the complication that Parliamentary discussion involves. I am sorry that he has found it necessary to make this fresh concession. I sup pose it is a, concession to his friends on the other side. I rather suspect that it it. I am becoming somewhat alarmed
    1008
    about the growing rapprochement between hon. Members on the other side and the.Government Bench. Perhaps coming events are casting their shadows before. I am sorry that the concession has been made, because I think it rather takes away from the rightness of the general principle that the Indians themselves have maintained, that a self-governing authority ought to have greater scope than is provided in the Bill for securing the quick recruitment of those who are to serve it in a civil capacity.
    6.17 p.m.
    Sir H. CROFT: The hon. Member need have no fear that, in spite of indifference of so many hon. Members on this question of India, Parliament will not be able to spare a day, or perhaps a couple of days, in the future to decide whether or not the Secretary of State is still to exercise its functions in connection with these great reforms. I do not think that we have sunk so low that in the days to come we shall not be able to spare a few hours to decide a very important subject like that. I stand corrected if the Secretary of State says that I am wrong, but I am inclined to think that there are not limiting words. My suggestion would be that it is almost unnecessary to say, "Until Parliament otherwise determines," because Parliament can always otherwise determine. I presume that the phrase has been put in to make a distinction between an Order in Council and Parliament; otherwise the words might have remained there. Thirty or 40years hence the Minister who may be sitting on the bench opposite will surely not contemplate anything drastic by Order in Council without taking into consultation the whole of the serried ranks sitting behind him, as well as the other parties in the House. There is one small danger in the actual words which are to be put in. If we put in the precise words, "until Parliament otherwise determines," is there not a possibility that that may give the impression that the matter is always open for revision, and that other Parliaments will have to be reminded from time to time that the provisions of this Clause exist? I am wondering whether the precise way in which the words are inserted may have the effect of causing agitation and of raising the subject frequently in the

    1009
    debates of the Legislative Assembly. I do not say that the words do not limit the powers, but there is some danger in the actual phraseology.
    6.19 p.m.
    Lord EUSTACE PERCY: There is no Law Officer present, and I was going to ask, for greater certainty, whether it is quire clear that the words "until Parliament otherwise determines "mean until an amending Statute is passed. Parliament can determine by Resolution.
    Sir S. HOARE: There is no ground for the anxiety of my hon. and gallant Friend the Member for Bournemouth (Sir H. Croft) nor can the words be open to the misunderstanding suggested. My hon. and gallant Friend and my Noble Friend the Member for Hastings (Lord E. Percy) may take it from me that the words are all right.
    Amendment agreed to.
    Further Amendments made: In page 135, line 10, at the beginning, insert "Until Parliament otherwise deter mines.?
    Inline 23, at the end, insert:
    "(4) It shall be the duty of the Governor-General to keep the Secretary of State informed as to the operation of this section, and he may after the expiration of such period as he thinks fit make ercommendations for the modification thereof.
    In discharging his functions under this sub-section, the Governor-General shall act in hisdiscretion."—[Sir S. Hoare.]

    CLAUSE 242.—(Special provision as to irrigation.)
    6.20 p.m.
    Sir S. HOARE: I beg to move, in page 135, line 24, to leave out from the be ginning, to "appoint," in line 28, and to insert:
    "Until Parliament otherwise deter mines, the Secretary of State may for the purpose of securing efficiency in irrigation in any Province."
    This Amendment deals with the Irrigation Service. The original proposal in the Bill was that the Secretary of State should be given the power to start re-crusting again for the Irrigation Service if he were satisfied that the Service was deteriorating through want of European officers. It was pointed out in the Committee that it might be no great ad vantage to allow the Secretary of State to resume recruitment when in the interval some fatal injury might have been inflicted on the Service. The Amend-
    1010
    ment is intended to meet that difficulty. It gives the Secretary of State power to recruit in cases where he thinks it is necessary from the beginning of the operation of the reforms. He will have to judge the cases on their merits, but it does not a tall follow that what would be done in the case of one Province would apply to another. It will, however, be his duty to satisfy himself that the recruitment conditions are satisfactory and that they are satisfactory from the be ginning of the changes.
    6.22 p.m.
    Sir H. CROFT: May I express gratitude that this very small concession has been made? I think it will add to the confidence and the efficiency of the Ser vice. There is one point which I think, is sometimes forgotten and that is that in this country we have no means of training men for irrigation, and if the Service in India did break down it would be absolutely impossible suddenly to telegraph to England: "Send out some irrigation officials." They would know nothing about it. They would not know the language, the rotation of crops and all those very important subjects in connection with this very vital service, which is one of the two most important questions for the whole of the Indian people. This Amendment does seem to help in that direction. I think that all those who have been sitting on the various grand inquests for the last seven years will bear me out when I say that practically the whole of the training for the Irrigation Service has been done in India. That has been the great school for this wonderful work, which has been so successful.
    I would remind the House that in the report of the Statutory Committee they very clearly laid it down that it is essential that we should have a much bigger hold with the irrigation officials in the future. They said:
    "We ourselves see strong advantages in the preservation of All-India recruitment, particularly for the Irrigation Service. An irrigation work like the Sukkur Barrage is to the vast territory which it supplies with water what the Assouan Dam is to Egypt; it is the basis of its whole economic being. The success of such a project depends not only on the efficiency of its construction but on the supervision of its subsequent administration.?
    Therefore, it is clear what the Statutory Committee thought on the subject. To the extent provided in the Amendment the Secretary of State will be able to

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    see that the recruitment in the future is not altogether eliminated from British sources, and that will certainly help. I am grateful for this small concession.
    Mr. KIRKPATRICK: I hope my right hon. Friend will bear in mind the method of recruitment of irrigation engineers, which has produced in the past probably the best engineers in the world. I refer not only to Indians and Anglo-Indians but Britishers educated in India. I hope that source of supply will not be over looked and that they will continue to be appointed by the Secretary of State for those appointments which are known as Secretary of State services.
    6.27 p.m.
    Sir R. CRADDOCK: In Committee I laid stress on the great importance of irrigation in India and the necessity of keeping up the efficiency of the Service and the supply of expert irrigation engineers. I am glad that the Secretary of State has moved the Amendment, and that he will not have to wait for evidence of serious inefficiency before he starts recruitment. I endorse every thing that my hon. and gallant Friend the Member for Bournemouth (Sir H. Croft) said about the impossibility of sending for irrigation engineers from England in case of a breakdown. To begin with, until the irrigation engineer has obtained administrative rank as a superintendent engineer he cannot have influence in controlling the large staff below that rank. It would take him from 15 to 18 years' service before he would be fit to perform the duties of superintendent irrigation engineer. No time must be lost in providing for this irrigation work. Although the subject was reserved, the Government have for several years past not recruited any new irrigation officers. I am not quite sure of the reason for that but I gathered from certain statements made to the Joint Select Committee that it was difficult to induce young entrants in this country to go out for the Irrigation Ser vice.
    It is, therefore, all the more incumbent on the Secretary of State to begin the work of filling up the vacancies in the proportion of British officers in the Service, which the Lee Commission, of which I was a member, recommended should be 40 per cent. The British recruitment has not been filled up for some
    1012
    years past and it is obvious that there must be something to make good. The Simon Commission said that as regards appointments in the Service they agreed with the Lee Commission and hoped that that system of recruitment would continue. The important point about recruitment for this Service when a proportion is fixed is that the proportion should go up evenly. The moment you recruit on one side Indians for, say, two or three years and then there is a gap and you get one or two British officers in you find difficulties hereafter in regard to promotion. Everyone knows that Indians are likely to stay their full time, with the result that they create a group at the top of the Service which blocks the general flow of promotion.
    I urge the Secretary of State to have great regard to the importance of making the contributions of each race in the strata of the Service go forward parallel with each other. It is also most important that the inquiry into the state of the Service in the various provinces should not be allowed to hangover for a long time. Indeed, I think action should be taken from the time when power is conferred upon the Secretary of State, and that he should institute, with the least possible delay, an inquiry into the state of the Irrigation Service and the distribution of posts between the two races. That inquiry should be instituted in advance, and he should use his powers to avoid any gaps in the seniority of British officers in the Service. I am grateful that the Secretary of State has met the criticism made in this respect, and I hope he will not wait until a position is reached when it might be too late.
    6.33 p.m.
    Mr. C. WILLIAMS: I congratulate the Secretary of State on having, at least on this occasion, got the support of every sensible person in the House on the very important matter of irrigation. It is very important that the Secretary of State should have the power of getting the essential officers, and that they should be men of the widest possible experience. From India some of the best irrigation officers have been sent to other places and in making these appointments to the Service, I hope that the Secretary of State will get into the closest possible co operation with those engaged in dealing

    1013
    with irrigation in other parts of the Empire, so that we may get the best possible officers for this Service.
    Amendment agreed to.

    CLAUSE 244.—(Conditions of service, pensions, etc., of persons recruited by Secretary of State.)
    Mr. BUTLER: I beg to move, in page 136, line 25, after "service," to insert "or a civil post."
    This is to make it clear that men appointed by the Secretary of State to isolated posts shall have the same protection as other men. A doubt arose as to whether isolated appointments were covered by the terms of the Bill, and the Amendment is to make this point clear.
    Amendment agreed to.
    6.36 p.m.
    Mr. BUTLER: I beg to move, in page 136, line 27, after "pensions," to insert:
    "and general rights in regard to medical attendance."
    The Clause as it stands says:
    "The conditions of service of all persons appointed to a civil service by the Secretary of State shall as respects pay, leave and pensions, be such as may be prescribed by rules to be made by the Secretary of State.?
    During our discussions in Committee there was a request that certain other matters should be added to those which may be prescribed by rules to be made by the Secretary of State. My right hon. Friend has considered with great sympathy the proposals that were made, and has decided that there is a case for adding general rights in regard to medical attendance. The question of medical attendance is one on which the civil ser vice feel very much. They have certain rights by which they themselves are entitled to treatment, and, in certain conditions, their wives and families as well. The availability of a British medical Officer in a station in which there is a substantial body of civilians is a right to which they attach great importance. In view of their conditions of service and of the special problems which arise under medical attendance, and in view of the rights which they have hitherto enjoyed, I think the House will regard it as legitimate that we should add to the general rights that of "general rights in regard to medical attendance, "besides those condi-
    1014
    tions of service which are referred to in the Clause.
    Mr. RHYS DAVIES: He would be a very foolish man to oppose a proposal of this kind, but the Under-Secretary has not made it clear whether it is intended to extend these medical rights to all persons involved. I hope he will tell us whether it is intended to give an extension or whether it is merely to legalise the status quo.
    Sir S. HOARE: The provision has nothing to do with an extension or limitation of medical rights. All it does is to say that the rules affecting medical treatment of civilians must be made by the Secretary of State. It does not prejudice the question of what the rules shall be. It brings them into the category where the rules must be made by the Secretary of State, and cannot be dele gated to anybody else.
    Amendment agreed to.
    6.40 p.m.
    Mr. BUTLER: I beg to move, in page 137, line 6, at the end, to insert:
    "(2) Any promotion of any person appointed to a civil service or a civil post by the Secretary of State shall, if he is serving in connection with the affairs of the Federation, be made by the Governor-General exercising his individual judgment and, if he is serving in connection with the affairs of a Province, be made by the Governor exercising his individual judgment.
    (3) If any such person as aforesaid is suspended from Office, his remuneration shall not during the period of his suspension be reduced except to such extent, if any, as may be directed by the Governor-General exercising his individual judgment or, as the case may be, by the Governor exercising his individual judgment.?
    The object of this Amendment is to safeguard the promotion of a particular Officer. Originally, the posting of officers was safeguarded, but there is thought to be a slight gap, that promotion which did not involve a change of posting may not be covered by the Bill. It is in order to cover the case of an Officer receiving promotion when there is no change in posting, that the Amendment is moved.
    6.41 p.m.
    Sir B. PETO: I beg to move, as an Amendment to the proposed Amendment, in line 1, after "promotion," to insert "or any order relating to leave."
    While the service is grateful to the Secretary of State for dealing with the

    1015
    question of promotion in this Amendment there is still a gap which has not been filled, on a matter to which the Civil service regard as of almost equal importance to those matters which have already received attention. That is the question of leave. If my Amendment to the Amendment is accepted, it will read:
    "Any promotion or any order relating to Leave of any person appointed to a civil service or a civil post by the Secretary of State shall, if he is serving in connection with the affairs of the Federation, be made by the Governor-General exercising his individual judgment and, if he is serving in connection with the affairs of a Province, be made by the Governor exercising his individual judgment.?
    The Civil service attach great importance to this matter. It was mentioned during the Committee stage but not discussed, and I want to ask the Secretary of State if he will not now take this simple concession, and thus cover all the points connected with service promotions and postings, and all other vital matters connected with the service, which will thus have the protection of being dealt with by the Governor-General himself in the exercise of his individual judgment, which means after consultation with his Ministers. I can see no reason why questions of leave which are so essential to Englishmen serving in India should be left out, and I hope that the Secretary of State will add to the general satisfaction by accepting my Amendment. It will not add to the cost, or do anybody any injustice, but will give protection to servants of the Crown in India in a matter of vital moment to them.
    6.44 p.m.
    Sir R. CRADDOCK: I desire to support the Amendment to the proposed Amendment. The Civil Service attach great importance to the question of leave, which they think should rank with the other points upon which the intervention of the Governor-General is pro vided. The question of leave is of ten a serious point to decide as against an Officer who is anxious for leave, and in all the governments with which I have been connected the question of leave was one which always came before the Governor, and was not disposed of by a lower authority. I do not think that any trouble or difficulty can possibly arise if the words proposed by the hon. Member for Barnstaple (Sir B. Peto) are accepted by the Government.
    6.45 p.m.
    Sir H. CROFT: I wish to support the Amendment to the proposed Amendment. The Secretary of State accused me about three nights ago of bringing up the matter of Ceylon like King Charles's head, and I accepted the rebuke with due humility. The only reason, when we are considering such a vital question as this, for mentioning Ceylon, is that it seems to me the only comparable situation that we have. This question of leave has been raised again and again by the State Council in Ceylon. It is conceivable that the new Eastern democracy may not appreciate the fact that leave to anyone in the British services is absolutely vital if he is to continue to do his work at all. I know the intense feeling amongst those who fear that they might be deprived of their privileges in this connection, when democratic institutions have been established. Everyone who has had anything to do with work in Eastern or tropical climates realises how important it is to preserve these leave privileges.
    6.47 p.m.
    Sir S. HOARE: I must ask the House to reject the Amendment to the proposed Amendment, not because I do not realise the necessity of having fair and adequate leave conditions, but because I believe that the Amendment to the Amendment is unnecessary and that it would be unworkable in practice. It is unnecessary for this reason: Hon. Members will see that in Clause 244, Sub-section (1, a), the rules for leave are effectively safe guarded. They have to be made by the Secretary of State. What better safeguard could there be? My hon. Friend's Amendment goes much further and recommends that not only the rules about leave but the actual orders should all be approved by the Governor-General or by the Governor. I should have thought that it was impossible for them to take all those details, to decide whether a man, for instance, should have three or four days' leave at a particular moment. The general rules already cover the general question. This proposal would take the matter away from the heads of departments and from the Indian Ministers.
    My information runs somewhat counter to the information of my hon. Friend the Member for the English Universities (Sir R. Craddock). I understand that

    1017
    these questions do not all go to the Governor-General and the Governors, but that in actual practice the detailed arrangement in nine cases out of ten is between the head of the department, or between the Minister and the officials of his department, and that there would not be the least need for them to go to some outside authority. If, however, an official was aggrieved and felt that he was being badly treated by the head of his Department or by the Minister, he has full powers to complain to the Governor-General or to the Governor under Clause 245. Further than that, there is the special responsibility of the Governor-General and of the Governor to safeguard the legitimate rights of the Services. The Governor-General or Governor could undoubtedly intervene under that special responsibility in a bad case. I hope I have made it clear that the official is effectively and adequately safeguarded, and that there is no reason, therefore, to exclude from the internal arrangements of a department the head of the department or Minister, or to bring the Governor-General and the Governor into detailed intervention about all sorts of matters that really affect the department and the Minister much more than the Governor-General and the Governor.
    Sir B. PETOAfter the explanation of my right hon. Friend, I beg to ask leave to withdraw the Amendment to the proposed Amendment.
    Amendment to the proposed Amendment, by leave, withdrawn.
    Proposed words there inserted in the Bill.
    6.51 p.m.
    Mr. BUTLER: I beg to move, in page 137, line 12, at the end, to insert:
    "Provided that, if any such person is serving in connection with the railways in India, so much only of his salary and allowances shall be charged on the revenues of the Federation as is not paid out of the Railway Fund.?
    This proviso is necessary in order to secure that railwaymen shall be paid out of the right fund and that is not out of the revenues of the Federation. It is necessary to preserve the right of railway officers appointed by the Secretary of State, and if for any reason there is not sufficient money in the railway fun d to pay the whole of their remunera-
    1018
    any deficiency shall be charged on the revenues of the Federation.
    Mr. RHYS DAVIES: I wish the Under-Secretary would explain the proposal a little more. Let me put the case as I see it. I do not understand the Indian problem as well as other hon. Members. Does this mean that if a railway company agrees to pay £2 10s. a week to a workman and the company decides that it will pay only £2of it, the State would be called upon to pay the remaining 10s.?
    Sir S. HOARE: My answer is that the question does not arise upon this Amendment, which deals with the question who should pay, should it be the railway authority or the Federation? What they should pay is another matter. This Amendment is simply putting the right payment authority in the Bill, and nothing more than that.
    Amendment agreed to.

    CLAUSE 245.—(Rights in respect of complaints, appeals, etc.)
    Mr. BUTLER: I beg to move, in page line 37, after "service," to insert "or a civil post."
    This Amendment is moved to ensure that the protection given to the Secretary of State's servants covers men appointed to isolated posts as well as those who form part of the general Civil Service.
    Amendment agreed to.
    Further Amendments made: In page line 7, leave out "in his discretion," and insert "exercising his individual judgment."
    In line 18, after "service," insert "or a civilpost."—[Mr. Butler.]

    CLAUSE 246.—(Compensation for altered conditions of service, etc.)
    Amendment made: In page 138, line 30, after "service" insert "or a civil post."—[Mr. Butler.]
    6.56 p.m.
    Sir H. CROFT: I beg to move, in page 138, line 31, after "affected," to insert:
    "or if by reason of a fall in the sterling exchange value of the rupee.?
    On 4th April an hon. Friend of mine moved an Amendment to Clause 238 of the original draft of the Bill providing for payment in addition to salary of exchange compensation allowance. The matter was debated at considerable

    1019
    length at that time, as will be found in col. 669 to 675 and col. 721 to 731 of the OFFICIAL REPORT. The Secretary of State appeared at the time to have accepted the principle underlying the Amendment of my hon. Friend, but be stated quite naturally that he must give 'further consideration to the whole matter, as he saw difficulties about putting the proposal into precise words. Therefore he could not give an explicit promise. But his attitude was undoubtedly unusual, because it was extremely sympathetic to the views we put forward. I mean that it was unusual in that particular case, although no one could be more sympathetic than my right hon. Friend when dealing with other subjects. The Amendment was withdrawn because we understood that the subject was open to review.
    As far as we can see none of the Secretary of State's Amendments to the Bill on Report refers to this matter. That is why this Amendment and one which stands later on the Order Paper have been put there. This Amendment does no more than attempt to specify a fall in the exchange value of the rupee as proper ground for the payment of compensation. It is merely implementing statements which I think the Secretary of State made in the Debate on 4th and 5th April. This is a matter which has created very deep concern amongst those who are likely to be affected, and I would remind the Secretary of State that the matter was covered under previous rules and instructions and that the principle has been admitted in the past. I hope he will be able to see his way to accept the Amendment.
    Sir A. KNOX: I beg to second the Amendment.
    The object is to stabilise the exchange at a rate that is not less favourable than the rate at present in force for civil servants. The present rate of ex change is 1s. 6d. per rupee. That has been the rate for a long time. I under stand that all withdrawals from the Provident Fund and so on are paid at that rate at present. It is feared that the new Government in India might possibly go in for inflation. In that case the value of rupee might be less favourable to those ex-civil servants who have to draw their pensions out of India. The Amendment we have put down proposes to stabilise
    1020
    the rate of payment for pensions that are in rupees, and paid outside India, and to stabilise the value of the rupee at ls.9d., and to keep that rate.
    7.1 p.m.
    Mr. BUTLER: The hon. and gallant Member for Bournemouth (Sir H. Croft) referred to the discussion which took place on this subject during the Committee stage, and quoted references to the Debates of the 4thand 5th April. I do not deny that the Government consider that any question such as this which might prejudicially affect the Members of the Civil Service should be looked upon with sympathy in order that it should be dealt with in case of necessity. We consider that this will be dealt with under the provisions of the Bill, as I shall show later. But before doing that I must give the House the exact words which I used in answering the Debate on that occasion. I said:
    "In view of all these problems and the difficulty of meeting them in any simple and easy manner in the statute, we consider that the matter had much better be left to the discretion of the Secretary of State to carry on the policy which he has under taken in the past."
    Then I said, after referring to the possibility of informal discussions about this matter with one or two hon. Members:
    "I do not want to give any undertaking that we have any easy method of placing it on the statute, since we consider that it would be very difficult and, if put in in the wrong way, would be very undesirable.?—[OFFICIAL REPORT, 5th April, 1935; cols. 729–30, Vol. 300.]
    That, I think, was the view of the Government, and that is substantially the view of the Government to-day. In Committee the hon. Member for Kidderminster (Sir J. Wardlaw-Milne) and the right hon. Member for Sparkbrook (Mr. Amery) put many complicated points which have been raised on this subject and explained the difficulties of fore seeing exactly what might arise and what the economic conditions would be in India and England if by any possibility the rupee were to depreciate. It was their opinion—and the opinion was shared by a great many Members in the Committees at that time—that anything laid down in the Statute would be almost impossible and that it would not in fact achieve the end desired. The first of these Amendments which we are considering is the simplest possible way in which an hon. Member can put forward

    1021
    what he has in mind, and I readily acknowledge that. It is much simpler and easier to put it in the Statute than the second Amendment which is very complicated, and which we do not think would be desirable on any ground. Let me, therefore, refer chiefly to the first Amendment—though my remarks will cover both of them. The hon. and gallant Member for Bournemouth desires that there should be a proper ground for payments of compensation inserted in the Bill, and desires that the present arrangement whereby this question is regulated by rule should be secured and continued. The rule that payments at a certain rate should be paid for rupee pensions converted into sterling will be carried on by the rule made by my right hon. Friend and protected by this Bill. There is another rule for provident funds which, though of a different type, will be governed by the conditions of the Clauses in each Service chapter.
    I must now address myself to the argument of the hon. and gallant Member for Bournemouth, who wants to know whether the Bill as it stands actually covers the potential need to meet the depreciation in the value of pensions and provident funds which would arise from a depreciation of the rupee. The opinion of my right hon. Friend and his advisers is that this matter is covered, notably by Clauses 244 and 246. Clause 246 is the Clause which gives power to grant compensation in cases of necessity. This might be taken to apply to individual cases. Actually it does give a general power of compensation. Under Clause 246 it will be possible to deal either with the isolated case of an Officer serving in some station on the outskirts of India who will be affected by a depreciation of the rupee or, I under stand, with the case of other individual officers who might be affected by the fall in the value of the rupee. But we have made assurance doubly sure. I am informed that in any case, under the references in Clause 244 to pay arid pensions, it would be possible for the security which members of the Services desire to be achieved. I did have a chance of conversation with at least one hon. Member on this subject and I think in that conversation it was possible to illustrate—as I am attempting to illustrate to the House—that the contents of
    1022
    these two Clauses do cover what we have in mind.
    Now let me refer to the other safe guards inserted in the Bill. We considered that this matter was better left to the discretion of the Secretary of State. It will be in the interest of the Services in the future that this should be so. Certain hon. and right hon. Gentle men may consider that they cannot rely on a future Secretary of State. In order to meet thatdifficulty—which I realise is one felt by some hon. Members—I would remind them that the Secretary of State in this matter will be guided by his advisers. If the majority of his advisers did not agree with him on this point he would have to conform to their wishes. He is not able to dismiss an adviser simply because he disagrees with him. There are provisions in the Clause relating to the advisers which insist that a large proportion of them shall have had service in India. It is, therefore, virtually certain that these advisers will have no axe to grind, and that they will have the interest of the Services at heart. The Secretary of State being to this extent almost at their mercy, it would be difficult for him, in the very unlikely case of his wishing to do so, to take any action which would be pre judicial to the interest of the Services. I think that safeguard in the constitution of the Secretary of State's Council, coupled with the assurances of the Bill and combined with the undoubted wish of any future Secretary of State to do his best for the Services, really does make the position watertight.
    On the question of the possible depreciation of the rupee, I think it is much better not to lay something down definitely in the Bill, but to rely on the assurances which I have attempted to give the House, based as they are on definite provisions in the Statute as it stands at present. In an uncertain matter such as this it is much better to rely on certain powers definitely given to the Secretary of State than to attempt to lay down a head what conditions are likely to be. In view of that firm conviction of the Government, who do desire to do their best for the Services, if this contingency should arise, and in view of the many complicated questions which arose out of it in Committee, I would ask the House not to accept this Amend-

    1023
    ment, and to believe that the matter will be dealt with, if it arises, in this way.
    7.10 p.m.
    Sir H. CROFT: I should like to ask the Under-Secretary whether, supposing that the rupee fell again to a shilling, there is any machinery in this Bill which would correspond to what is known as the Exchange Compensation Fund? Does that exist under the Bill? We have heard hopes expressed that some such machinery would be brought in, but I should like to know whether such a fund does exist and whether it will definitely come into effect?
    Sir S. HOARE: There is no specific provision for the existence of a fund, but I assure my hon. and gallant Friend that there are full powers in the Bill to give compensation. My own considered view is that it is much better to leave the question of compensation in that general state rather than to attempt to deal with a very complicated contingency here and now. I assure my hon. and gallant Friend that there are full powers to deal with this. I cannot conceive my self, or any Secretary of State, at any time and to what ever party he belongs, not dealing with such a situation if it arose.
    7.12 p.m.
    Sir B. PETO: The Under-Secretary has made it quite clear that there is contained in Clauses 244 and 246 powers which the Secretary of State can use to counter such a disability as is contemplated in the Amendment, caused by a fall in the exchange value of the rupee. The Secretary of State has told us that he thinks it much better to leave it with no statutory provision, and that he does not think any Secretary of State in the future—no matter to what political party he might belong—would ever be likely not to deal with the contingency when it arose and see that adequate compensation was made to the Civil Service in case of a great fall in the exchange value of the rupee. But the Amendment de finitely asks that this shall be put in the Bill and that it shall not be left to be governed by the general words in Clause 246 which immediately follow the word "affected," and which read:
    "or if for any other reason it appears to the Secretary of State that compensation ought to be granted.?
    1024
    These words are so wide that there is no question that the Secretary of State has power to deal with the case when itarises—but the Amendment asks that after the word "affected" there shall be put in the words:
    "or if by reason of a fall in the sterling exchange value of the rupee.?
    Those of us who want to see that the interests of the Civil Service are definitely protected by the provisions of the Clause would much prefer to see the Amendment put in, and to know that any fall in the exchange value of the rupee would definitely be a matter which would be dealt with, rather than leave it in the vague way in which it is now left in those Clauses. I did not think that the Under-Secretary's explanation was satisfactory on that point. He did not tell us why it was in the interests of the civil servants that they should not be specifically safeguarded by Statute in the event of a fall in the exchange value of the rupee whereby the whole of the value of pay and pensions would be affected. He did not tell us why it would be better in their interests not to put those words in. He only told us that in his opinion it was better left for Secretaries of State to deal with if they thought fit. In the circum stances I hope that the hon. and gallant Member for Bournemouth (Sir H. Croft) will think it worth while to divide the House, because I am certain that the civil servants would much prefer that this vital point of the exchange value of the rupee should be definitely dealt with in the Bill, so that they may know the value in terms of sterling of the salaries and pensions they get, without any doubt as to what a future Secretary of State might decide.
    7.16 p.m.
    Mr. MORGAN JONES: I cannot understand why hon. Members feel so much apprehension as to any line of action which a future Secretary of State may take on this matter. It is clear that he will look upon it not from the political point of view but from the point of view of pure equity and justice. Hon. Members have possibly over looked this point. As Chairman of the Public Accounts Committee I happen to know that in the last few years civil servants of the Crown in various parts of the Empire have suffered a depreciation in salaries by reason of

    1025
    exchange fluctuations, and, as far as I know, in each of those cases compensation has been given to make the salary under the new conditions equal to what it was under the old conditions. I can not imagine there would be any departure from that custom in respect of British civil servants in India.
    Sir B. PETO: The hon. Member would not go so far as to say that the fact that a thing has happened in the past is any guarantee that it will always happen in the future?
    Mr. JONES: I think the hon. Baronet will agree that in these matters precedents have a good deal of influence. Civil servants would be shrewd enough to point to a precedent having been laid down in the year so-and-so governing this particular set of circumstances, and I cannot imagine what grounds there can be for this excessive measure of disquiet on the part of hon. Gentlemen in various parts of the House. I am not sure whether it is strictly in order to deal with the other point which the Under-Secretary mentioned, but I cannot agree to the proposal that the Secretary of State should be so inexorably in submission to the views of a majority of the Civil Service when be acts as Secretary of State in Council. That seems to be a very grave departure indeed from what is regarded as the principal function of a civil servant in regard to the advice given to Minsters. The Minister is answerable to this House, but I do not see how he can fairly be expected to be answerable to this House when he himself is not in authority but under the authority of those who happen to be on his Council. I can only express apprehension at the wild course which there volutionaries on the Government Bench are taking in this matter.
    7.20 p.m.
    Lieut.-Colonel HENEAGE: If I were an Indian Civil Servant I should prefer not to have this Amendment in the Bill. Clause 246 begins with these words:
    "If by reason of anything done under this Act the conditions of service … have been adversely affected."
    I think it would hardly be possible for the Indian Legislature to prove that a fall in the currency was due to anything done under this Act, arid I feel that the Secretary of State has far wider powers than this Amendment would give to him.
    1026
    This is a limiting Amendment, because it limits it to any thing that happens under this Act.
    Lord E. PERCY: There are also the words "or if for any other reason."
    Lieut.-Colonel HENEAGE: That shows the difficulty of reading these Clauses. Having heard the explanation the Secretary of State has given, which shows what wide powers he has, I think this Amendment would be a limiting Amendment, and for that reason I shall vote against it.
    7.22 p.m.
    Mr. RAIKES: I confess that I have been very much disappointed by the reply we have had from the Government Benches, although we have been full of disappointments in regard to this Bill. After all, we are asking for no more than this, that the principle of exchange compensation allowances should be allowed under the Bill as it has been allowed in the past in regard to the Civil Service when there has been a depreciation of the rupee. It is all very well for the hon. Member for Caerphilly (Mr. M. Jones) to say that he cannot see why anybody here should be disturbed by the present situation, but the people who are disturbed are not so much the Members of this House as the members of the Civil Service. We had this matter dealt with in the Bengal Association, because the Civil Service is afraid of losing the principle, which has always been upheld in the past, that if there is depreciation some compensation allowance shall be granted in order to adjust the difference. My hon. Friend the Under-Secretary quoted from what he had said on the Committee Stage, and one realises the difficulties he has had to face in finding some method of dealing with the situation, but I do not think he made one point quite clear. When he replied on the 5th April and said he would further consider the question of giving statutory form to the request for compensation allowance he added the words:
    "On the other hand if the Noble Lord the right hon. Member for Hastings considers that it would be valuable my right hon. Friend would be perfectly ready to talk the matter over with him and other hon. Members who have raised this question before the Report stage, in view of the unanimity of opinion in the Committee that this matter should be met."—[OFFICIAL REPORT, 5th April, 1935; col.730, Vol. 300.]

    1027
    There was unanimity in the Committee on 5th April, apparently, that the request ought to be met, and there was unanimity in the Bengal Association that something ought to be done, and I do not see that the House has been taken very much further by the statement of the Secretary of State: "It is all right, it is in our discretion to deal with this matter." Nothing new has happened to change the position since 5th April, when the Committee were dissatisfied with the position taken up by the Government, and I very much hope that my hon. and gallant Friend will take his Amendment to a Division, because this is an issue of very great importance.
    7.25 p.m.
    Lieut.-Colonel Sir WALTER SMILES: Nothing has been said yet about appreciation in the value of the rupee. After all, most of us remember that in 1920 and 1921 the Government of India officially guaranteed that the value of the rupee would be 2s.After that it rose to 2s. 10½. and subsequently fell back to 1s. 2½d. Everybody in India suffered from those wild fluctuations. If now the rupee appreciates instead of depreciates, are we to understand that the civil servants will gain, because I see no mention of that. It occurs to me that if these words were inserted, so that they did not lose by reason of a fall in the sterling exchange value of the rupee, it might be just and equitable to insert that their salaries should be paid in sterling only, and that if they gained by reason of a rise in the exchange value of the rupee they might, in the converse case, lose that amount in rupees by which they now stand to benefit. Perhaps the Secretary of State, if he replies, will state what is the position of the civil servants if the exchange value of the rupee rises.
    7.27 p.m.
    Mr. HERBERT WILLIAMS: On this matter I find myself in some disagreement with those with whom I am usually associated. In Clause 244 the general conditions are prescribed by rules. Under Clause 246, if anything goes wrong, there are general provisions for putting them right. If we insert one specific item, that is the rate of exchange, there is a danger
    of limiting the value of Clause 246. We want to safeguard civil servants against a great many risks. Clause 246, covering "altered conditions "in the service, is very wide, and if we put in special words dealing with one particular risk we make it stand out and diminish the protection in respect of the other risks.
    Sir B. PETO: The words which we propose to insert in this Clause are followed immediately by the words "or if for any other reason." No matter what words we put in we cannot do away with "any other reason."
    Mr. WILLIAMS: They are sandwiched between the words" have been adversely affected "and" or if for any other reason." If we put in one reason we make it an outstanding feature and diminish the protective authority of the other words. Clause 258 is very important. There has been a good deal of reference to what some future Secretary of State might do, but in Clause 258 it states that the powers conferred by this Chapter on the Secretary of State shall not be exercisable by him except with the concurrence of his advisers. Therefore, in these matters, the Secretary of State is not a free agent. Clause 274 sets out who are the advisers of the Secretary of State:
    "One half at least of the persons for the time being holding Office under this section as advisers of the Secretary of State shall be persons who have held Office for at least ten years under the Crown in India and have not last ceased to perform in India official duties under the Crown more than two years before the date of their respective appointments as advisers under this section."
    The advisers will be recently retired civil servants—at least half of them will be. Since the Secretary of State must take their advice and since, I think, they are not capable of dismissal in the ordinarysense—except on grounds of incapacity—there is a measure of protection which is very substantial. Having regard to these other Clauses and the danger of the limiting effect of the Amendment, I think that, on balance, the situation will be better if the Amendment is not inserted.
    Question put, "That those words be there inserted in the Bill."
    The House divided: Ayes, 33; Noes, 247.

    Division No. 220.]

    AYES.

    [7.30 p.m.

    Acland-Troyte, Lieut-Colonel.

    Blaker, Sir Reginald.

    Burnett, John George

    Atholl, Duchess of.

    Bracken, Brendan.

    Courtauld, Major John Sewell

    Balfour, George (Hampstead)

    Broadbent, Colonel John.

    Craddock, Sir Reginald Henry

    Croft, Brigadier-General Sir H.

    Lees-Jones, John

    Smiles, Lieut.-Col. Sir Walter D.

    Davison, Sir William Henry.

    Lennox-Boyd, A. T.

    Somerville, Annesley A. (Windsor)

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

    Levy, Thomas.

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

    Fuller, Captain A. G.

    Macquisten, Frederick Alexander.

    Touche, Gordon Cosmo

    Gritten, W. G. Howard

    Mellor, Sir J. S. P.

    Wayland, Sir William A.

    Hales, Harold K.

    Perkins, Walter R. D.

    Wise, Alfred R.

    Keyes, Admiral Sir Roger

    Peto, Sir Basil E. (Devon, Barnstaple)

    Kimball, Lawrence.

    Remer, John R.

    TELLERS FOR THE AYES.—

    Knox, Sir Alfred

    Rutherford, John (Edmonton)

    Mr. Raikes and Mr. Emmott

    NOES.

    Acland, Rt. Hon. Sir Francis Dyke

    Glossop, C. W. H.

    Macmillan, Maurice Harold

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

    Glyn, Major Sir Ralph G. C.

    Magnay, Thomas

    Addison, Rt. Hon. Dr. Christopher

    Graham, D.M.(Lanark, Hamilton)

    Mander, Geoffrey le M.

    Agnew, Lieut.-Com. P. G.

    Grattan-Doyle, Sir Nicholas

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

    Albery, Irving James

    Greenwood, Rt. Hon. Arthur

    Martin, Thomas B.

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

    Grenfell, David Rees (Glamorgan).

    May hew, Lieut.-Colonel John

    Anstruther-Gray, W. J.

    Grenfell, E. C. (City of London)

    Milner. Major James

    Aske, Sir Robert William

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

    Molson, A. Hugh Elsdale

    Assheton, Ralph

    Grimston, R.V.

    Monsell, Rt. Hon. Sir B. Eyres

    Attlee, Clement Richard

    Groves, Thomas E.

    Morgan, Robert H.

    Bailey, Eric Alfred George.

    Grundy, Thomas W.

    Morris, Owen Temple (Cardiff, E.)

    Baldwin, Rt. Hon. Stanley

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

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

    Baldwin-Webb, Colonel J.

    Gunston, Captain D. W.

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

    Banfield. John William

    Guy, J. C. Morrison

    Morrison, William Shephard

    Barclay-Harvey, C. M.

    Hacking, Rt. Hon. Douglas H.

    Most, Captain H. J.

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

    Hall, George H. (Merthyr Tydvil)

    Nation, Brigadier-General J. J. H.

    Beit, Sir Alfred L.

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

    Nicholson, Godfrey (Morpeth)

    Bernays, Robert

    Hammersley, Samuel S.

    O'Connor, Terence James

    Boulton, W. W.

    Hannon, Patrick Joseph Henry

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

    Braithwaite, J. G. (Hillsborough)

    Harbord, Arthur

    Orr Ewing, I. L.

    Brocklebank, C. E. R.

    Harvsy, George (Lambeth, Kenningt?n)

    Owen, Major Goronwy

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

    Harvey, Major Sir Samuel (Totnes).

    Paling, Wilfred

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

    Haslam, Henry (Horncastle)

    Palmer, Francis Noel

    Brown, Ernest (Leith)

    Haslam, Sir John (Bolton)

    Parkinson, John Allen

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

    Headlam, Lieut.-Col. Cuthbert M.

    Patrick, Colin M.

    Butler, Richard Austen.

    Heilgers, Captain F. F. A.

    Peake, Osbert

    Campbell, Sir Edward Taswell (Brmly).

    Heneage. Lieut.-Colonel Arthur P.

    Pearson, William G.

    Campbell, Vice-Admiral G.(Burnley)

    Hepworth, Joseph

    Peat, Charles U.

    Campbell-Johnston, Malcolm.

    Herbert, Capt. S. (Abbey Division)

    Penny, Sir George

    Cape. Thomas.

    Hills, Major Rt. Hon. John Waller

    Percy, Lord Eustace

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

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

    Petherick, M.

    Cazalet, Thelma (Islington, E.).

    Holdsworth. Herbert.

    Pickthorn, K. W. M.

    Chapman, Sir Samuel (Edinburgh, s.).

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

    Procter, Major Henry Adam

    Clarke, Frank

    Hore-Belisha, Leslie

    Pybus, Sir John

    Clayton, Sir Christopher

    Hornby, Frank

    Radford, E. A.

    Cocks, Frederick Seymour

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

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

    Colfox, Major William Philip

    Hunter, Dr. Joseph (Dumfries)

    Ramsay, r. B. W. (Western Islet)

    Cook, Thomas A.

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

    Ramsbotham, Herwald

    Cooke, Douglas

    Jackson, Sir Henry (Wandsworth, C.)

    Ramsden. Sir Euqand

    Courthope, Colonel Sir George L.

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

    Rathbone, Eleanor

    Cripps, Sir Stafford

    Jesson, Major Thomas E.

    Rea. Walter Russell

    Crookshank, Col. C. de Windt (Bootle)

    John, William.

    Reed, Arthur C. (Exeter)

    Croom-Johnson, R. P.

    Jones, Morgan (Caerphilly)

    Reid. William Allan (Derby)

    Cruss, R. H.

    Ker, J. Campbell

    Rickards, George William

    Culverwell, Cyril Tom

    Kerr, Lieut.-Col. Charles (Montrose)

    Robarts, Aled (Wroxham)

    Curry, A. C.

    Kerr, Hamilton W.

    Robinson, John Roland

    Daggar, George

    Kirkpatrick, William M.

    Ropner, Colonel L.

    Davies, Edward C.(Montgomery)

    Kirkwood, David

    Rosbotham, Sir Thomas

    Davies, David L. (Pontypridd)

    Lamb, Sir Joseph Quinton

    Ross Taylor, Walter (Woodbridge)

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

    Law, Sir Alfred

    Ruggles-Brise, Colonel Sir Edward

    Denman, Hon. R. D.

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

    Russell, Albert (Kirkcaldy)

    Dickie, John P.

    Lawson, John James

    Russell, Hamer Field (Sheffield, B?tside)

    Dobbie, William

    Leckie, J. A.

    Russell, R. J.(Eddisbury)

    Dower, Captain A. V. G.

    Leech, Dr. J. W.

    Rutherford, Sir John Hugo (Liverp'l)

    Drewe, Cedric

    Leighton, Major B, E. P.

    Salmon, Sir Isidore

    Duckworth, George A. V.

    Leonard, William

    Salt. Edward W.

    Dugdale, Captain Thomas Lional

    Lewis, Oswald

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

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

    Liddall, Walter S.

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

    Eady, George H.

    Llawellin, Major John J.

    Sanderson, Sir Frank Barnard

    Eales, John Frederick

    Lloyd, Geoffrey

    Shakespeare, Geoffrey H.

    Edwards, Charles

    Lovat-Fraser, James Alexander

    Shaw, Helen B.(Lanark, Bothwell)

    Ellis, Sir R. Geoffrey

    Lumley, Captain Lawrence R.

    Shepperson, Sir Ernest W.

    Elmley, Viscount

    Lunn, William

    Shute, Colonel Sir John

    Entwistle, Cyril Fullard

    Mabane, William

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

    Evans, David Owen (Cardigan)

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

    Smith, Tom (Normanton)

    Evans, R. T. (Carmarthen).

    MacAndrew, Major J. O. (Ayr).

    Somervell, Sir Donald

    Fielden, Edward Brocklehurst

    Macdonald, Gordon (Ince).

    Somerville, D. G. (Willesden, East)

    Foot, Dingle (Dundee)

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

    Sotheron-Estcourt, Captain T. E.

    Foot, Isaac (Cornwall, Bodmin)

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

    Southby, Commander Archibald R. J.

    Fox, Sir GI fiord

    McKie, John Hamilton

    Spears, Brigadier-General Edward L.

    Fraser, Captain Sir Ian

    McLean, Major Sir Alan

    Spencer, Captain Richard A.

    Ganzoni, sir John

    Maclean, Nell (Glasgow, Govan)

    Spens. William Patrick

    Gledhill, Gilbert

    McLean, Or. W. H.(Tradeston)

    Stanley, Rt. Hon. Lord (Fylde)

    1030

    1031

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

    Todd, A. L. S. (Kingswinford).

    Williams, Herbert G. (Croydon, S.)

    Stones, James

    Train, John

    Williams. Thomas (York, Don valley)

    Storey, Samuel

    Tryon, Rt. Hon. George Clement

    Wild, Wilfrid D.

    Stourton, Hon. John).

    Turton, Robert Hugh

    Wilmot, John

    Strickland, Captain W. F.

    Wallace, Sir John (Dunfermilne)

    Withers, Sir John James

    Stuart, Lord C. Crichton-

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

    Worthington, Dr. John V.

    Sueter, Rear-Admiral Sir Murray F.

    Wardlaw-Milne, Sir John S.

    Tate, Mavis Constance

    Warrender, Sir Victor A. G.

    TELLERS FOR THE NOES.—

    Thomas, James P. L. (Horeford)

    Wells, Sydney Richard.

    Mr. Blindell and Sir Walter Womersley.

    Thompson, Sir Luke

    White, Henry Graham

    Tinker, John Joseph

    Williams, David (Swansea, East)

    CLAUSE 247.—(Application of four last preceding sections to persons appointed by Secretary of State in Council, and certain other persons.)
    7.39 p.m.
    Sir A. KNOX: I beg to move, in page 140, line 6, at the end, to insert:
    ?(4) Notwithstanding anything contained in sub-section (1) of the section of this Act of which the marginal note is Conditions of service, pensions, &c., of persons recruited by the Secretary of State, "the conditions of service of the person mentioned in the first two sub sections of this section shall be regulated by rules to be made by the Secretary of State with the concurrence of his advisers in respect of all matters in respect of which the said conditions were, before the commencement of Part III of this Act, regulated by rules made by the Secretary of State in Council:
    Provided that no rule under this sub section shall have effect so as to give to any person less favourable terms as regards rights and conditions of service than were given to such person by rules made by the Secretary of State in Council."
    This Amendment, which is couched in the usual legal language and made as obscure as possible, I will try to explain. It will be observed that Clause 244, Sub section (1, a), obliges the Secretary of State to make rules regarding pay, leave, and pensions. As regards other matters, he is not obliged to make rules. He can make rules if he pleases, but otherwise he can delegate his rule-making authority to the Governor-General or the Governors, and in turn they can delegate that authority to subordinates. This provision for the delegation of his rulemaking power by the Secretary of State has given great anxiety to the Services. They wish the Secretary of State would retain this power in his own hands, and they think that they could get a better deal by that means. It is true that those threeheadings—pay, leave, and pensions—can be made to cover most of the things with which they are chiefly concerned, but there are other less definite matters, such as provision for medical treatment and home allowances, which do not come
    1032
    under those headings, and the Services do not like the delegation of the rule-making power on these subjects to be handed over by the Secretary of State to the Governor-General or the Governors.
    The object of the Amendment, in brief, is that the Secretary of State should retain in his own hands the power to make rules regarding the Services, at any rate as regards the people who are now serving in India. The Under-Secretary of State, in dealing with the last Amendment, explained his absolute belief in the Secretary of State at the present time and in all future Secretaries of State. I hope the Secretary of State will agree, on those grounds if on no others, to this Amendment.
    7.42 p.m.
    Sir H. CROFT: I beg to second the Amendment.
    I would ask the Secretary of State to tell the House why it is proposed to depute his rule-making power in this respect. We are asking that, at any rate as regards the officers now serving, they should not be deprived of the protection of the Secretary of State, and I would ask the right hon. Gentleman to appreciate that point of view, which we have tried to express on several occasions, that officers who are in the Services did join up believing that they were under permanent institutions which were not likely to change to the extent that this Bill indicates. Granted that under the 1919 Act they might have realised that there was to be a progressive form of self-government, step by step, with great gradualness, as indicated by the late Secretary of State, Mr. Edwin Montagu, no one who joined the Services until this extraordinary change of attitude on the part of His Majesty's Government in the year1931 could have supposed that the Service which they joined was to be placed entirely in so many cases, under Indian ministers. Therefore, I urge my right hon. Friend to accept the Amendment.
    7.44 p.m.
    Sir S. HOARE: I really think it is un necessary for the House to accept this Amendment. The hon. and gallant Member raised this same question on the Committee stage. I then pointed out to him that the Secretary of State can make all rules of every kind, but that the first Sub-section of Clause 244 makes it obligatory upon him to make the rules himself that are concerned with the more important conditions in a civilian Ser vice. Hon. Members will see, if they look at Sub-section (1, a) of Clause 244, that we do coverall those main conditions—pay, leave, and pensions. My hon. and gallant Friend just now said we ought to add medical treatment. He cannot have been in the House during the last hour, when I myself proposed an Amendment, which was accepted by the House, to add medical treatment to those categories. I do not think it necessary to go further than those categories. They cover all the main conditions of service, particularly when medical treatment is added. If the Secretary of State thinks that there are other more detailed rules that should be made, he can make them, but I do not see why, in the case of these less important rules, he should not be empowered to delegate them, if he wishes, to some other authority. That being so, and in view of the fact that I have just added to the list the important item of medical treatment, I suggest that it is unnecessary to make this Amendment.
    Amendment negatived.
    7.46 p.m.
    The ATTORNEY-GENERAL: I beg to move, in page 140, line 21, after "to," to insert "or in respect of."
    Sub-section (5) deals with the existing rights of pensioners and its object is to preserve those rights. This Amendment is to make it plain that the liability to pay a pension includes the liability to pay a pension in respect of the dependants of a former member of the public service. The Amendment which follows will prevent any inference being drawn from the existing form of the Clause that a right of suit for liability to pay a pension is a new one. We obtain that effect by substituting the expression any other liability" for the expression "liability."
    Amendment agreed to.
    Further Amendment made: In page 140, line 21, to leave out "a," and insert "any other."—[The Attorney-General.]

    CLAUSE 250.—(Judges of the Federal Court and High Courts.)
    The ATTORNEY-GENERAL: I beg to move, in page 142, line 10, at the end, to insert:
    "(c) nothing in this Section shall be construed as excluding the Office of judge of the Federal Court or of a High Court from the operation of the provisions of this chapter with respect to the eligibility for civil Office of persons who are not British subjects.?
    This is a drafting Amendment consequential upon the new Clause which we added to the Bill enabling State subjects to be appointed in certain circumstances to Offices under the Crown.
    Amendment agreed to.
    The ATTORNEY-GENERAL: I beg to move, in page 142, line 25, after "liability," to insert:
    "to pay a pension granted to or in respect of any such person or any other liability."
    This is of the same character of the last Amendment but one. It makes it clear that the liability to pay a pension extends to liability to pay a pension to dependants of the judge in order to avoid any inference that the liability to pay a pension is made a new ground of suit.
    Amendment agreed to.

    CLAUSE 251.—(District judges, etc.)
    Sir S. HOARE: I beg to move, in page 142, line 36, to leave out from "the," to the end of the Sub-section, and to insert:
    "High Court shall be consulted before a recommendation as to the making of any such appointment is submitted to the Governor."
    Mr. ATTLEE: May we have some explanation of this Amendment? As I read it, the Minister is eliminated altogether from the appointment of persons to the post of district judge, and, instead, the High Court is to be consulted. I do not know whether that is the intention. If so, we should have some explanation.
    The ATTORNEY-GENERAL: This is really only a drafting Amendment, be cause the Sub-section, as drawn, provides that the Minister concerned shall, before making any recommendation, consult the High Court. The Amendment puts it round the other way, and provides that

    1035
    the High Court shall be consulted before a recommendation is submitted to the Governor. It may seem to be a distinction without a difference, but it merely provides that the High Court shall be consulted instead of providing that the Minister shall consult the High Court.
    Mr. ATTLEE: Does it exclude the Minister from any say?
    The ATTORNEY-GENERAL: It does not exclude the Minister. He is still the person to submit a recommendation, and the Amendment provides that the High Court shall be consulted, but it does not say that it shall be the duty of the Minister to consult the High Court.
    Amendment agreed to.
    Further Amendment made: In page 143, line 3, at the end, insert:
    "chief judge of a small cause court, chief presidency magistrate.?—[The Attorney-General.]

    CLAUSE 256.—(Provisions as to certain persons serving in or before 1924.)
    Amendment made: In page 145, line 30, at the end insert:
    "Provided that, if any such person as aforesaid is serving in connection with the railways in India, so much only of his salary and allowances shall be charged on the revenues of the Federation as is not paid out of the railwayfund."—[Sir S. Hoare.]

    CLAUSE 259.—(Eligibility for Office of persons who are not British subjects.)
    7.52 p.m.
    Sir S. HOARE: I beg to move, in page 146, line 33, to leave out "any named native of any."
    This and the following Amendments are intended to cover an oversight in the original draft of the Bill. The Governor-General in Council, with the approval of the Secretary of State, can make appointments to the Service out of the Indian States and out of the tribal areas and territories adjacent to India. The object of the Amendments is to continue this power.
    Further Amendments made: In page 146, line 38, leave out "any named native of any."
    In line 41, at the end, insert:
    "(3) The Secretary of State may declare that any named subject of an Indian State, or any named native of a tribal area or territory adjacent to India, shall be eligible for appointment by him to any civil service under the Crown in India to which
    1036
    he makes appointments, and any person who, having been so declared eligible, is appointed to such a service, shall be eligible to hold any civil Office under the Crown inIndia."—[Sir S. Hoare.]

    CLAUSE 263.—(Functions of Public Service Commissions.)
    Sir S. HOARE: I beg to move, in page line 16, at the end, to insert:
    "(2) It shall also be the duty of the Federal Public Service Commission, if re quested by any two or more Provinces so to do, to assist those Provinces in framing and operating schemes of joint recruitment for their forest services and any other ser vices for which candidates possessing special qualifications are required.?
    This Amendment is moved in response to various representations that were made to me in the Committee stage with reference to the Forest Service. It was pointed out to me with great force that there were substantial advantages in having a central recruitment for a service like the Forest Service. The object of the Amendment is to make it easier and possible for the Federal Public Service Commission to undertake central recruitment for the Provinces which are prepared to accept it and to make it clear in the body of the Bill that the House generally gives its blessing to such central recruitment.
    Amendment agreed to.
    Sir S. HOARE: I beg to move, in page 150, line 23, at the end, to insert:
    ?or, in the case of the subordinate ranks of the various police forces in India, as respects any of the matters mentioned in paragraph (a), (b), and (c) Sub-section (2) of this section.?
    This Amendment is moved in response to an undertaking given on the Committee stage. The effect will be to do what was always intended by means of the powers in Sub-section (2) of the Clause, namely, to exclude from the purview of the Public Service Commission the recruitment, promotion and discipline in the subordinate ranks of the police. We never intended that they should come within the purview of the Commission. It was implicit in the Bill before, and in the Amendment we propose to make it explicit.
    Amendment agreed to.

    CLAUSE 270.—(Provisions as to family pension funds.)
    Sir S. HOARE: I beg to move, in page 156, line 36, at the end, to insert:

    1037
    "and estate duty shall not be payable in Great Britain, nor, if the Parliament of Northern Ireland so provides, in Northern Ireland, in respect of any pension payable under the regulations or rules relating to any such fund.?
    The Amendment covers a technical point. Under the British Finance Act existing funds are exempted from estate duty, but the form of exemption can hardly cover any new fund formed under the provisions of Sub-section (3). I am glad to say that I have the approval of the Chancellor of the Exchequer to make this exemption to cover the new fund that it is proposed to set up for the family pensions. I move the Amendment with that object.
    Amendment agreed to.

    CLAUSE 271.—(Saving for East India Annuity Funds Act, 1874, and Bombay Civil Fund Act, 1882.)
    Sir S. HOARE: I beg to move, in page 158, line 1, after "Act," to insert, "the India Military Funds Act, 1866."
    When the Clause was drafted it was overlooked that there are certain military funds, the beneficiaries of which appear to have just as good a claim to this provision as the beneficiaries of the civil funds named. I therefore move that these military funds should be included in this pro vision.
    Amendment agreed to.

    CLAUSE 282.—(Use of His Majesty's Forces in connection with discharge of the functions of the Crown in its relations with Indian States.)
    Sir S. HOARE: I beg to move, in page 165, line 22, at the end to insert:
    "but the net additional expense, if any, incurred in connection with those forces by reason of that employment shall be deemed to be expenses of His Majesty incurred in discharging the said functions of the Crown.
    (2) In discharging his functions under this Section the Governor-General shall act in his discretion.?
    Clause 282 was added to the Bill in pursurance of the undertaking given on page 35 of the State White Paper with reference to Clause 8, paragraph (i), in order to make clear that the armed forces of the Federation are available for the protection of the States in pursuance of treaty obligations. The addition now proposed is to make the assurance doubly clear that the functions of the Governor
    1038
    General under this Clause, like the rest of his functions in relation to defence, are exercised in his discretion, and that any sums due in connection with this Clause fall within Clause146 and Clause 43.
    Amendment agreed to.

    CLAUSE 283.—(Aden.)
    Sir S. HOARE: I beg to move, in page line 31, to leave out Sub-section (5) and to insert:
    "(5) Any property which immediately before the separation of Aden from India was vested in His Majesty for the purposes of the Government of India and either was then situate in Aden or, by virtue of any delegation from the Secretary of State in Council or otherwise, was then in the possession, or under the control of, or held on account of, the Local Government of Aden, shall, as from the said separation, vest in His Majesty for the purposes of the Government of Aden, and any contract made or liability incurred by or on behalf of the Secretary of State in Council before the said separation solely for a purpose which will after the separation be a purpose of the Government of Aden shall, as from the separation: have effect as if it had been made or incurred by or on behalf of the Government of Aden.?
    This refers to property in Aden. Although the Amendment is long, it merely clarifies the position as to the allocation of property in Aden after separation. The principle adopted is that when Aden is handed over it is handed over as a going concern and the Colonial Office will assume all Government property and liability for all contracts made in the past in connection with that Government.
    Amendment agreed to.

    CLAUSE 284.—(Creation of new Provinces of Sind and Orissa.)
    8.0 p.m.
    Sir S. HOARE: I beg to move, in page line 27, at the end, to insert:
    "(d) in the case of Orissa, such provisions with respect to the jurisdiction therein of any court theretofore exercising the jurisdiction of a High Court, either generally or for any particular purpose, in any area to be included in the Province."
    This and the next Amendment are intended to fill a gap in our proposals with reference to the jurisdiction of certain high courts. They are intended to fill a gap in the arrangements provided for by this Clause for bringing into being before the commencement of Provincial Autonomy of the two new Provinces of Orissa and Sind. The Bihar Government

    1039
    pointed out that the arrangement as it stands partly in virtue of Sub-section (4) would appear to have the result of necessitating that the Patna High Court should assume jurisdiction in all cases pending in the Madras High Court. It was urged with justice that great in justice would result to the public as a result of the arrangement as it stands.
    Amendment agreed to.
    Further Amendment made: In page 168, line 3, leave out Sub-section (4).—[Sir S. Hoare.]

    CLAUSE 285.—(Creation of new Provinces and alterations of boundaries of Provinces.)
    The following Amendment stood upon the Order Paper:
    In page 168, line 26, at the end, to insert:
    "Provided that no Order in Council under this Section shall transfer the civil station of Bangalore from British India."—[Mr. A. Somerville.]
    8.2p.m.
    Mr. SPEAKER: I have had some doubt in my mind as to whether the Amendment in the name of the hon. Member for Windsor (Mr. A. Somerville) is out side the scope of the Bill or not. If the Secretary of State tells me that it is outside the scope of the Bill, I will not call it; otherwise, I will.
    Sir S. HOARE: May I point out to you that Bangalore is State territory? It is part of the territory of the State of Mysore. It is not a part of British India at all. I would submit to you that any question of dealing with the transfer of State territory, territory which is not territory of British India at all, which is outside the purview of this House, must surely be out of order in a Bill of this kind.
    Mr. SPEAKER: The Amendment says:
    "Provided that no Order in Council under this section shall transfer the civil station of Bangalore from British India.?
    If Bangalore is not in British India it cannot be transferred from British India. In that case, I am certain that the Amendment would be outside the scope of the Bill.
    Sir S. HOARE: It can only be transferred by treaty between the Crown and
    1040
    the State of Mysore. It cannot be transferred by any Act of this Parliament.
    8.4 p.m.
    Mr. ANNESLEY SOMERVILLE: In the year of rendition an agreement was made that until the military station was removed from there that territory would remain in British India. I understand that it is still in British India.
    Sir S. HOARE: No, it is not.
    Mr. A. SOMERVILLE: I wish to move with the object of affording an opportunity for the Secretary of State to acquaint the House as to the exact position of the British Bangalore question. It is of the greatest moment to the people of Bangalore, the great majority of whom are opposed to the transfer.
    Sir S. HOARE: That has nothing to do with this Bill.
    8.5 p.m.
    Mr. SPEAKER: I can only repeat that if Bangalore is not included in British India. It cannot be transferred from British India. That is quite clear. The Secretary of State assures me that Bangalore is not included in British India.
    Duchess of ATHOLL: This question of the secession of Bangalore has repeatedly been the subject of questions in this House. It has never been argued that the House has not the right to ask such questions.
    Mr. SPEAKER: I quite agree that it has been the subject of many questions, but that does not make it in order on this Bill.
    8.6 p.m.
    Mr. A. SOMERVILLE: I understand that it was a question of whether it comes under paramountcy or not. I thought that that was a matter in dispute, that it has not been decided that this was a question of paramountcy. I therefore thought that it would be in order to move the Amendment.
    Sir R. CRADDOCK: No doubt Bangalore might or might not be, if the whole story were gone into, technically British India, or it might or might not be found to belong to the State of Mysore. But the point is that the British Minister is in exactly the same

    1041
    position as regards Bihar, and Bihar we have freely discussed; in fact, the Bill has several Clauses dealing with Bihar. The two cases are, I submit, parallel.
    Mr. SPEAKER: That does not put this particular Amendment in order. If Bangalore is not in British India, I cannot call the Amendment.

    CLAUSE 288.—(Adaptation of existing Indian laws.)
    8.8 p.m.
    The ATTORNEY-GENERAL: I beg to move, in page 170, line 8, at the end, to insert:
    "Provided that no such law as aforesaid shall be made applicable to any Federated State by an Order in Council made under this Section.?
    The Amendment makes it clear that action taken under this Section could not itself apply any existing law to an Indian State. It must be the work of the Federal Legislature if it is done.
    Amendment agreed to.

    CLAUSE 289.—(Foreign, jurisdiction.)
    The ATTORNEY-GENERAL: I beg to move, in page 170, line 40, at the end, to insert:
    "(4) In the Foreign Jurisdiction Act, 1890, the expression a British court in a foreign country' shall, in relation to any part of India outside British India, include any person duly exercising on behalf of His Majesty any jurisdiction, civil or criminal, original or appellate, whether by virtue of an Order in Council or not.
    (5) Nothing in this Act shall he construed as limiting any right of His Majesty to determine by what courts British subjects and subjects of foreign countries shall be tried in respect of offences committed in Indian States.?
    The first of these two Sub-sections is to regularise the position of political officers under the Foreign Jurisdiction Act. The second Sub-section, No. 5, deals with a power which at present is exercised. to prevent the trial by State courts of British subjects for offences committed in the States. The right is claimed and exercised under paramountcy at the present time, but there is an in he rent right of the Crown to insist on British subjects being tried in British courts for offences committed outside British India if it is thought desirable for any reason. It was thought desirable to make that position plain by positive enactment.
    Amendment agreed to

    CLAUSE 292.—(Prohibition, of certain, restrictions on internal trade.)
    8.11 p.m.
    Sir S. HOARE: I beg to move, in page 172, line 1, to leave out from "of" to the end of the Sub-section, and to insert:
    "anything in this Act have power to impose any tax, cess, toll, or due on goods of any class or description which, as between goods produced or manufactured in the Province and similar goods not so manufactured or produced, discriminates in favour of the former.?
    My right hon. Friend the Member for Hastings (Lord E. Percy) pressed me to extend the scope of this Clause. I am glad to say that we are agreed that we can make this considerable extension in the direction of prohibiting possible restrictions on internal trade.
    8.12 p.m.
    Mr. HAMMERSLEY: I am glad to support this Amendment and to pay a tribute to the Government and to thank them for closing a loophole which, if it had been left open, might have been harmful to British trade in India. The Governor-General in the Bill is given the responsibility of preventing penal discrimination, but that responsibility is not carried forward to the powers and special responsibilities of the Provincial Government. Therefore, it became obvious that It might be possible for some provincial taxation to be imposed on goods passing through the Provinces and thereby some measure of discrimination be brought to bear on goods by reason of their origin. The Government, realising that situation, put down a new Clause which now stands in the Bill as Clause 292, and this Clause, as the Secretary of State has explained, prohibits a Provincial Government from making certain restrictions. But as it stands in the Bill at the moment it prohibits them only in respect of taxes. The Amendment extends the prohibition from taxes to cesses and tolls and therefore makes more certain that British or Burmese trade should not be subjected to penal discrimination. I have great pleasure in supporting the Amendment.
    8.15 p.m.
    Mr. FLEMING:: I wish to take this opportunity of adding my quota of praise to my right hon. Friend for this Amendment. I have not the slightest doubt that it will go a long way towards re moving any doubts which exist among the

    1043
    people of Lancashire more especially those engaged in the cotton trade with India, about this matter. I would, of course, like to see my right hon. Friend go much further than this Amendment proposes but we are thankful for a little since every little helps
    Amendment agreed to.

    CLAUSE 293.—(Persons not to be subjected to disability by reason of race, religion, etc.)
    8.16 p.m.
    The ATTORNEY-GENERAL: I beg to move, in page 172, line 12, to leave out "British."
    There are three other Amendments in the name of my right hon. Friend to this Clause and they are practically altogether concerned with matters of drafting. The Amendment which I now propose is to leave out the word "British" as being superfluous. The Clause provides that no subject of His Majesty domiciled in India shall on grounds of race, religion, etc., be ineligible for Office under the Crown in British India. It will now read "in India." There are two Amendments designed to bring this Clause into general accord with Clause 111 which deals with discrimination against British subjects domiciled in the United Kingdom. The remaining Amendment is purely a matter of drafting. At the end of Sub-section (2, a) of the Clause as drafted are the words, "any person not belonging to some such class." These words were criticised, I think, by the hon. and learned Gentleman the Member for East Bristol (Sir S. Cripps), as being a little colloquial and we are trying to meet his views as to more dignified language by proposing to leave out the word "some," and insert the word "any."
    Amendment agreed to.
    Further Amendments made: In page 172, line 13, after "from," insert "acquiring, holding or disposing of property or."
    In line 13, after "any," insert "occupation."
    In line 23, leave out "some," and insert "any."—[The Attorney-General.]

    CLAUSE 294.—(Compulsory acquisition of land, etc.)
    The ATTORNEY-GENERAL: I beg to move, in page 172, line 32, to leave out
    1044
    "land belonging to private persons," and to insert:
    "any land or any commercial or industrial undertaking or any interest in, or in any company owning, any commercial or industrial undertaking.?
    There are four Amendments to this Clause in the name of the Secretary of State. The first Amendment which I now move is a substantial one. It is designed to make the Clause apply, not only to land which belongs to private persons but to Any land or any company or commercial or industrial undertaking. The Amendment to that extent enlarges the scope of the Clause. A second Amendment deals with the question of compensation. The Clause provides that no land, orundertaking—as it will be if the first Amendment isaccepted—is to be taken for the purposes of the State unless the Paw provides for the payment of compensation for the property acquired. I think it was remarked during the Committee stage that the compensation might be of a derisory character. It might be the smallest coin known to the Realm. The Amendment now proposed will re quire that the law should either fix the amount of the compensation or fix the principles upon which it is to be Assessed by some arbitrator or tribunal. In either case it will result in notice being given to the person or company whose property is to be taken and will enable the Governor-General to form an opinion as to the nature of the legislation for the purposes of the discharge by him of his duty in connection with the power of withholding his assent. The other two Amendments are consequential upon the first Amendment which I now move.
    8.21 p.m.
    Mr. MOLSON: I wish to thank the Attorney-General and the Government for the very full way in which they have met the point raised during the Committee stage. No doubt there will also be the amendment in the Instrument of Instructions to which my right hon. Friend referred during the Committee stage.
    Amendment agreed to.
    Further Amendments made: In page 172, line 34, At the end, insert:
    "and either fixes the amount of the compensation, or specifies the principles on which, and the manner in which, it is to be determined.?
    In line 37, leave out "the rights of private persons," and insert "rights."—[The Attorney-General.]
    8.23 p.m.
    Mr. COCKS: I beg to move, in page 173, line 4, at the end, to insert:
    "Provided that in the case of a Bill or amendment making provision for the extinguishment or modification of the rights of zamindars and others who are the successors in interest of those in whose favour the permanent settlement of Bengal, Bihar, and Orissa and parts of the United Provinces and Madras was made at the end of the eighteenth century, the previous sanction of the Governor-General or the Governor shall not be required, but the Bill or amendment, before enactment, shall be reserved by the Governor-General or the Governor, as the case may he, for the signification of His Majesty's pleasure.?
    This Amendment deals with what is known as the permanent settlement and is intended to bring the proposals of the Bill as I understand them, into line with the recommendations of the Joint Select Committee. As I have said before it would be impossible for the House to go into the long and complicated history of the permanent settlement. I believe that many books have been written on the subject and that when the settlement was first brought in, it aroused a great controversy. To put the matter quite simply, I think I am right in saying that at the end of the 18th century there existed in these Provinces of Bengal, Bihar and Orissa, and parts of Madras and the United Provinces, a certain number of people who were hereditary rent collectors. They were known as zamindars. Under the administration of Lord Corn wall is a permanent settlement was made by which these rent collectors became the actual owners of the land. It was agreed that they should pay, in perpetuity, a certain fixed sum towards the Indian revenue and the sum was fixed upon the value of the land at that time. Since then in many cases the land has immensely increased in value owing to urbanisation, but the same fixed sum is still paid—a sum fixed upon figures determined in 1780. The Joint Select Committee recognised that the case of these zamindars differed from other cases, such as that of the taluqdars of Oudh of various vested interests which are held by various individuals or classes of individuals, owing to grants made by the British Government for services rendered.
    1046
    They say in paragraph 371, in regard to those people:
    "We recommend, however, that the Constitution Act should contain an appropriate provision requiring the prior consent of the Governor-General or the Governor, as the case maybe, to any proposal, legislative or executive, which would alter or prejudice the rights of the possessor of any privilege of the kind to which we have referred.?
    When they come to the question of the permanent settlement of the zamindars, they take another view. If the House will pardon me, I will read what they say:
    "We have considered whether similar provision should be made to protect the rights of the zamindars and others."
    They go on to say, as I have said, what the zamindarsare. Then they say:
    "It is apparent that the position of zamindars under the permanent settlement is very different from that of the individual holders of grants or privileges of the kind we have just described; for, while the privileges of the latter might, but for a protection such as we suggest, be swept away by a stroke of the pen with little or no injury to any but the holder of the vested interest himself, the alteration of the character of the land revenue settlement in Bengal, for instance, would involve directly or in directly the interests of vast numbers of the population, in addition to those of the comparatively small number of zamindars pro per, and might indeed produce an economic revolution of a most far-reaching character. Consequently, no Ministry or Legislature in Bengal could, in fact, embark upon, or at all events carry to a conclusion, legislative proposals which would have such results, unless they had behind them an overwhelming volume of public support. We do not dispute the fact that the declarations as to the permanence of the settlement, contained in the Regulations under which it was enacted, could not have been departed from by the British Government so long as that Government was ineffective control of land revenue. But we could not regard this fact as involving the conclusion that it must be placed beyond the legal competence of an Indian Ministry responsible to an Indian Legislature, which is to be charged inter alia with the duty of regulating the land revenue system of the Province, to alter the enactments embodying the permanent settlement, which enactments, despite the promises of permanence which they contain, are legally subject (like any other Indian enactment) to repeal or alteration. Nevertheless, we feel that the permanent settlement is not a matter for which, as the result of the introduction of Provincial Autonomy, His Majesty's Government can properly disclaim all responsibility. We recommend therefore that the Governor should be instructed to reserve for the signification of His Majesty's pleasure any Bill passed by the Legislature which would alter the character of the permanent settlement.?

    1047
    I apologise for that long extract, but it is important because it illustrates the position I take up. The Committee made a distinction between permanent settlements and the others. They say that there must be a previous sanction required in the one case but, in the case of the permanent settlements, they apparently say that all that is necessary is that the Bill should be preserved when passed for the significance of His Majesty?s pleasure. My Amendment is to carry out that particular view of the Joint Select Committee, and because of that fact I hope that the Government will accept the Amendment
    8.39 p.m.
    Sir W. SMILES: I beg to second the Amendment
    The question which has been raised by the hon. Member for Broxtowe (Mr. Cocks) would have a very far-reaching effect. I rise to second on condition that the hon. Member will accept a manuscript Amendment to insert the words "The United Provinces, Assam and Madras." Although he is not aware of it, parts of Assam are already permanently settled. I have heard the permanent settlements discussed by Indians at various times. It is, I think, generally recognised that if Indians are to have the right of governing themselves, and if the Provinces are to decide upon their own land revenue, one of the first cases that will come up will be this question of the permanent settlements in those Provinces. Rent has multiplied 20, 30, 40, 50 or perhaps 100 times what it was when the land was originally permanently settled. You find land which is not permanently settled beside land which is permanently settled, and the former is paying a far greater land revenue to the Government than the latter. The Amendment would make a far-reaching revolution in this respect, and would affect a great number of people, but, if you are not to make self-government a mockery, these people should be given the right—and this is one of the first rights that they should have—of deter mining their own revenue.
    8.31 p.m.
    Mr. BUTLER: The hon. Member for Broxstowe (Mr. Cocks) has read almost the entire observations of the Joint Select Committee on the subject of the
    1048
    Permanent Settlements. He has chosen words which signify the immense importance of the settlements and illustrate the magnitude of some of the questions which will fall to be decided in the future, and which will probably arise for discussion after the coming into operation of this Bill. We have no intention of departing from the recommendation of the Joint Select Committee in this matter. The Joint Select Committee recommended what the hon. Member for Broxstowe has read out, and we have no intention of departing from that.
    The hon. Member's decision to move the Amendment can have done nothing but good in illustrating how we have attempted to implement the recommendations of the Joint Select Committee. He desires his Amendment to be inserted in the Bill. We consider, on the other hand, that the matter would be much better met in the Instrument of Instructions. Accordingly, in the Instrument of Instructions to the Governor-General and in the Instrument of Instructions to Governors, we have definitely included reference to the Permanent Settlements. To take, for in stance, only the Instructions to the Governors, we say in paragraph XVIII of the Instrument of Instructions to Governors:
    "Our Governor shall not assent in Our name to, but shall reserve for the consideration of Our Governor-General, any Bill of any of the classes herein specified, that is to say:
    (c) any Bill which would alter the character of the Permanent Settlement.?
    It is intended by that to reserve for His Majesty?s consent any Bill which alters the character of the permanent Settlements. We consider that this is the best manner of meeting the recommendation of the Joint Select Committee and the desire which the hon. Member for Broxstowe has in mind. I said that the hon. Member was justified in moving the Amendment. I think he is justified for this reason. In referring to the terms of Clause 294 (3), he may have been concerned about the question of previous sanction. If necessary, we should have to look into the question of amplifying, in that respect, the Instrument of Instructions, to ensure that the previous sanction required under the Clause shall never be withheld in such case. If I inform the hon. Member that we have this point in mind, I hope he

    1049
    will not insist on pressing the Amendment. Let me assure him that the Government have no intention of departing from the recommendation of the Joint Select Committee.
    8.45 p.m.
    Sir R. CRADDOCK: I am very glad to hear what the Under-Secretary of State has said. I am disposed to agree with the view which he put forward, namely, that the Instrument of Instructions is the best place to deal with this matter. I feel, however, that Members of the House might like to hear a little more about the nature of the permanent settlement than appeared from the hon. Member's speech. The permanent settlement was, no doubt, a great political act, but it did not produce the anticipated results, because of the previous exactions of the earlier native rulers and because there was no one but the East India Company to administer it, and therefore it was administered largely by the old agencies which then existed in the country. It so happens, however, that I was able to see a very admirable note, which I do not believe has ever been published, the work of the late Lord MacDonnell, who at that time had been acting as Lieutenant-Governor of Bengal. That note showed, first of all, that the permanent settlement was fixed at 90 per cent. of the then rent, 10 per cent. being left to the zamindars for their trouble and expense in connection with it. At that time there were no railways, steam launches, or other means of locomotion, but of course these developed a great deal more quickly than any body at that time could possibly have anticipated.
    At the same time, it has always been the feeling that the word of the British Government had been given for good and all about the permanent settlement. It is not as though only large proprietors hold the land and enjoy the benefits of the permanent settlement; large parts of the permanently settled land are held by quite small proprietors, all of whom have bought and paid for their land, and their possession of the land has continued up to the present time on the faith that, whatever else might happen, the land revenue settlement would never be disturbed. Consequently, anyone who wanted to alter it would have to take into consideration the fact that they were
    1050
    not merely recovering wealth that had been lavished upon the previous owners, namely, the original zamindars, although there are still some big zamindars among them, but would be depriving a large number of small people who bought the land on the faith of the permancy of the settlement, which has been so often declared by the British Government.
    I think it is extremely wise to say that, before any step is ever taken to alter the permanent settlement, there shall be the utmost precaution and examination, because, if the word of the British Government is not acknowledged or is definitely broken, even in circumstances which justify some modification, it would yet seem to Indians—not only those who benefit by the permanent settlement, but all Indians all overIndia—to be a great breach of faith and of promises made by authorities whom they have always thought would never be found to alter their word once it was given. Further, all the land settlements which have been made in India, whether for 30 years or whatever the period may be, are still out side the jurisdiction of the courts, and people throughout the length and breadth of India depend upon the good faith of the Government that any terms of settlement, whether permanent or otherwise, will be faithfully kept both in the spirit and in the letter. Therefore, I think that the method adopted by the Government is the best method for dealing with this very thorny and difficult question
    8.41 p.m.
    Mr. ATTLEE: I do not want to follow the hon. Member into his very interesting and learned account of this difficult question, but, while he has rightly stressed the fact that we gave our word, we are now proposing to hand over their destinies in Bengal to the people of Bengal, and I feel sure that it would be a most happy thing if we could get rid of this responsibility, because I do not think that anything will ever be done in Bengal until there is a revolution in the land system. The Indian people will have to carry that out themselves. When they will do so I do not know, but what we want is that we should not be in the position of upholding the continuance of the system when the people of Bengal or any other part of India want to get rid of it. I think the Under-Secretary has met very fairly the point that has been put

    1051
    forward, and in view of what he has said with regard to the Instrument of Instructions, I hope that my hon. Friend will withdraw his Amendment
    8.42 p.m.
    Mr. COCKS: In view of the assurance of the Under-Secretary, for which I am very grateful, that he intends to look into this matter, and will put such words in the Instrument of Instructions or elsewhere as will make it certain that, in the case of the permanent settlement, the King's sanction will never be withheld, I beg to ask leave to withdraw the Amendment
    Amendment, by leave, withdrawn.
    Amendment made: In page 173, line 9, at the end, insert:
    "and 'undertaking' includes part of an undertaking."—[Sir S. Hoare.]

    CLAUSE 295.—(Protection of rights of Jagirdars, Inamdars, etc.)
    8.43 p.m.
    The SOLICITOR-GENERAL: I beg to move, in page 173, line 14, to leave out from "grant," to "made," in line 15, and to insert:
    "or confirmation of title of or to land, or of or to any right or privilege in respect of land or land revenue, being a grant or confirmation.?
    This Amendment and the following one on the Paper—In page 173, line 17, to leave out "fifty-eight," and to insert "seventy"—deal with Sub-section (1) of the Clause. The Sub-section gives the limited protection set out in it to grants of or connected with land or land revenue, and it is limited to grants made before the 1stJanuary, 1858. The reason for that date is obvious. A number of these grants were made in connection with services rendered to the civil power at the time of the Mutiny. The grants took different forms, and in the Bill as drafted the words are "grant of land." In the Amendment we propose to add the words "or confirmation of title of or to land," to cover the case which I under stand exists in which the grant did not actually take the form of a grant of land, but merely confirmed an existing title to land; while the words "or of or to any right or privilege in respect of land or land revenue" slightly extend the generality of the words. That has been found necessary in order to cover, as the
    1052
    earlier words were intended to cover, grants of this kind. The other point is that the date of 1858 is being extended to 1870.The reason for that is that, al though these grants were made in respect of services rendered during the Mutiny, owing to the leisurely manner in which things were done in India in those days the actual completion of the grant was protracted in some cases for many years. Therefore, it is necessary to put in a later date, not with a view to bringing in any new category of people, but simply to make sure that all grants made in respect of services before 1858 shall be brought within the Clause.
    Amendment agreed to.
    Further Amendment made:
    In page 173, line 17, leave out "fifty-eight," and insert "seventy."—[The Solicitor-General.]
    8.45 p.m.
    The SOLICITOR-GENERAL: I beg to move, in page 173, line 19, to leave out
    "on political considerations shall be discontinued," and to insert:
    "before the commencement of Part III of this Act by the Governor-General in Council or any Local Government on political considerations or compassionate grounds shall be discontinued or reduced, otherwise than in accordance with any grant or order regulating the payment thereof.?
    The second Sub-section of this Clause gives the same protection to pensions granted "on political considerations," which are words taken from an old Indian Act and have perhaps rather wider scope than they might have in this country. They cover, in fact, all pensions granted in respect of special services to the Government, some no doubt from the time of the Mutiny, and others from more recent times, and where special services have been rendered in connection with what ever it may be, terrorism or other matters. The object of the Clause is to see that those pensions are safeguarded to the extent provided here, namely, that the Governor-General, in the exercise of his individual judgment, must give his consent to any discontinuance of them. The Amendment merely puts right what was our original intention, namely, to limit this safeguard to pensions already granted. There is no reason why this House in this Bill should give any special protection to pensions which may be granted in the future. We are concerned

    1053
    to see that pensions of this kind which have been granted in the past shall have a protection of this kind.
    Amendment agreed to.

    CLAUSE 299.—(Procedure as respects proposals for amendment of certain provisions of Act and Orders in Council.)
    8.48 p.m.
    Mr. BUTLER: I beg to move, in page 175, line 4, to leave out from "the," to "would," in line 5, and to insert:
    "proposed amendment and, in particular, as to the effect which it.?
    This Amendment, and others which are in the name of my right hon. Friend, operate upon this Clause, which gives, in certain circumstances, the power of sending messages to the Secretary of State with a view to the possible modification of certain aspects of the Constitution, and I will refer to them together. The first Amendment requires the Governor-General and the Governor to for ward his opinion not merely, as the Bill stands, on the effect any proposed Amendment may have on the interests of any minority, but his opinion generally, and in particular, on its effect on any minority. The Amendment seems to us desirable, and we consider it right that the Governor-General should be required to state his opinion upon the effect a proposal would be likely to have on any of the special responsibilities, and not merely on the special responsibilites, but on its effect on minorities.
    The second Amendment is of a drafting nature and makes clear that the opinion required from the Governor-General or the Governor should he his own personal opinion and not necessarily an opinion forwarded on the advice of his Minister. That means that the Governor-General should have thought over this matter himself, and in fact it should be framed in his discretion. The third Amendment is of a very small character and really gives power to amend in small details such questions as may arise out of the very complicated franchise Schedule, for example, which before it is put into operation will certainly need to be looked into in order to ensure that its complicated provisions are, as we think at present, correct before they are put into operation. Therefore, these Amendments are slight modifica-
    1054
    tions, and, we think, improvements inserted for the purposes we have in mind, and I hope that the House will agree to them.
    8.51 p.m.
    Mr. H. WILLIAMS: I should like to know from the Under-Secretary how this will work. It seems to modify to some extent the whole working of Clause 299.In this Clause the first step is that motions are proposed in each Chamber by the Minister, and the Minister does not do it in any personal capacity, but on behalf of the council of ministers, and the council of ministers is something over which the Governor or Governor-General may preside in his discretion. Therefore, in one sense a- motion put forward in the Chamber on behalf of the council of ministers is something in which the Governor-General or the Governor has already possibly played some part. I wonder whether it is the intention or whether this is something which the council of ministers will do. It is not an executive Act or a matter where the Governor-General has to act on their behalf. The actual thing is done by the ministers in the Chamber, but is it presumed that before they take that action the first thing is that they consult the Governor-General or the Governor and then, when the Chambers have done what is necessary, he, in sending his opinion forward, uses his own discretion. I am glad that these words are to be put in because it is very sound indeed that the Government here should have the opinion not of the ministers who proposed it, but of the Governor or Governor-General officially. It is a great advantage, but it seems to be a somewhat unusual procedure that the Governor-General should have two functions. In one he consents to what is done because he has no option, and later on he expresses an opinion about something of which he is in doubt.
    8.53 p.m.
    The SOLICITOR-GENERAL: My hon. Friend has put his finger on an interesting point, but the Clause has in fact been drafted to meet the position. If one had not these rather unusual words:
    "on behalf of the Council of Ministers "
    It might have been said that this was an executive act with which the Governor or Governor-General would have had to associate himself or from which he would

    1055
    have had to dissociate himself at the initial stage. Therefore, it has been put in this form so that the Council of Ministers can proceed as far as the technical and constitutional position is concerned on their own responsibility, be cause it is assumed under the Clause that the Governor should be there to express his opinion in his discretion on what they propose, and what a fortiori has been approved by the Legislative Assembly
    Amendment agreed to.
    Further Amendments made: In page 175, line 7, at end, insert:
    "In formulating any such statement of opinion the Governor-General or the Governor, as the case may be, shall act in his discretion.?
    In line 12, after "choosing," insert "or the qualifications of."
    In line 26, after "choosing," insert "or the qualifications of."—[Sir S. Hoare.]
    >8.55 p.m.
    Mr. ISAAC FOOT: I beg to move, in page 175, line 38, at the end, to insert:
    "Provided that if the Amendment under Sub-section (2) (a) of this Section shall re late to the substitution of the direct vote in territorial constituencies for the method of electing the Federal Legislature, established under this Act, action may be taken under Sub-section (1) of this Section, whether or not the period of ten years from the establishment of the Federation has expired.?
    The question raised by this Amendment is the subject of direct and indirect election. I realise now that we are at this stage of the Bill, that it is not open for us to go into the general merits of the question, which was decided by the House early in the Committee stage. It will be understood, of course, that we do not recede in the slightest from the position that we then took up. We think that whatever has happened since has fortified what we said on that occasion. In the message that came from the "Times" correspondent, published in the "Times" on the 18th of this month, there was a very interesting review of the opinion in India upon the Bill. In the course of that article the following words appeared:
    "The moderates do not understand why Parliament has accepted the principle of in direct election at the Centre. They claim that moderate opinion in this country"—
    speaking of India—
    "will be handicapped at the Centre, which will naturally be affected by the composition of the Provincial Legislatures."
    1056
    We shall have an opportunity on the Third Reading of expressing an opinion upon that part of the Bill. The right hon. Gentleman is aware that for the most part we have supported the Bill right through, but also from the beginning we have stated as strongly as we could our objection to what we think is the most lamentable change that was made after the White Paper was placed before the House.
    We ask that Clause 299 should be amended in this particular. Hon. Members will be aware that the Clause gives power to bring about certain alterations by Order in Council. It gives power to bring about certain alterations if the request is made either by a Provincial Parliament in India or by the Central Parliament in India. Some of those alterations can be made presumably with the least possible delay but in respect of other alterations an interval of ten years must elapse. I am well aware that the Joint Select Committee in making their recommendations suggested that before certain constitutional alterations were carried out an interval of ten years should expire. I think, however, that in relation to this question of the vote for the Lower Chamber at the Centre it would be a very serious thing to say that, whatever may be Indian opinion, that change shall not be made for a period of ten years after the establishment of the Federation.
    There is no answer to the contention that if Indian opinion should be so strongly in favour of this change, that if Indian opinion as expressed in the Central Legislature should be as strong as we believe it to be to day throughout that great sub continent, it would be a very wanton action on the part of this House to say to the Indian people, "Whatever may be your desires, how ever strongly you may express them, whatever constitutional appeal may be made under the terms of this Measure by the people of India, we refuse to con cede it for a period of ten years." There is no virtue in ten years, and if the demand be made it should be the business of this Parliament to meet a demand when legitimately and constitutionally expressed. There is no doubt that the Joint Select Committee decided on the indirect vote, but they gave this House, the country, India and the world
    1057
    in their report quite clearly to under stand that the proposal might be temporary. They said that it might not last for ever, and suggested that a change might be brought about.
    When the matter was discussed in this House not long ago the right hon. Gentleman said that whilst we regarded it as a matter of principle he only looked on it as a matter of machinery, but he went on to say that it was an experiment. He emphasised that more than once, and said that it was a temporary arrangement. If it is to be a temporary arrangement why cannot it be made temporary to this extent that if under the Constitution of these Central Parliaments in India there is the requisite majority, knowing India, knowing its needs a great deal better than we can do and a great deal better than the Joint Select Committee could do, and that majority on their own responsibility deliberately make their request, on what grounds can that request be refused? It seems to me that, especially on a matter where opinion is so divided, it cannot well be refused. The right hon. Gentleman him self said that at the beginning he had been vehemently opposed to the direct vote but that he had been brought to support it because he saw the difficulties of the indirect franchise. But he said that he had again changed his opinion as a result of the many arguments that were used in the Committee. He gave us clearly to understand that his mind was not definitely made up.
    No one knows better than the right hon. Gentleman the difficulties of either course. We think that the difficulties are greater with the indirect vote than with the direct vote. Seeing that he himself took one side and then the other on account of the arguments used during the last three or four years, seeing that opinion was so divided in the Joint Select Committee and that opinion has generally been divided in the discussions which have taken place, surely where there is a very uncertain position a decision that is made by the Indian people, if it is a decision by a substantial majority arid made by those who are the only ones in a constitutional position to express the mind of India, on what grounds are we, at the same time that we are seeking to give the Indian people control over their own affairs, entitled to say: "You shall
    1058
    not come to the Bar of this House. You shall not, however constitutionally you make this request affecting your lives, conditions and circumstances, have your desires granted."
    If what we desire cannot be done here and now, if the right hon. Gentleman will give us an assurance that while the Bill is under discussion in another place this proposal will be taken into consideration he will go a long way towards allaying the difficulty that we have in our minds and the disappointment that we have felt consequent upon this very substantial change. 1cannot believe that in this matter any difficulty would be occasioned by accepting our Amendment, but I would ask the House to consider the difficulties of refusing it. If it is refused we say that for 10 years the change that we desire cannot be made, whatever happens. In the course of 10 years vested interests become established and it will be very difficult to induce a House to abolish itself. In the course of those 10 years these members will be vested with power and the authority and standing that comes from being members of a central legislature. They will be depending upon a tiny electorate, elected in the backrooms it may be of the Provinces, possessed of almost incalculable power, dealing with the political fortunes of one-fifth of the people inhabiting this planet and elected by little companies of people over whom there cannot be anything like the control of the people whose interests are affected. During those 10 years vested interests will grow up, and it maybe difficult to get rid of many matters which can easily be dealt with in the first years or so of the experience of Indian self-government.
    We approach this matter as supporters of the Bill. It does not represent our mind in many parts, but it was not in tended to represent the mind of any one party in the State, but the greatest common measure of agreement. This, however, is a subject upon which we feel deeply. To deny to the Indian people a right which they have enjoyed for 14 years, and to make that denial in contradiction of expressed Indian opinion and the strongly expressed opinion of the Government of India itself, is a responsibility which I suggest the House should not undertake. If we are driven to pass the Bill in its present form, surely the Secretary of State can meet us to this

    1059
    extent, that he will not withhold from the people of India the right to decide on a point affecting their own lives and conditions. Apart from any speech of mine, the Amendment commends itself. In a House which has been built up in an atmosphere of democracy and self-control and after the discussions on a Bill which is intended to give to the people of India the management of their own affairs, all one need do is to read the Amendment to accept it at once.
    9.8 p.m.
    Mr. BUTLER: We all appreciate the earnest attention which the hon. Member for Bodmin (Mr. Isaac Foot) has given to this subject and his motives in moving the Amendment. The question is one to which the Government have given the most close attention, particularly in view of the importance which is attached to it by Indian opinion. The Joint Select Committee made a definite recommendation on the question of indirect or direct election, and decided that election to the Federal Legislature should be by indirect election. The Amendment is largely answered by the view which the Joint Select Committee took on the subject. They recommended that indirect election should be substituted for direct election, and added some observations on their decision in a paragraph, the sub-head of which is:
    "Indirect election to be regarded as being open to future review.?
    In this paragraph they make some interesting observations upon the decision they have taken, and the Government share their view that the matter should be regarded as being open to future review.
    Mr. ISAAC FOOT: The Under-Secretary will remember that the addition was made there because of an Amendment brought forward by us in the name of Lord Lothian.
    Mr. BUTLER: I do not think that that alters the argument. I was about to pay a tribute to the hon. Member and his friends. I was about to refer to the past history of the matter and the observations which the Joint Select Committee made when they came to their decision, but the hon. Member has taken the credit, and I will not deny him the credit of a most estimable paragraph in the report. Let
    1060
    us examine the paragraph which the hon. Gentleman has acknowledged was inserted owing largely to his own initiative. In the paragraph in which he takes such pride the Joint Select Committee say that the question of indirect or direct election should come under review, but that this should not be done until the political forces in India have had time to settle down and until we have been able to see how the new Constitution works. They say:
    "do not propose that there should be any formal examination of the problem by a Statutory Commission after any specific date, for we think that experience has shown that there are strong objections to automatic provisions of this kind."
    We have it, therefore, that the Joint Select Committee did not consider that the change should be made until the Constitution has settled down and then that it should not be reviewed by a Statutory Commission. What did they recommend? If the hon. Member will read on, he will see these words:
    "We consider that Parliament should recognise that, after sufficient time has elapsed to enable clear judgments to be formed of the way in which the constitution works and of the new political forces it has brought into being, it may be necessary to make amendments in the method of composing the Central Legislature, and we hope that if Indian opinion thinks modification is required the Federal Legislature will lay its own proposals before Parliament in the form recommended else wherein this report.?
    In that they are referring us to paragraphs 380 and 381, which set out the form of machinery, which is the form suggested in the Bill. Therefore, the Joint Select Committee were not content with deciding once and for all upon the question of direct or indirect elections but., largely on the advice of the hon. Member and Lord Lothian, decided that the matter was susceptible of possible future re vision; but they considered that this should not be done in the early years after the new Constitution had come into force or by means of a Statutory Commission, but that it should be submitted to the machinery which we have included in Clause 299. If the hon. Member will refer to paragraphs 380 and 381 he will see set out what is come to be known as the Jayakar procedure; it represents a suggestion made by Mr. Jayakar that in certain circumstances and after 10 years Indian Legislatures should

    1061
    have an opportunity of making a sub mission to Parliament. We therefore have given this matter the most sympathetic consideration. We have found that the Joint Select Committee have given it also the most serious and sympathetic consideration. Quite apart from the merits of the position of direct versus indirect election, we have decided that a period of time had better elapse before the matter is reviewed. I have based my case upon the decision of the Joint Select Committee, upon the gist of an Amendment moved by my hon. Friend the Member for Bodmin. I think we are wiser to remain upon the decision given by the Joint Select Committee, for the reasons given by that Committee, than to change at this stage to the Amendment that is now before the House.
    9.17 p.m.
    Sir HERBERT SAMUEL: I feel much regret that the Government have come to the conclusion which the Under-Secretary has just announced. As he has said, we here have supported this Bill throughout on all important matters of principle, and indeed in almost every point of detail. The only point of substance to which we attached importance, both in the Committee stage and now on the Report stage, is the one that is before the House. We feel most strongly that a very grave mistake has been made in destroying the present system of direct election to the central Legislature, which has existed in India for 14 years, by substituting the most amazing form of indirect election that has ever found its way into any Constitution in any country.
    I do not propose to argue the merits of direct and indirect election. I had an opportunity of stating my views during the Committee stage. I think every one will agree that the form of indirect election embodied in the Bill cannot be regarded as satisfactory. A system which allows groups of six, seven, eight or nine persons, meeting together, to select individual members for the central Parliament of India is liable to give rise to the gravest abuses. There fore we suggested in the Committee stage that direct election should be restored to the Bill, and that was the original proposal of the Government and of the
    1062
    Government of India. That, however, has not been done. We now suggest that this matter should be left for the Indian Legislature itself to devise its own scheme of election, that when it has done so this House should approve or disapprove it by a vote upon an Order in Council to be presented to it, instead of it requiring completely new legislation to be carried through in the form of a Bill, and that this should be done at any time, not merely after the expiration of 10 years.
    The Government have refused to accept that suggestion, and by so doing they are running counter to all forms of Indian opinion. All the information which reaches us is to the effect that all schools of Indian thought are against this indirect system of election and in favour of direct election. No one has denied that. The Indian Government takes the same view. In Indian opinion I would include European Indian opinion. The Europeans in India, by an overwhelming majority if not unanimously, favour direct as against indirect election. Yet the Government are brushing aside all these expressions of opinion because in the Joint Select Committee the majority, without advice from the Indians who were consulted in the earlier stages of the proceedings, decided in favour of indirect election.
    When the Under-Secretary said that a paragraph was inserted in the Report of the Joint Select Committee which was originally suggested by Lord Lothian and by my hon. Friend the Member for Bodmin (Mr. Isaac Foot) and their colleagues in that Committee, and that it supports the view which he has now expressed to the House, I am informed that, although it is true that the paragraph itself has attached to it other paragraphs which embodied the period of 10 years and declined to permit this procedure to be adopted before a whole decade elapsed, that proposal was not supported or proposed by my hon. Friends. That proposal was attached to the paragraph and by no means represented their view. So we are wholly free from any previous commitment in proposing the Amendment now before the House, and we must think it our duty to record our votes in the Lobby in dissent from the view expressed from the Treasury Bench.
    9.22 p.m.
    Lord EUSTACE PERCY: Perhaps I may say a few words on this subject, because we are not now discussing the system of direct versus indirect election, but the question whether a particular proposal made on the recommendation of the Legislature in India should be considered by this House before the lapse of 10 years. Our decision on that subject must be mainly controlled by our judgment as to whether this House will in fact be prepared to take action on such a recommendation in the next 10 years. The right hon. Gentleman the Member for Darwen (Sir H. Samuel) said by a slip of the tongue that he was claiming for India the right to have a resolution by this House on a scheme of that kind. But neither this Clause nor the Amendment will give him that. He is giving India the right to present a resolution, and surely the worse thing in the world we can do is to give a Legislature in India a solemn right to approach this House if we think that as a matter of fact this House will not be prepared to take any action, when India does appeal, as the hon. Member for Bodmin (Mr. Isaac Foot) said, at the Bar of this House.
    Let us base our decision on a consideration whether this House will in fact take any action on such a recommendation within such a short period, and therefore whether the right which we are pre tending to give to an Indian Legislature is a nugatory one or a real one. Surely it is a nugatory one because of the very terms of this Amendment. I cannot understand how my hon. Friend the Member for Bodmin reconcile the terms of this Amendment with the terms of the paragraph for which he has claimed credit in the report of the Joint Select Committee. What is he asking in this Amendment? He is asking that if an Indian Legislature shall present are solution relating to
    "the substitution of the direct vote in territorial constituencies for the method of electing the Federal Legislature … action may be taken …whether or not the period of ten years from the establishment of the Federation has expired.?
    But what did he say in the paragraph of the Joint Select Committee's report for which he has claimed credit:
    "We feel that the ultimate solution may well he found in some variant, either of the
    1064
    system whereby groups of primary voters elect secondary electors who vote directly for members of the Federal Assembly, or of the system whereby those already elected to local bodies, such as village panchayats, are the voters who vote directly or members of that Assembly.?
    That is not direct voting; that is another form of indirect election. But, he said, and we all said on the Joint Select Committee, that we felt that the ultimate solution may be in that direction. My hon. Friend does not propose to give the Indian Legislatures any right to approach this House and get a decision from this House. His Amendment is confined to the direct vote, and, although he and I believe in the pure direct election, as we have it in. Western Europe, it will not be the probable solution to this question. Therefore, why give an express invitation to the Indian Legislature to present a proposal before 10 years have elapsed, when none of us believe, whatever views we hold about direct or indirect election, that the probable solution lies in that direction.
    Mr. ISAAC FOOT: The Noble Lord has put emphasis on the last words of that passage. Before the Amendment was proposed we had supported a Clause asking for the direct vote in territorial constituencies and had been defeated upon that vote. Is not the hon. Member aware that from the beginning we did ask for the direct vote in territorial constituencies?
    Lord E. PERCY: I agree. I think my hon. Friend and his associates in the Committee had been somewhat shaken, in the course of the discussion, in their belief that that was really the probable solution. Let me, finally, put an argument that I do not think has been presented in this House before in discussions on this Bill. The difficulty about direct election to the Federal Legislature is this: the right hon. Gentleman the Member for Darwen (Sir H. Samuel) stated that our system of indirect election was unprecedented. I presume that direct election, proposed in the original White Paper and supported—
    Mr. DEPUTY-SPEAKER (Captain Bourne): I do not think we can go into the merits of direct or indirect election on this Amendment. The question is solely whether the matter shall be considered within 10 years, or after 10 years.
    Lord E. PERCY: I have already argued that the system of direct election is, of all possible alternatives, the least desirable to consider, and that there are many other alternatives which may be much more worth considering. I thought I was within the Rules of Order in explaining why I took that view, but I bow to your Ruling, and I will not go into that further. It does remain the fact that any system of direct election you may propose is a system which proposes to impose a higher franchise for the Central Assembly than the Provincial Assembly, and I should be glad to know if anyone can find a precedent for that in the constitutional history of the world. I think this Amendment is another, I will hardly say attempt, but tendency to lead Indian opinion down a blind alley and ignore, and by implication discourage, those alternatives to the present proposal in which the Joint Select Committee, with the assent at least of the hon. Member for Bodmin, has said the ultimate solution probably lies.
    9.29 p.m.
    Mr. MORGAN JONES: Mr. Deputy-Speaker a few minutes ago ruled that it was not possible for us to discuss the merits of direct and indirect election tonight. While I accept that Ruling, I can only say that I am extremely sorry that we are prohibited from entering on a discussion of the matter; but that being so, I will bow to the Ruling. We are, however, called upon to determine the merits of the Amendment as moved by my hon. Friend below the Gangway. I was very glad to hear the right hon. Gentleman say that he was prepared, if necessary, to carry this matter to a Division. I am quite sure they will carry with them in this matter not only the assent of my hon. Friends on this side but the assent of Indian opinion. The Noble Lord opposite said he was under the impression that my hon. Friend the Member for Bodmin (Mr. Isaac Foot) was responding, in making his second suggestion to the Joint Select Committee, to the weight of argument Adduced inside the Committee room. The only person I saw bending under the weight of appeal —I will not say argument—was the Secretary of State himself, and I am not pre pared to concede it was argument that weighed with him in that matter. Perhaps there was some measure of convenience, too. Let us for a minute take
    1066
    the merits of the argument of my hon. Friends who are moving this Amendment. There is no doubt about the proposition the right hon. Gentleman the Member for Darwen (Sir H. Samuel) laid down. I am certain that there is no sort of organised Indian opinion that was even in favour of the Government's procedure in this matter. Indian opinion of all shades is in favour of the principle of direct election.
    Lord E. PERCY: No
    Mr. JONES: Yes, including even the Indian Government, as the Noble Lord knows. I was told I must not disclose too much of what I heard in side the Joint Select Committee room, but if I am provoked too much I may say more than I' ought. The Government have taken a step we believe to be contrary to Indian opinion. The question is how long a time should elapse before Indian opinion has an opportunity of ex pressing itself. It seems not an unfair proposition that if an Indian Legislature, either Provincial or Central, arrives at a conclusion that the time has come when It might properly approach this Parliament, it ought to be allowed to do so. I am satisfied, in my own judgment, that the sooner this blunder, as I regard it, is remedied, the better it will be for all concerned, for there is not the faintest doubt that the step which the Government took in regard to this question of direct and indirect election was a blunder, and will tend to alienate Indian opinion unnesessarily. If, therefore, opportunity is given to an Indian Legislature, either Central or Provincial, to petition Parliament to alter this method of election, we ought not to stand in its way and prevent it from so doing. I do not know that the Noble Lord is entitled to assume that some other form of in direct election than this is an inevitable development at some future date.
    Lord E. PERCY: Why rule it out?
    Mr. JONES: I am saying that I do not think the Noble Lord is entitled to claim that that is inevitably the truth. So far Indian experience in the past 14 years has been an experience of direct election, and I see no reason whatsoever why we should not give the Indian people the opportunity, if a Central or Provincial Legislature petitions this House in that sense, to return to the position they have

    1067
    known for the past 14 years. I do not know what amuses the Noble Lord so much in that proposition.
    Lord E. PERCY: I will tell my hon. Friend. What amused me was to hear him say that the only thing that any Indian Legislature was allowed to do was to return to what they had been doing—an extremely unprogressive remark from those benches
    Mr. JONES: And if I had said it it would have been an unprogressive remark. I did not say that. I have never said from this place that that was the only thing they might do. Far from it. I simply say that in the present circumstances—which I deplore—the Indian legislatures should be allowed to approach this Parliament in an appropriate way, with a view to remedying what I regard as an exceedingly bad step in the constitutional development of India. For my part, and I think I can speak for my hon. Friends, we deplore that step. In our judgment the Amendment is the best way of trying to remedy a grotesque blunder.
    9.36 p.m.
    Sir ROBERT HAMILTON: Why does the Noble Lord the Member for Hastings (Lord E. Percy)suggest that this is an attempt to lead Indian opinion down a blind alley? Why a blind alley
    Lord E. PERCY: I was referring to the argument of the Joint Select Committee, that direct election might possibly work within a restricted franchise, but that with any considerable extension of the franchise it would not work.
    Sir R. HAMILTON: I understood from the Noble Lord's general argument that he considered that it would be useless for Indians to come to this House at the present time to get such a change, because the House would refuse it, and that it was not right to lead Indian opinion to think that this House would adopt a different method from that proposed in the Bill. But what will be the position at the end of 10 years? Does he consider that in 10 years this would still be a blind alley and that no change whatever could be made. I admit that the words "direct election by territorial constituencies" are in this Amendment but the Noble Lord's argument was that no
    1068
    change whatever would be made which would bring us any nearer to direct election than the system at present in the Bill. Does the Noble Lord stand by his argument that India is following a blind alley if she thinks that she can come to this House to get a change in the system of election which is proposed in the Bill?
    Lord E. PERCY: The words "blind alley" were not used by me in connection with the approach of the Indian legislatures to this Parliament. I used them in the same connection as that in which the Joint Select Committee used them, namely, in relation to the fact that purely direct election was in itself in the nature of a blind alley because it would be impossible to continue it under an extended franchise.
    Sir R. HAMILTON: We are not now discussing the merits of direct and indirect election. What we have to consider is the right of India to come to this House and ask for a change in the system. According to the Noble Lord's argument in no circumstances can she do so for 10 years, and he suggests that even after 10 years it would still be just as well that she should not do so.
    Lord E. PERCY: Not at all.
    Sir R. HAMILTON: We on this side are inclined to think that if the Bill is to be made the real living thing which we hope to see, we must hold out to the Indians this opportunity of making improvements.
    Lord E. PERCY: Hear, hear.
    Sir R. HAMILTON: If the Indians find, when the system comes to be worked, that there are defects in it which call for improvement, surely they ought to have the right to come to this House, without having to wait a decade. That is the gist of the Amendment.
    Lord E. PERCY: No, it is not.
    Sir R. HAMILTON: That is certainly the view which I take of it.
    Lord E. PERCY: You would only allow the Indians to come to this House if they presented a particular kind of proposal for reform.
    Sir R. HAMILTON: Suppose the Amendment were made wider in the direction suggested by the Noble Lord, would he then support it?
    Lord E. PERCY: As a matter of fact I should.
    Sir R. HAMILTON: In that event the Government might be inclined to take the same view. The Noble Lord has kindly stood at the elbow of the Secretary of State from time to time in the course of these debates, and when he takes the view which he has just expressed it may influence the Secretary of State to, modify the view expressed by the Under-Secretary. There is only one other point to which I would refer. Throughout these debates it has been asserted, I fear with a considerable amount of truth, that little goodwill towards this Measure has been expressed in India. The Secretary of State should consider that an Amendment in these terms would secure for the Bill a considerable measure of that good will in India which is now wanting.
    9.40 p.m.
    Mr. BERNAYS: I rise to indicate that there is at any rate one Member usually a supporter of the Government who disagrees with the line taken by my right hon. Friend on this Amendment. It is clear that the great majority of Indians are behind the proposal of direct election. When the Noble Lord the Member for Hastings (Lord E. Percy) complained that we were leading Indian opinion in a certain direction, namely towards direct election, he forgot that Indian opinion is already there. We are not leading the many where and we have had no argument yet as to why this overwhelming Indian opinion should be flouted. I ask the Government what is to happen if the sys tem of indirect election breaks down, as it may easily do? It may prove within two or three years to be unworkable and if this Amendment is refused it will be impossible to alter the system for 10 years. That is a serious position. I can not understand why the opponents of the Bill are not supporting the Amendment, because if this indirect election becomes part of the Bill it will not strengthen the hands of the Viceroy—it will weaken them. When, in certain circumstances, he has to appeal from the Central legislature to the constituencies he will be appealing to the same narrow electorate as that which has sent the Central legislature there to legislate. It seems to me that we have here a serious flouting of Indian opinion for which no adequate excuse has
    1070
    been offered by the Government and I shall certainly vote with my hon. Friend opposite on this Amendment
    9.44 p.m.
    Sir S. HOARE: The hon. Member for North Bristol (Mr. Bernays) is under a misapprehension. He seems to think that if this Amendment be not accepted it will be impossible for the Imperial Parliament to make a change for 10 years. That is not so. The power of Parliament is not limited by this Clause, and Sub section (4) specifically states that Parliament can take such action as it thinks fit. All that the Clause does is to provide that the formal procedure under which resolutions come to this country and under which they have formal recognition by Parliament, is only to come into operation after a period of 10 years. There is nothing in this Bill that would prevent Parliament passing either an amending Order in Council or an amending Act, if the system of election had manifestly broken down, to provide that the necessary change could be made.
    Mr. BERNAYS: But the Indian Legislatures would have no power to petition Parliament and explain what changes they wanted.
    Sir S. HOARE: My hon. Friend's argument was much narrower than that. It was that we were tying our hands for a period of 10 years. That is not the case. The question—and it is a narrow question—is whether or not it is wise to shorten the period during which this form of procedure should prevail. It is nothing more than that. My own view is, and I do not want to dogmatise on this question at all—I never have dogmatised on it, and I have always admitted that there was a strong feeling in India against this legislation—that the House having taken the view in favour of indirect election, after a very full consideration, it would be very unwise for the House now to risk having the worst of both worlds; and I am genuinely afraid that the effect of this procedure, under which the formal act of the Indian Legislatures would come into operation in the period before the 10 years had ended, would be a direct stimulation to the Assemblies, both Federal and Provincial, in India to start demanding a change at once and not to give a chance for indirect election to work successfully.

    1071
    I would say to the House, therefore, whatever their views may be about direct or indirect election, Do not let us have the worst of both worlds, and do not let us start upon the line of indirect election but so introduce indirect election as to make it almost certain to fail by stimulating a demand in India from the very outset for a change. Again, without attempting to dictate to the House, I should have said that this was not a good Amendment, that if indirect election manifestly works badly in India, the hands of Parliament are not tied; we can make a change before the end of the 10 years' period. If, on the other hand, it is working not badly, let us give it a chance and do not let us encourage opposition by bringing within the provisions of this Clause the possibility of the formal procedure coming into operation before the end of the 10 years and encouraging the Indian Legislatures to demand a change before they would otherwise demand it. For these reasons, and while fully admitting the case on both sides, I think on the whole the House would be wise to reject the Amendment.
    Mr. ISAAC FOOT: If Parliament moved of its own volition within the 10 years, would not an Act of Parliament be needed, whereas if it acted in response to an appeal contained in the Bill, could it not be done by Order in Council
    Sir S. HOARE: My answer is that Parliament can act either by Order in Council or by amending Act.
    Sir R. HAMILTON: Before10 years?
    Sir S. HOARE: Before 10 years, under Sub-section (4).
    9.50 p.m.
    Mr. BAILEY: I think the whole House has welcomed the contribution which has come from the Liberal benches on this matter, because it has shown us one subject upon which there is a strong opinion in India on something that we might do. If there is a strong opinion in India in favour of something that might be put into this Bill, that would seem to me to be a very weighty reason indeed for acceding to that opinion. I have found it very difficult to find anything in the Bill of importance on which anyone seemed to agree in India, or even in this country, for that matter, except in a negative way. Therefore if there is a
    1072
    strong opinion about this in India, surely we, who are seeking to give India a type of self-government that she wants, if we are honest in our own convictions, ought to accede to that strong opinion. I do not believe in self-government for India, but the Government apparently do, and it seems to me that those who believe in self-government ought not to try to force the medicine down the patient's throat, but ought to try to give the patient something more acceptable. You should either rule firmly or give the people of India the kind of constitution they want. To do something in between, and to say that to give them the opportunity of asking for something that they want is encouraging them not to work the existing Measure, is to me quite wrong
    I take the view that they are not fit for the powers you are giving them, but if you think they are fit to have the destiny of a fifth of the population of the world in their hands, to a large extent, you have no right to assume that they will be so factious as to make use of the privileges which you propose to give them in order to wreck the whole Act. It is purely an internal matter for the Indians themselves whether elections should be direct or indirect, and surely the very people who ought to he in a position to give you advice on that subject, if you have any confidence in them at all, are the Indian Legislature Assemblies them selves. It is casting a grave reflection on them, I submit, not to give them the opportunity to tender such advice now but to suggest that after 10 years they will be fit to tender it.
    If the right hon. Gentleman really has any confidence in them at all, he ought not to suggest that they would be capable of such unworthy practices that they would wreck this heaven-sent Measure. It is most wrong to suggest that the Indian Legislatures would be guilty of such conduct. Either they are fit for responsibility or they are not, but to burden them with all these restrictions, to pretend to give them self-government, to give them the semblance of self-Government but in reality to keep the reins in your own hands, will never work. You must give a free and generous gift or keep the whole thing in your own hands. The doom of Laodicea is on the whole of this Bill. [An HON. MEMBER: "What is the doom of Laodicea?"] One hon. Member asks what the doom of Laodicea

    1073
    is. It is the doom of being neither hot nor cold, but of being lukewarm. The Apostle Peter, it will be remembered, spewed them out of his mouth.
    Lord E. PERCY: The hon. Member had better look up his Bible again.
    Mr. BAILEY: The Bill on this subject is neither hot nor cold. It pretends to give self-government, but it does not trust the Indians with sufficient powers to make self-government a success. You cannot have it both ways. The refusal of the Government to yield to this very reasonable Liberal Amendment—it is so seldom that a Liberal Amendment is reasonable—shows a lack of the spirit of compromise on their part. Who are more fitted to decide on what form of Government they should have than are the Indians themselves, if you think they should have self-government at all? I
    therefore very much hope, even at this late hour, that the Government will find it possible to make this concession to the Liberals. After all, they have been very faithful to the Government in these discussions. I do not know what the Government would have done but for the support they have had from Socialist and Liberal votes. It is rewarding these faithful hirelings of this policy very ill to give them such scant consideration when they ask for some concession. It is very unkind of the Government not to give way to them when they have been faithful so long. Considerations of delicacy should have impelled the Government to accept this Amendment, for which I propose to vote.
    Question put, "That those words be there inserted in the Bill."
    The House divided: Ayes, 61; Noes, 200.

    Division No. 221.].

    AYES.

    [9.58 p.m.

    Acland, Rt. Hon. Sir Francis Dyke.

    Graham, O. M. (Lanark, Hamilton).

    Mailalleu, Edward Lancelot

    Addison, Rt. Hon. Dr. Christopher.

    Greenwood, Rt. Hon. Arthur

    Maxton, James

    Attlee, Clement Richard.

    Grenfell, David Rees (Glamorgan).

    Milner, Major James

    Bailey, Eric Alfred George.

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

    Oman, Sir Charles William C.

    Batey, Joseph.

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

    Owen, Major Goronwy

    Bernays, Robert

    Groves, Thomas E.

    Paling, Wilfred

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

    Grundy, Thomas W.

    Palmer, Francis Noel

    Cape, Thomas.

    Hall, George H. (Merthyr Tydvil).

    Parkinson, John Allen

    Cleary, J. J.

    Harris, Sir Percy.

    Rathbone, Eleanor

    Cocks, Frederick Seymour.

    Holdsworth, Herbert.

    Remer, John H.

    Cripps, Sir Stafford.

    Jenkins, Sir William.

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

    Curry, A. C.

    John, William

    Smith, Tom (Normanton)

    Daggar, George

    Jones, Morgan (Caerphilly)

    Tinker, John Joseph

    Davies, David L. (Pontypridd)

    Lawson, John James

    White, Henry Graham

    Cobble, William

    Lees-Jones, John

    Williams, David (Swansea, East)

    Edwards, Charles

    Leonard, William

    Williams, Thomas (York, Don Valley)

    Evans, David Owen (Cardigan)

    Logan, David Gilbert

    Wilmot, John

    Evans, R. T. (Carmarthen)

    Lunn, William

    Foot, Dingle (Dundee)

    Macdonald, Gordon (Ince)

    TELLERS FOR THE AYES.—

    Foot, Isaac (Cornwall, Bodmin)

    McEntee, Valentine L.

    Sir Robert Hamilton and Mr. Walter Rea.

    Gardner, Benjamin Walter

    Maclean, Nell (Glasgow, Govan)

    Goodman, Colonel Albert w.

    Mainwaring, William Henry

    NOES.

    Acland-Troyte, Lieut.-Colonel

    Buchan-Hepburn, P. G. T.

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

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

    Burghley, Lord

    Emmott, Charles E. G. C.

    Agnew, Lieut.-Com. P. G.

    Burnett, John George

    Entwistle, Cyril Fullard

    Albery, Irving James

    Butler, Richard Austen

    Erskine-Bolst, Capt. C. C. (Blk'pool)

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

    Campbell, Sir Edward Taswell (Brmly)

    Everard, W. Lindsay

    Anstruther-Gray, W. J.

    Campbell, Vice-Admiral G. (Burnley)

    Fleming, Edward Lascelles

    Aske, Sir Robert William

    Carver, Major William H.

    Fuller, Captain A. G.

    Assheton, Ralph

    Chorlton, Alan Ernest Leofric

    Ganzoni, Sir John

    Baldwin, Rt. Hon. Stanley

    Clayton, Sir Christopher

    Gault, Lieut.-Col. A, Hamilton

    Baldwin-Webb, Colonel J.

    Cochrane, Commander Hon. A. D.

    Gibson, Charles Granville

    Balfour, George (Hampstead)

    Colfox, Major William Philip.

    Gledhill, Gilbert

    Barclay-Harvey, C. M.

    Cook, Thomas A.

    Glossop, C. W. H.

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

    Copeland, Ida

    Goff, Sir Park

    Belt, Sir Alfred L.

    Cranborne, Viscount

    Gower, Sir Robert

    Benn, Sir Arthur Shirley

    Croft, Brigadier-General Sir H.

    Grattan-Doyle, Sir Nicholas

    Bilndell, James

    Crookshank, Col. C. de Windt (Bootle)

    Graves, Marjorle

    Bossom, A. C.

    Croom-Johnson, R. P.

    Greene, William P. C.

    Boulton, W. W.

    Cruddas, Lieut.-Colonel Bernard

    Grimston, R. V.

    Braithwaite, J. G. (Hillsborough)

    Culverwell, Cyril Tom

    Gunston, Captain D. W.

    Brandbent, Colonel John

    Denman, Hon. R. D.

    Guy, J. C. Morrison

    Brocklebank, C. E. R.

    Dickie, John P.

    Hacking, Rt. Hon. Douglas H.

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

    Doran, Edward

    Hales, Harold K.

    Bruwn, Ernest (Leith)

    Dugdale, Captain Thomas Lionel

    Hammersley, Samuel S.

    Hanbury, Cecil

    Mellor, Sir J. S. P.

    Selley, Harry R.

    Hannon, Patrick Joseph Henry

    Milne, Charles

    Shakespeare, Geoffrey H.

    Harberd, Arthur

    Mitchell, Sir W. Lane (Streatham)

    Shaw, Helen B. (Lanark, Bothwell)

    Harvey, Major Sir Samuel (Totnes)

    Molson, A. Hugh Elsdale

    Shaw, Captain William T. (Forfar)

    Haslam, Henry (Horncastle)

    Monsell, Rt. Hon. Sir B. Eyres

    Shepperson, Sir Ernest W.

    Haslam, Sir John (Bolton)

    Morgan, Robert H.

    Shute, Colonel Sir John

    Headlam, Lieut.-Col. Cuthbert M.

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

    Smiles, Lieut.-Col. Sir Walter D.

    Heilgers, Captain F. F. A.

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

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

    Heneage, Lieut, Colonel Arthur P.

    Morrison, William Shephard

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

    Hepworth, Joseph

    Moss, Captain H. J.

    Somervell, Sir Donald

    Herbert, Capt. S. (Abbey Division)

    Nail, Sir Joseph

    Southby, Commander Archibald R. J.

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

    Nation, Brigadier-General J. J. H.

    Spears, Brigadier-General Edward L.

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

    Nicholson, Godfrey (Morpeth)

    Spencer, Captain Richard A.

    Hore-Belisha, Leslie.

    O'Neill, Rt. Hon. Sir Hugh

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

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

    Orr Ewing, I. L.

    Stewart, J. Henderson (Fife, E.)

    Hume, Sir George Hopwood

    Patrick, Colin M.

    Stones, James

    Hunter, Dr. Joseph (Dumfries)

    Peake, Osbert

    Storey, Samuel

    Hunter-Weston, Lt.-Gen. Sir Aylmer

    Pearson, William G.

    Stourton, Hon. Jonn J.

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

    Peat, Charles U.

    Strickland, Captain W. F.

    Jackson, Sir Henry (Wandsworth, C.)

    Percy, Lord Eustace

    Sueter, Rear-Admiral Sir Murray F.

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

    Perkins, Walter R. D.

    Sutcliffe, Harold

    Jesson, Major Thomas E.

    Petherick, M.

    Tate, Mavis Constance

    Ker, J. Campbell

    Pickthorn, K. W. M.

    Taylor, C. S. (Eastbourne)

    Kerr, Lieut.-Col. Charles (Montrose)

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

    Thompson, Sir Luke

    Kimball, Lawrence

    Procter, Major Henry Adam

    Touche, Gordon Cosmo

    Lamb, Sir Joseph Quinton

    Radford, E. A.

    Tryon, Rt. Hon. George Clement

    Law, Sir Alfred

    Raikes, Henry V. A. M.

    Turton, Robert Hugh

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

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

    Wallace, Sir John (Dunfermline)

    Leech, Dr. J. W.

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

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

    Leighton, Major B. E. P.

    Ramsbotham, Herwald

    Wardlaw-Milne, Sir John S.

    Levy, Thomas

    Ramsden, Sir Eugene

    Wayland, Sir William A.

    Lewis, Oswald

    Rankin, Robert

    Wells, Sidney Richard

    Liddall, Walter S.

    Reed, Arthur C. (Exeter)

    Whiteside, Borras Noel H.

    Lindsay, Kenneth (Kilmarnock)

    Reid, William Allan (Derby)

    Williams, Charles (Devon, Torquay)

    Llewellin, Major John J.

    Renwick, Major Gustav A.

    Williams, Herbert G. (Croydon, S.)

    Lockwood, John C. (Hackney, C.)

    Rickards, George William

    Wills, Wilfrid D.

    Loftus, Pierce C.

    Robinson, John Roland

    Windsor-Clive, Lieut.-Colonel George

    Lovat-Fraser, James Alexander

    Rosbotham, Sir Thomas

    Wise, Alfred R.

    Lumley, Captain Lawrence R.

    Rots Taylor, Walter (Woodbridge)

    Womersley, Sir Walter

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

    Russell, Albert (Kirkcaldy)

    Worthington, Dr. John V.

    MacAndrew, Major J. O. (Ayr)

    Russell, Hamer Field (Sheffield, B'tslde)

    McLean, Major Sir Alan

    Russell, R. J. (Eddisbury)

    TELLERS FOR THE NOES.—

    Magnay, Thomas

    Rutherford, John (Edmonton)

    Sir Victor Warrender and Major

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

    Rutherford, Sir John Hugo (Liverp'l).

    George Davies,

    Mavhew, Lieut.-Colonel John

    Salt, Edward W.

    10.4 p.m.
    Mr. ATTLEE: I beg to move, in page 175, line 38, at the end, to insert:
    "Provided that so far as regards any amendment of the provisions relating to the number of Chambers in a Provincial Legislature if, on a motion proposed in the Legislative Assembly of a Province by a minister on behalf of the council of Ministers, such Legislative Assembly pass in two successive sessions a resolution recommending the abolition of the Legislative Council, the provisions of Sub-section (1) of this Section except the provision requiring a resolution to be passed in each Chamber, shall apply."
    I think the House will recognise that this is a very reasonable Amendment. If I could remember them all, I should repeat the eloquent words used by the hon. Member for Bodmin (Mr. Isaac Foot) on the previous Amendment. He pointed out how difficult it is to get a Legislative Chamber to commit suicide. He pointed out that you might have a Chamber elected by a very small number of persons in a hole-and-corner manner. That is what you have in regard to second Chambers. They are elected by
    1076
    small number of people, and you are going to have vested interests set up. Equally, as he pointed out, it will be against the will of the Provinces concerned—except for the very few Provinces which are not to have second Chambers. I am not going to argue the case for and against second Chambers on this Amendment. But it is clear that if you want to give a reasonable chance of change from bi-cameral to uni-cameral constitutions in the Provinces it is not much good making a rule that the resolution must be passed by both Houses, because it is very unlikely that you will get a second House to agree to its own abolition The whole point of this Clause—we call it the Jayakar Clause—is to give Indian Legislatures an opportunity of coming to this House and expressing their wishes. If some Provinces make decisions to abolish the second Chamber they will not be able to come to this House because of the provision in Sub section (1) that the motion must be carried in both Chambers—and the object of this Amendment is to exempt from

    1077
    that provision an Amendment designed to deal with second Chambers.
    I think the House will agree that if we do not put this in we are most unlikely ever to get the opinion of the Assemblies expressed on this question. They will be held up every time by the second Chambers. Here is a subject on which there is very great division of opinion. On the Indian Statutory Commission opinion was divided and in India itself opinion is divided. Even at the present time we are not providing second Chambers in every Province. When first the White Paper came out there were only a few Provinces with second Chambers; then some more have been added; and even on this Report stage other Provinces have been given this incubus of a second Chamber. Others may call it a blessing—but the broad principle is that the Indian people should decide whether they should have it or not. We should give them an opportunity to decide that. I move this Amendment because this is the only way in which we can get the possibility of the lower Houses expressing theiropinion—and the electorate through the
    lower Houses expressing their opinion—in favour of uni-cameral Legislatures.
    10.10 p.m.
    Sir S. HOARE: I take a, view differing from that just expressed by the hon. Member for Limehouse (Mr. Attlee). I regard second Chambers as an integral part of the Provincial Constitution, and I see no reason why they should be excluded from voting upon an important issue of this kind. Otherwise, the second Chamber is put into the hands of the first Chamber. The first Chamber can destroy it if it so desires, or at least it can send forward a resolution to this House to that effect. That is not what the Joint Select Committee contemplated. They contemplated that where second Chambers were set up these Chambers should be regarded as an integral part of the Provincial Constitution with equal rights in matters of this kind with the first Chamber. That being so, I am afraid I cannot accept the hon. and gallant Member's Amendment.
    Question put, "That those words be there inserted in the Bill."
    The House divided: Ayes, 44; Noes, 222.

    Division No. 222].

    AYES.

    [10.12 p.m.

    Acland, Rt. Hon. Sir Francis Dyke

    Greenwood, Rt. Hon. Arthur

    Maclean, Nell (Glasgow, Govan)

    Addison, Rt. Hon. Dr. Christopher

    Grenfell, David Reel (Glamorgan)

    Mainwaring, William Henry

    Attlee, Clement Richard

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

    Maxton, James

    Batey, Joseph

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

    Owen, Major Goronwy

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

    Groves, Thomas E.

    Parkinson, John Allen

    Cape, Thomas

    Grundy, Thomas W.

    Rathbone, Eleanor

    Cleary, J. J.

    Hall, George H. (Morthyr Tydvill)

    Smith, Tom (Normanton)

    Cocks, Frederick Seymour

    Jenkins, Sir William

    Tinker, John Joseph

    Cripps, Sir Stafford

    John, William

    White, Henry Graham

    Duggar, George

    Jones, Morgan (Caerphilly)

    Williams, David (Swansea, East)

    Davies, David L. (Pontypridd)

    Lawson, John James

    Williams, Thomas (York, Don Vallay)

    Davies, Rhys John (Westhouhton)

    Leonard, William

    Wilmot, John

    Dobbie, William

    Logan, David Gilbert

    Edwards, Charles

    Lunn, William

    TELLERS FOR THE AYES.—

    Gardner, Benjamin Walter

    Macdonald, Gordon (Ince)

    Mr. Paling and Mr. D. Graham.

    George, Major G. Lloyd (Pembroke)

    McEntee, Valentine L.

    NOES.

    Acland-Troyte, Lieut.-Colonel.

    Boulton, W. W.

    Craddock, Sir Reginald Henry

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

    Bracken, Brendan

    Cranborne, Viscount

    Agnew, Lieut.-Com. P. G.

    Braithwaite, J. G. (Hillsborough)

    Croft, Brigadier General Sir H.

    Albery, Irving James

    Broadbent, Colonel John

    Crookshank, Col. C. de Windt (Bootie)

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

    Brockiebank, C. E. R.

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

    Anstruther-Gray, W. J.

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

    Cross, R. H.

    Aske, Sir Robert William

    Brown, Ernest (Leith)

    Cruddas, Lieut.-Colonel Bernard

    Assheton, Ralph

    Burghley, Lord

    Culverwell, Cyril Tom

    Atholl, Duchess of

    Burnett, John George

    Curry, A. C.

    Bailey, Eric Alfred George

    Butler, Richard Austen

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

    Baldwin, Rt. Hon. Stanley

    Campbell, Sir Edward Taswell (Brmly)

    Denman, Hon. R. D

    Baldwin-Webb, Colonel J.

    Campbell, Vice-Admiral G. (Burnley)

    Dickie, John P.

    Balfour, George (Hampstead)

    Carver, Major William H.

    Doran, Edward

    Barclay-Harvey, C. M.

    Cazalet, Thelma (Islington, E.)

    Dugdale, Captain Thomas Lionel

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

    Chorlton, Alan Ernest Leofric

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

    Belt, Sir Alfred L.

    Clayton, Sir Christopher

    Elmley, Viscount

    Benn, Sir Arthur Shirley

    Cochrane, Commander Hon. A. D.

    Emmott, Charles E. G. C

    Bernays, Robert

    Colfox, Major William Philip

    Entwistle, Cyril Fullard

    Blindell, James

    Cook, Thomas A.

    Erskine-Bolst, Capt. C. C. (Blk'pool)

    Bossom, A. C.

    Copeland, Ida.

    Evans, David Owen (Cardigan)

    Evans, R. T. (Carmarthen)

    Leighton, Major B. E. P.

    Remer, John R.

    Everard, W. Lindsay

    Levy, Thomas.

    Renwick, Major Gustav A.

    Fleming, Edward Lascelles

    Liddall, Walter S.

    Rickards, George William

    Foot, Dingle (Dundee)

    Lindsay, Kenneth (Kilmarnock)

    Robinson, John Roland

    Foot, Isaac (Cornwall, Bodmin)

    Llewellin, Major John J.

    Ropner, Colonel L.

    Fuller, Captain A. G.

    Lloyd, Geoffrey

    Rosbotham, Sir Thomas

    Ganzonl, sir John

    Lockwood, John C. (Hackney, C.)

    Rote Taylor, Walter (Woodbridgt)

    Gault, Lieut.-Col. A. Hamilton

    Loftus, Pierce C.

    Russell, Albert (Kirkcaldy)

    Gibson, Charles Granville

    Lovat-Fraser, James Alexander

    Russell, Hamer Field (Sheffield, B'tside)

    Gledhill, Gilbert

    Lumley, Captain Lawrence R.

    Russell, R. J. (Eddisbury)

    Glossop, C. W. H.

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

    Rutherford, John (Edmonton)

    Goff, Sir Park

    MacAndrew, Major J. O. (Ayr)

    Rutherford, Sir John Hugo (Liverp'l)

    Goodman, Colonel Albert W.

    McKie, John Hamilton

    Salt, Edward W.

    Gower, Sir Robert

    McLean, Major Sir Alan

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

    Grattan-Doyle, Sir Nicholas

    Magnay, Thomas

    Selley, Harry R.

    Graves, Marjoris

    Mallalieu, Edward Lancelot

    Shaw, Helen B. (Lanark, Bothwell)

    Greene, William P. C.

    Mayhew, Lieut.-Colonel John.

    Show, Captain William T. (Forfar)

    Grimston, R. V.

    Mellor, Sir J. S. P.

    Shepperson, sir Ernest W.

    Gritten, W. G. Howard.

    Milne, Charles

    Shute, Colonel Sir John

    Gunston, Captain D. W.

    Mitchell, Sir W. Lane (Streatham)

    Smiles, Lieut.-Col. Sir Walter D.

    Guy, J. C. Morrison

    Molson, A. Hugh Elsdale

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

    Hacking, Rt. Hon. Douglas H.

    Morgan, Robert H.

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

    Hales, Harold K.

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

    Somervell, Sir Donald

    Hamilton, Sir George (llford)

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

    Southby, Commander Archibald R. J.

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

    Morrison, William Shepherd.

    Spears, Brigadier-General Edward L

    Hammersley, Samuel S.

    Moss, Captain H. J.

    Spencer, Captain Richard A.

    Hannon, Patrick Joseph Henry.

    Nail, Sir Joseph

    Stewart, J. Henderson (File, E.)

    Harbord, Arthur

    Nation, Brigadier-General J. J. H.

    Stones, James

    Harris, Sir Percy

    Nicholson, Godfrey (Morpeth)

    Storey, Samuel

    Haslam, Henry (Horncastle)

    O'Donovan, Dr. William James

    Stourton, Hon. John J

    Haslam, Sir John (Bolton)

    Oman, Sir Charles William C.

    Strickland, Captain W. F.

    Headlam, Lieut.-Col, Cathbert M.

    O'Neill, Rt. Hon. Sir Hugh

    Sueter, Rear-Admiral Sir Murray F

    Heilgers, Captain F. F. A.

    Orr Ewing, I. L.

    Sugden, Sir Wilfrid Hart

    Heneage, Lieut.-Colonel Arthur P.

    Palmer, Francis Noel

    Sutcliffe, Harold

    Hepworth, Joseph

    Patrick, Colin M.

    Tate, Mavis Constance

    Herbert, Capt. S. (Abbey Division)

    Peake, Osbert

    Taylor, C. S. (Eastbourne)

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

    Pearson, William G.

    Tryon, Rt. Hon. George Clement

    Holdsworth, Herbert

    Peat, Charles U.

    Turton, Robert Hugh

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

    Penny, Sir George

    Wallace, Sir John (Dunfermline)

    Hore-Belisha, Leslie

    Percy, Lord Eustace

    Ward, Irene Mary Bewick (Wallsend)

    Hame, Sir George Hopwood

    Perkins, Walter R. D.

    Wardlaw-Milne, Sir John S.

    Hunter, Dr. Joseph (Dumfries)

    Petherick, M.

    Warrender, Sir Victor A. G.

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

    Pickthorn, K. W. M.

    Waterhouse, Captain Charles

    Jackson, Sir Henry (Wandsworth, C.)

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

    Wayland, Sir William A.

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

    Procter, Major Henry Adam

    Wells, Sydney Richard

    Jesson, Major Thomas E.

    Radford, E. A.

    Whiteside, Borras Noel H.

    Ker, J. Campbell

    Raikes, Henry V. A. M.

    Williams, Charles (Devon, Torquay)

    Kerr, Lieut.-Col. Charles (Montrose)

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

    Williams, Herbert G. (Croydon, J.)

    Kimball, Lawrence

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

    Wills, Wilfrid D.

    Knox, Sir Alfred

    Ramsbotham, Herwald

    Windsor-Clive, Lieut.-Colonel George

    Lamb, Sir Joseph Quinton

    Ramsden. Sir Eugene

    Wise, Alfred R.

    Law, Sir Alfred

    Rankin, Robert

    Worthington, Dr. John V.

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

    Rea, Walter Russell

    Leckie, J. A.

    Reed, Arthur C. (Exeter)

    TELLERS FOR THE NOES.—

    Leech, Dr. J. W.

    Reid, William Allan (Derby)

    Lieut.-Colonel Sir A. Lambert Ward

    and Sir Walter Womersley.

    Question put, and agreed to

    10.19 p.m.
    Mr. BUTLER: I beg to move, in page 176, line 8, after "time," to insert:
    "before or after the commencement of Part III of this Act."
    This is consequential on the previous Amendment.
    10.20 p.m.
    Sir H. CROFT: Might I ask the Secretary of State to tell the House why this Amendment appears here? The fact that it is consequential is not clear to me, because there may be a. fundamental alteration of the whole position. I understand that the Communal Award, under which the status quo was promised for 10 years with separate electorates for minorities, could be completely altered if this Amendment were carried, and I
    1080
    should be grateful, should I have wrongly interpreted it, if the Secretary of State would tell us exactly why he proposes the Amendment.
    Duchess of ATHOLL: Might I further ask to what Amendment this is consequential?
    10.19 p.m.
    Mr. BUTLER: When I used the word "consequential," I meant consequential on the explanation of the Amendment which I had already given. I will briefly, if I may, give the explanation again. When I moved that Amendment I said—
    Duchess of ATHOLL: Which Amendment
    Mr. BUTLER: This particular Amendment. I do not know whether the Noble Lady was present when I asked permission of the House to explain all these Amendments together. I gave an explanation at that time, and, with the permission of the House, I am quite ready to explain the position again. This Amendment operates from the beginning of Sub-section (4) and makes clear that alterations might be made by His Majesty's Government by Order-in Council under the Clause, if necessary, before the Act actually comes into operation. As I explained to the House when I moved the Amendment, the purpose is to give power to correct mistakes which might be found, for example, in the very long franchise Schedule which we discussed in Committee, and which would have to be very closely examined with a view to the necessary action being taken. It is in order to give us power to make any final alteration which might be necessary that we ask the House to insert the Amendment. That is the object of it, in order to be quite sure that we have complete accuracy, so that when any action is taken on these very long and complicated Schedules no legal difficulties shall result.
    10.23 p.m.
    Mr. C. WILLIAMS: I would like to comment upon the extraordinary position into which the Government are getting now. We have before us an Amendment which is said to be consequential upon an explanation. That is a very curious position, which is very rarely accepted in the House. My hon. Friend the Under-Secretary of State, in one of those clear and excellent speeches, proceeded to say that the Amendment was for the purpose of correcting mistakes. I should have thought that the Government would not need to put in an Amendment for that purpose, because we have been undoing mistakes most of the day. The Government are putting forward a consequential Amendment without the usual quotation of the Clause to which it applies. I admit the difficulty of the Government, but the position is not clear to many of us. People afterwards, reading the Debate, will wonder what we have been doing when they read of an Amendment which is consequential upon an explanation, but which is an important consequential Amendment.
    Duchess of ATHOLL: I am very sorry to have given my hon. Friend the Under-Secretary the trouble of making an explanation a second time.
    Mr. SPEAKER: The Noble Lady has exhausted her right to speak.
    Duchess of ATHOLL: With due respect, Sir. I only asked a question.
    Mr. SPEAKER: There are questions and questions.
    Duchess of ATHOLL: With all respect, Sir, I venture to say that this Sub-section raises much bigger questions than drafting considerations.
    Mr. SPEAKER: I must abide by the Rule of the Report stage, that the Member only makes one speech.
    10.25 p. m.
    Sir A. KNOX: I would like to ask the Secretary of State if it is not true that even before the new Provincial Government is tried out, the whole arrangement for the franchise can be scrapped under this Amendment? If hon. Members will cast their minds back to Sub-section (2) of the Clause, I think that they will see that the Amendment to that Sub-section practically covers everything in the Bill. Are we to understand that by Order-in Council the Government at the last moment may change everything
    10.25 p.m.
    The SOLICITOR -GENERAL: Of course the House might, if it chose, before the Act comes into operation, pass an amending Bill repealing the whole Measure. If the House completely changes its mind, it can, by its ordinary procedure, completely reverse its previous decision. My hon. and gallant Friend is absolutely accurate in saying that the scope of the powers of the Order-in-Council procedure is extended by this Amendment to the period after the Bill has become an Act and before the commencement of its operation. But in that period Parliament could exercise all the powers which can be exercised by Order in Council equally on the Bill as it is presented to the House. It could have exercised them the day after the Act came into operation. Therefore, no point of substance arises. The Amendment, as I have said, does extend the power which, under the Bill as drafted, could be exercised immediately after the Act came into

    1083
    operation, to the period between the passing of the Bill and the coming into operation of the Act. The reason for asking for that extension is that, in, for instance, a very complicated Franchise Schedule, there might be some minor points on which it would be very undesirable to have to go through the whole business of passing an amending Bill to put them right where they could be put right by an Order in Council immediately the Act came into operation.
    Sir H. CROFT: Does that apply to the Communal Award? Could the whole Communal Award be upset?
    Sir JOSEPH NALL: I hope the House understands, that under Sub-section (2) as it is now, it would appear that by Order in Council the whole proportion between British India and the States could be upset. Have the States been consulted about that?
    Amendment agreed to.
    10.29 p.m.
    Miss RATHBONE: I beg to move, in page 176, line 30, at the end, to insert:
    "(5) Without prejudice to the generality of the foregoing provisions of this Section, if, when the electoral rolls for the territorial constituencies in any Province are first prepared under this Act, it appears that of the total names included therein less than two-elevenths are the names of women, it shall be the duty of the Secretary of State to prepare and submit to Parliament the draft of an Order in Council under this Section making such Amendments in the provisions relating to the franchise in that Province as will, in his opinion, secure that at least two-elevenths of the names contained in the said rolls when next revised will be the names of women.
    In this Sub-section?territorial constituencies' means the territorial constituencies mentioned in paragraphs 5 and 8 of the Fifth Schedule to this Act.?
    This is an exceedingly moderate Amendment—so moderate that I could scarcely bring myself to move it if it were not that attempts to extend the women's franchise more adequately have already been made and failed. The Amendment would simply ensure that, if at the time of the first general election held under the Act the ratio of women enrolled proved to be less than the two-elevenths which has all along been regarded by women as a reasonable ratio, then, before the second general election held under the Act, steps should be taken so to alter
    1084
    the women's qualification as to achieve this minimum ratio. In this Amendment we are not asking for anything more than the Joint Committee has clearly emphasised as desirable, nor are we asking for anything which can cause any serious administrative difficulty. Following the Statutory Commission, the Round Table Conference, and the Indian Franchise Committee, the Joint Select Committee used words which can scarcely be regarded as too strong concerning the importance of an adequate women's vote. I will not quote the words because I did so in a previous speech in relation to another women's Amendment, and I do not want to weary the House. It will be found in the report of the proceedings when last the question was discussed. The Joint Select Committee also recognised equally clearly the desirability of attaining
    "at as early a date as possible, and if practicable before the second election under the new Constitution, the ratio of not less than approximately one woman to five men electors."
    It was recommended by the Indian Franchise Committee. That is the pro portion for which we ask in this Amendment, because the actual proportion mentioned by the Franchise Committee was more nearly one woman to four men than one woman to five men. Further, the Joint Select Committee recognised that it was very probable that this ratio which it considered desirable would be prevented by the effect of the requirement of application placed on a majority of women voters. Therefore, it is suggested that there should be application, at any rate, in the case of wives or widows qualified in respect of a husband's property, as early as practicable. Our Amendment is on the lines of what the Joint Select Committee recommended, except that we do not ask that the form of application shall necessarily be with drawn, because we recognise that the reasons for that reform which are alleged in certain Provinces is that social difficulties may not have disappeared before the date of the second general election. We have left it entirely to the judgment of the Government to decide, after communication with local governments, how the ratio of women to men should be raised. I think that the ratio could be raised by several alternatives, either by removing the conditions that a voter must apply for a vote

    1085
    or by extending the vote to the wives or widows referred to, or by selecting some of the groups of men voters whose wives are not at present, under the Bill, entitled to vote. Hon. Members will remember that in the Schedule there are in every province a large number of different qualifications for men voters. Some of these qualifications entitle wives to vote, and some do not. There can be no real difficulty in selecting some additional groups of men voters and entitling the wives to vote, especially, as, in view of the experience of the first general election, there will be ample indication of the number of potential and actual voters likely thus to be secured.
    I would beg of the Secretary of State for his own credit and for the sake of the good repute of Parliament, to accept this proposal. Consider the position that might arise. In Debates in this House and elsewhere for the last four years, it has been held out to the women of India that the proposals that we intended would enfranchise about 6,000,000 women voters. That was the figure which was given in this House in Committee only about a fortnight ago by the Under-Secretary. Suppose through the retention of the condition that wives must apply for votes in advance, the actual number of voters in any province is cut down, as it easily may be, to one-half or less of the anticipated ratio, the large majority of the women voters will be wife voters to whom the condition of application will apply. The Joint Select Committee recognised the very serious effect of that condition. Inevitably it will be represented in un friendly quarters in India that the talk of 6,000,000 women voters has been a mere piece of window-dressing, and that there has never been any serious intention on the part of Parliament to realize it.
    The application condition has been re moved in certain Provinces. It is very likely therefore that the full intended ratio of women voters will be achieved in those Provinces, whereas something in finitely less will be found to have resulted in those Provinces which happen to include some of the most advanced and progressive Provinces, such as Bombay and Madras, where the application condition is retained. Is not that likely to give rise to a strong sense of unfairness where the women find them-
    1086
    selves in so much less favourable position? It cannot be desired by this House that Indian women, many of whom are very much inclined to move towards the left, towards Congress, should have reasonable excuse for thinking that Parliament has played fast and loose with them and that hopes have been held out to them which there was no real intention to enable them to realise.
    I anticipate that the Secretary of State may say that the Amendment is not necessary, because it is possible under the Clause as it stands, by Order-in Council, to increase the qualifications of women electors and therefore their ratio. Let us consider the practical possibilities. We all know the difficulty of getting Parliament to reconsider a subject with in a short time which has already been elaborately discussed, studied and settled. We shall be told if we try to do that in a few years, that it is too soon. Personnel changes very quickly both in governments and in the House of Commons, and we can have no certainty that five years or seven years hence if this question is brought up the Secretary of State or the Under-Secretary or any of us will be in a position to press The point. The responsibility of acting fairly by the women of India, and helping them to realise the hopes that have been held out to them must rest upon this Parliament, and the opportunity for doing it is now. It would not be wise for the right hon. Gentleman to shift his responsibility on to an unknown successor acting under political conditions which are unpredicted.
    When the women Amendments were before the House a little while ago the Under-Secretary suggested that the women had not shown themselves grateful for some of the concessions made already, but a little later he showed that gratitude had been expressed, indicating that the women were satisfied. It re minds me of the old maxim of our nursery days that those who ask do not care, and those who do not ask do not want. We who are pressing this matter are not in satiable, nor are we satisfied. I ask the right hon. Gentleman to consider whether the women of India have reason to be grateful for what has been done. What is the position? Four years ago, after an exhaustive examination, the Indian Franchise Committee, of which the Under-

    1087
    Secretary of State was a member, scheduled proposals which would have given women considerably more than they would get even if the Amendment was accepted; a much better proportion of voting strength. When the White Paper was issued these proposals were drastically cut down. We remonstrated vigorously and the Joint Select Committee said that our remonstrances were well justified. The Bill made certain improvements on the White Paper and since then we have had a substantial concession of certain seats for women on the Council of State. But still the proposals are less than those which were held out to the women of India a year ago.
    We know the reason. We know that there is no reluctance on the part of the Secretary of State and those who act with him, but that they have to consider the opinion of local governments in India. As far as that opinion is based on the practical difficulties the Amendment fully meets them, and I do not think that the Secretary of State would claim that there are any administrative difficulties in granting the Amendment. If he does not accept it is it not because he is again yielding to the prejudices and superstitions which have all along been the undoing of the women of India? What have the authorities in India, either British or Indian, done for the women of India that there should be so much yielding to these prejudices You have only to look at the Report of the Statutory Commission to see what they have done for women in the educational sphere and in removing those social evils of child marriage and imperfect medical facilities which weigh so heavily upon them. The Secretary of State recognises just as well as a Joint Select Committee that the only real hope for the future of the women of India lies in giving them the power of influencing their own destinies through the recognised constitutional means of the vote and representation. This is the last effort we shall be able to make on this Bill to secure for women their pound of flesh, that modicum of voting strength which the Government itself have always recognised as their right.
    10.44 p.m.
    Mr. ISAAC FOOT: I should like to associate myself with the remarks of the hon. Member for the English University (Miss Rathbone) except that I think her
    1088
    reference to the pound of flesh was rather unfortunate. It is neither her desire nor ours to reproach the Secretary of State in that way. I would not of fend the House by pretending that the right hon. Gentleman is less concerned about this matter than the rest of us. Indeed, I am sure that we are pushing an open door as far as his sentiments and opinions are concerned on the franchise for women. He was not in the House, un fortunately, owing to the illness from which we are glad to see he has fully recovered, when this matter was discussed a short time ago, but it was very evident when the Schedule came under consideration that an apprehension was left on our minds that what we had hoped for under the suggestions of the Joint Select Committee and what we had hoped for under the Bill, was not likely to be achieved. The Under-Secretary put very powerfully the arguments of those who resist the removal of the necessity for application, and he spoke of the strong social objections that there would be in many parts of India to the removal of the necessity for application. I was satisfied, and I think many of us were, that the very reasons that made unlikely the removal of that necessity for application would probably tend to reduce the vote, would have the same effect in preventing women from exercising their franchise. At any rate if this Bill passes through this House and passes through another place and it is found that the number of women taking part in the exercise of the vote is very much short of what we had anticipated, there will be great disappointment in India and in this country.
    It is very interesting to find ourselves in territory where there is no division of views at all. I think we all agree that the Constitution of India and the Government of that country cannot succeed without some commensurate assistance from the women of that country. The number that is proposed, taking the maximum, we think is too small, but we do not want to see that small number reduced, as we fear it will be, if that necessity for application is continued. It may be that the Secretary of State is not able to accept this Amendment in the terms in which it is proposed, but is it not possible for him to give us some assurance, particularly in relation to the application for the vote as to certain

    1089
    Provinces, that would lead us to hope that women will be able to take some fuller share in the government of the country when this Bill comes into operation?
    This is a subject that we have discussed again and again. It is now very late and the arguments are very well known to all Members. The arguments were constantly before us on the Joint Select Committee. The arguments were put before us in 1930 when two women's representatives of the two great sections in India very powerfully stated their case. It is that case which we desire to meet. I believe that the Secretary of State is desirous of carrying out what the Joint Select Committee intended to give, and if he can meet the Amendment in some way I believe that he will give great satisfaction to the Members of this House without distinction of party, and I am sure that any concession in that direction would be welcomed by those in India upon whose shoulders—I am speaking of thewomen—will increasingly rest the burden of government, and not only the burden of government, but such legislation as will bring about economic improvement and social uplift.
    10.49 p.m.
    Mrs. TATE: I do hope that the Secretary of State will be able to regard this Amendment with sympathy, in as much as it merely asks that if, after the first general election, the proportion of women recommended not only by the Franchise Committee but by the Joint Select Committee is not given voting power, they shall then be assured that they shall have it. I do not wish to keep the House at this late hour. If the Secretary of State cannot accept this Amendment I hope he Will at least give us some assurance that the promises which were given to the women of India will be fulfilled.
    10.50 p.m.
    Mr. COCKS: I would like to associate myself with this Amendment on behalf of the Opposition. The name of the Leader of the Opposition is attached to the Amendment. One of the things which have disappointed me most in the course of the whole of these Debates is the attitude taken by the unofficial die-hard opposition below the Gangway. The whole of their case has been that we are handing over helpless millions to ancient
    1090
    tyrannies, and yet whenever we suggest that they should be defended by being given the vote where are the members of that opposition? Most of them are absent. When we are protecting the women of India one would have thought that a thousand swords would have leapt from their sheaths. Where is the Achilles of Epping? Sulking in his tent, or, like Kempenfelt, his sword is in its sheath, his fingers hold the pen. Where are the banners of the old ladies of Bournemouth, beneath which the hon. and gallant Member has dealt such resounding thwacks? Where are the Galahads? Even the Noble Lady opposite is quite unusually silent.
    We all think that the communal evil is one of the greatest evils of India. We think that the women of India will break across that dreadful thing. This is the evidence given by the Rajkumari Amrit Kaur. She was asked:
    "Are you of opinion that the development of political consciousness in Indian women is one of the factors which is most likely to break down in the future the communal and caste distinctions?"
    She replied:
    "Without doubt.?
    Finally, the point is put whether the women of India are in the hands of the priests, and whether it is they who chiefly support the rule of the orthodox religions. Her reply was:
    "Undoubtedly they are religions, and the older generation of women are orthodox, I cannot deny it; but I think you will find that there is a rapid advance in the outlook of women, and the younger generation can in no way be said to be orthodox or conservative, and not only that, as I say, the women go even further than the men do to-day.?
    That is the voice of the women of India. That I believe is the voice of the future of India. I do ask the Government to allow that voice to be heard clearly on the councils of India, in the constituencies, in the legislatures. I ask the Government therefore to accept the Amendment.
    10.53 p.m.
    Sir S. HOARE: I am as anxious as any hon. Member to see the women's vote really effective. I am anxious to see the percentages reached that we have had in our minds during our previous discussions. I therefore approach this Amendment with the fullest possible sym-

    1091
    pathy. I must, however, say that I cannot accept it. I do not believe that it would work. I do not believe that you can deal with the question with the kind of percentage prescription that the hon. Lady offers to us. I believe that there would be great difficulties in providing this kind of differential franchise for women supposing the percentage was not reached. I therefore take the view that if we are to make an advance the practical line to take is the line suggested by the hon. Member for Bodmin (Mr. Isaac Foot), namely, the line along which we can advance in the direction of dealing with the condition of application for the vote. The hon. Lady will remember that in the past I have done what I could to get that application condition removed where it was practicable to remove it.
    I am glad to inform the House that since the Committee discussion upon this question I have made further investigation in India, and I am able to tell the House that I think we can make substantial advance in that direction. I find from my further inquiries that in all the Provinces in India, apart from the two or three Provinces where social conditions make too quick an advance dangerous, it seems possible to remove the application qualification at the second election. When I say "the second election" I mean an election which takes place within a reasonable time after the first election. I wish to safeguard myself against the possibility of a, snap election almost immediately after the first election. But taking the normal period of the lifetime of assemblies, I see no reason why the condition of application should not be withdrawn in all the Provinces other than the three or four in which the social conditions would make it dangerous to attempt to impose that duty upon the Government here and now.
    I am prepared to undertake that the Government will introduce in another place an Amendment upon those lines, first, with the reservation of the Provinces in which the social conditions would make it impracticable, and, secondly, on the condition that there is a reasonable period between the first and second elections, making it clear that we will withdraw the conditions in those other Provinces. I think when the hon. Lady sees the Amendment which we are prepared to put down on the question she
    1092
    will recognise that we are making a great advance in the direction she desires and that there is every likelihood of the desired percentage being reached, or, if not actually reached, being nearly reached. I hope that statement will meet the views which I know are held by a great many hon. Members in all parts of the House.
    Miss RATHBONEIn view of the right hon. Gentleman's statement and thanking him for the consideration which he has given to the matter, I beg leave to with draw the Amendment.
    Amendment, by leave, withdrawn.

    CLAUSE 300.—(Orders in Council.)
    Amendments made: In page 176, line 39, at the end, insert:
    "either in the form of the draft, or with such amendments as may have been agreed to by Resolutions of both Houses.?
    In page 177, line 11, at the beginning, insert:
    "Subject to any express provision of this Act."—[The Solicitor-General.]

    CLAUSE 301.—(Power of His Majesty in Council to remove difficulties.)
    10.59 p.m.
    The SOLICITOR-GENERAL: I beg to move, in page 177, line 42, at the end, to insert:
    "(2) No Order in Council in relation to the transition from the provisions of Part XIII of this Act to the provisions of Part II of this Act shall be made under this section after the expiration of six months from the establishment of the Federation, and no other Order in Council shall be made under this section after the expiration of six months from the commencement of Part III of this Act."
    This Amendment carries out an under taking given by my right hon. and learned Friend during the Committee stage that Orders in Council dealing with the transitional period should only be possible for the period of six months.
    Amendment agreed to.
    It being Eleven of the Clock and objection being taken to further Proceeding, further Consideration of the Bill, as amended, stood adjourned.
    Bill, as amended, to be further considered to-morrow.

  REFRESHMENT ROOMS AND LAVATORIES.
  Ordered, That so much of the Lords Message [23rd May]communicating the Resolution,

  1093
  "That it is expedient that a Joint Committee of both Houses of Parliament be appointed to consider and report upon the accommodation for Refreshment Rooms and Lavatories in the Palace of Westminster,"
  be now considered.—[Sir C. Penny.]
  So much of the Lords Message considered accordingly
  Resolved,
  "That this House doth concur with the Lords in the said Resolution."—[Sir G. Penny.]
  Message to the Lords to acquaint them therewith.
  The remaining Orders were read, and postponed.

TERRITORIAL ARMY (GUNNER'S DISCHARGE).
Motion made, and Question proposed, "That this House do now adjourn.?—[Captain Margesson.]
Mr. MAXTON: I apologise for detaining the House for a few additional minutes on what must be regarded by many Members as a relatively small matter. It is a matter that admittedly only affects one man, and an unemployed man at that, but it seems to me that there are certain principles involved in it that justify my asking the Financial Secretary to the War Office for a little more enlightenment on the subject than he has so far vouchsafed in reply to questions put to him in the House. On the 14th May I asked the right hon. Gentleman, as representing the War Office, as to the discharge of a certain William Walker from a branch of the Territorial Army in Edinburgh on the ground that he had participated in a hunger march in Scotland. I asked the right hon. Gentleman if this man had been court-martialled and dismissed, and the reply was that I was under a misapprehension, that the man had not been court-martialled, and that he had not been dismissed from the Forces. Further questioning elicited the point that the man had been discharged on the ground that his services were no longer required, and when I pressed the Minister for reasons as to that, he said it was not in the public interest to answer that question. I asked if the reasons were political, and he said, in effect, "No;
1094
the Army does not concern itself with politics."
That seemed to me very unsatisfactory, because it was obvious tome that at any moment the authorities in the Territorial Force could discharge a man, saying his services were no longer required, and if that discharge were questioned in the House and the Minister took refuge behind the statement that it was not in the public interest to give reasons, then the whole status of the men in the Territorial Force was changed substantially, from what is the general public under standing. It is understood generally that when a man joins the Territorial Force he does not give up his citizen rights as a man does when he joins the Army or the Navy. He remains a citizen for all purposes, but gives up a certain pro portion of his time and a certain number of his liberties to equip himself to serve in the armed forces of the Crown. He takes on certain obligations as regards training, but he retains to himself all the ordinary rights of the ordinary citizen, including his political rights. If a commanding Officer, without stating any reasons, can discharge a man, and the Minister can reply that it is not in the public interest to say why he is discharged, the man as a citizen has a serious blemish put upon his character, and he has no opportunity of getting it removed and has no way of letting it be known among his friends, neighbours and associates what were the causes that led to his dismissal.
I do not want to criticise the right hon. Gentleman unfairly. I know that the phrase "in the public interest" has its uses in this House, but if Ministers were in every minor individual matter in reply to a question to say, "It is not in the public interest," the purposes and uses of Parliament would be very largely destroyed. The phrase, in my experience in the House, has only been used in very grave matters where the giving of information could be used in foreign lands to the detriment of this country. That is the general use of the phrase in this House. This is not a matter of that magnitude at all. This is the case of an unemployed man who, feeling the grievances of the unemployed and desirous of doing something to remove those grievances, associates with other unemployed men in a demonstration in Scotland particularly

1095
directed to call attention to the unfair operation of the recent unemployment assistance regulations. He was not the only person in Britain who felt that these regulations were operating grievously. It is not an exaggeration to say that a majority of this House felt that, but they certainly did not feel it so keenly as the unemployed men who were being put under the regulations. This man joined with his fellows to make public protest against the regulations. He went to Glasgow on the march from Edinburgh. I will read what the man himself has described as his experiences:
"On my return from the Scottish un employed march to Glasgow, I, in common with other Territorials were sent to Aldershot for a training course. In my own case the training in particular was that of an Army cook. In this connection it should be stated that only those who satisfy the requirements of the commanding Officer are sent to such a course, indicating that at that point the man had a good character in the Territorial Force. My training having concluded satisfactorily, I re turned to Edinburgh, and on presenting myself to resume Territorial obligations I was ordered to appear before the commanding Officer. For this purpose the regimental sergeant-major and the permanent sergeant instructor become my escort, I being marched between them before the ccmmanding Officer. On order, I removed my cap. The commanding Officer proceeded to state that serious allegations had been made against me, the allegations being that I had participated in the Scottish hunger march. He then quoted sections of the King's Regulations. Naturally, having no desire to contradict such allegations, I admitted my participation. I was then questioned regarding my future line of conduct in connection with such activities. Previous to my reply on this point the commanding Officer indicated that my reply, if in support of such activities, would lead to discharge and loss of bounty and Jubilee allowances. Nevertheless, I took the opportunity to state that while serving as a Territorial my political views had undergone a complete change. That explained my antagonism to the means test, and my desire and intention to do everything possible to end it. The commanding Officer, on hearing my reply, immediately ordered my discharge. It may be possible for the War Office to draw fine distinctions between what is a court-martial and what is not, but spades are spades and, in my opinion, they are frequently something worse. My discharge was an act of political victimisation and no questions other than those dealing with my political outlook were put to me by the commanding Officer. I, therefore, challenge the War Office to produce the reasons other than political for my discharge. Had I remained politically backward and without
1096
realisation of the need to struggle for the ending of poverty imposed on the working classes, I would still have been Gunner W. Walker of the 78th Lowland Field Brigade. I served four years with the Royal Scots Territorials and terminated my service satisfactorily. Subsequently I served for over two years with the 78th Lowland Field Brigade and during the six years' service I never once was reprimanded.?
That is the man's statement of the case, and to me it is apparently a straightforward, honest statement. The right hon. Gentleman tells me, in reply to questions, that the man was not court-martialled. The man himself describes what took place and I suppose, in the strictly technical sense, it was not a court-martial. He was discharged by his commanding Officer. I have here the King's Regulations governing Territorials, and the appropriate section that deals with the dismissal of men by the commanding Officer—"Conduct unsatisfactory"—applies to men who conduct themselves in such a way as to render their retention in the Territorial Army undesirable, and who are discharged under the provisions of Section 9 (d). In the Territorial and Reserve Forces Act, 1907, I find that any man of the Territorial Forces may be discharged by his commanding Officer for disobedience to orders by him while doing any military duty, or for neglect of duty, or for misconduct by him as a man of the Territorial Force, or for other sufficient cause, the extent and sufficiency of such cause to be judged by the commanding Officer.
That is a sweeping and wide enough section. A man under it could be discharged for doing anything. It is pro vided that any man so discharged shall be entitled to appeal to the Army Council, who may give such directions in any such case as they may think just and proper. The right hon. Gentleman, in reply to me, tells me that this man has no appeal. There is no appeal at all. I do not know any other section of the Territorial Forces Act dealing with the discharge of a man by his commanding Officer except that, and the man's statement says that he was discharged by his commanding Officer. The right hon. Gentleman tells me that he was not court-martialled. When I challenge him further on the matter, the right hon. Gentleman tells me that is not the section of the Territorial Regulations under which the man is discharged. He tells me that it is Regulation 199 (6A), dealing with "services no

1097
longer required," but when I turn to that I find that a commanding Officer is not entitled to dismiss a man under that particular regulation, that dismissal under the regulation can only be carried out by the brigade commander. This man never appeared before the brigade commander. So that under whichever regulation the right hon. Gentleman cares to take it, this man has been unjustly treated, and I do not believe the House will stand for the unjust treatment of even the most in significant citizen in the State. If the case has been made out, as I believe it is, that this man has been unjustly treated, I do not believe the House will stand for it.
The right hon. Gentleman said to me, and I thank him for it, that as an act of grace he is prepared to allow this man to make representations. I hope that if the right hon. Gentleman will not be persuaded by me and by the House to do the fuller measure of justice, that the man will be given this opportunity of making representations, and I would like the right hon. Gentleman to tell me to whom such representations would have to be made, what rights the man would have to support his representations, to whom the representations would be made, where they would be made, and what assistance the man would be permitted to have in the statement of his case. Personally I should like those representations to be made in such a manner that the man can be personally present, and that I or some one else can be alongside him and hear the whole procedure, to see exactly what takes place. But while I ask for that I ask for the bigger thing. I ask that the right hon. Gentleman should just tell us here that somebody has blundered, that a distinct breach of the King's Regulations has been committed—onlyagainst a private soldier, admittedly, but if Ring's Regulations mean anything they should apply equally to field marshal or to private; and if King's Regulations have been broken against this man, then his right is to be reinstated in the place from which he was discharged. That is what I am asking as the larger claim.
The second thing I am asking is that, failing that, if the right hon. Gentleman feels that this man has done something that called for some examination and investigation or discipline, that the man
1098
should have his appeal as a right and not as an act of grace. These are the three things I am putting to the right hon. Gentleman. I have stated the man's case. Up to now the right hon. Gentle man has not told me why this man has been dismissed. He denies that it was for the reason that the man states, and that I have stated on the Floor of the House, and I ask him to tell us what are the reasons. Secondly, I ask him to tell me what representations he intends the man should have, to whom, in what circumstances, and so on. Thirdly, I ask him to do the biggest thing of all, to reinstate the man in the Territorial Force. Fourthly, I ask him, if none of these other things are conceded, that the man should have the appeal as a right, as laid down in King's Regulations relating to the Territorial Army.
11.19 p.m.
The FINANCIAL SECRETARY to the WAR OFFICE (Mr. Douglas Hacking): The hon. Member who introduced this matter to-night started by saying it was a relatively small matter. I agree entirely with him when he added that the House would not stand for any unjust treatment, however humble the individual may be in the Army or in civil life. Having said that, I hope that I shall convince the hon. Member and the House that no injustice has been perpetrated in this instance. I hope that I shall be able to show the hon. Member that his assertion that injustice has been meted out to Gunner Walker is unfounded.
What is the history of this case? The hon. Member has stated it once more. He has included in his speech certain of the questions which he has asked me during the last few days across the Floor of the House. His first question suggested that this man had been court-martialled and discharged for taking part in a hunger march. I replied that that was untrue. Thereupon the hon. Member the next day, or the day after, said, in the form of a question, what he has said to-night. He altered his story somewhat. He changed his ground to some degree, and indicated that Walker was asked by his Officer if he would give up his association with unemployed workers, and that on refusing he was told that he would be dismissed from the regiment. That is the story which

1099
the hon. Member has repeated to-night. He asks me whether or not that is true. If I say that it is also untrue, no doubt in, a few days time he will ask me another question.
Mr. MAXTON: No, I will not. I want the right hon. Gentleman to tell me what is true.
Mr. HACKING: I have already told the hon. Member that I am not prepared to disclose the reasons for this man's dismissal. I hope to be able to convince the hon. Member and also the House not only that it is not in the public interest for the reasons for dismissal to be disclosed, but that it is not in the interests of the man himself. Let me repeat: If I tell him again now that his later statement is untrue, by a process of elimination eventually he will find out the actual reason. I could not tell him now. The hon. Member said that this man was discharged by his commanding Officer. He said that he was discharged under the Territorial and Reserve Forces Act, 1907, Section 9 (4). I have already told him, in answer to a question, that the man was not dismissed under that Section, and that he was not discharged by his commanding Officer at all; he was dismissed under a paragraph of the Territorial Army Regulations. If his discharge was under Section 9 (4) of the Territorial and Reserve Forces Act, 1907, it was a wrongful discharge, for, under that Section, discharges are carried out only in connection with a definite of fence. That is made clear—I have not the time to quote it to-night, but if the hon. Member will do me the justice to look at paragraph 201, he will see that it is perfectly clear.
Mr. MAXTON: That is the first time you have quoted that one
Mr. HACKING: I have not had an opportunity of doing so. The hon. Member will see quite definitely that discharges under Section 9 (4) are only carried out in connection with a definite of fence. If a soldier is just a general nuisance, if his general behaviour is un satisfactory, he cannot be discharged under Section 9 (4) of the Territorial Forces Act, 1907.
The facts are as I have already told the hon. Member. This man was discharged under paragraph 199 (6, a) of
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the Territorial Army Regulations, as his services were no longer required. He accepted that condition on attestation. When he signed his attestation form he said he would serve for a certain number of years, or so long as his services were required. There is nothing irregular or unusual in his being dismissed in these circumstances. I have been informed that the commanding Officer did not even interview this man. I am informed that the adjutant of the 78th Field Brigade, Royal Artillery, interviewed Walker and asked him whether he had any statement to make. He replied that he had no complaint, and apparently he was satisfied.
The hon. Member asks whether this discharge means that the man must go through the rest of his life with the stigma attached to him that he has been discharged from the Territorial Force for reasons so grave and disgraceful that they cannot be mentioned publicly. My reply to that is perfectly simple. It does not of necessity mean anything of the kind. The hon. Member must not imagine that a man must be a criminal, or that he must have done some particularly disgraceful act, before being discharged under this paragraph of the Territorial Army Regulations. We always refuse to give full reasons for the discharge in similar cases, because, as I have told the hon., Member, it is not in the public interest so to do; but it is a very important argument in favour of non disclosure that it is not in the interests of the men themselves- that publicity should be given to the reasons for which they are discharged. If full information were given in one instance, it would be impossible to resist giving full information in every case. There might be cases where, if full disclosures were made, soldiers might have much less chance in civil life after their discharge from the Army. I maintain that if any injustice has been done in this case, the injustice, in the main, has not been done by the military authorities, but by the hon. Member in giving this case publicity.
Mr. MAXTON: Nonsense.
Mr. HACKING: Had he not done so, this man would have gone quietly out of the Army; no one would have been any wiser, no one would have had any thought that his of fence was a serious one. It is

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merely due to the hon. Member having brought the case before the House of Commons and the publicity that has been given to it, enabling the public to make it a much more serious of fence than it might have been. Walker has no right of appeal; never the less, in order that he should have no sense of grievance, the War Office authorities said that he might make representations regarding his discharge and that they would receive full consideration. The hon. Gentleman wants to know to whom he should make representations. He can either make them to his late commanding Officer or direct to the War Office, and finally, if necessary, they would go to the Army Council, who would decide this matter ask the hon. Member to accept my assurance that it is not in the public interest or in the interest of the individual concerned to give publicity of the character desired by the hon. Member. The Territorial Army regulations give discretion to the competent Officer, who in this case is the brigade commander, to discharge any soldier from the Territorial Army whose services are no longer
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required, and on this occasion he has exercised his lawful discretion with the fullest sense of his responsibility for the future well being of the Army as a whole.
The military authorities take no account of politics as such. A recruit is never asked his political faith on attestation. Apart from that it is not the practice to take any steps on account of a man's political views, but if a man shows by his actions that he is at variance with the accepted standards of thought, behaviour and general tone of the Army, he becomes an element of potential discord and consequently his services are better dispensed with. This man has not been dismissed for any particular reason. It was not thought in the public interest to be a desirable thing for him to re main in the Army. It was quite legitimate and lawful to dispense with his services, and my right hon. Friend the Secretary of State regrets that he can take no further action in the matter.
Adjourned accordingly at Twenty-nine minutes after Eleven o'Clock.