HC Deb 21 April 1936 vol 311 cc59-73

Motion made and Question proposed,

"That— (a)as from the twenty-second day of April, nineteen hundred and thirty-six, in lieu of the duties of customs theretofore chargeable on tea imported into the United Kingdom, there shall be chargeable duties of customs at the following increased rates, that is to say:—

Tea not being an Empire product the 1b. 6d.
Tea being an Empire product the 1b. 4d

(b)the enactments relating to the allowances of drawback on blended tea prepared from teas on which customs duties have been paid shall extend to blended tea prepared from teas in respect of which either of the duties chargeable under this Resolution has been paid;

(c)in this Resolution the expression "Empire product" has the same meaning as in Sub-section (1) of Section eight of the Finance Act, 1919, as amended by any subsequent enactment.

And it is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

5.2 p.m.


To-day, as on several previous occasions, I rise after the Chancellor of the Exchequer to congratulate him on the manner in which he presents his Budgets. He has a, great gift of expression, and no one can make a clearer statement, when he wants to. In the earlier part of his statement the right hon. Gentleman gave an admirably concise and clear exposition, but in the later stages his clarity was somewhat less noticeable; when he came to deal with the question of providing for the Government's armaments policy he became extremely vague indeed. The right hon. Gentleman has also great power of selecting words and topics, and I should like to congratulate him on the way in which he made his statement of the achievements of the Government, and on the wise, from his point of view, selection of the points on which he thought emphasis was desirable. One would have gathered from his statement that the foreign situation was something with which the Government had nothing at all to do, and that it was an act of God or a blizzard; that the Government had suddenly walked into a situation which, in their judgment, compelled enormous expenditure in armaments.

As a matter of fact, the dangers which the Government have to face are the creation, to a very large extent of their own policy. The right hon. Gentleman cannot ride off by saying that we have to pay our insurance premium because we feel the flames heating in our faces. He should have thought of that when he did not take earlier action to stop the fire. The inflammable material which is lying around has been largely left there by the present Government. We shall have something to say in the course of the Budget discussions about the Government's armaments programme and the reasons for it, and about the somewhat surprising fallacies put up by the right hon. Gentleman. One point I would emphasise right-away is the extraordinary conception that there has been no expenditure on armaments generally until this danger suddenly arose. There has been increasing expenditure on armaments by this Government right through the four years, during which 28 per cent. additional cost was put upon the fighting Services. Now we are to have another enormous addition, which is to be met by 2d. on tea and 3d. increase upon the Income Tax. We shall have occasion to put before the House again our conclusions with regard to the Tea Duty, but we shall never hope to emulate the eloquence of the right hon. Gentleman the Member for Epping (Mr. Churchill) in his denunciation of that duty when it was taken off.

The right hon. Gentleman made some remarkable statements with regard to the allocation of expenditure on defence between the present generation and posterity. One gathered that he was contemplating some kind of loan in the future for the defence Services. It would be more straightforward and honest if the Government would tell the country exactly on what they are going to spend the money, and how they propose to raise it. Is this Budget to be like the Estimates, fundamentally dishonest because they deal only with certain items and leave the rest wrapped in a mystery which is not revealed? The right hon. Gentleman did not give a fair statement of the position of the country, any more than his review of the past was a fair statement, because there were a good many items which he did not mention. He did not mention that a debt, the American Debt, has been piling up all this time. We never hear it mentioned from the other side now, but it always had to be mentioned when the Labour Chancellor of the Exchequer was in office and when he had the Sinking Fund to meet. Now that we are in the new financial morality, the right hon. Gentleman is able to do nothing about it.

We shall have an opportunity of examining more closely the claims of the right hon. Gentleman. I shall not depart from the usual custom of making only a few preliminary remarks at this stage, but we cannot accept the position in which the right hon. Gentleman says that trade is on the up-grade and everything is going well, but the whole of the benefit is to be thrown away upon armaments. We cannot accept that the right way to meet the situation is to put 2d. on tea.

This Budget will cause no enthusiasm anywhere. It does not mark the success of the Government, but their failure. It marks their complete failure to deal with foreign affairs, and it marks also that the Government are resolved to enter upon a course of expansion in armaments which, so far from rising to a peak a few years hence, is more likely to land us into the abyss a few years hence, following the course which, in the years prior to the Great War, did not lead to a peak and then to a cessation on armaments, but went on to the crescendo which ended in the final catastrophe. That is where the policy of this Government is leading us. I intend to say no more this afternoon. My colleagues will, no doubt, in the coming fortnight examine the Chancellor's proposals. The one thing about this Budget, apart from small and comparatively unimportant items, is that it is a Budget which will ultimately lead us to war.

5.9 p.m.


The Chancellor of the Exchequer has opened his Budget this afternoon with a characteristically clear, compact and revealing statement. The superlatives which hon. and right hon. Gentlemen have rightly applied to the successive Budget statements of the right hon. Gentleman during the last five years have grown almost stale by repetition; it therefore remains to me to offer only an unadorned, but no less sincere, tribute of admiration to the Chancellor of the Exchequer for his statement this afternoon. In the past, the tributes of respect to the Chancellor of the Exchequer have been suffused with the warmer glow of gratitude for favours received and of expectation of favours to come, but no such emotions can stir us to-day. The most enthusiastic supporters of the Government can say only that the Budget might have been worse. None can deny that the financial outlook to-day is graver than it has been at any time since the War, except in 1931.

The proposals which the right hon. Gentleman has laid before us are indeed formidable. The expenditure is swelling to £797,000,000 on the one hand, and there is an addition to the Tea Duty which must, at the present level of price of tea, impose a considerable hardship upon the consuming masses of the people. The present level in the price of tea makes me doubtful whether the Chancellor will realise the estimate which he has made of the yield of this addition to the duty. On the other hand, there is no Sinking Fund. The Chancellor of the Exchequer tells us that these are not normal times. He told us two years ago that we ought to have a Sinking Fund, and he warned the House about it, although he thought he had better leave it until times got a little better and recovery had proceeded a little further. Last year he reminded us of the warning of the year before, but he still thought he should allow recovery to proceed a little further until times were a little better. Now he tells us that the times are still not normal. When are they likely to become normal? So far as we can see from the Chancellor's statement to-day, we may well ask when are the times likely to become normal in the sense that the conditions will be favourable for making substantial payments to a Sinking Fund?

The Chancellor said that we are already shouldering our liabilities at a cost of very serious sacrifices. We are not repaying our debts, and that is a very important liability and one which it is the duty of this House to look to. When are we to begin to do so The Chancellor of the Exchequer has said that expenditure on armaments will be rising swiftly to a peak for five years. Does that mean that for five years we are to have, instead of redemption of debt, additions to debt, year by year after the present year? The Chancellor of the Exchequer described his Budget of three years ago as a Budget of great expectations, but this is a Budget of shattered hopes. I do not wish to be controversial. There will be adequate opportunities this week and in succeeding weeks, for discussing these important issues of policy. I would like to offer a word of thanks to the Chancellor for what seems an admirable arrangement in regard to the, I do not say illegitimate, but unauthorised educational trusts, whereby the money derived from closing this means of escape from Income Tax will be used in relief of the small Income Tax payer who has family responsibilities. I would end by thanking the Chancellor of the Exchequer for a diagnosis of the financial situation in which the qualities of courage, candour and dexterity were admirably blended.

5.15 p.m.


On these occasions I have usually been the briefest, of those who have dared to speak on this day. I have been brief because the Leaders of the two Oppositions have usually spoken at somewhat greater length than has been the case to-day, and I have always been anxious to allow the Chancellor to withdraw from the House at the earliest possible moment for a much needed cup of tea. To-day the Leaders of the Opposition have been excessively brief, and I too have the feeling that this is a kind of Budget about which those who speak to-morrow will have a better opportunity of saying things than those who venture in to-day; and I also feel that there is not the same reason for releasing the Chancellor for his cup of tea, for I should imagine, after the announcement he has made to-day, that he will be ashamed ever to look a cup of tea in the face again.

That is the one personal shock that comes to me from the present Budget. I was just smiling widely—though I thought the Chancellor was a bit cruel in the way he presented it to the Committee—at the extra 3d. on the Income Tax, and the gloomy faces of hon. and right hon. Gentlemen opposite; but I had not got my smile properly expanded when the extra 2d. on tea knocked it off my face at one fell blow, because it struck me in my most tender part. It is a terrible thing, when a man has only one or two vices, to find that they are the most heavily taxed vices in the whole community, although the least noxious of all. I think the outstanding thing about the Chancellor's statement to-day is that it reveals what is to me an altogether unpleasant healthiness about the capitalist system. My political theorisings have led me to the conclusion that this system cannot continue very much longer without complete collapse, but I have to admit that during this last year, and on the Chancellor's prophecies for the coming year, it is going fairly strong so far as the internal aspect of its affairs is concerned. Unfortunately for capitalism, however, when it is going reasonably well on the internal side, externally it goes all up in the air, and any advantages that might have been gained for its relief from the prosperity during 1935–36 are going to be dissipated through external considerations during 1936–37.

I regret very much that, in a Budget statement where provision is being made for very large extensions in our armament expenditure, there has not been made some slight provision for improvement in some of the social services. If capitalism is, as the right hon. Gentleman indicated, a strong, healthy, economic system, surely, when we are making such tremendous provision for the defence of the country, we should make some slightly better provision for the defence of the individual homes of the country. On the statement which the Chancellor made of the financial position of the country, wages ought to have been jumping up all over the place, but will those who watch wages movements tell me of any substantial increases that have been gained by any section of industry in the country? The one substantial section of the working class who have had an increase in wages during this very prosperous year are the miners of this country, who were on a sweated wage, and the increases they have got are of such a trivial amount that they are still on a sweated wage, with the sweating, perhaps, a little less intense than it was. In practically no other industry—


The engineers have received an increase of 2s. a week during the last two months.


The hon. Member would not think much of that amount as a tip to a waiter who served him with a decent meal. I was saying that, on these indications, one would have expected substantial increases of wages all over the country. I cited the miners as having had a miserable increase, and, before I could complete my survey, the hon. Gentleman came in to applaud a miserable 2s. increase to the engineers.


I did not applaud at all; I was only endeavouring to answer a question that the hon. Member put. I think, however, that he is entirely wrong, because not only have the men who were in employment had this increase, but also those who were not in employment before but are now.


Undoubtedly that is something, and I always try to play fair, but I am saying that, if the industries of this country are in such a good position as is shown by the Chancellor's figures, if trade is so buoyant and on the up-grade as to allow him to anticipate substantial increases next year, surely we might have expected that something would be done to give the masses of the people, who are outwith Income Tax and Super-tax, a substantial all-round rise in their standard of life. I regret very much that the Chancellor has not seen fit to make any such provision. Imagine the old age pensioner being asked to contribute, out of her 10s., an extra 2d. on tea to defend the country, and, incidentally, to defend the kind of home she can maintain on 10s. a week. Twopence on tea is a bit heavy for the old person with 10s. a week as her total income, and I regret very much that something could not have been done in that direction. It seems to me that the orphans, widows, and all the others who have served the community, are on a miserably low level, and it would be a shocking thing if, in the attempt to provide defence services which in the past have never been a defence for the mass of the people, a large proportion of the homes of the nation have to continue to exist on this miserable pittance.

I have been led to make more in the way of a speech than I had intended to make. The Chancellor has congratulated himself, and, judged by his standard, he was entitled to congratulate himself, on the different position financially as between 1932 and 1936, although I have the feeling, and I said so at the time, that the economic crisis of 1931 was largely an imaginary crisis created by the right hon. Gentleman and his friends when they sat on these benches. I admit that they had carried on their propaganda about the crisis, bankruptcy, the profligate Government and so on, to such an extent that they had almost come to believe it, and certainly had made interested parties in other parts of the world believe it too, but essentially it was an imaginary crisis. The right hon. Gentleman is to be congratulated on having dissipated the imaginary crisis that he himself created when he was sitting in Opposition, and to that extent he deserves the congratulations. He has done his job as Chancellor of the Exchequer of the National Government in a capitalist system of society. I understand from the newspapers that greater distinctions are in very early store for him. I am told that drastic changes are going to be made in the personnel of the National Government, and the Chancellor will receive the promotion which he has so rightly earned, while other people will go into the rest and quiet which they also have so thoroughly earned. Whether that may be so or not, the Chancellor may congratulate himself to-day, if this is to be his last Budget, on having brought it forward and manipulated the country's finances in a most dextrous fashion.

5.27 p.m.

Lieut.-Colonel Sir WILLIAM ALLEN

As a back-bencher I would like to congratulate the Chancellor of the Exchequer on the clearness of his statement, which I think was understood by every Member of the House. I am sure the country will receive with great disappointment the announcement of an additional 3d. on the Income Tax. It may seem strange, to those who have the opportunity of taking advantage of the additional allowances for children and married people, if, on the remainder of their income, they have to pay 3d. extra in the £. It looks very much like taking money out of one pocket and putting it into another. Again, I can never understand why successive Governments from time to time take the capital of the country and use it for ordinary expenditure. The Chancellor stated to-day that lie viewed with pleasure, as I suppose we all do, the increase in the capital value of the country which is shown by the amount of Income Tax that it produces, and also by the increase in Estate Duties. Surely these two items are taken largely out of the capital of the country, but nevertheless the Government from time to time have not hesitated to use this money for ordinary expenditure. I trust that some future Chancellor will think it right to use the capital of the country, as represented by Income Tax, Surtax and Estate Duties, for the purpose of redeeming the debt of the country. With regard to the Tea Duty, probably many people will be disappointed at the increase of 2d., but somehow or other I always think that the Tea Duty, particularly when the amount is so small, will be so manipulated that we shall have to pay very little extra. The Sinking Fund is one of those things which every Chancellor ought to set himself to increase by some small amount every year.

There is no surplus, unfortunately, and we must provide for armaments. We have been wrong in our policy with regard to reduction in the hope that other nations would follow our example, but that has not been done and the Chancellor is in that difficulty. In very extraordinary and very difficult circumstances lie has done the best he could and, while he is to be congratulated, I think we must also congratulate the people of the country most heartily, for during the last five years they have been raised from a state of financial poverty and morass almost inconceivable to a position which compares favourably with any other country in the world, and at the end of the year we may hope to find ourselves in a better position even than now. I should like to see the poor man who smokes a pipe of tobacco getting it a little cheaper, but in the circumstances I do not see how it was possible for the Chancellor to do more than he has done.

5.33 p.m.


It is usual for the House to rise early on Budget Day. I have never agreed with that policy. It is a glorious opportunity for back-bench Members to get their say in, for during the next few days we shall have all the so-called big men pegging out their claims and taking the best part of the time, with the back-benchers looking out for any slight opportunity that may come. We have had a very interesting statement and, looking at it as a capitalist Budget, I do not think we could have had a better one. The right hon. Gentleman has closed several gaps by which evasion was taking place and I give him credit for that, and also for giving the increased children's allowance. I am not a married man, but the nation is dependent on its children, and those with families are entitled to as much relief as can be given. I also welcome the increased married men's allowance. I recognise that married people have a greater burden to bear and all possible relief should be given them. We recognise that in our trade unions and give similar benefits in respect of wives and children. I do not, however, agree with the increased Tea Duty. An article that is largely used in the ordinary working man's household ought not to be taxed at a time like this.

With regard to the Income Tax, I should not cavil at an increase of 6d., because that would provide money for some of the points that I wish to put forward. I agree with the hon. Member for Bridgeton (Mr. Maxton) that something might have been done for some of the social services. I think the time has come to give a higher rate of pension to our elderly people. I do not think that 10s. is enough and I am looking forward to the time when something more will be given. I also advocate a lowering of the pensionable age. A third point, which I think would be welcomed by most Members, is in reference to the anomalous position where the insured contributor's wife is younger than her husband and they get only one 10s. until she attains the age of 65. The point has been raised several times and it was answered by the Financial Secretary to the Treasury only about a fortnight ago, when he told the House that, it would involve in the first year an extra £6,500,000 and, following on that, £8,000,000 per annum. I have a number of letters from people asking that this should be dealt with. One typical letter starts: Some time ago during a speech you made in the House of Commons you mentioned that upon a moan attaining pensionable age his wife should be included though she had not reached the age of 65. That just fits my case and, no doubt, thousands besides. I am 68, have been married 30 years and brought up a family as well as I could afford and have been working nearer 60 than 50 years and am beginning to feel that I could do with a little rest. What can such as we do, give up work and apply for public assistance? He goes on to say that he will have to keep on working until his wife attains 65. I have another letter on similar lines: Some 40 years ago, when I was 31 years of age, I married my wife, who was then 20 years of age—11 years my junior. I am now 71 years of age and my wife is short of 60. I have received a pension since I was 65 and my wife has still over five years to go. I am getting really too old to do much work and I should be glad if an extra 10s. could be given so that I might have a chance to give up. These are typical of thousands of cases. We are a prosperous nation and have a Budget of £800,000,000. We speak of the defence of our shores, but it would be a good kind of defence to look after our people more adequately, and it could be done.

In almost the first sentence of his speech the right hon. Gentleman said that in previous Budgets we had been restoring the cuts and he felt that we had arrived at a time when we might look for some relief of taxation. Would anyone say that all the cuts had been restored in full? I find in the financial statement that the amount given for transitional payment and unemployment benefit has been reduced by some £5,000,000. That reduction has taken place because of the means test. If all the cuts had been restored, as they ought to be, the means test would have been taken away and the unemployed would have got greater benefits than they are getting now. It is not right at a time like this to ignore the social services, but we are obsessed with the idea of defence and all the money must go for that purpose. I admit that certain things will have to be done in that direction but, while doing them, I claim that something should be done along the lines that I have mentioned. I have said many times that a person who pays Income Tax is much better off than one who does not. He is always sure of a decent standard of life before he is called upon to pay tax at all. I should never cavil at an increase in the Income Tax so long as there are people requiring more help.

Another point that I want to deal with concerns what might be termed the safety services. There is something seriously wrong with our mines. It is said that the safety point is not as it ought to be. The Mines Department costs £196,744 and there are 112 inspectors, who take out of that sum just over £68,000. Judging from what is happening in the mines, there is something lacking in the examination, and the question to my mind is whether we have enough inspectors. More money ought to be provided for this purpose. Safety measures in the mines must be continued, and the State must provide money for increasing the inspectorate. It is difficult to raise these points at an appropriate time in the House of Commons, but I think that the most appropriate time is when the financial statement is before the House, because this would mean the provision of extra money. I urge the Chancellor of the Exchequer to attend to this matter. I maintain that it would be a saving to the nation to provide additional inspectors to see to the safety of the mine workers. There would be less loss of life. I am satisfied that more inspectors are required, and that the present staff is overworked. The employers know that also; they know that when an inspector has paid a visit to their mine it will probably be months before he pays another visit.

The DEPUTY-CHAIRMAN (Captain Bourne)

The hon. Member has said that this question should be raised at the appropriate time. I think that the appropriate time would be on the occasion of the Estimates of the Mines Department.


I have followed this question closely because I did not want to get at cross purposes with the Chair. I maintain that this matter should be brought forward when the financial statement of the country is before us. However, Captain Bourne, you are always fair to the Committee, and I have had my say and will not pursue the matter further. I urge upon the Chancellor of the Exchequer and upon the Government that all the attention ought not to be directed to the question of the rich people. There are a vast volume of people below the borderline of a decent standard of life, and if the Government pride themselves upon what they have done during the last three or four years, they ought to recognise the need for doing something along the lines I have indicated. They should increase the old age pension, lower the pensionable age, remove the anomaly with regard to the pensioner's wife who is younger than her husband, and remove the means test. If this capitalist Government can do that, they are likely to last a little longer than otherwise will be the case. Unless they do it, the collapse of the present system is not very far off.

5.49 p.m.


I sincerely add my congratulations to those already given to my right hon. Friend the Chancellor of the Exchequer for his excellent Budget speech. I have merely risen to put one point of view. I am bound to admit that the end of his speech caused me considerable disappointment. My hopes had led me to expect some remission of taxation. A month or two ago the Chancellor of the Exchequer and his righthon. Friend the President of the Board of Trade deliberately threw away some tens of thousands of pounds by the remission of duty upon imported potatoes. With that example in front of us, we agriculturists were led to believe that we should have a Budget possibly containing some remission of taxation. I would suggest to the Chancellor of the Exchequer a source of income. There is coming into this country thousands of hundredweights of bacon, meat, butter and eggs, which are being dealt with by his right hon. Friend the Minister of Agriculture by quantitative regulation of imports, which raises the price of the commodity to the exporter. I respectfully suggest to the Chancellor that a better means would be for the imports of these commodities to be dealt with by the straightforward and honest method of tariffs. It would be better for British agriculture, and it would give him an income instead of raising the price to the foreign exporter. I have a greater interest in my own country than in the country that exports its commodities to this country. The Chancellor of the Exchequer should take an opportunity of increasing the revenue of this country and at the same time helping British agriculture by putting a duty upon many of these imported agricultural commodities.

5.51 p.m.


I wish to protest against any attempt to have this Budget presented as a defence Budget or against the central part of it being concerned with defence policy. The Chancellor of the Exchequer said towards the con- clusion of his speech that defence covered all people and that all would have to contribute towards defence, and I wish to take exception to that view. The people of this country want peace and are prepared to make all the sacrifices necessary to ensure the maintenance of peace. The people this country also want defence of a particular character. When we talk of defence there must always be a qualification. The mothers of this country want defence against the scourge of maternal mortality, and the allowances in this Budget for building big guns and manufacturing bombs will not bring us healthy mothers and happy children, which is a matter with which every Member of this Committee should be concerned. The defence for which they call is defence against the terrible scourge of maternal mortality with regard to the stopping of which nothing has been done in the past few years. I do not know whether Members of this Committee have read the Press reports of what Sir John Orr had to say on starvation and malnutrition in this country. There are millions, men, women and especially children, crying out for defence against malnutrition. Is that provided for in this Budget? Is the amount set aside for social services going to be sufficient to defend these children? The Chancellor of the Exchequer knows that it is not.

An hon. Member here has referred to the means test. What is it against which the unemployed want defence? Is it against Germany or any of the other armed nations of Europe? The unemployed want defence against the means test. It is that which is destroying their homes and their If we are to have defence, let it be real defence. Reference has been made to old age pensions of 10s. at 65. These old people do not know whether they are living or whether they are dead on 10s. a week. There is no allowance in the Budget for, say, £1 per week at 60. Old people who have finished work cannot look forward to a few years of quiet and enjoyment on 10s. a week. Is there no defence against that sort of thing? An ex-Civil Lord of the Admiralty in one of the debates said that there was more loot in London than there is in Addis Ababa. This Budget is a Budget for the defence of loot, and not for the defence of the people of this country. Is not the duty on tea, tobacco and beer in defence of loot? Why should we defend that sort of thing? I would ask the Chancellor of the Exchequer how, if there were no money provided for Defence Forces, the Army, the Navy and the Air Force, it could affect those engaged in work? I can see how it would affect the great landowners and financiers if there was not the bludgeon and the bayonet to protect them. All this talk of defence is defence of loot. All right, let the looters pay.

I ask the Chancellor of the Exchequer to consider the question of defence from the point of view of protecting the teeming masses from poverty and hunger, and from the terrible maladies and diseases which follow, and which are rife in every industrial district in the country. Hon. Members may smile and think that it is all very funny. Let them go round the industrial and derelict areas. All the Chancellor can say is, "We will encourage small businesses" instead of providing for great work schemes of social value in order to provide employment. Millions of money are to be provided for manufacturing big guns and erecting factories for the manufacture of bombs and poison gas, and yet there are people all around suffering unnecessarily and undeservedly, and hon. Members opposite know it. If they do not know it, I am prepared to take them out to see it. I want defence of the people. Yes, hon. Members may smile, but, is it not a tragic thing to have people in derelict areas starving when you have millions being handed to the Chancellor of the Exchequer which ought to be given to them? There is nothing in the Budget to alleviate their suffering. If there is to be any question of defence, it should be defence of the people against hunger and want and the diseases which follow this condition. When it comes to a question of the supply of armaments and of armament factories to build guns and all the rest of it, it is the defence of loot —wealth stolen from the workers of this country and from the Colonial slaves. It is that with which you are concerned, and not the defences of the people of this country.

Question put, and agreed to.