Commons Sitting of 16 June 1936

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

PRIVATE BUSINESS.
Private Bills [Lords] (Standing Orders not previously inquired into complied with),
Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That in the case of the following Bills, originating in the Lords, and referred on the First Reading thereof, the Standing Orders not previously inquired into, which are applicable thereto, have been complied with, namely,
South Metropolitan Gas Bill [Lords].
Brighton Corporation Bill [Lords].
Ilfracombe Urban District Council Bill [Lords].
Rochester Corporation Bill [Lords].
North West Kent Joint Water Bill [Lords].
Bills to be read a Second time.
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,
Sea Fisheries Provisional Order (No. 1) Bill.
Sea Fisheries Provisional Order (No. 2) Bill.
Ministry of Health Provisional Order (North Herts Joint Hospital District) Bill.
Land Drainage Provisional Order (No. 1) Bill.
Land Drainage Provisional Order (No. 2) Bill.
Bills to be read a Second time To-morrow.
Liverpool Corporation Bill [Lords] (by Order),
Second Reading deferred till Monday next.

ORAL ANSWERS TO QUESTIONS.

  ASSURANCE COMPANIES (WINDING-UP) ACT, 1935.
  Sir NICHOLAS GRATTAN-DOYLEasked the President of the Board of Trade the number of cases in which he has taken action under the provisions of the Assurance Companies (Winding-Up) Act, 1935?
  The PRESIDENT of the BOARD of TRADE (Mr. Runciman): Inquiries under the provisions of the Assurance Companies (Winding-Up) Acts, 1933 and 1935 have been made in certain cases, but it has so far not been found necessary in any case either to appoint an inspector or to present a petition for the winding-up of a company.

  COMPANIES ACT, 1929.
  Sir N. GRATTAN-DOYLEasked the President of the Board of Trade whether he will, when amending the Companies Act, 1929, introduce a Clause to prohibit the registration of holdings of securities in the names of individual or corporate nominees unless the names of the beneficial owners are also stated on the instrument of transfer and on the stock or share register, in view of the dangers, disclosed by the evidence before the Budget Tribunal, inherent in the practice of effecting insurances in the names of nominees?
  Mr. RUNCIMAN: My hon. Friend's suggestion has been noted for consideration when the amendment of the Companies Act, 1929, is being examined.

  MERCANTILE MARINE.

    TRAMP SHIPPING SUBSIDY.
    Mr. BENJAMIN SMITHasked the President of the Board of Trade whether he has now consulted the Tramp Shipping Administrative Committee as to the validity of lascar agreements on ships in respect of which subsidy has been claimed; and, if so, with what result?
    Mr. RUNCIMAN: I am not aware of any reason for consulting the committee on this subject, but I may remind the hon. Member that lascar agreements are

    779
    Indian Government agreements signed in India under the supervision of the Indian Government's representatives.
    Mr. SMITH: Has not the right hon. Gentleman given the House to understand that the Maritime Board's agreements are the agreements which have to be met before the collection of the subsidy; and is he not now saying that he is extending these agreements to lascar agreements made in India for which the Maritime Board have no responsibility at all?
    Mr. RUNCIMAN: Never at any time have I suggested that the Maritime Board have any responsibility. I have made quite clear on more than one occasion that these are Indian Government agreements.
    Mr. SMITH: Why did the right hon. Gentleman say that he accepts them as conforming to the Maritime Board's agreements? The condition of the subsidy is that maritime rates are paid to British subjects.
    Mr. RUNCIMAN: The hon. Member is mistaken in imagining that the Maritime Board agreements apply in these cases.
    Mr. SMITH: The point I want to get is this: Will the right hon. Gentleman see that maritime rates are enforced for all British seamen employed as a condition of receiving the subsidy?
    Mr. RUNCIMAN: Excepting for lascars, in this case as in all others with which I have dealt in answer to questions, the British Government agreements apply.
    Mr. SHINWELL: Is not that a complete evasion of the whole spirit of the regulations governing the shipping subsidy agreement?
    Mr. RUNCIMAN: Nothing of the kind. It is a repetition of what has been said many times before.

    GOVERNMENT DEPARTMENTS (CHARTERING).
    Mr. ADAMSONasked the President of the Board of Trade whether, in arranging charters of vessels for use by other Departments, commission is charged; if so, whether such commission is treated as a revenue of the Board of Trade; and whether commission is paid to others concerned in the charters?
    Mr. RUNCIMAN: The only vessels chartered by the Board of Trade for other Departments are for the Defence Departments and the India Office. For these charterings no commission is charged or paid, but the cost of the services rendered by the Board of Trade in connection with these services is recovered from the Departments concerned.

    RADIO BEACON, SHETLAND.
    Major NEVEN-SPENCEasked the President of the Board of Trade whether it is proposed to establish wireless direction-finding facilities for shipping in Shetland; and, if so, when?
    Mr. RUNCIMAN: I am informed by the Commissioners of Northern Lighthouses that they are considering the question of proposing in their estimates for 1937–38 provision for the establishment of a radio beacon in Shetland.

    RUSSIAN TIMBER (BRITISH SHIPS).
    Mr. LENNOX-BOYDasked the President of the Board of Trade what percentage of the timber imported into the United Kingdom from the Soviet Union in the year 1933 was carried in British ships?
    Mr. CARTLANDasked the President of the Board of Trade what percentage of the tonnage of the shipping chartered to bring timber from the Soviet Union to Great Britain during this season is British?
    Mr. SANDYSasked the President of the Board of Trade whether he will take steps to secure the introduction into the Anglo-Russian Trade Agreement of a clause to ensure that a definite percentage of the timber imported into Great Britain from the Soviet Union should in future be carried in British ships chartered in the United Kingdom?
    Mr. RUNCIMAN: There are no official statistics on this subject. Particulars collected by the Chamber of Shipping in respect of nearly 75 per cent. of the total imports of Russian timber to the United Kingdom in the first nine months of 1935 showed that 16 per cent. of those imports by weight were brought in British ships. On the available information the present position of British shipping in the timber trade between Russia and this country is not satisfactory, and the matter has recently been discussed with the Soviet

    781
    trade representative in this country with the object of seeing what steps can be taken to improve the position.
    Mr. CARTLAND: Will the right hon. Gentleman be in a position to make a statement shortly as a result of these discussions?
    Mr. RUNCIMAN: I am not sure how soon it will be possible to do that. The point is now under discussion between ourselves and the Russian representative.

    HEARTS OF OAK ASSURANCE COMPANY, LIMITED.
    Mr. SHORTasked the President of the Board of Trade whether the claims against the Hearts of Oak Assurance Company, Limited, which is in liquidation, have now been settled; and, if not, when will the liquidator be in a position to settle?
    Mr. RUNCIMAN: Practically all the claims against the company have now been dealt with, and I understand that the liquidator hopes to declare a dividend at an early date.

  TRADE AND COMMERCE.

    OTTAWA AGREEMENTS.
    Major DORMAN-SMITHasked the President of the Board of Trade what steps he has taken to invite the observations of the industries affected on the subject of the revisions of the Ottawa Agreements; the names of the organisations with which he has communicated on the subject; and the final date fixed for the receipt of their replies?
    Mr. RUNCIMAN: Preliminary discussions with a view to the revision of the Ottawa Agreement with Canada will begin shortly. The Association of British Chambers of Commerce, the Federation of British Industries, and the National Union of Manufacturers, as well as a number of bodies representing particular industries, have been invited to furnish their observations to the Board of Trade by 19th June. I shall, of course, be happy to consider observations submitted by any interested parties. The question of consultation in connection with the possible revision of the Ottawa Agreements with other parts of the Empire does not arise at present.
    Major DORMAN-SMITH: Will the right hon. Gentleman allow the agricultural interests to submit their observations?
    Mr. RUNCIMAN: Certainly. If they have any observations to make I shall be only too glad to listen to them.
    Mr. T. WILLIAMS: Will the right hon. Gentleman also listen to representations from organisations representing the consumers?
    Mr. RUNCIMAN: If the hon. Member will tell me to which organisations he refers I can give him an answer.
    Mr. PETHERICK: Will the right hon. Gentleman make a special point of consulting the National Farmers' Union?
    Mr. RUNCIMAN: If the National Farmers' Union have representations to make, I am sure they are vocal enough to make them.

    ARGENTINA.
    Sir EUGENE RAMSDENasked the President of the Board of Trade whether he is aware that, thanks to the provisions of the trade agreement made with Argentina in 1933, the value of the export of Bradford woollens and worsteds to that country increased by nearly 100 per cent. between 1932 and 1935; and whether, in negotiating for new agreement, he will keep in mind the desirability of securing a continuation of the same favourable conditions of sale and sterling payment for British exporters?
    Mr. RUNCIMAN: Yes, Sir; I will certainly keep this matter in mind.

    IRON AND STEEL TRADE.
    Mr. GRAHAM WHITEasked the President of the Board of Trade whether he can make a statement with regard to the progress of the reorganisation up to the present time of the iron and steel trade and the proposals to be carried out in the near future?
    Mr. RUNCIMAN: Information as to the progress of reorganisation of the iron and steel industry has been published in the various reports of the Import Duties Advisory Committee which have been laid before Parliament, and further information will be contained in the White Paper shortly to be issued in connection with Clause 6 of the Finance Bill. As announced in the Press from time to

    783
    time, important schemes of development have taken and are taking place, and further schemes are under active consideration in the industry.
    Mr. LOUIS SMITH: Has not the claim that if adequate protection were given to this industry prices in the home market would rapidly rise proved to be unfounded, and that the price level in the home market is almost static?
    Mr. RUNCIMAN: The information for which the hon. Member asks is in the White Paper.
    Mr. WHITEasked the President of the Board of Trade whether he is satisfied that the output of the iron and steel industry in this country, together with

    Statement showing the total value of United Kingdom trade in merchandise during the year 1935 with (a) British Colonies and Protectorates and (b) Countries mandated to the United Kingdom.

    —

    Imports.

    Exports.

    Produce and manufactures of the United Kingdom.

    Imported merchandise.

    Total.

    £'000.

    £'000.

    £'000.

    £'000.

    British Colonies and Protectorates.*

    46,050

    35,841

    1,384

    37,225

    Countries mandated to the United Kingdom.

    3,520

    3,198

    69

    3,267

    * Including Togoland and Cameroons (under British mandate) and New Hebrides (British and French condominium), for which separate particulars are not available.

    FOOD PRICES.
    Mr. W. H. GREENasked the President of the Board of Trade whether his attention has been called to the fact that although, according to the cost-of-living index figures, the average increase in price foodstuffs on 1st May, 1936, compared with July, 1914, was 25 per cent., the price of fish was 107 per cent., milk 73 per cent., and potatoes 65 per cent. above the prices of July, 1914; and what steps he proposes to take in the matter?
    Mr. RUNCIMAN: I am aware of these figures. The considerations involved cannot be dealt with satisfactorily within the limits of a Parliamentary answer, but I can assure the hon. Member that the interests of consumers in relation to these foodstuffs are being, and will continue to
    the current imports, is sufficient to enable the consuming trades to carry on without delay and inconvenience
    Mr. RUNCIMAN: Yes, Sir.

    COLONIES AND PROTECTORATES.
    Mr. T. SMITHasked the President of the Board of Trade the value of the imports into the United Kingdom from British Colonies and Protectorates for the year 1935 and the value of the exports from the United Kingdom to British Colonies and Protectorates for the same period?
    Mr. RUNCIMAN: As the answer is in the form of a tabular statement, I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.
    Following is the answer:
    be, very closely watched, with the assistance of the various public bodies and committees concerned.
    Mr. GREEN: Does not the right hon. Gentleman think that where there has been such alarming increases in the prices of commodities some inquiry should take place, particularly as many people feel that the increases are largely due to the recent action of the Government?
    Mr. RUNCIMAN: If the hon. Member will let me know what increases he regards as alarming I will look into the matter.
    Mr. TINKER: Is it not time that we had a discussion in the House on the whole question of food supplies in order to find out what the position really is?
    Mr. VYVYAN ADAMS: Can the full story be told unless allowance is made for the tremendous increase in wages and benefits?

  BRITISH ARMY.

    LIFE INSURANCE (OFFICERS).
    Sir ASSHETON POWNALLasked the Secretary of State for War whether he has under consideration any scheme by which officers of the Army can be given the opportunity of life insurance on advantageous terms?
    The SECRETARY of STATE for WAR (Mr. Duff Cooper): No, Sir. This question has been very carefully considered on more than one occasion, when it was decided that the general life insurance of officers is a matter in which the War Office should not intervene.
    Sir A. POWNALL: Has the attention of the right hon. Gentleman been called to an arrangement recently entered into by the Admiralty with three principal insurance offices by which advantageous terms are given for the insurance of naval officers? I suggest that that should be done for Army officers.
    Mr. COOPER: That may be so.
    Mr. G. GRIFFITHS: Will the right hon. Gentleman also see about the insurance of privates as well as the insurance of officers?

    RECRUITING.
    Captain PLUGGEasked the Secretary of State for War whether he has any information showing whether there is a better supply of recruits in those regiments, such as the Guards, which provide a smart walking-out kit for soldiers, as opposed to those regiments the ranks of which are only provided with a khaki uniform?
    Mr. COOPER: Recruiting is undoubtedly better for the Foot Guards than for the Infantry, but I do not think this can be attributed solely to the possession of full dress uniform. As a stimulant to recruiting generally, permission has recently been given for men of all regiments to "walk out" in blue uniform with coloured forage cap, and I am hoping that this, in conjunction with other measures that are being taken, will lead to the desired improvement in recruiting.
    Mr. SHINWELL: Does the right hon. Gentleman think the kind of speech he made yesterday is calculated to stimulate recruitment?
    Mr. COOPER: I hope so.
    Mr. SHINWELL: Is it not time the right hon. Gentleman stopped playing the role of bogy man?
    Mr. COOPER: I think it is time the Labour party made up its mind whether it wishes to encourage recruitment or discourage it.
    Mr. THURTLE: Does the right hon. Gentleman wish the unemployed workers of this country to be coerced into the Army by hunger?
    Captain PLUGGEasked the Secretary of State for War what has been the expenditure on Press advertising during the past two years in order to stimulate Army recruiting; and whether he will consider the extended use of this medium to make up present deficiencies?
    Mr. COOPER: Approximately £3,500 was expended from Army funds on Press advertising for recruiting purposes, during the two years ended 31st March last. While I appreciate the value of this particular medium, and will not fail to bear in mind my hon. and gallant Friend's suggestion, I do not at present propose to extend the use of Press advertising until greater experience has been gained of this and other forms of recruiting publicity now in operation.

    MARRIED QUARTERS.
    Mr. DAYasked the Secretary of State for War whether he can state, separately, the number of new married quarters that have been built for officers and other ranks during the five years ended to the last convenient date?
    Mr. COOPER: During the five years ended 31st March, 1936, the number of married quarters built for officers and other ranks was 121 and 801 respectively.
    Mr. DAY: Is the right hon. Gentleman satisfied with the progress which has been made?

  SCOTLAND.

    POLICE (COATBRIDGE).
    Mr. BARRasked the Secretary of State for Scotland whether his attention has been called to the judgment of

    787
    Lord Robertson on 3rd June last, in the petition of certain members of the Coat-bridge burgh police force, to the effect that an inquiry should be instituted as the only satisfactory way out of the difficulties that have arisen; and what action he proposes to take in the matter?
    The SECRETARY of STATE for SCOTLAND (Sir Godfrey Collins): The answer to the first part of the question is in the affirmative. I have drawn the attention of the town council who, in their statutory capacity as disciplinary authority, are responsible for considering complaints about the chief constable to certain features of the case, and have asked the town council to reconsider the whole position.

    PRISONS.
    Mr. KIRKWOODasked the Secretary of State for Scotland whether the Scottish Office has made any progress regarding the proposal of the Glasgow Corporation for the removal of Duke Street prison and the conversion of the site into an open space for the recreation of adults and children; how many people are accommodated in Duke Street prison and what is the total accommodation
    Sir G. COLLINS: Two suitable sites have now been provisionally selected and active negotiations are in progress with a view to acquiring one of them. The number of prisoners in custody at Duke Street prison on the 11th instant was 75 females and 17 males. The prison has accommodation for 404 females and 159 males.
    Mr. KIRKWOOD: When is the demolition of the prison likely to take place, seeing that they have taken all these years to acquire the land on which to build further accommodation?
    Sir G. COLLINS: It is true that a long time has been occupied in finding a site, but two suitable sites are now being considered, and when a decision has been taken as to one of them, I hope very shortly afterwards the new prison may be erected.
    Mr. GALLACHER: Is the Minister aware that this building, situated as it is opposite the Cathedral, is a blot on the landscape and should be removed without further delay?
    Mr. T. JOHNSTONasked the Secretary of State for Scotland whether he will state for each of the five rates of dietaries in use in Scottish prisons the approximate cost of the food supplied to the prisoners per day; and what steps, if any, he proposes to take to ensure that the law-abiding working classes shall be at least as well fed as the inmates of prisons, whose diet is prescribed by the regulations approved in June, 1931, and amended in August, 1932, and March, 1933?
    Sir G. COLLINS: The approximate wholesale cost of the ingredients of the items in the dietary rates per person per day in 1935 is as follows:

    d.

    Rate I

    4¾

    Rate II

    5

    Rate III

    5½

    Rate IV

    6¾

    Rate V

    8½

    The cost would, of course, be higher if the ingredients had to be purchased at retail prices. In view of these figures, I am unable to accept the suggestion made in the last part of the question.
    Mr. JOHNSTON: Has the right hon. Gentleman not been assured by his medical advisers in charge of these prisons that the prison population is better fed after a period in prison than it was before entering the prisons?
    Sir G. COLLINS: Not only the diet in the prison, but the regular life they lead and the work they do have some bearing on their physique.
    Mr. JOHNSTONasked the Secretary of State for Scotland whether he is aware that under the rates of dietaries supplied for use by governors of prisons in Scotland, the only class of inmates which is given a supply of fish on any one day of the week is the class of criminal lunatics and defectives, and that other classes of inmates have had the fish course discontinued since 1930; and whether he is prepared to arrange for the inclusion of fish in the rates of dietaries and the provision of proper facilities for cooking?
    Sir G. COLLINS: The answer to the first part of the question is in the affirmative. Prison dietary rates are at present under consideration and I shall

    789
    bear in mind, in connection with this review, the suggestion made by the right hon. Member.
    Mr. JOHNSTON: Will the right hon. Gentleman explain why the only class which gets a guaranteed fish ration is the class of criminal lunatics and defectives?
    Sir G. COLLINS: Prisoners used to receive a fish ration, but in 1930, for reasons best known to the authorities in charge at that time, it was discontinued. I am looking into the matter.
    Mr. JOHNSTON: Was not the reason for its discontinuance the fact that the prisoners would not eat boiled fish and demanded it fried?
    Sir G. COLLINS: I understand at that time most of the prisoners came from England.
    Miss HORSBRUGH: Are herrings included with the other fish?
    Sir G. COLLINS: I will also look into that matter.
    Mr. MATHERS (for Mr. CASSELLS)asked the Secretary of State for Scotland whether he is aware that in His Majesty's prison of Barlinnie, Glasgow, persons sent there for Borstal training are permitted to mix with criminals undergoing long terms of imprisonment; and what steps, if any, he is prepared to take to remedy this?
    Sir G. COLLINS: The persons referred to are mainly lads whose Borstal licences have been revoked because of convictions 0or serious misconduct while out on licence, and they are allowed to associate only with juvenile adult prisoners. When the new Male Borstal Institution, for which an initial instalment of £20,000 is provided in this year's Estimate of the Prisons Department for Scotland, is completed, all Borstal lads will be accommodated there.
    Mr. GARRO JONES: What is the highest age of what the right hon. Gentleman describes as the juvenile adult prisoner?
    Sir G. COLLINS: Under 21.

    INFECTIOUS DISEASES.
    Sir R. W. SMITHasked the Secretary of State for Scotland the number of cases of scarlet fever notified from the
    790
    districts and burghs of the county of Aberdeen each year from 1925 to 1935, inclusive; the number of these cases, each year, that were treated in county fever hospitals; and what, for each year, was the average time patients were retained in hospitals?
    Sir G. COLLINS: As the reply involves a table of figures I will, with my hon. Friend's permission, circulate it in the OFFICIAL REPORT.
    Following is the reply:
    The following table shows the number of cases of scarlet fever notified from the districts and burghs of the county of Aberdeen (excluding the city of Aberdeen), the number treated in the county fever hospitals, and the average time patients were retained in hospital during each year:—

    Year.

    Number of notifications.

    Number removed to County Fever Hospitals.

    Average number of days of treatment.

    1925

    540

    500

    38

    1926

    700

    635

    41

    1927

    619

    556

    42

    1928

    609

    562

    41

    1929

    360

    324

    43

    1930

    281

    265

    35

    1931

    223

    210

    40

    1932

    317

    286*

    41

    1933

    660

    596*

    40

    1934

    1,491

    1,176*

    41

    1935

    1,412

    1,148*

    43

    * In addition the following number of cases were accommodated in Aberdeen City Hospital.

    1932

    12

    1934

    126

    1933

    17

    1935

    109

    Sir R. W. SMITHasked the Secretary of State for Scotland how many infectious diseases hospitals there were in the county of Aberdeen, excluding the city of Aberdeen, in the year 1930 and how many in the year 1935; and the number of beds available for infectious fever cases in 1930 and 1935 in the above hospitals?
    Sir G. COLLINS: The number of infectious diseases hospitals in the county of Aberdeen (excluding the city of Aberdeen) in the year 1930 was 12, and the number of beds available for infectious fever cases (exclusive of tuberculosis) was 155. In the year 1935, the corresponding numbers were five and 80. I

    791
    may point out, however, that under arrangements now in force between the county and the city of Aberdeen the hospitals of the latter are available for county patients.
    Sir R. W. SMITHasked the Secretary of State for Scotland how many beds were available for infectious diseases cases which come under the Infectious Diseases Act, 1889, in the counties of Scotland, including small burghs, in the years 1930 and 1935?
    Sir G. COLLINS: In 1930, there were available in infectious diseases hospitals in the counties of Scotland, including small burghs, approximately 2,850 beds for the treatment of patients suffering from infectious diseases; in 1935, there were approximately 3,000 beds.

    WATER SUPPLIES (RURAL DISTRICTS).
    Mr. HENDERSON STEWARTasked the Secretary of State for Scotland whether he has any further statement to make regarding the provision of more adequate water supplies for the rural districts of Scotland?
    Sir G. COLLINS: I propose to await the report of the Committee on Scottish Health Services, which is expected shortly, before considering what action, if any, is necessary. Meanwhile, improvements are being carried out in a number of areas with the aid of grants under the Rural Water Supplies Act, 1934, or by the Commissioner for the Special Areas.
    Mr. STEWART: Has the committee concerned a special duty to examine the question of water supply in connection with housing?
    Sir G. COLLINS: Yes, that is directly included in its terms of reference.

    HERRING INDUSTRY.
    Mr. HENDERSON STEWARTasked the Secretary of State for Scotland whether he has any statement to make regarding the recent disputes in the herring trade as regards the questions of a minimum wage, curers' discount, and related matters?
    Sir G. COLLINS: I am glad to say that the different sections of the industry at Fraserburgh and Peterhead have settled the dispute by an arrangement whereby voluntary levies will be made
    792
    available towards a minimum wage scheme; the Herring Industry Board have no funds which could be applied to such a scheme. As regards the question of curers' discount, a meeting will take place at Aberdeen to-morrow between the Herring Industry Board and the Curers' Association to discuss this dispute. The chairman and other members of the board have arranged to visit early next month the main herring ports in Scotland where fishing is in active progress, for the purpose of meeting the fishermen and other sections of the industry.
    Mr. LEONARDasked the Secretary of State for Scotland whether he is 'aware that the president of the Scottish Kipperers' Association has advised the Herring Board of the sympathy with striking Scottish fishermen expressed at a meeting of canners, kipperers and freshers at Peterhead, and of their willingness to sustain a levy on all purchases to permit the claims of the fishermen to be met; and whether he will take steps to operate machinery which can take advantage of this proposal?
    Sir G. COLLINS: I am glad to say that the offer referred to in the first part of the question has been made and has contributed to the settlement mentioned in my answer to the previous question. Without an amendment of the existing herring industry scheme the board have no power to administer funds contributed by the industry to supplement fishermen's earnings, and therefore in present circumstances any such machinery can only be operated by the industry itself.
    Mr. LEONARD: Is the right hon. Gentleman aware that the Herring Board has intimated to the Fraserburgh herring trade that they are approaching the Government with a view to having the scheme extended so as to permit of a wages scheme being countenanced by the Government; and if these approaches are made, will he take steps to see that the powers are given?
    Sir G. COLLINS: No such representations have yet reached me from the Herring Industry Board, but naturally any representations coming from that board will receive my most careful consideration.
    Mr. HENDERSON STEWART: Does the right hon. Gentleman understand

    793
    that the voluntary agreement which was come to at Peterhead is likely to be extended and adopted on other parts of the coast?
    Sir G. COLLINS: A voluntary agreement would undoubtedly be more successful, and I hope that the practice followed at Fraserburgh and Peterhead may be developed in other ports.

    PIGS MARKETING BOARD (REGIONAL COMMITTEES).
    Mr. LEONARDasked the Secretary of State for Scotland whether he is aware that the basis of county representation decided upon by the Pigs Marketing Board for their regional committees permits of the representation of every county in England and Wales on their appropriate regional committee while Scotland will have 15 counties unrepresented on any regional committee; and will he ascertain if special provision can be made for some representation covering these counties with a combined pig population of over 32,000?
    Sir G. COLLINS: I am aware of the arrangements made by the Pigs Marketing Board for setting up regional committees which, in Scotland as in England, will be composed of representatives for each county having a pig population of not less than 5,000. While on that basis certain counties in Scotland will not have direct representation on the committees, I understand that the total membership of the committees in Scotland will, in proportion to the total pig population for the country, be stronger numerically than that of the committees in England. The constitution of these committees is entirely a matter for the board. I have, however, brought the hon. Member's question to their notice.
    Mr. LEONARD: Will the right hon. Gentleman bear in mind that every county in England is represented upon those regional committees, and will he endeavour to ascertain whether a modification of the basis of representation cannot be arrived at in order to ensure that there shall be greater representation for Scotland?
    Sir G. COLLINS: That is a matter for the Board itself, but I have no doubt it will give consideration to the hon. Member's point of view.
    Mr. CHARLES WILLIAMS: As the right hon. Gentleman clearly explained that the pig population of Scotland is over-represented, will he take some of the representation away so as to be fair?

    TRAINING OF NURSES.
    Mr. GUYasked the Secretary of State for Scotland what action he proposes to take on the report of the Committee on the Training of Nurses?
    Sir G. COLLINS: I am not yet in a position to make any statement pending consideration of representations which have been received from various interested bodies and consultation with the General Nursing Council which is now taking place.

    PRISON SERVICE.
    Mr. N. MACLEANasked the Secretary of State for Scotland how many officers from Barlinnie Prison have attended the Glasgow Technical College at State expense during the last 15 years to receive instruction in trades; and whether any of them had served apprenticeship in the trade in which they were receiving technical instruction?
    Sir G. COLLINS: No officers from Barlinnie Prison have attended Glasgow Technical College at the expense of the Prisons Department: during the last 15 years to receive instruction in trades. The second part of the question does not, therefore, arise.
    Mr. MACLEANasked the Secretary of State for Scotland the terms governing the granting of instructing allowances in the Scottish prisons; the details of the officers who receive an allowance for instructing prisoners, and the amounts paid; and whether these officers served an apprenticeship to the trades they are instructing prisoners?
    Sir G. COLLINS: In terms of their engagement on appointment, prisons officers may be required to give instruction or assistance in any trade with which they may be acquainted without extra remuneration; but exceptionally, where special circumstances so warrant, temporary allowances may be paid at the discretion of the Prisons Department. At the present time 63 officers draw allowances varying from 1s. 6d. to 6s. per week. With eight exceptions, these officers served a full apprenticeship to their trades.

    DESTRUCTION OF FOOD.
    Mr. MACLEANasked the Secretary of State for Scotland whether he is aware that over 2,000 crans of herring were thrown back into the sea at Lerwick on 6th June and 300 crans thrown back into the sea at Peterhead on the same day; whether he has read the complaints made by school teachers in Highland schools at the Educational Institute Conference in Edinburgh on the same day, that they had to beg supplies of food and provide meals out of their own pockets to feed the school children in some of the Highland areas; and what steps he proposes to take to stop the destruction of food while children are in need of it and arrange for better organisation of the distribution of the food supplies?
    Sir G. COLLINS: I learned with regret of the two cases of dumping referred to in the first part of the question. As regards the second part of the question, there appears to be some misunderstanding because the provision of food for necessitous school children where not provided by voluntary agency is a duty on the education authority and the cost is not met by the teachers themselves, As regards the third part of the question, I would refer to the answers given to similar questions by the hon Member for Central Bradford (Mr. Leach) of 25th May, and the right hon. Member for West Stirling (Mr. Johnston) on 26th May.
    Mr. MACLEAN: Has not the right hon. Gentleman read the statement made at this conference of school teachers, and what steps is he taking to see that the education authorities in the Highland counties mentioned at that conference are doing their duty?
    Sir G. COLLINS: I have seen the statements that certain teachers in Highland schools had to provide meals for the children out of their own pockets, and also that they had to raise the money for the purpose by means of dances and in other ways. If there is any complaint of bad administration in any of these cases, I will look into it.
    Mr. MACLEAN: Has the right hon. Gentleman not read the phrase which was in one of the speeches delivered at the conference to the effect that the
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    teachers had to put their hands in their pockets to provide these meals; and does not that show it was the teachers themselves who were providing money for that purpose?
    Sir G. COLLINS: I read that phrase in the newspaper account, but it is quite unnecessary for the teachers to do this unless they so desire.
    Mr. MACLEAN: Will the right hon. Gentleman see that the county councils do it?

    CROFTERS' SETTLEMENT SCHEME.
    Mr. MATHERSasked the Secretary of State for Scotland whether he is aware that certain farms bought by the Department of Agriculture under the crofters' settlement scheme have, as in the case of the farm now known as the Cape Wrath Hotel, near Durness, Suther-landshire, became licensed premises for the sale of intoxicants; and whether in future he will take steps to make it a condition of transfer of property to be used as crofter club farms that they shall not be used as licensed premises?
    Sir G. COLLINS: The property referred to by the hon. Member was acquired in 1921. The farmhouse was not required for land settlement purposes. Since 1928 it has been occupied as a hotel, and a licence was granted by the local authority. On one other property acquired by the Department there is a licensed hotel which was used as such prior to the acquisition of the property. In neither case are the premises occupied by a landholder. By Statute, a landholder may not open a house on his holding for the sale of intoxicating liquor without the consent of his landlord, and no such consents have been given by the Department.
    Mr. MATHERS: Will no such consent be given by the Department in future?

    SCAFFOLDING ACCIDENTS, GREENOCK.
    Mr. GALLACHERasked the Secretary of State for the Home Department whether he is aware that a recent strike in Lithgow's yard, Greenock, arose out of a demand of the management that the riveters erect their own scaffolding; that several fatal and other accidents had already taken place arising out of faulty

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    scaffolding; and will he take steps to see that the regulations, which lay it down that specially qualified men should be employed for the erection of scaffolding, are carried out?
    The UNDER-SECRETARY of STATE for the HOME DEPARTMENT (Mr. Geoffrey Lloyd): According to my information, the question of riveters erecting certain parts of the staging was raised in the course of the negotiations between the men and the management, but was not the primary cause of the strike. I am advised that none of the recent staging accidents at the yard in question appears to have been due to faulty scaffolding, but the question of compliance with the regulation as to erection of stages by staging gangs will be gone into by the Factory Department.
    Mr. GALLACHER: Is the hon. Gentleman aware that what is now taking place in the yard is bringing about a situation in which fatal accidents may occur at any time? Will he take steps to see that everything possible is done to carry out the regulations.
    Mr. LLOYD: The suggestion in the first part of the supplementary question is not in accord with my information; but I do not think I can at this stage add anything to what I said, namely, that the factory inspectors are going to conduct an investigation.

    BORSTAL INSTITUTIONS.
    Mr. MATHERS (for Mr. CASSELLS)asked the Secretary of State for Scotland the number of persons remitted by sheriff substitutes to Borstal institutions in Scotland in the years 1933, 1934 and 1935?
    Sir G. COLLINS: The numbers of persons sentenced by sheriff courts to borstal detention during the years 1933, 1934 and 1935 were respectively 134, 118 and 119.
    Mr. GALLAGHER: Is that not a crime against the youth of Scotland, and should not the sheriffs get a term of imprisonment?

  COAL INDUSTRY.

    GRESFORD COLLIERY (EXPLOSION).
    Mr. D. L. DAVIESasked the Secretary for Mines whether his attention has
    798
    been directed to a statement made by Mr. Charlton, the divisional inspector of mines, during the inquiry held into the cause of the Gresford colliery explosion, to the effect that the ignition of firedamp was caused by the emission of a spark from a telephone in use at the colliery; and will he take immediate steps to inform colliery managers of the danger caused by the continuance of the use of such telephones as those in use at Gresford?
    The SECRETARY for MINES (Captain Crookshank): Yes, Sir. I am aware that. among the suggestions made to the Court of Inquiry as to possible causes of the explosion at Gresford was one by Mr. Charlton that the explosion might have been started by the operation of an underground telephone. As regards the second part, the use of telephones in which there is a risk of open sparking is prohibited in any part of a mine in which gas
    "though not normally present is likely to occur in quantity sufficient to be indicative of danger"
    and the precautions necessary to comply with this regulation have been repeatedly emphasised in the annual reports of my Department, in a special safety pamphlet, and in circulars issued in 1933 and 1935 to colliery owners and managers. I will send the hon. Member copies of these circulars and pamphlet.
    Mr. DAVIES: If this circular has been sent round to the managers, ought not this gentleman who advances this ridiculous theory to have known about it and ought he not to have examined this telephone for which he was responsible and which he now claims caused the ignition?
    Captain CROOKSHANK: As the inquiry is going on, I do not feel at liberty to make any comments on any statements made before it.
    Mr. DAVIES: In view of the fact that this is the third colliery explosion that the hon. Gentleman's Department has atrributed to defective telephones or signalling apparatus, and particularly in view of the fact that Mr. Charlton had one of these in his division, ought he not to have seen to it that this telephone was in proper order?
    Captain CROOKSHANK: It is not the case that my Department has made any

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    statement at all. Mr. Charlton mentioned this as one of many suggestions of a possible cause of the disaster, but he did not pin himself down to it as the exact cause.
    Mr. LAWSON: When is the House likely to hear the report of this investigation; or is it to continue for all time?
    Captain CROOKSHANK: The inquiry is not yet closed.

    OVERTIME (NORTHUMBERLAND).
    Mr. R. J. TAYLORasked the Secretary for Mines the number of hours overtime worked in the Northumberland coalfields in the years 1935, 1934 and 1931?
    Captain CROOKSHANK: I regret that the information asked for is not available.
    Mr. TAYLOR: Can we have the reason why the overtime statistics for Northumberland are not available?
    Captain CROOKSHANK: They are not available for any district. These statistics have not been collected in that form.
    Mr. SHINWELL: Has the hon. and gallant Gentleman not got the number of cases of overtime worked at each pit? Are these statistics not available to his Department?
    Captain CROOKSHANK: No, Sir. They are not available now any more than they were when the hon. Gentleman was in charge of the Department.
    Mr. T. WILLIAMS: Do His Majesty's Inspectors insist on the law being carried out if the appropriate details are not prepared?

    ACCIDENTS (NORTHUMBERLAND).
    Mr. R. J. TAYLORasked the Secretary for Mines whether reports of accidents and fatalities to boys in the Northumberland coalfield are made to the Mines Department; and whether he can extract from these reports the accidents and fatalities which occurred in the respective shifts?
    Captain CROOKSHANK: The answer to the first part of the question is "Yes," but the wide variations in the hours at which the shifts begin at the different collieries render it impossible to classify these accidents satisfactorily as
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    between the morning, afternoon and night shifts. I shall, however, be glad to have a statement prepared dividing the accidents into four groups each covering six hours of the 24, if that would serve the hon. Member's purposes.
    Mr. TAYLOR: Is the Minister aware that, as far as Northumberland and Durham are concerned, the shifts are practically in watertight compartments, and, therefore, there should be no difficulty in getting all the accidents in the completed shifts? Can I have his assurance that he will endeavour to let us have them either in the completed shifts or in the six-hours as he suggested?
    Captain CROOKSHANK: I suggested what seems to be the most practical way of doing it. If that does not meet the hon. Member's view, perhaps he will have a word with me about it. I am prepared to do what I have suggested.

    PRODUCTION.
    Mr. GEORGE HALLasked the Secretary for Mines whether he can give an estimate of the total potential capacity of all the coal mines now available for production in this country?
    Captain CROOKSHANK: During the period of exceptional demand last winter, collieries were producing at the rate, after allowing for holidays, of about 260,000,000 tons per annum. With the re-opening of pits temporarily closed, and the introduction of more labour and more machines, this figure could be materially increased, but the extent of such increase must obviously be a matter of conjecture.

    AUTOMATIC GAS DETECTORS.
    Mr. T. WILLIAMSasked the Secretary for Mines whether he is now in a position to state the result of his negotiations with the Coalowners' Association on the question of automatic gas detectors?
    Captain CROOKSHANK: As I informed the house, in answer to a question by my hon. and gallant Friend the Member for Ripon (Major Hills) on 4th May, I discussed this matter with representatives of the Mining Association and asked for an interim report on the position, including a statement of the further action the mine owners are prepared to take in each district. I understand that the terms of this report will be settled at a meeting to be held to-morrow, and I hope to have it in my hands at an early date thereafter.

    WORKING HOURS.
    Mr. LESLIEasked the Secretary for Mines whether the Government are represented at Geneva on the committee dealing with the question of hours in mines; and, if so, what is the attitude of the Government on the subject?
    Captain CROOKSHANK: The membership of the committee referred to did not include a representative of His Majesty's Government, but one has been present at the meetings of the committee. As regards the second part of the question, the view of His Majesty's Government with regard to the application to various industries (including Coal Mining) of the principle of the 1935 Forty-hour Draft Convention was expressed by my right hon. Friend the Minister of Labour in a speech he delivered to the International Labour Conference last week. This speech will be published in due course in the Record of the Conference, but I will send the hon. Member a copy.
    Mr. SHINWELL: Can the hon. and gallant Gentleman explain why no representative of the Government was present at the meeting of this committee, and does the absence of a representative of the Government or an official of the Department indicate that the Government have abandoned the idea of ratifying this convention?
    Captain CROOKSHANK: The views of the Government on the latter point have been expressed several times in the House. I have said that a representative of the Government was present at the meeting of the committee, but he was not a member of the committee. He was not a member because he was not asked to be.
    Mr. SHINWELL: Is it not possible for an official of the Mines Department to become a member of the committee if His Majesty's Government so desire?
    Captain CROOKSHANK: I should like to have notice of that question, but I understand that, generally speaking, membership is chosen by a selection committee.
    Mr. LEACH: Can we have the speech of the Minister of Labour edged in black as a sign of mourning?
    Captain CROOKSHANK: No, Sir.

    DIRECTORS' FEES.
    Mr. POTTSasked the Secretary for Mines whether he is aware that coal-mining statistics show a collective figure for the December quarter of 1935, for management, salaries, insurances, repairs, office and general expenses, depreciation, etc., £6,248,868, without giving separate information as to the cost of directors' fees and expenses; and will he provide information as to the number of directors and directors' fees?
    Captain CROOKSHANK: The answer to the first part of the question is "Yes." As regards the second part, the only information available is that contained in the report of the Royal Commission on the Coal Industry (1925) where it is stated, with reference to fees, that "their amount is negligible—less than ½d. per ton." I have no reason to think that there is any material change in the position.
    Mr. POTTS: Is not this information obtainable? Surely, the information as to the number of directors and the money obtained by them ought to be obtainable?
    Captain CROOKSHANK: It is not available because the statistical figures which my Department collects are those which are derived from the ascertainment figures furnished by the industry, and the returns do not provide for these details to be included.
    Mr. GARRO JONES: Is the Minister aware that the figures of directors' fees given in balance sheets are no indication of the total amount of remuneration received by directors, in that salaries paid to directors need not be separately shown, and that therefore the conclusion the hon. Gentleman draws that these amounts are negligible is entirely fallacious?
    Captain CROOKSHANK: It was not my conclusion but that of the Royal Commission, who were, no doubt, aware of the points which the hon. Gentleman makes.
    Mr. POTTS: I happened to give evidence to the Royal Commission—

    ABANDONED MINES.
    Mr. JAMES GRIFFITHSasked the Secretary for Mines the number of known abandoned mines in the South Wales

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    coalfield for which no reliable plans of the workings are available; and the number of such mines situate in the inspectorate divisions of Swansea and Cardiff, respectively?
    Captain CROOKSHANK: The Catalogue of Plans of Abandoned Mines which is published by my Department shows about 500 old pits or workings in the Cardiff division, and about 900 in the Swansea division for which no plans of workings are available; but there are, no doubt, many others unknown. Most of these mines were abandoned before 1872, when the deposit of plans became compulsory, and many were extremely small.
    Mr. GRIFFITHSasked the Secretary for Mines whether he will take steps to ensure that, where a coal mine is working in proximity to abandoned workings for which no reliable plans are available, it shall be an obligation upon the manager of such a coal mine to provide for advance bore-holes so as to give some measure of protection to the men employed at the mine?
    Captain CROOKSHANK: Protection of this kind against inrushes of water from old workings is already compulsory under Section 68 of the Coal Mines Act, 1911; and as I informed the hon. Member on Thursday last, I am considering what further measures can be taken to relieve the anxiety of the workmen in Pembrokeshire as a result of the flooding accident at Loveston Colliery.
    Mr. GRIFFITHS: If this provision, is compulsory, how does the Secretary for Mines account for the fact that twice in the last two years collieries in Pembrokeshire have broken unexpectedly into old abandoned workings, with serious loss of life in one case and a miraculous escape in another?
    Captain CROOKSHANK: I would like to have notice of that question, but I dare say there were no reliable plans. The important thing is to see whether we can do something now, and I am glad to say that a meeting has been arranged for next week between His Majesty's inspectors and representatives of the management and workmen in Pembrokeshire to discuss these very points.
    Mr. GRIFFITHS: Will the hon. and gallant Member say why the inspectors did not enforce the compulsory measures to those collieries where it was known there were old abandoned workings?
    Mr. G. GRIFFITHS: Is it not a fact that if proper bore-holes to the right and left of the workings were provided according to the Mines Act, there would be no incursion of the water?

    AIR RAID PRECAUTIONS.
    Mr. DAYasked the Prime Minister which Government Departments are responsible for schemes or suggestions that have been communicated by the Government to local authorities, advising them of the best methods to be adopted for the protection of the civil population against poison gas attacks in the event of same being made by a hostile Power in any future air raid; and can he give particulars?
    The PRIME MINISTER (Mr. Baldwin): In England and Wales the Home Secretary, and in Scotland the Secretary of State for Scotland, are primarily responsible. I am sending the hon. Member a list of the circular letters and memoranda issued to local authorities on the subject.

    CANADIAN SECURITIES (UNITED KINGDOM INVESTORS).
    Sir N. GRATTAN-DOYLEasked the Chancellor of the Exchequer whether he will draw the attention of the Committee on Foreign Issues to the action of the authorities of Alberta and Vancouver in relation to their obligations towards United Kingdom investors in Alberta and Vancouver securities; and will he request the committee to consider the advisability of extending the scope of its operations so as to cover future issues of Canadian securities, if offered to United Kingdom investors without the guarantee of the Canadian Dominion Government?
    The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain): My hon. Friend may feel assured that the matters to which he refers are within the knowledge of the Foreign Transactions

    805
    (Advisory) Committee. Issues on behalf of Canadian borrowers would come within the purview of the committee in so far as they involve an indirect remittance of funds outside the British Empire through the mechanism of the New York market. I must add, however, that the terms of reference and instructions to the committee expressly state that the soundness of an investment is left exclusively to the judgment of the market.

    STEAMSHIP "QUEEN MARY."
    Mr. JOHNSTONasked the Chancellor of the Exchequer whether he is aware that the wireless equipment of the "Queen Mary" was provided by the Standard Company of the United States of America; whether any opportunity was given to British manufacturers to quote for this equipment; and whether he will stipulate as a condition of any State assistance by the British Treasury to further steamship building that British products shall at least be considered as to price and quality with foreign products in the construction and equipment of the subsidised ships?
    Mr. CHAMBERLAIN: I am informed that the wireless equipment of the "Queen Mary" was supplied and is operated by the International Marine Radio Company, Limited, which in its turn obtained over 90 per cent. of the equipment from the British factories of the Standard Telegraphs and Cables Company. Both companies are subsidiaries of the International Telegraph and Telephone Corporation of New York; but they are registered and carry on their operations in this country. Practically the whole of the wireless equipment of the "Queen Mary," therefore, was actually designed and manufactured in Great Britain.
    Brigadier-General CLIFTON BROWN: Is my right hon. Friend aware that the whole of the oak in the "Queen Mary" came from estates in Sussex?

  NATIONAL FINANCE.

    TITLES (TAXATION).
    Mr. POTTSasked the Chancellor of the Exchequer whether he will authorise the introduction of legislation to
    806
    tax titles, the proceeds therefrom to be credited to the national Exchequer?
    Mr. CHAMBERLAIN: No, Sir.
    Mr. POTTS: Has the right hon. Gentleman any knowledge of any case of payment being made to a party in this House for a title? Has he any knowledge whatever? I have.
    Mr. GALLACHER: Arising out of the very definite negative, will the right hon. Gentleman introduce legislation to abolish titles?

    UNITED STATES (BRITISH DEBT).
    Mr. POTTSasked the Chancellor of the Exchequer the amount of debt owing by this country to the United States of America for the year ended 1930–31 and each respective year to the latest available date, giving the annual interest due and the annual interest actually paid, stated in sterling?
    Mr. CHAMBERLAIN: For the sums due I would refer the hon. Member to the War Debt Agreements (Command Papers 1912 and 4202), and for the sums paid to the Annual Finance Accounts of the United Kingdom.

    DOUBLE INCOME TAX.
    Mr. ROSTRON DUCKWORTHasked the Financial Secretary to the Treasury with what countries agreements have now been reached to provide for the mutual elimination of the taxation of nonresidents trading through agents; and whether an agreement in this connection has yet been reached with France?
    The FINANCIAL SECRETARY to the TREASURY (Mr. W. S. Morrison): Arrangements for relief from double Income Tax as regards certain profits arising through agencies have been made with Sweden, Switzerland, Finland and the Netherlands. Arrangements have also been made with Canada and Newfoundland. Negotiations with France are still in progress.

    POLICE COURTS (EVENING SITTINGS).
    Captain STRICKLANDasked the Home Secretary whether, in view of the fact that most motor cyclists and drivers of motor cars are workers engaged in industry and have consequent difficulty in

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    attending police courts held during normal working hours without series results and loss of wages, and bearing in mind the expression of opinion from some of the benches that non-attendance aggravates the alleged offence, he will consider the institution of courts held in the evening?
    Mr. LLOYD: It is for the justices of the peace in each division to decide at what time their sittings shall be held, and if in any area, after consideration of local circumstances and the convenience of the various classes of persons concerned, it appears that there would be advantage in evening sessions, it is open to the justices to make arrangements accordingly.
    Captain STRICKLAND: Can the Home Office indicate to benches of magistrates that in the cases I have mentioned this suggestion should be considered in a favourable light, in view of the fact that where a motor cyclist is summoned to attend a court some distance away he has to pay the cost of getting there and lose a day's pay, whether he is guilty or not, as well as being liable to a fine if he is convicted?
    Mr. LLOYD: I have indicated in my answer that this is a matter which the local justices have the power to decide for themselves, and is not one on which my right hon. Friend has any authority to issue instructions.
    Mr. R. C. MORRISON: Is the hon. Gentleman aware that the information he has just given is not generally known to benches of magistrates, and will he take steps to see that they are made acquainted with that information?
    Mr. LLOYD: I think this question and answer will give them the information.

    PUBLIC MEETINGS, EAST END OF LONDON.
    Mr. J. HALLasked the Home Secretary whether he will consider the advisability of arranging for increased police supervision when Fascist public meetings are held in the streets of Stepney, such meetings being of a provocative character, there being evidence of a deliberate attempt to create racial strife by raising the anti-Jewish question in a manner calculated to provoke violence and bloodshed?
    Mr. LLOYD: Special steps are being taken by the Commissioner of Police of the Metropolis to deal with any attempt to insult or molest the Jews. The Commissioner informs me that only one Fascist meeting has been held in Stepney this year, and that this meeting was adequately policed.
    Mr. HALL: Is the hon. Gentleman aware that concurrently with the holding of these Fascist meetings in Stepney uniformed Blackshirts parade the streets using insulting epithets to the Jewish people? Will the Home Secretary consider taking steps to prevent those incitements to disorder?
    Mr. LLOYD: I was not aware of the particular instance which the hon. Member has brought to my notice, but I would remind him that extra police were drafted into certain areas by the Commissioner to deal with this problem, and I have no doubt that they are doing so.
    Mr. HALL: Is the Under-Secretary aware that the position in Stepney is becoming a very difficult one and a menace, and will he consider the possibility of providing adequate police protection in order to prevent the possible development of this state of affairs into a riot very shortly?
    Sir PERCY HARRIS: Is the hon. Gentleman aware that these incitements to violence against the Jews are not by any means confined to Stepney but are going on all through the East End of London, and that they are most offensive and provocative? Will he inquire into them personally?
    Mr. LLOYD: Certainly, but I would remind hon. Members that my right hon. Friend did make it clear in the Debate we had earlier that language of an insulting kind would in certain circumstances be an offence.
    Mr. LANSBURY: Will the hon. Gentleman tell his chief that it is a fact that this sort of thing is increasing in East London? Is he aware that if a tithe of the energy which was forthcoming in dealing with Communists a few years ago were applied by the Department to preventing these insulting statements, and sometimes assaults, an end would be put to the present state of affairs? I want him to convey to his right hon. Friend that the present state of affairs is increasing all over East London.
    Mr. LLOYD: Certainly, I will convey to my right hon. Friend what the right hon. Gentleman has said, but I would also remind him that in the last few months my right hon. Friend has shown that he takes a personal interest in this matter, and I am certain that in the light of the additional information which lion. Members have put forward he will give further attention to it.

    NEW INDUSTRIES (DURHAM COUNTY).
    Mr. W. JOSEPH STEWARTasked the Minister of Labour whether any progress has been made in regard to establishing new industries in Durham County as a Special Area; have any firms been approached recently with a view to startling new industries; and is it intended to build any armament factories in the area and, if so, when and where?
    The MINISTER of LABOUR (Mr. Ernest Brown): I am informed that the North-East Development Board which receives assistance from the Special Areas Fund is constantly in touch with various firms with a view to the establishment of new industries in the North-East Special Areas. I would also remind the hon. Member of the formation of North-Eastern Trading Estates, Limited, and of the arrangements contemplated by the Special Areas Reconstruction (Agreement) Act, 1936. As regards the last part of the question, I have nothing to add to the answer given by my right hon. Friend the Secretary of State for War to the hon. Member for East Woolwich (Mr. Hicks) on 26th May.
    Mr. STEWART: Arising out of that answer, which to me is unsatisfactory, is the right hon. Gentleman aware that in the north-eastern part of Durham County the figure of the insured unemployed is 41 per cent., and in the western part it is 48.5 per cent.? Are the Government prepared to do anything worth while in view of this appalling percentage of insured unemployed?
    Mr. BROWN: Much has been done, as I have shown in my answer.
    Mr. L. SMITH: When the investigators are going further into this matter, will careful consideration be given to the provision in that area of more machine tool works, which are badly needed in this country?

    ELECTRICITY SUPPLY (CHARGES).
    Mr. LEONARDasked the Minister of Transport whether the recent reorganisation of electricity generating, and its attendant savings, will be directed by the Electricity Board towards a national uniform rate of charges to all customers?
    The PARLIAMENTARY SECRETARY to the MINISTRY of TRANSPORT (Captain Austin Hudson): As the result of the corning into operation of the Grid Tariffs of the Central Electricity Board, there is a growing tendency for bulk supply charges to become more uniform, and this will facilitate the adoption of more uniform methods of charge by authorised undertakers. All possible opportunities are taken by the Electricity Commissioners of impressing upon the supply industry the need for greater uniformity in methods of charge.
    Mr. G. HARDIE: Since the passing of the Act of 1926, has anything been done in the way of giving the consumer the results that were promised to him? Does the hon. and gallant Member not think that the Act of 1926 was the biggest swindle and ramp ever put across the public?

    FRENCH FOREIGN LEGION (BRITISH SUBJECTS).
    Mr. DAYasked the Secretary of State for Foreign Affairs how many times during the past five years has an appeal been made to him to assist in securing the release of British subjects who have joined the French Foreign Legion; and will he give particulars of any action he has taken and with what result?
    The UNDER-SECRETARY of STATE for FOREIGN AFFAIRS (Viscount Cranborne): During the past five years the Foreign Office have been approached on 16 occasions in the sense indicated. In five cases there were no grounds for making representations to the French authorities and the applicants were informed accordingly. In the remaining 11 cases representations were made to the French authorities by His Majesty's Embassy in Paris. In two of these cases His Majesty's Embassy were informed that there were no grounds on which the persons in question could be released;

    811
    and in two further cases the persons concerned escaped from the Legion while inquiries were being pursued. In the remaining seven cases the representations made by His Majesty's Government were successful, in five cases because the person in question had enlisted while under the minimum age of 18, or, being between the ages of 18 and 20, without his parents' consent. In two cases release was granted on medical grounds.
    Mr. DAY: Do the figures that the Minister has given show those who were rearrested?
    Mr. A. BEVAN: Is the Under-Secretary aware that it is now easier to get Englishmen out of the Foreign Legion than out of the British Army?

    MALTA (BROADCASTING).
    Mr. WISEasked the Secretary of State for the Colonies (1) on what grounds and on whose authority the broadcasting in Malta by the Rediffusion Broadcast Relay Services (Malta) Limited, of church services of all denominations, previously relayed from England under licence from the local government, has been discontinued or suppressed; and whether such action has been taken with the knowledge and the concurrence of His Majesty's Lieutenant-Governor of Malta;
    (2) whether he will take steps to safeguard to all subjects of His Majesty in Malta alike the provisions of Article 56 of the Constitution and, in the matter of religious broadcasting, to order the restoration to Rediffusion Broadcast Relay Services (Malta) Limited, of facilities for the broadcasting of church services and addresses of all denominations relayed from England or other parts of the Empire?
    The SECRETARY of STATE for the COLONIES (Mr. Ormsby-Gore): The matter appears to be one for settlement between the Rediffusion Company and the religious bodies concerned, and it is not easy to see in what manner Government, can effectively intervene with regard to it. It is understood, however, that the company desires to relay religious services provided that this can be done with complete impartiality as between the various denominations. The services have been discontinued for the
    812
    time being, owing to the fact that it has not yet proved possible for the company to reach an agreement on a basis which is satisfactory to all the religious interests concerned.
    Mr. WISE: Is it not possible for His Majesty's Government to make their attitude very clearly known in order to safeguard the provisions of Article 56, and not to allow this country to be browbeaten by the Italian Archbishop?
    Mr. ORMSBY-GORE: I regret my hon. Friend's last phrase. It is not a majority of the Island who are concerned, but various denominations who asked to be catered for. I believe that the special reason is that the relay company can only relay two alternatives. They are endeavouring to adjust the claims between the various religious denominations, and I hope they will succeed in doing so. I am sure that the attitude of the company is quite right in seeing that there is strict impartiality among the different religious denominations.
    Mr. THURTLE: Has the right hon. Gentleman any information to show whether Malta really wants the services relayed?
    Mr. ORMSBY-GORE: Yes, Sir. I understand that representations have been made about it.
    Mr. LOGAN: Can the right hon. Gentleman make arrangements to hear one of these services?

    MIDWIVES BILL.
    Reported, with Amendments, from Standing Committee C.
    Report to lie upon the Table, and to be printed.
    Minutes of Proceedings to be printed.
    Bill, as amended (in the Standing Committee), to be considered upon Thursday, and to be printed. [Bill 135.]

    CROWN LANDS BILL.
    Reported with Amendments, from the Select Committee, with Minutes of Evidence.
    Report to lie upon the Table, and to be printed.
    Minutes of Evidence to be printed.
    Bill, as amended, recommitted to a Committee of the Whole House for Thursday.

MESSAGE FROM THE LORDS.
That they have agreed to,—
Amendments to—
Gravesend and Milton Waterworks Bill [Lords], without Amendment.

ORDERS OF THE DAY.

  FINANCE BILL.
  Considered in Committee. [Progress, 15th June.]
  [Sir DENNIS HERBERT in the Chair.]

  FINANCE BILL.

    CLAUSE 19.—(Provisions as to income settled on children.)
    3.45 p.m.
    Mr. BENSON: I beg to move, in page 21, line 43, to leave out from "Act," to the end of the Sub-section.
    I hope that we shall have the sympathy and support of the Chancellor of the Exchequer himself for this Amendment. We are attempting to rescue him from the effects of his own weakness. Had it not been for his inability to stand up to the pressure put upon him by the interests concerned, this Amendment would not have been necessary, because irrevocable trusts would not have been excepted from the operation of the Clause. When the Clause was first drafted, but before it saw the light, the intentions of the Chancellor and his Department that irrevocable trusts should be included in the Clause in order to stop tax avoidance were disclosed. The Chancellor stated quite clearly not only what he intended to do, but his reasons for doing it. His statement was such an excellent one in favour of our Amendment that I propose to state it again. These are the words he used:
    "Suppose we have an irrevocable trust, under whch the taxpayer makes over a certain proportion of his capital to trustees with instructons to them to hold the security in trust for the child, but until the child becomes of age paying the income over to the parent for the purpose of maintaining the child. Is that a case which any hon. Member would wish to defend? "—[OFFICIAL REPORT, 27th April, 1936; col. 686, Vol. 311.]
    We cannot conceive that any Member would wish to defend that case and, therefore, we are proposing to put that type of trust outside the protection which the Chancellor now proposes to give and to make the disponer liable for aggregation of tax.
    This favourable treatment of the irrevocable trust is not a second thought of the Chancellor, due to undiscovered facts which have suddenly come to his notice. A complicated Clause like this is not drawn lightly or rapidly, but is the result
    828
    of very careful examination by the Chancellor's Department. This tax evasion Clause is the result of very careful investigation of trusts, and there would not be exclusion of the irrevocable trusts had it not been for backstairs influence by hon. Gentlemen behind the Chancellor. I want to examine whether there is any valid ground for the differentiation between the revocable trust, which is caught by this Clause, and the irrevocable trust, which is excluded from the operation of the Clause. Quite frankly, I can find no real, logical ground of differentiation.
    As a matter of fact, the gap between the irrevocable and the revocable trust is bridged by a large number of intermediate forms. In the Debate yesterday, hon. Gentlemen opposite were continually bringing forward particular types of trusts which they said it was unfair to include in the Clause and exclude from the benefits of the completely irrevocable trust, and the Chancellor himself was compelled to admit that there was a case for examination. He could not logically draw a difference between the types of trust suggested to him by his friends behind him and the irrevocable trusts which he proposes to benefit under this Clause. There is no logical difference between the revocable and the irrevocable. There is, however, a very distinct social difference. The irrevocable trust is a type of trust which, by its very nature, must be confined to people with a considerable amount of wealth, whereas the smaller and less important revocable trust is one which people of very moderate means could afford to establish. So far, however, as the really irrevocable trust is concerned, it must of necessity be a luxury of the rich, because no one except a rich man can afford to alienate permanently either a serious portion of his income or an amount of capital with which it is worth while to deal.
    It has been suggested that the revocable trust, the trust which the parent can revoke if and when he wishes, or in given circumstances, is really aimed, not at the establishment of a trust, but at the avoidance of tax, whereas the irrevocable trust has been established mainly for other motives—for really prudential motives, for motives mainly concerned with safeguarding the future interests of the child. But the Income Tax is not a tax upon motives; it is not a tax which ought to take into consideration motives.

    829
    It is, on the contrary, a tax which ought to take into consideration results, and results only. But let us assume for the moment that the irrevocable trust really is entirely providential in its object. Let us assume that the disponers who have established their irrevocable trusts had no intention whatsoever of avoiding tax. If that be so, it is no hardship to impose tax upon them, because they have not established their trusts for the purpose of avoiding tax, and, therefore, there can be neither disappointment nor hardship if they find that the income of their trusts aggregates with their own income. As a matter of fact, that assumption is utterly unwarranted. As my authority for that statement I have the hon. Member for Twickenham (Mr. Keeling). Speaking last night—I do not know whether he intended it—he let the cat out of the bag beyond all hope of getting the animal back again. Speaking on this Clause, he made the following statement:
    "Up to the date of a certain decision in the House of Lords, I believe that everybody who wanted to make these trusts was advised by his solicitor that he should make them irrevocable, but when that decision was made a large majority of solicitors advised their clients that it was desirable to make their trusts revocable and that the effect was identical with making them irrevocable."—[OFFICIAI, REPORT, 15th June, 1936; col. 747, Vol. 313.]
    What was the effect aimed at there? It was the effect of tax evasion. Prior to the decision of the House of Lords on this point, solicitors, according to the hon. Member for Twickenham, had been recommending the irrevocable trust because it would enable tax to be avoided. After the decision they changed their form of trust, because the more flexible form also enabled them, under that decision, to avoid aggregation. The hon. Member, who, no doubt, has far more experience of the establishment of trusts than I have, points out that the motive behind the form of each trust was the same, that is to say, the evasion of tax. But, quite apart from the question of motive, the irrevocable trust avoids aggregation just as effectively as the revocable one, and, as I have pointed out, the irrevocable trust is one in which only a rich man can indulge. The result is that the irrevocable trust, which the Chancellor proposes to omit from the Clause, in all probability avoids tax at a far higher rate than the revocable trust, which may have been established
    830
    by a small man who could only hope to save thereby a few pounds a year.
    There is another point that I want to bring to the notice of the Chancellor of the Exchequer, and that is in regard to the trust which is irrevocable in form but definitely revocable in intention. Thus, whether the form of the trust be revocable or irrevocable, both are aimed simply and solely at the avoidance of tax. The Chancellor himself, in his Budget speech, drew attention to the widespread advertising, by certain types of financial companies, of these particular forms of trusts, and, indeed, they are an extraordinarily simple matter. I have here, on a single sheet of foolscap, two forms of trust, one revocable and the other irrevocable. Quite obviously, a form of trust deed which can be set out in half a sheet of typewriting is a perfectly simple and easily drawn up document, which does not require a solicitor, and these forms have been broadcast throughout the country. The Chancellor may say that that may be true, but that, if a parent has adopted the irrevocable form, he is entitled to the protective effect of the words which I am proposing to omit. But the question whether the parent adopted the revocable or the irrevocable form was very largely a question of luck, according to the particular document that was set before him; and, moreover, the irrevocable form was advertised as irrevocable in form only, and not in actual fact. I have here quotations from a couple of advertisement circulars. The irrevocable form is advocated in these words:
    "Technically you undertake to pay an agreed sum for the joint lives of yourself and child, which means that the trust is terminated on your death or the death of the child. You cannot however bind a minor by deed. As soon as your child reaches 21 he will possess legal authority to discharge you from further liability under the scheme."
    Another circular with exactly the same idea makes the statement:
    "At 21 the minor can discharge his father's liability. Was there ever an easier way of making money? Father pays nothing but the original Stamp Duty.
    It is upon irrevocable trusts formed under this sort of advocacy and with that intention that the Chancellor proposes to allow tax avoidance to continue. There is no justification for it whatever. Let me sum up the case that we have against

    831
    the exclusion of the irrevocable trust from this Clause. To begin with, the exclusion is entirely illogical. There is no justification for differentiation. Secondly, the exclusion of the irrevocable trust definitely favours the rich trustee and is definitely hostile to the poorer. It thus allows the avoidance of Surtax in effect, but prevents very largely the avoidance of Income Tax. It is not introduced into this Clause because the Chancellor or his Department considers it desirable or necessary. It is introduced simply and solely because the Chancellor was unable to stand up to the pressure put upon him.
    4.4 p.m.
    The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain): At the beginning of his speech on this Amendment the hon. Member for Chesterfield (Mr. Benson) stated that his purpose was to rescue the Chancellor of the Exchequer from weakness. I have observed that the course of conduct described as weakness when it refers to one set of circumstances, is described as hard-heartedness and obstinacy when it applies to representations made by the other side.
    Mr. BENSON: Circumstances alter cases.
    Mr. CHAMBERLAIN: Circumstances alter cases. It depends on which side of the House one happens to be sitting. Anyone who listened to the hon. Member would have failed to appreciate that the exception which is the subject of the Amendment deals with pre-Budget irrevocable trusts and not with fresh trusts of that character. The charge which the hon. Member made against me, that I had changed my mind, was completely
    destroyed. I still maintain what I said about these trusts in general, as far as they occur in future. There is no difference between revocable and irrevocable trusts except in the case of accumulated income; but it does seem to me that the case of the irrevocable trust entered into at the time when it was not only lawful but encouraged by Statute stands on quite a different footing from the later trusts entered into after the Bill was introduced. A man who entered into an irrevocable trust did so knowing that he was acting entirely in accordance with the law, and on the strength of that fact he has in many cases bound himself by undertakings or entered into engagements which, since the trust is irrevocable, he cannot now get out of.
    It seems to me that a good case is made out for the fact that an injustice would be committed in the case of people who, had circumstances been entirely altered by a change of the law, were nevertheless in no position to adjust themselves to those altered conditions. With regard to the question of trusts which appear to be irrevocable in letter but which in fact can be made into revocable trusts, I hope we have provided against that by the definition in Sub-section (7), which of course applies to pre-Budget trusts just as much as to post-Budget trusts. That being so, I hope the Committee will see that there is really no reason to support the Amendment, which would commit a definite injustice in particular cases and really would make little difference to the Exchequer.
    Question put, "That the word 'except' stand part of the Clause."
    The Committee divided: Ayes, 196; Noes, 102.

    Division No. 234.]

    AYES.

    [4.7 p.m.

    Acland, Rt. Hon. Sir F. Dyke

    Briscoe, Capt. R. G.

    Clarke, F. E.

    Acland, R. T. D. (Barnstaple)

    Brown, Rt. Hon. E. (Leith)

    Collins, Rt. Hon. Sir G. P.

    Acland-Troyte, Lt.-Col. G. J.

    Brown, Brig.-Gen. H. C. (Newbury)

    Colville, Lt.-Col. D. J.

    Adams, S. V. T. (Leeds, W.)

    Browne, A. C. (Belfast, W.)

    Cook, T. R. A. M. (Norfolk, N.)

    Albery, I. J.

    Bullock, Capt. M.

    Cooke, J. D. (Hammersmith, S.)

    Aske, Sir R. W.

    Burgin, Dr. E. L.

    Cooper, Rt. Hn. A. Duff(W'st'r S.G'gs)

    Atholl, Duchess of

    Burton, Col. H. W.

    Cooper, Rt. Hn. T. M. (E'nburgh, W.)

    Baldwin, Rt. Hon. Stanley

    Butler, R. A.

    Courthope, Col. Sir G. L.

    Barclay-Harvey, C. M.

    Cartland, J. R. H.

    Craddock, Sir R. H.

    Baxter, A. Beverley

    Carver, Major W. H.

    Critchley, A.

    Beaumont, Hon. R. E. B. (Portsm'h)

    Cary, R. A.

    Croft, Brig.-Gen. Sir H. Page

    Beit, Sir A. L.

    Cazalet, Thelma (Islington, E.)

    Crooke, J. S.

    Bennett, Capt. Sir E. N.

    Chamberlain, Rt. Hn. N. (Edgb't'n)

    Crookshank, Capt. H. F. C,

    Birchall, Sir J. D.

    Channon, H.

    Cross, R. H.

    Boulton, W. W.

    Chapman, A. (Rutherglen)

    Crossley, A. C.

    Bowater, Col. Sir T. Vanslttart

    Chapman, Sir S. (Edinburgh, S.)

    Crowder, J. F. E.

    Braithwaite, Major A. N.

    Christie, J. A

    Clverwell. C. T.

    Dawson, Sir P.

    Kerr, H. W. (Oldham)

    Reid, Sir D. D. (Down)

    Denman, Hon. R. D.

    Kerr, J. Graham (Scottish Univs.)

    Remer, J. R.

    Denville, Alfred

    Keyes, Admiral of the Fleet Sir R.

    Rickards, G. W. (Skipton)

    Despencer-Robertson, Major J. A. F.

    Kirkpatrick, W. M.

    Ropner, Colonel L.

    Dorman-Smith, Major R. H.

    Lamb, Sir J. Q.

    Ross, Major Sir R. D. (L'derry)

    Duckworth. W. R. (Moss Side)

    Lambert, Rt. Hon. G.

    Ross Taylor, W. (Woodbridge)

    Dugdale, Major T. L.

    Latham, Sir P.

    Ruggles-Brise, Colonel Sir E. A.

    Dunglass, Lord

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

    Runciman. Rt. Hon. W.

    Elliston, G. S.

    Leckie, J. A.

    Russell, A. West (Tynemouth)

    Emmott, C. E. G. C.

    Leech, Dr. J. w.

    Russell, S. H. M. (Darwen)

    Emrys- Evans, P. V.

    Lees-Jones, J.

    Salt, E. W.

    Erskine Hill, A. G.

    Lennox-Boyd, A. T. L.

    Samuel, Sir A. M. (Farnham)

    Evans, D. O. (Cardigan)

    Levy, T.

    Samuel, M. R. A. (Putney)

    Everard, W. L.

    Lewis, O.

    Sandeman, Sir N. S.

    Flldes, Sir H.

    Lloyd, G. W.

    Sandys, E. D.

    Fraser, Capt. Sir I.

    McCorquodale, M. S.

    Savery, Servington

    Gllmour, Lt.-Col. Rt. Hon. Sir J.

    MacDonald, Rt. Hn. J. R. (Scot. U.)

    Shaw, Major P. S. (Wavertree)

    Gledhill, G.

    McEwen, Capt. J. H. F.

    Shepperson, Sir E. W.

    Graham, Captain A. C. (Wirral)

    McKie, J. H.

    Shute, colonel Sir J. J.

    Grattan-Doyle, Sir N.

    Macnamara, Capt. J. R. J.

    Sinclair, Rt. Hon. Sir A. (C'thn's)

    Gridley, Sir A. B.

    Macqulsten, F. A.

    Smiles, Lieut.-Colonel Sir W. D

    Griffith, F. Kingsley (M'ddl'sbro, W.)

    Magnay, T.

    Smith, L. W. (Hallam)

    Grimston, R. V.

    Maitland, A.

    Somervell, Sir D. B. (Crewe)

    Gunston, Capt. D. w.

    Makins, Brig.-Gen. E.

    Spens, W. P.

    Guy, J. C. M.

    Manningham-Buller, Sir M.

    Stanley, Rt. Hon. Oliver (W'm'l'd)

    Hacking, Rt. Hon. D. H.

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

    Stewart, J. Henderson (Fife, E.)

    Hamilton, Sir G. C.

    Meller, Sir R. J. (Mitcham)

    Strauss, E. A. (Southwark, N.)

    Hanbury, Sir C.

    Mills, Sir F. (Leyton. E.)

    Strickland, Captain W. F.

    Hannah, I. C.

    Mills, Major J. D. (New Forest)

    Sueter, Rear-Admiral Sir M. F.

    Hannon, Sir P. J. H.

    Mitchell, Sir W. Lane (Streatham)

    Tasker, Sir R. I.

    Harris, Sir P. A.

    Moore, Lieut.-Col. T. C. R.

    Taylor, Vice-Adm. E. A. (Padd., S.)

    Hartington, Marquess of

    Moreing, A. C.

    Touche, G. C.

    Haslam, H. C. (Horncastle)

    Morris, O. T. (Cardiff, E.)

    Tree, A. R. L. F.

    Heneage, Lieut.-Colonel A. P.

    Morrison, G. A. (Scottish Unlv's.)

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

    Hepburn, P. G. T. Buchan

    Morrison, w. S. (Cirencester)

    Ward, Irene (Wallsend)

    Hepworth, J.

    Neven-Spence, Maj. B. H. H.

    Warrender, Sir V.

    Herbert, Major J. A. (Monmouth)

    Orr-Ewing, I. L.

    Waterhouse, Captain C.

    Herbert, Captain S. (Abbey)

    Patrick, C. M.

    Wedderburn, H. J. S.

    Hills, Major Rt. Hon. J. W. (Ripon)

    Peake, O.

    Wells, S. R.

    Hoare, Rt. Hon. Sir S.

    Penny, sir G.

    White, H. Graham

    Holdsworth, H.

    Perkins, W. R. D.

    Williams, C. (Torquay)

    Hopkinson, A.

    Petherick, M.

    Williams. H. G. (Croydon, S.)

    Horsbrugh, Florence

    Pickthorn, K. W. M.

    Windsor-Clive, Lieut.-Colonel G

    Howitt, Dr. A. B.

    Plugge, L. F.

    Wise, A. R.

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

    Ponsonby, Col. C. E.

    Young, A. S. L. (Partick)

    Hulbert, N. J.

    Pownall, Sir Assheton

    Hunter, T.

    Radford, E. A.

    TELLERS FOR THE AYES—

    Hurd, Sir P. A.

    Raikes, H. V. A. M.

    Mr. James Stuart and Lieut.-Colonel

    James, Wing-Commander A. W

    Ramsden, Sir E.

    Llewellin

    Keeling, E. H.

    Rathbone, J. R. (Bodmin)

    NOES.

    Adams, D. (Consett)

    Groves, T. E.

    Mathers, G.

    Adams, D. M. (Poplar, S.)

    Hall, G. H. (Aberdare)

    Maxton, J.

    Adamson, W. M.

    Hall, J. H. (Whitechapel)

    Montague, F.

    Anderson, F. (Whitehaven)

    Hardie, G. D.

    Morrison, R. C. (Tottenham, N.)

    Attlee, Rt. Hon. C. R.

    Henderson, A. (Kingswinford)

    Oliver, G. H.

    Banfield, J. W.

    Henderson, J. (Ardwick)

    Parker, J.

    Barnes, A. J.

    Henderson, T. (Tradeston)

    Parkinson, J. A.

    Barr, J.

    Holland, A.

    Pethick-Lawrence, F. W.

    Benson, G.

    Hopkin, D.

    Potts, J.

    Bevan, A.

    Jagger, J.

    Richards, R. (Wrexham)

    Brooke, W.

    Jenkins, A. (Pontypool)

    Rlley, B.

    Brown, Rt. Hon. J. (S. Ayrshire)

    Jenkins, Sir W. (Neath)

    Ritson, J.

    Burke, W. A.

    Jones, A. C. (Shipley)

    Roberts, Rt. Hon. F. O. (W. Brom.)

    Cape, T.

    Jones, Morgan (Caerphilly)

    Robinson, W. A. (St. Helens)

    Charleton, H. C.

    Kelly, W. T.

    Rowson, G.

    Cluse, W. S.

    Kennedy, Rt. Hon. T.

    Salter, Dr. A.

    Compton, J.

    Kirby, B. V.

    Sexton, T. M.

    Cove, W. G.

    Kirkwood, D.

    Shinwell. E.

    Daggar, G.

    Lansbury, Rt. Hon. G.

    Short, A.

    Davies, D. L. (Pontypridd)

    Lathan, G.

    Sllkin, L.

    Day, H.

    Lawson, J. J.

    Smith, Ben (Rotherhithe)

    Dobble, W.

    Leach, W.

    Smith, E. (Stoke)

    Dunn, E. (Rother Valley)

    Lee, F.

    Smith, Rt. Hon. H. B. Lees- (K'ly)

    Edwards, Sir C. (Bedwellty)

    Leonard, W.

    Smith, T. (Normanton)

    Gallacher, W.

    Leslie, J. R.

    Sorensen, R. W.

    Gardner, B. W.

    Logan, D. G.

    Stewart, W. J. (H'ght'n-le-Sp'ng)

    Garro Jones, G. M.

    Lunn, W.

    Taylor, R. J. (Morpeth)

    Gibbins, J.

    Macdonald, G. (Ince)

    Thurtle, E.

    Graham, D. M. (Hamilton)

    McGhee, H. G.

    Tinker, J. J.

    Green, W. H. (Deptford)

    MacMillan, M. (Western Isles)

    Walkden, A. G.

    Griffiths, G. A. (Hemsworth)

    MacNeill, Weir, L.

    Watkins, F. C.

    Griffiths, J. (Llanelly)

    Marklew, E.

    Watson, W. McL.

    834

    835

    Westwood, J.

    Williams, T. (Don Valley)

    TELLERS FOR THE NOES.-

    Wilkinson, Ellen

    Young, Sir R. (Newton)

    Mr. Whiteley and Mr. John.

    Williams, E. J. (Ogmore)

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

    Amendments made: In page 21, line 43, leave out "an irrevocable," and insert "a."
    In page 22, line 2, at the end, insert "which immediately before that date was irrevocable."
    In line 5, leave out "section," and insert "subsection."—[Mr. Chamberlain.]
    Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill.
    Mr. PETHICK-LAWRENCE: I rise to ask for a short account of the precise meaning of the very complicated Subsection (4), which is legislation by reference carried to a high degree. I hope we shall get an explanation which will enable us to understand what is the intention of it.
    4.18 p.m.
    Sir ARTHUR MICHAEL SAMUEL: The discussions on this Clause have shown that the Chancellor of the Exchequer has had the sympathetic support of everyone on this side. What we have done is to endeavour to point out where there will arise, I will not say flaws, but unforeseen contingencies which will bring about results that might be regarded as undesirable. I think my right hon. Friend must be glad that we have tried to point out defects. He will be anxious to make the Clause work without friction and above all, will want it to be just and to be constructed in such a manner that there will later on be no necessity for taxpayers to go to the Courts to have it explained. I remember quite well taking part as a back bencher in the discussions and deputations that brought about Section 20 of the Act of 1922. I know that Section almost by heart. It is referred to in the most complicated way in Sub-section (4) of this Clause. I have tried to grasp it and have found it utterly unintelligible. One might as well try to find out the thoughts in the mind of the Sphinx as try to unravel what is meant by this Sub-section (4). I agree that it is difficult to make a Finance Clause work as intended, and at the same time make it intelligible. But the duty of any Department is to make its Bills intelligible to ordinary people. This Subsection contains four "as ifs"—four
    836
    conditionals. It compares "this" Section with "that" Section of the Act of 1922 and vice versa, and there are variations of references and conditional effects. I do not know whether my right hon. and gallant Friend the Member for Ripon (Major Hills) can disentangle it. I doubt whether he can. The only way to get anything like lucidity is to repeal the 20th Section of the Act of 1922; then take out of it such operative statements as you wish to put into this Bill and re-enact the result as a new Clause without references, giving the whole thing a fresh start.
    I referred last night to a point which, I think, had not been foreseen by the Treasury, that is, the case of a young wife of 18. Under this Bill as it stands an infant who marries comes out of the operation of the Bill. Yet if a girl of 18 marries in the early part of an assessment year, say in May, if she has enough to add to her settlor-parent's income to make Surtax payable, her income, instead of being aggregated to that of her husband, will be aggregated for n months—from May until the next April—to her settlor-father's income. That seems to be wrong. We think the Clause will work pretty well, but that Sub-section (7) will also have to be redrawn and clarified. We hope that the representatives of the Treasury will consider what we have said in Debate and will improve Sub-section (7) in the way in which we have indicated it can be improved, to make it work so that people may not be taxed unfairly.
    4.25 p.m.
    Mr. CROWDER: I should like to endorse the request that has been made to the Chancellor to do his best to clarify the wording of this difficult Clause. Very few lawyers who have been consulted can say for certain whether any particular deed that is put before them is irrevocable or not. I consulted one the other day and he told me that all the deeds he had drawn were irrevocable as far as he understood the word, but he could not tell me if such a deed would be held to be irrevocable by the Inland Revenue if the Bill passed as now worded. That may be an exaggeration but I feel that, unless the wording is considerably altered, it will be rather hard on the ordinary taxpayer, because he will have in nearly

    837
    every case to consult his lawyer and get into communication with the Revenue authorities and argue the point out with them. The wording of the Clause has been devised with the object of giving the Revenue power to say in practice that nearly every deed is revocable. It seems to me rather like loading the scales in favour of the Revenue. In every case the onus will be on the taxpayer to make the Revenue believe that the deed is irrevocable. If the Chancellor could see his way to word the Clause so that any ordinary deed which has been held up to now to be irrevocable will be so held unless it contains an obvious Clause which anyone can understand that it can be revoked at any time, the taxpayer would know where he stood.
    I understand that the Revenue will be flooded with these documents shortly and asked to adjudicate as to whether they fall within the terms of the Bill or not. If the wording could be made clearer, it would be a great help to the taxpayer. After all, there cannot be so many borderline cases as regards deeds made before 21st April, 1936. I should like to see the Clause altered to read more or less that such deeds made before 21st April, 1936, will be deemed to be irrevocable unless they contain certain specific clauses which obviously make them revocable. I, and many of my friends, do not like this idea, of retrospective legislation. I hope the Chancellor will give every reasonable chance to those who executed deeds before 21st April, 1936, who thought they were making irrevocable deeds. We do not complain of legislation dealing with deeds made after that date, because everyone knows where he is. But many people will be penalised unless the wording is made clearer and borderline cases are allowed to be called irrevocable if it was obviously the intention of the settlor to make them irrevocable.
    4.29 p.m.
    Mr. KEELING: When a similar very abstruse Section of a previous Finance Act was before the courts, Mr. Justice Rowlatt said:
    "The section is perfectly unintelligible to any layman or lawyer who has not made a prolonged study with all his law books at his elbow, and it is a growing scandal that legislation by which the public is taxed should appear on the Statute Book in an unintelligible form. I am told by the Attorney-General that it is only by legislation by reference that the Statute can be carried through at all. Then
    838
    all I have to say is that the price of getting this legislation through is that the people of this country are taxed by laws which they cannot possibly understand, and I think this is the worst possible example of that kind of thing ever put on the Statute Book."
    It is on record that in the reign of Edward III the Chief Justice, accompaned by another judge, went to the House of Lords and asked them, as they had lately passed a Statute, what they intended thereby. If that expedient were available at the present time the Lords would be kept even busier than the Commons.
    I would like to comment on a suggestion made by my hon. Friend the Member for Farnham (Sir A. M. Samuel), that the old Section in an Act which it is intended to amend should be repealed and that a new Section reproducing the old Section with the desired Amendments should be enacted in its stead. The obvious objection to that course is that if you put the whole of the old Section into your Bill, you throw into the melting pot not only the parts you want to amend, but also the parts you do not want to amend, and that must prolong debate. But I make this suggestion for the consideration of the Government: It involves an alteration of Standing Orders, but I do not think that ought to be impossible. My suggestion is that when you want to amend a Section of an old Act, but only want to amend a few words in it, you should print the parts of it which you do not want to amend in a special type, or underline them, and that a Standing Order be passed that those parts which are so printed or underlined shall not be the subject of amendment or debate.
    This matter of abstruse legislation is a matter to which the Income Tax Codification Committee, in its recent report, devoted a great deal of attention. They said:
    "we have referred to the chaotic condition in which we found the legislation which it has been our task to codify, and have indicated that this was largely due to the haphazard process of amendment to which the law has been subjected. Should the result of our efforts to reduce this incoherent accumulation to some semblance of order meet with acceptance, we confess that we view with apprehension the prospect of the renewal of the same unsatisfactory process, with the consequent reproduction of the state of matters which we have sought to remedy. It is not within our province or our competence to suggest any alteration

    839
    in the present system of income tax legislation which would obviate this result, but it is manifestly desirable that such alterations and adjustments as may from time to time be found necessary should be so effected as to preserve the consistency of the scheme as a whole."
    The adoption of my proposal would largely obviate the danger to which the Committee draw attention, and I would ask the Government whether they will not consider this question of amending the Standing Orders and printing Bills in the way I have suggested.
    4.34 p.m.
    Mr. ALBERY: Several hon. Members learned in the law have complained of the drafting of this Clause. I, as an ordinary layman, have found it extremely difficult to understand, and I imagine that there are many others in the Committee who, like me, do not know exactly what we are doing here or what the effect of this Clause is. When you go to get a will drawn by a lawyer, he usually draws it in a form which you cannot understand, but if you tell him that you insist on having your will drawn in such a way that you, and possibly your wife also, can read and understand it, he is quite capable of doing it. Therefore, I am not convinced myself that it is beyond the wit of the Government draftsmen so to frame Bills that they can be reasonably understood by an ordinarily intelligent person. During the Second Reading of this Bill, my right hon. Friend the Chancellor of the Exchequer assured the House that he would willingly answer in detail the many difficult points which arise in it. I wish to say that the right hon. Gentleman and his very able lieutenant, the Financial Secretary to the Treasury, and also the learned Attorney-General, have given lucid replies—I imagine they were lucid, though I have not always understood them—to the questions which have been addressed to them. At any rate, they have remained good tempered, and we have nothing to complain of in the way in which they personally have met our attempts at criticism.
    Criticism of this Clause from an ordinary Member has been almost impossible, and that brings me to the main reason which brought me to my feet. The right hon. Gentleman has intimated his intention, for which I think most of
    840
    us are grateful, of reconsidering many portions of this Clause and of moving many Amendments on the Report stage. It was difficult enough to understand what was intended by this Bill when we had it presented to us for the Committee stage, but how on earth are we to understand what will be intended when we come to the Report stage and have submitted to us the draft of this Bill as it goes out of the Committee with none of the Chancellor's intended Amendments included in it? I want to ask the right hon. Gentleman whether he will at any rate give us an assurance that his proposed Amendments will be put down at an early date, at least some four or five days before the Report stage of the Bill is taken.
    4.37 p.m.
    Mr. H. G. WILLIAMS: I would like to reinforce the complaints which have been made as to the unintelligibility of this Clause. A good deal of it arises from the fact that in Acts of Parliament we have very long sentences instead of short sentences. I believe that when sentences are broken up, what was unintelligible becomes intelligible. But the real proof of the unintelligibility of the Clause was found in the Debate last night on this and the preceding Clause, which occupied about three hours and in which practically every speech was read, although the Standing Orders say that they should not be read. Those speeches included all those made from the Treasury Bench, because neither Ministers nor Members could make speeches on this subject without elaborately prepared briefs. I gather that the Chancellor of the Exchequer dissents from that statement. At any rate, the original reply which a Minister gave us was read, and subsequently he did the best he could. I am not blaming him. The sad thing is that we have to have a Clause like this at all.
    I knew nothing about this method until a year ago. Let there not be any misunderstanding. It is not only Conservative Members who have had to do with these settlements, but Members of the Labour party as well. [HON. MEM-BEES: "Name."] It would not be proper to name any hon. Member, but I know Members of the Labour party who have made these settlements. As I say, I knew nothing about it until a year

    841
    ago, and it then seemed a good idea, so I started in. Those happy times have come to an end. To be serious about it, however, why do people enter into this kind of settlement? Obviously because taxation is so unreasonably high. If it were on a reasonable level, we should not have people trying to indulge in these efforts, not to evade taxation, but to avoid it. There is all the difference in the world between the two. You are entitled to arrange your affairs so that you pay the minimum amount. There is not one hon. Member opposite who, in his daily transactions, does not try to arrange them so that he gets the maximum value for every penny that he spends. It is perfectly honourable and legitimate to find out what the law is on any subject and then to arrange your affairs so as to get the maximum benefit.
    There is no impropriety in that. But I knew, when I signed one of these documents a year ago, what would happen. I said to myself, "I wonder how long this will last." I knew that some Chancellor of the Exchequer was bound to stop a -device of this kind, which ultimately was involving him in a loss of several millions a year, otherwise everybody else in due course would have joined in and thus have reduced to a complete absurdity the proposal that the allowance in respect of a child was to be £60. In common with a great many other hon. Members, I shall lose when this becomes law, but I think we are in duty bound to vote for it, because obviously, although what we were doing was proper, it was nevertheless destroying the original purpose of the scheme of allowances and the rest of it. My point is, however, that people would not attempt to do these things if we pursued in this country a more moderate policy in regard to expenditure. It is the intolerable burden of expenditure, leading in turn to an intolerable burden of taxation, that forces the hands of people to try and adopt methods which are intended to avoid burdens imposed by Parliament. I hope that the lesson of this Clause will be borne in mind in inducing Members not to be so willing to support extravagant propositions in the future.
    4.41 p.m.
    Mr. TINKER: It has been pointed out by the hon. Member for South Croydon (Mr. H. G. Williams) that he understood
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    that several Members of the Labour party had made use of this method of tax avoidance. That might be so, but behind the objection of hon. Members opposite is not so much a feeling against the unintelligible appearance of the Clause as the fact that the Chancellor of the Exchequer has attempted to do something to make an inroad on their incomes, and that a large number of them will have to find more money for taxation than they have found in the past. Behind all their arguments is this thought, that certain concessions ought to be made. They say that they agree that this evasion ought to be stopped, but that all those who have taken advantage of the position hitherto should be allowed now to go free, that all those who have signed these agreements should not be penalised. At any rate, that is what I understand they are trying to get from the right hon. Gentleman. All of them seem to agree that this evasion wanted blocking some time ago, but one by one they have been taking advantage of it because the law allowed it.
    I wanted to think that many of them were really anxious that this Clause should foe intelligible, so that everybody could understand it, but I am not now altogether satisfied on that point. The hon. Member for Finchley (Mr. Crowder) was against the unintelligibility of the Clause, but he wanted the Chancellor to allow that those agreements that had been made in the past should not be interfered with. I listened very carefully to what he said, and behind it all was that point of view, that all those who had entered into these agreements should not be interfered with. It is evident that many hon. Members opposite have been making use of the position and trying to evade what I think are their responsibilities. Surely giving so much money to your children out of your income that would never have been given if you had not to pay tax on it means that you attempted to evade taxation. If the Chancellor of the Exchequer had not attempted to block this kind of thing, practically all their money would have been given to their children in this way, and there would have been nothing left for the Chancellor, until probably later on some of those children would not have been true to their parents and would have got away with it, as a lot did over the death duties. The same thing happened

    843
    there. Many people made allocations to their children, and it was found out afterwards that the children were not responsive to it, and people lost their money on it, which closed that kind of thing.
    I am very pleased that the Chancellor of the Exchequer has seen his way to checking these inroads that have been made on what ought to have been legitimate taxation, and I trust that when it comes to reviewing Clause 19, he will treat the Members of his own party in the same hard-hearted way as he has treated us on these benches. We asked yesterday for a small concession which would have cost £100,000. On this point I do not think one hon. Member on this side will benefit. I want to rouse the hon. Member opposite to retort and to give us some names. I would urge the Chancellor of the Exchequer to be as flint-hearted towards his own people as he has been towards us. If so, he can depend on our support on Clause 19 when it comes up for review again.
    4.45 p.m.
    Major HILLS: I should like to make a reference to the speech of the hon. Member for Leigh (Mr. Tinker). No one wants to make a revocable settlement irrevocable, but what we want to avoid is that a settlement which was intended to be and was an irrevocable settlement should be made into a revocable settlement by the terms of this Clause. There are cases in which a settlement in fact and in law was irrevocable, but it might be turned into a revocable settlement under the Clause. I should like to put a question with regard to what is known as the educational policy. It is a very common form of settlement to provide for the education of a child and to pay a premium until the child attains school age. After that time for a certain number of years an income is paid for the education of the child. The income goes to the benefit of the child and not to the benefit of the parent, but there is a provision in a great many of these policies that if the child dies before attaining school age and before the insurance payment starts, the premiums, or part of the premiums, are returned to the insurer. Therefore, there is some return to the insurer. I suggest that this is a very proper and useful form of providing for the education of a child. I do not
    844
    expect an answer from the Financial Secretary now, but perhaps he will consider the matter?
    4.47 p.m.
    Mr. CHARLES WILLIAMS: One remembers the hearty approval with winch the Chancellor of the Exchequer was greeted when he brought in this Clause for the purpose of endeavouring to protect the revenue, but many people have since declared that the Clause is so complicated that there is nothing clear about it. I am convinced that there are at least two things perfectly clear in the Clause. The first is that it is so complicated in its wording that it will be even more complicated when it comes into operation, and the average taxpayer will have to pay a great deal more than usual in order that he may be perfectly certain that he is paying his right proportion of taxation. When taxation is being made so complicated, and is being made still more complicated by this Clause, we are adding a very definite burden in the cost of fees for many people who can ill afford the expense.
    The Clause completely changes the incidence of taxation in many cases. Apparently, ven very few lawyers can understand it. When we have a position such as that, it must inevitably mean that there will be a very great number of cases of litigation. I do not know whether those interested in the law courts have yet asked the Chancellor of the Exchequer to celebrate the increase of fees which will follow the adoption of this Clause, but it is certainly hard on the taxpayer to have to face this kind of thing. The House of Commons was instituted primarily for the purpose of protecting the taxpayer, and I am sure the Chancellor of the Exchequer wishes to maintain the traditions of the House. One of the disadvantages of the present time is that there is not an Opposition strong enough and capable enough to enforce upon the Government the necessity of putting their Acts into the clearest possible words, and words that can be understood. There are methods of Opposition under which it would be possible to compel the Government to do that. I think that I should be capable of doing it, but it is not my job.
    Mr. A. BEVAN: There has not beer an Opposition for the last 150 years strong enough to do that.
    Mr. WILLIAMS: That is the hon. Member's opinion, but it would not apply to those of us who have seen other Oppositions working and have seen them able to do what I suggest. From the point of view of the taxpayer, something should be done between now and the Report stage to make the Clause simple and clear. It can be done and it should be done. After the protests that have been made by many supporters of the Government, all of whom have unanimously supported the Chancellor of the Exchequer in his wish for fairness, I think my right hon. Friend ought to do his best—it could be done by the Treasury, if they wished—to make the Clause simple and clear, so that an unnecessary burden will not be placed on the taxpayer by having to interpret the Clause.
    4.52 p.m.
    Sir JOHN WITHERS: I rise to add my protest against the Clause. It is the most complicated Clause that I have ever had to deal with. I have had to deal with settlements of various kinds for the last 45 years, and I have taken this Clause home and tried to read it and understand it but I have entirely failed. I sent it to the very best Counsel at the Bar and have received several letters from them to say that it is totally unintelligible. That opinion is from the best Counsel at the Chancery Bar. If that be so, what will happen when the Clause comes into operation and these matters come up for interpretation in the courts? I hope and pray that the Chancellor of the Exchequer will put the Clause into some order, and let us know in simple language what it really means, what it covers and what it does not cover.
    The ordinary legal practitioner absolutely fails to discover what it means. There has been a Committee of the Law Society studying it. This morning I spoke to a leading member of the Committee and I was told that they are thoroughly puzzled by it. They have made some criticisms on several points, which they have sent to the Chancellor of the Exchequer, and they have given me a copy of their criticisms. There are innumerable other points. It is a hardship that the ordinary man in the street who wants to obey the law should not know what it is. The law ought to be
    846
    made clear. I do not know what the Clause means or whether it means anything in some parts. If it does mean anything, it ought to be put in simple language, so that we may know what we can do and what we cannot do. The Chancellor of the Exchequer has a clear mind and the Financial Secretary has a clear mind and I would ask them to apply their minds to this Clause and to put it into ordinary, simple language that people can understand.
    4.55 p.m.
    The FINANCIAL SECRETARY to the TREASURY (Mr. W. S. Morrison): There have been a number of criticisms directed against the language of the Clause because of its so-called obscurity. I do not deny that the language used is of a highly technical character in some of its parts, but that to some extent is unavoidable because the Clause deals with trusts, dispositions and settlements. The hon. Member for Cambridge University (Sir J. Withers), whose experience of trusts and settlements is very large, will recollect that the language of the trusts and settlements is not as pellucid as the language which he has been urging us to adopt. Let me say a few words about the so-called legislation by reference, and the technical language. Clarity is a very desirable thing but certainty of meaning is equally desirable. The hon. Member for Twickenham (Mr. Keeling) suggested one reason which led Governments to indulge in legislation by reference. May I suggest another, and that is that where you are introducing legislation which impinges upon a body of law which has been the subject of judicial interpretation, it is well to preserve certain phrases which have acquired through the ages a definite meaning as terms of art, and there is no doubt as to their legal interpretation? If you do sometimes lose in clarity by adopting these terms of art, you do gain in certainty. I would ask hon. Members to accept that assurance.
    The hon. Member for Gravesend (Mr. Albery) spoke of going to a solicitor and asking for a will to be prepared, and finding out afterwards that the will bears the common mark of unintelligibility. He said that if you go again to the solicitor and ask him to put it into simple language, he does so. I should not like to cause any anxiety to the hon. Member for Gravesend, but I should not be so

    847
    certain that the simple version would stand a close analysis. Take the case of the Workmen's Compensation Act, which in certain of its provisions is drafted so as to be intelligible to the workman. It refers to a man being injured by an accident "arising out of or in the course of his employment." That term to the ordinary man would appear as crystal clear as the day, but there are very few words which in use have led to so much expensive litigation. I would ask hon. Members to bear in mind that the use of words which have a special meaning is often a real safeguard against litigation, and to offset that advantage against the loss of clarity to the lay mind.
    My right hon. Friend has given an assurance that in so far as that part of the Clause which appears to be obscure, is concerned, namely, Sub-section (7), he is willing to consider between now and the Report stage what can be done to deal with it. The hon. Member for Graves-end asked for an assurance that we would put down these Amendments as early as possible—within the next three or four days. I am not sufficiently aware of the time-table to be able to give a definite assurance with regard to the date, but we shall put down the Amendments at the earliest possible moment so that they will be before the House for the longest possible period.
    Mr. PETHICK-LAWRENCE: May I ask that the Clause should be treated in some way or other in the new form in which it is to be, so that we can see the Clause as a whole?
    Mr. MORRISON: I cannot give an assurance at the moment. It will depend, naturally, upon the size and importance of the alterations in the structure of the Clause, but at present I should not think that such a course would be necessary. The criticism has centred round Subsection (7), which defines the irrevocable trust, and it is particularly in that region that reconstruction will take place. I do not think that it will be necessary to adopt the hon. Gentleman's suggestion, but it will be borne in mind, and if we consider that it is for the convenience of the Committee and is necessary, we shall do it. The discussion was originated by the request of the hon. Member for East Edinburgh (Mr. Pethick-Lawrence) that I should attempt to elucidate Subsection (4). My hon. Friend the Member
    848
    for Twickenham (Mr. Keeling) quoted a passage from Mr. Justice Rowlatt in which he complained that the people were being taxed by Statutes whose language they could not comprehend. That criticism does not apply to this particular Sub-section because it is not a Sub-section which taxes people at all. It is, in fact, nothing new, but merely the perpetuation of a piece of machinery which has been in existence ever since 1922.
    Section 20 of the Act of 1922, which is referred to in the Sub-section, is the key to its meaning. That particular Section was one which had considerable effect, in that it caused to be deemed as the income of the settlor, the income which was paid to certain trusts of a revocable character. That Section said that a certain income which hitherto had been supposed to be the income of the child should be considered the income of the settlor, but it provided for this sort of contingency arising, that if a man had paid Income Tax on the assumption that the income was to be for his children or vice versa, those who had paid the tax should recover the amount of Income Tax paid from the person who had actually received the income.
    If hon. Members will read the Subsection they will see that it merely applies the machinery provision of Section 20 of the Act of 1922 to the present Clause. It does the same sort of thing, but to a greater extent. A larger range of income supposed to be the income of the child is now deemed to be the income of the settlor. If a parent has to pay additional tax by virtue of the Clause on the child's income, he can recover the amount of the additional tax from the trustee or other person to whom the income has been paid. Subsection (3) of this Section of the Act of 1920 dealt with the converse position where by reason of this change a man might be able to recover more in the way of relief than he otherwise would, and then that excess relief should go back to the child. That is the very ordinary machinery of the provision which is designed to prevent a man or a trust paying Income- Tax when they are not getting the income. With that explanation of this somewhat complicated sounding Clause I hope that the Committee will allow it to be passed. It is one which has been criticised, but I have found a perfectly genuine desire in all

    849
    sections of the Committee to stop the evasive side of these trusts, and hon. Members who have brought forward suggestions have done so with an equally keen desire that an innocent and proper trust should be protected. I have learned a great deal in the discussion, taken part in by hon. Members in all parts of the Committee, and I hope that the Committee will now let us have the Clause.
    Mr. KEELING: Will the hon. and learned Gentleman give an assurance that the suggestion which I made, that the Standing Orders should be altered so as to mitigate the evils of legislation by reference will receive the consideration of the Government?
    The CHAIRMAN: That matter is hardly in Order.
    5.7 p.m.
    Mr. LEWIS: I wish to emphasise the request of my hon. Friend the Member for Gravesend (Mr. Albery), that we should have reasonable notice of Government Amendments on this Clause on the Report stage. The Financial Secretary, although he could not give any undertaking at the time, indicated that they would be put down as soon as possible. I suggest to the Chancellor of the Exchequer that it might be well if he could have a conversation with the Chief Patronage Secretary on the decision as to the period of time. It is unfair to private Members of the House for the Government to put down Amendments to so complicated a Clause, unless the Government give reasonable time to consider them before the Debate. I suggest seriously to the Chancellor of the Exchequer that, if he wishes this Clause to have a sympathetic and reasonably quick passage on the Report stage, it is essential that he should give the House reasonable time to consider his Amendments.

    CLAUSE 20.—(Exclusion of certain, machinery from valuation for Schedule A, etc.)
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    5.8 p.m.
    Mr. LEWIS JONES: I have an Amendment on the Order Paper to leave out Clause 20.
    The CHAIRMAN: I may as well put the hon. Member straight on the matter. He should know that it is not an Amendment. He has an opportunity of speaking against the Clause on the Question "That the Clause stand part of the Bill."
    Mr. JONES: I wish to call attention to the new principle which the Chancellor of the Exchequer is introducing into the Finance Bill by means of Clause 20. The House will be aware that under the existing law an annual value allowance is granted, and that under the rules a deduction from taxable profits is allowed of one-sixth of the annual value of mills, factories, and other hereditaments. This allowance was always intended to recognise the extra depreciation to which industrial factories were exposed. The allowance has appeared in the Finance Acts of 1918 and 1919, and is definitely stated as being of one-sixth value. At one time, prior to the Finance Act of 1918 the allowance was a voluntary one made by the Inland Revenue people. The Finance Acts of 1918 and 1919 superseded the voluntary allowance and indicated definitely the form that the allowance should take. It takes the form of one-sixth of the annual value of the hereditament, and it is the general practice, for the purpose of Income Tax Schedule A assessment, to adopt, as the basis for this one-sixth, the annual value adopted for rating purposes. What is the change which the Chancellor of the Exchequer proposes in this Clause? At the present time the annual value of mills and factories for Income Tax assessment has a hypothetical tendency. The landlord undertakes the burden of repairs, insurance and other expenses necessary to maintain the factory or premises in such a state as to command a certain value.
    This is the important point at which the change is being brought into being. Up to now annual value has always included both process machinery and structure. The annual value was the valuation for rating purposes until 1929, and the assessments to Income Tax Schedule A, and was based on the rating valuation, which included process machinery. When the valuers went round the various properties they took into consideration not only the value of the structure itself but of the process machinery. In 1925 the Rating and Valuation Act was passed, setting up a

    851
    new basis for arriving at annual value, and the effect of that Act was to exclude from annual value for purposes of rating the value of all process machinery. This came into operation for rating purposes in 1929. Assume that the annual value prior to the 1925 Act was £10,000. That included the value of the structure and the machinery. As a result of the Rating and Valuation Act of 1925, process machinery was excluded from that valuation, so that, instead of the hereditament or factory having an annual value of £10,000, the annual value was reduced to £6,000, and that became the basis of rating. But the Rating and Valuation Act of 1925 was not concerned with anything but rating purposes. It was not concerned with Inland Revenue, but the Inland Revenue authorities adopted the annual value arrived at under the 1925 Act as the annual value which was to be the basis of their one-sixth allowance.
    Throughout the country small and large factories alike received rather a shock, and after a time a case was taken to the General Commissioners. It was put forward by Hudsons, and was known as the Crawford versus Hudson case. They appealed to the General Commissioners that the Inland Revenue people were not playing the game and were adopting the basis of the Rating and Valuation Act in arriving at an annual value which was not in accordance with the intention of Parliament when it passed the Finance Acts of 1918 and 1919. It affected small and large factories in all parts of the country. An appeal was made by this firm to the General Commissioners of Income Tax, and it was decided that the Inland Revenue people were wrong and should have adopted the annual value, which included structure and process plant. The Inland Revenue were not satisfied and went to law, with the result that Mr. Justice Finlay gave a decision against them, and told them that they were bound to take as the annual value and which to base these allowances the value of the structure and the machinery. As a result of that decision the old annual value was restored and the Inland Revenue people made the allowance of one-sixth on the value of the structure and machinery. Then they appealed to the Treasury, with the result that the Chancellor of the Exchequer has introduced this Clause into the Finance Bill
    852
    making legal what the courts declared to be illegal.
    What is the effect of this Clause? In the first place it was intended that the allowance of one-sixth should be given on an annual value which included the structure and process machinery, but the Inland Revenue by reducing the annual value obviously increased the taxation on industries generally. In the second place, when the one-sixth allowance was made on the gross annual value it was a uniform benefit to all industries, but once machinery is deducted from the annual value then the amount of the one-sixth allowance varies in different industries and different businesses. Take a large engineering works which is highly mechanised, the structure being merely a shell with expensive machinery inside. It is possible for the machinery to be 80 per cent. of the whole annual value and, therefore, the withdrawal of the value of machinery in calculating the annual value is a serious injustice to the owner of such a factory. Where you have steel works with huge furnaces the change in the method of calculating this one-sixth is not quite so serious, but the effect is that whereas before there was a uniform system of one-sixth allowance on structure and machinery you are now introducing a system of allowances which is not uniform. If it is right to give this one-sixth allowance to industry, then it is right that the method of its application should be uniform. I suggest that the Chancellor of the Exchequer should look at this matter again, and if he has to make a change it should be a change which will not wreck the system of uniformity which has been operating so successfully for some years. That is my objection to the Clause.
    5.19 p.m.
    Mr. BATEY: I understand that the hon. Member for West Swansea (Mr. L. Jones) considers that machinery bears too large a proportion of the burden of rates and taxation. I am not sure that I am quite so keen about this matter as I used to be. There is a great difference between the machinery of to-day and the machinery of the old days. Machinery is supplanting man wholesale. Employers have no consideration for the displacement of men. Indeed, they are relieved from the payment of contributions to National Health Insurance and

    853
    unemployment. In view of the huge installation of machinery during the last few years I think that the Chancellor of the Exchequer should give his attention to the rating of all machinery again in order to make it bear its fair shave of taxation.
    5.20 p.m.
    Mr. CHAMBERLAIN: The hon. Member for West Swansea (Mr. L. Jones) has put his case in simple language, and it may be that hon. Members think that they completely understand the situation. But the difficulty about these simple matters is that they are simple because the hon. Member has not given the Committee quite an accurate and a complete picture of what the Clause is intended to do. Therefore, I think it necessary that I should give the Committee a short explanation of what the Clause is intended to do, and I will try to make the matter clear. It is not true that there was uniformity in this matter. There never was uniformity in the rating of machinery until the Act of 1925 introduced a new plan under which machinery was divided into two categories, one which was rateable and one which was not. In assessing valuation for the purposes of Schedule A it has been the practice to fallow the system adopted for valuation for rating purposes and, accordingly, the last valuation for Schedule A followed the Rating and Valuation Act procedure, with the result that valuations for Schedule A of mills and factories containing machinery were in some cases considerably less than they were before, because from that valuation was excluded the value of certain process machinery.
    The result was to reduce the taxation of these mills and factories under Schedule A. It is true that the case to which the hon. Member has referred was decided against the Inland Revenue and, as the application in that case was that the valuation for Schedule A should be increased, the first result was an increase of the amount they would have had to pay in taxation. It may seem a remarkable thing that anybody should go to the courts to secure that their taxation might be increased, but the Committee will understand that it did not end there, and that the firm who applied for a reversal of the processes of valuation which had been followed did not do so for the purpose of increasing their taxation but for
    854
    decreasing it. The decrease arose from this fact, that for the purposes of Schedule D, profits made under Schedule D, there are allowed two deductions, first, the actual amount spout on repairs and, secondly, a statutory repairs allowance. The gross valuation under 'Schedule A is subject to the statutory repairs allowance of one-sixth. When you come to make a deduction from Schedule D you are allowed to deduct not only the actual amount you spend on repairs but also the gross valuation under Schedule A. There are two allowances for repairs, the actual amount spent and also the statutory allowances for repairs.
    What is the explanation of that? It seems somewhat anomalous and incongruous. It was a special concession intended to provide for extra depreciation on buildings which were subject to extra vibration on account of the plant and machinery. Therefore, the effect is that you include in your valuation under Schedule A not only the value of the buildings and structural plant but also the fixed processes plant. You increase, of course, the valuation but you also increase the statutory repairs allowances. But when you come to make deductions for Schedule D it is the gross valuation which you deduct, and that gross valuation has been increased by the inclusion of the process machinery. Therefore this double allowance extends from the buildings to the machinery itself. Of course hon. Members' are aware that there is a special allowance for the wear and tear of machinery, so that if the matter had been allowed to stay as it was after the decision in the case of Crawford v. Hudson the owners of factories and mills with process machinery would get two allowances for repairs, the statutory allowances and the extra allowances which are given under Schedule D, and that would have meant a considerable loss to the Revenue which was entirely unjustified on the merits of the case. That is the reason why, the case having been decided on questions of law, we have introduced this Clause in the Bill.
    Clause 21 ordered to stand part of the Bill.

    CLAUSE 22.—(Modification of exemption from estate duty on property situate abroad.)
    5.28 p.m.
    Mr. SPENS: I beg to move, in page 24, line 33, at the end, to add:
    "(c) which passes under or by reason of a disposition made before the twenty-second day of April, nineteen hundred and thirty-six."
    I desire to raise a point of some difficulty in connection with this Clause, which is intended to extend the liability for Estate Duty to all foreign personal property which is not at present caught by the Estate Duty provisions. The foreign personal property which is caught at present by the Estate Duty provisions is such as would also have to pay Legacy Duty or Succession Duty. If it has to pay Legacy Duty the foreign personal property has to pass under sale to the executors who have to pay the Estate Duty, although the foreign property on which the duty has to be paid is outside the jurisdiction. The executors themselves are not only inside the jurisdiction but are the persons who legally control the foreign property and, therefore, make the foreign property bear its proper share of Estate Duty. In the same way foreign personal property which is subject to Succession Duty and has to bear Estate Duty being outside the jurisdiction, only becomes subject to Succession Duty if there are English trustees inside the jurisdiction. There, again, although the executors have to pay Estate Duty they have got inside the jurisdiction the person who has a legal right to the property and from whom they can collect the Estate Duty.
    As the hon. and learned Gentleman the Financial Secretary explained, the object of this Clause is to make liable to Estate Duty foreign personal property which is not at present liable either to Legacy or Succession Duty, and the hon. and learned Gentleman gave as an instance the case of foreign personal property which a man has given away to a foreigner within three years of his death. Let us suppose that happens, and that within three years of his death a man has given to a friend in America £50,000 worth of investments which he had in New York. The person who, under the Estate Duty provisions, is liable to pay the duty on the whole property is the. executor in England who, before he gets probate, has to pay the
    856
    whole of the Estate Duty. The only assets from which he can pay it are such assets in this country as are under his control. The result of this Clause will be to increase the rate of duty on the English property, and this will mean that the English property will have to bear, in the first instance, the total increased Estate Duty both on itself and on the foreign property.
    Then arises the question as to how the executor, having paid that Estate Duty to the Government, can get it back from the foreign donee of the property. It is an international convention that no foreign country will enforce a tax claim of another country, and this even applies to our own Dominions. In those circumstances, it seems to me that the position would be that the executor, before he could get a probate, would have to pay out of the English property which goes to the English legatees the whole of the Estate Duty, without having any means of getting it back from the foreign donee of the property. If this is to operate only as regards future dispositions, a man may very well take care of himself. If in future a man gives away foreign property and leaves a certain amount of property in this country, after this Clause is passed he will know that the property which he leaves in this country will bear the whole of the Estate Duty, unless he makes an arrangement for his foreign donee to give it back, and that his English legatees will take so much less. I suggest that it will be very unfair if this Clause is made to apply to someone who has already given away his foreign property or part of it, but who may die within three years from making that gift and after this Clause is in operation. In those circumstances, we should be penalising innocent English legatees by making them pay out of what may be intended to come to them not only their own share of the Estate Duty, but the whole Estate Duty on the foreign property, without giving them any means, as far as I can see, of putting the matter right as between those who take the English property and those who take the foreign property. It is for the purpose of raising this difficulty that I have moved this Amendment.
    5.35 p.m.
    The ATTORNEY-GENERAL (Sir Donald Somervell)I think the argument

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    of the hon. and learned Gentleman the Member for Ashford (Mr. Spens) is based on a misunderstanding of the results which the new Clause will bring about. He started by claiming rightly that this Clause is intended to bring within the ambit of Estate Duty certain movable property situate abroad which does not come within the provisions of the Finance Act, 1894. The property which it is intended to include falls mainly under three heads: First, gifts made abroad within three years of the death of the donor; secondly, joint investments made abroad; and thirdly, foreign settlements where the settlor has a British domicile. These three means have been used for avoiding the payment of Death Duty and Estate Duty, and it is that which the Clause is designed to prevent. I do not think my hon. and learned Friend quarrels with the general intention of the Clause, but what concerns him are the powers which the Clause may confer upon the Inland Revenue authorities to recover the duty so imposed from the executors in this country.
    The powers to recover from the executors when this Clause becomes applicable will be no greater than the existing powers which are contained in the Finance Act, 1894, and if my hon. and learned Friend will refer to that Act he will see that the liability of the executor is restricted to Estate Duty on the personal property of which the deceased is competent to dispose at his death. Therefore, in the case of the first form of property which this Clause is designed to include, namely, gifts made abroad within three years of the death of the donor, the liability cannot be placed on the executor because it is not property of which the deceased is competent to dispose at his death. The liability for Estate Duty on such a gift will be on the donee, and if it cannot be recovered from the donee because he is outside jurisdiction, it cannot be recovered at all. As far as joint investments are concerned, again the liability would be imposed on the executor only in cases where the joint investment constituted a joint tenancy. In regard to foreign settlements, my hon. and learned Friend will appreciate that property in that circumstance will only be property of which the deceased is competent to dispose at his death in the event of the
    858
    settlement itself containing a power of revocation or a general power of appointment. I think it is clear that my hon. and learned Friend moved this Amendment in the belief that the possible liability on the executor was very much wider than it is. I hope that, in view of the explanations I have given, he will be satisfied that the injustice which he feared will not occur, and that he will not press his Amendment.
    5.39 p.m.
    Mr. SPENS: I am very much obliged to the Attorney-General for his explanations which, so far as they go, appear to me to be satisfactory. The only criticism which comes to my mind after listening to him is that it seems to me that we are passing a Clause to impose Estate Duty on foreign property which in a great number of cases, and at any rate as far as concerns property given away to somebody abroad, we are never to be able to recover in any circumstances, and that the only effect of imposing duty on that property will be, in fact, to raise the rate of duty on the English property. I agree, however, that the point which I raised about the English legatees having to bear the duty on foreign property without having any chance of recovering it has been met by the answer of the Attorney-General, and in those circumstances I beg to ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    5.42 p.m.
    Mr. BENSON: I would like to raise a point in connection with paragraph (b) which reads:
    "which by the law of the country in which it is situate is immovable property."
    I assume that the words "immovable property" refer to such things as works of art in Italy and various types of property which may not be exported from the country in which they are. My point is that although the property may be immovable under the law of the country, it may be saleable, and an executor may be able to realise it and therefore have an enjoyable property under his control which would not be taxable.
    5.43 p.m.
    Mr. LEWIS: With regard to the question of removing property from abroad,

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    I would like to refer to what is known as a frozen credit. Hon. Members know that it not infrequently happens at the present time that, as a result of some transaction abroad, a man has a credit in a foreign country which under normal circumstances he could transfer to this country, but which, owing to exchange restrictions, he is debarred from moving from that country. Such a frozen credit might and no doubt often does form part of the estate of a man who has died. In such a case the question of saleability, which was raised by the hon. Member for Chesterfield (Mr. Benson), docs not arise, because clearly one cannot sell a frozen credit. I would like to know what is to be the position of an executor in the event of a large portion of the estate consisting of a frozen credit. Is probate to be denied until the duty on that credit is paid, and if so, is the executor to be compelled to find the money from other property in this country? I admit that the subject is a very difficult one; I tried to frame an Amendment to deal with it but was unable to do so. I would like to have from the Front Bench some understanding as to how this position is viewed, because it is a matter which will arise under this Clause, since exchange restrictions are likely to continue for some time. I take this opportunity to ask for a statement as to how this problem of frozen credits is to to dealt with under this Clause.
    5.44 p.m.
    The ATTORNEY-GENERAL: In reply to the questions which have been put to me, the reference to immovable property does not contemplate the type of property referred to by the hon. Member for Chesterfield (Mr. Benson). It means land or such interests in land as are regarded as immovable property by the law of the country where the land is situate. By a general understanding between nations, no nation in the past has ever attempted to tax land which constitutes part of the territory of another country. Therefore, foreign land has always been outside the Death Duty or Estate Duty net. It is simply a proviso that nothing in the Clause is to operate so as to charge with duty any property which by the law of the country in which it is situate is immovable property. It simply excludes foreign land.
    Mr. BENSON: Does that also refer to foreign real property—to bricks and mortar?
    The ATTORNEY-GENERAL: Yes.
    Mr. BENSON: A man might invest his money abroad in foreign property and that would be excluded from Estate Duty. But if the property were sold and the proceeds brought back here, would they also be excluded?
    The ATTORNEY-GENERAL: No. It is only as long as the property consists of land and the buildings on it, or such other interests in land as are within the words "immovable property," situate in a particular foreign country that this applies. One, of course, would have to look at the law of the foreign country concerned to see what was regarded as immovable property in that country. Under our own law, land and the buildings on it are included in real property and I have no doubt that foreign systems of law adopt the same principle. But once a man sells that property then, instead of being the owner of foreign land which has houses upon it or similar property, he becomes entitled as a personal right to the purchase price and when the purchase price is paid to him the money thus realised would come within the net. It is only as long as the property is land abroad that it is outside the net.
    My hon. Friend the Member for Colchester (Mr. Lewis) raised a point which is wholly outside the Clause. A frozen credit could not possibly come within the three categories of property situated abroad with which the Clause deals. He was, therefore, asking me to give an opinion on the legal effect of the existing law in respect of a matter apart from this Clause. It would he contrary to the Rules of Order to do so, even if I were competent at the moment to express any useful opinion upon that point and I must, therefore, ask my hon. Friend to excuse me from dealing with it.
    Clauses 23 to 26 ordered to stand part of the Bill.

    CLAUSE 27.— (Provisions as to Road Fund.)
    5.50 p.m.
    Mr. BENJAMIN SMITH: I beg to move, in page 26, line 33, to leave out Sub-sections (1) and (2).

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    The obvious effect of the Clause, as it stands, is to take from the Minister of Transport the powers to build and maintain roads and to borrow money on the security of the Road Fund and to hand over the whole of the taxation on motor vehicles and petrol to be used for general taxation purposes—no doubt to be used at some future date for the somewhat grandiose arms policy of the Government. The Minister of Transport under the Roads Improvement Fund Act of 1909 was given the powers to build and maintain roads and to borrow money on the security of the Road Fund. These powers are still held by the Minister, under the Roads Act of 1920, but they have never been exercised either by the Minister of Transport or the Roads Board, obviously, because the Treasury, taking a different view from that of the House of Commons, have steadily prevented the exercise of those powers to which their consent is necessary.
    This Clause is a Treasury measure drafted in order to carry out something different from what the House of Commons by resolution has approved, and also to alter the law of the land in a manner which has not been approved by the House of Commons by taking this power from the Minister. Under Sub-section (1) of the Clause the power of the Minister to make advances to or in conjunction with highway authorities is limited. It will have the effect of making expenditure either on new construction or on the maintenance of roads subject to the consent of the Treasury in future, and it seems to me that, as far as the roads are concerned, it will do away with the necessity of having a Minister of Transport at all. The making of new roads will be left entirely in the hands of the Treasury.
    The Treasury are taking over in this way a lucrative form of revenue which is growing rapidly. If we take the period of 10 years from 1926 to 1935 we find that the number of omnibuses in use has grown from approximately 40,000 to 47,000, and the number of goods vehicles from approximately 257,000 to 435,000. In the same period, the mileage of classified roads has increased by 11.1 per cent. The number of motor vehicles per mile of classified roads has increased from 34.6 in 1924 to 59.2 in 1935. If we take into account all roads, the user per mile by vehicles has increased from 7.4 to 14.5, or
    862
    approximately doubled. The Royal Commission on Transport in 1930 recommended that in future two-thirds of the cost of the highways should be borne by the motorists, yet in 1930–31 the motorists paid £40,000,000, or a sum equivalent to the annual cost of the whole highways system. The Salter Commission in their report stated:
    "We consider that the total contribution payable should be equal to the current expenditure on roads. That expenditure is estimated at £60,000,000."
    The fact is that the present taxation on motor vehicles from all sources, that is motor taxation itself and taxation on petrol, crude oil and lubricating oil and so forth, is equivalent to a sum of £71,149,000 per annum. It has risen to that figure from £55,741,000 since 1932, or an increase of £15,408,000 in five years. All of that the Chancellor of the Exchequer is taking power to incorporate in the general taxation of the country. When the right hon. Gentleman the Member for West Birmingham (Sir A. Chamberlain) as Chancellor of the Exchequer instituted the Road Fund he gave, for what it was worth, the pledge that the revenue from the taxation on motor vehicles should be used for the sole purpose of creating new roads and maintaining existing roads. It has been my province since to lead one or two deputations to Chancellors of the Exchequer. One of these was received by the right hon. Gentleman the Member for Epping (Mr. Churchill) and we were assured by him that no Chancellor could pledge his successor. But at a time when the unemployment figure in the country is so high and when the development of roads is so essential, to take this power from the Minister of Transport and put it into the hands of the Treasury is, we think, a retrograde step by the Government and one which is likely to militate against the efficiency of our road system.
    I hope that whoever replies for the Government will indicate what is to be the policy of the Government once they secure control of this fabulous sum—I think it is not too high a description of it—of £71,000,000 per year. Are they going to follow out the policy of increasing the mileage of roads in order to meet the increasing demands of motor traffic? Will they deal with existing roads in such a way as to render them safer both for pedestrians and motorists? Will they

    863
    maintain the policy which has hitherto been followed by the present Minister of Transport? One is at a loss to understand how the Minister has come to acquiesce so easily in this raid upon his revenue and this removal from him of powers which obviously ought to belong to him. Incidentally, it is curious to notice that the Minister himself should be absent from the Committee on this occasion. I think it is essential for the proper discussion of this matter, involving as it does such large sums of money, that the Minister should be present to speak in defence of his Department. We feel it to be his duty to be present and to take part in the discussion. For the reasons which I have already stated I commend this Amendment to the Committee.
    6.0 p.m.
    Mr. W. S. MORRISON: The hon. Member for Rotherhithe (Mr. Benjamin Smith) realises, I am sure, that the acceptance of his Amendment would destroy the whole Clause. Though he selects two Sub-sections for execution, the death of those two Sub-sections would destroy the whole structure of the proposal, and indeed the hon. Member's speech showed that that was really his purpose because, as I understand him, he objects entirely to the financial change which is here proposed by the Government. He complained of the absence of the Minister of Transport. The fact is that this Clause does not deal in any way with the policy to be applied to roads or with the duties of the Minister of Transport. It merely makes a financial change in that it provides that in future the revenues of the Road Fund are no longer to be met by the proceeds of certain licence duties but are to be provided out of moneys voted by Parliament. It is therefore, a matter for the Treasury and not a matter which raises large issues of road policy. The hon. Gentleman seemed to feel apprehensive lest this change would remove the power to construct roads which is vested in the Ministry of Transport by the Development and Road Improvement Funds Act, 1909, and I gathered it was in this respect that he feared that the change would involve some curtailment of the powers of the Minister and of his status in regard to this matter. If the hon. Gentleman will look at Sub-section
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    (1, a), he will find that the operative words are:
    "there shall be paid into the fund from time to time out of moneys provided by Parliament such sums as the Minster of Transport may, with the consent of the Treasury—
    Sir PERCY HARRIS: Why does the hon. and learned Member drop his voice when he says "with the consent of the Treasury"?
    Mr. MORRISON: If I used a fittingly trivial tone of voice, it was because these words involve no change at all. Treasury consent is necessary at the present moment for the operation of the Road Fund, and this Clause involves no change in the practice. The paragraph goes on:
    "determine to be required for the purpose of making advances to or in conjunction with highway authorities under Section eight of the Development of Road Improvement Funds Act, 1909, and for other purposes of the fund."
    Those other purposes of the fund include all the purposes of the fund, and the fact that this change is now being made from a separate fund fed from particular taxes to a fund fed by moneys voted by Parliament, involves no change of policy in regard to roads or the actual working of the Road Fund or the Ministry of Transport itself. I do not think that the Committee would take it kindly from me if I were to attempt on this Amendment to rehash the old arguments for this change. No doubt in the course of our discussions on the Clause we shall have an opportunity of bringing in many matters which are considerations of importance in this question. In the meantime, I have tried to answer the arguments of the hon. Gentleman and, as his Amendment would destroy the Clause, I have no option but to refuse it.
    Mr. HOLDSWORTH: The Financial Secretary said that this change did not alter the running of the fund. Can he explain Sub-section (2), which takes away the power to borrow? That is vital.
    Mr. MORRISON: That does not at all alter the policy and the working of the fund. The power to borrow as it at present exists is very small, about £200,000 a year. The reason for that provision is that now that the money is to be provided by Votes, the appropriate

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    security for any borrowing will not be the Road Fund, but the Consolidated Fund, and, in so far as borrowing powers are altered by this change, it improves the security.
    6.6 p.m.
    Mr. HERBERT MORRISON: I beg to move, "That the Chairman do report Progress, and ask leave to sit again."
    I do this because the Committee is faced with an extraordinary situation. It has been the common practice in the House and the Committee, when dealing with matters on the Finance Bill which affect the Ministry of Transport and its work, for the Minister of Transport to be on the Bench with representatives of the Treasury. Often he has been asked by the Government Whip to be in charge of the particular Clause which affects the Ministry. We are now dealing with a matter which not only affects the Minister of Transport, but brings the axe down on the Minister's neck. It affects his control of the Road Fund. We are very glad to have the Financial Secretary to the Treasury with us. He is doing his best and he is a competent expounder of these matters, but it is clear from his rather halting speech that he is not entirely familiar with the operations of the Ministry of Transport. We say that the proposal to abolish the Road Fund, which has existed ever since the Road Development Act of 1909, is clearly a first-class issue of Ministry of Transport policy, and the Minister ought to be here. Presumably, the Minister has been consulted and has acquiesced in this change. If he has—and one must assume that he has—he is jointly responsible with the Chancellor of the Exchequer.
    The Minister of Transport ought to be here with his Parliamentary Secretary, and we say that it is a positive scandal that the Committee should be discussing this Clause with only the Financial Secretary to the Treasury on the Bench. Indeed, the Chancellor ought to be here as well, but no doubt he is fully occupied in conducting the business of the Foreign Office. Are we to understand that the Treasury now, through the Chancellor of the Exchequer, has not only swallowed the Foreign Office, but has swallowed the Ministry of Transport as well? It is elementary courtesy to the Committee and an elementary duty on the part of the Minister of Transport to be here
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    when this vital matter affecting the whole future of his Department and its functions is under discussion. The Committee ought to refuse to go on until the Minister of Transport is here. Therefore, as a protest against this contemptuous attitude to the Committee, I move that the Chairman do report Progress.
    6.10 p.m.
    Sir P. HARRIS: I entirely endorse what the right hon. Gentleman has said. I have vivid memories of many discussions on Clauses in the Finance Bill affecting the Minister of Transport, and it has always been left to the Minister to defend and explain the effect of the increase or reduction of any taxes affecting transport. I am inclined to think that the explanation is very simple, and that there is no mystery about it. The right hon. Gentleman the Minister of Transport is ashamed of this particular proposal. He has been robbed of his power. He is now going to be tied entirely to the coat-tails of the Chancellor of the Exchequer. Money is to be doled out in small sums according to the whim of the Chancellor and to the financial pressure at the Treasury. It is a distinct betrayal of pledges given not only to the House, but to the motor industry. The very least that ordinary common courtesy demands is that the Minister of Transport, who is the responsible Minister, should be in his place to defend his submission to this direct attack on his Department.
    6.12 p.m.
    Mr. BEVAN: On no single occasion when this matter has been discussed do I remember seeing the Minister of Transport on the Front Bench. We have had several discussions on it. We had a general discussion, in which I had the honour to take part, on the Second Reading of the Finance Bill. We had discussions on the Resolutions before that, and on no occasion was the Minister present on the Front Bench. This is not treating the Committee with respect. If the contention is that it is not necessary for the Minister of Transport to be present because this is purely a Treasury matter, it is answered, not by the Amendment before the Committee, but by the last paragraph in the Clause, which surely demands that the Minister be present. Under that paragraph it is proposed to transfer to the Treasury a sum of money

    867
    which is outstanding on the Road Fund. We want to know from the Minister of Transport why that surplus is on the fund at all. Are we not entitled to ask him? He was asked on a previous occasion when he was not here to answer the question. The Liberal National Members ought to raise their voices in support of their champion. [Interruption.]
    I am very glad to see that the right hon. Gentleman has now appeared. It would have been much more graceful if he had come voluntarily and had not been dragged here reluctantly by the Motion to report Progress. However, I do not suppose that my right hon. Friend now proposes to press his Motion. We will leave the matter where it is in order that we may get on to the much more important matter of discussing the Amendments to the Clause. I have noticed expressions of apprehension on the faces of the right hon. Gentleman's immediate supporters. He will be expected to provide some justification for his election to the chairmanship of that section of the Government's supporters. The first chairman has passed by the way, and the right hon. Gentleman is now in the ascendant in the councils of his party. That is easy for him because there are not many of them and, such as they are, they are not very eminent. Nevertheless, we are expecting to hear from him the reason why, although there has been clamour all over the country for new roads, although there has been a heavy casualty list on the roads, he nevertheless finds himself with this nest-egg which the Chancellor can raid at the end of the year. I can assure him that not only this Committee but the country will be listening anxiously for his explanation this evening.
    Mr. H. MORRISON: I am sure that both the Minister of Transport and the Parliamentary Secretary were gratified by the unusually cordial reception they met with on entering the House, and as the purpose of my Motion has now been achieved, and they have bowed to the will of the Committee, I beg to ask leave to withdraw the Motion.
    Motion, by leave, withdrawn.
    Question again proposed, "That the words proposed to be left out, to the word 'and', in line 38, stand part of the Clause."
    6.16 p.m.
    Miss LLOYD GEORGE: We have been told this afternoon that the change to be undertaken is purely a financial change and will not affect the road policy in the very slightest, but I think most hon. Members who listened to the Financial Secretary to the Treasury, and noticed that very significant chopping of the voice of which he was guilty, will have realised the significance of it. The Chancellor said some time ago that there was no longer the same necessity that there was in the early days of motor traffic to remind the public of the need for new roads. Unfortunately, that is only too true. The number of accidents and casualties is a very grim and ever present reminder of that need. It is almost incredible that during the last 10 years the number killed and injured on the roads of this country was in the neighbourhood of 2,000,000, only 500,000 less than the numbers from this country killed and injured in the Great War; and there seems very little indication from this year's figures of any substantial improvement in those casualty lists. I believe the figures for the last Whitsun holiday were slightly higher than last year's, and that the figures for the first 23 weeks of this year arc 2 per cent. higher than for the first 23 weeks of last year, and this in spite of the fact that the Minister has been making unprecedented efforts and has been facing the situation with a courage which I think most hon. Members greatly admire.
    This is the very moment, when the figures are showing no substantial improvement, that the Chancellor has chosen not to raid but to ransack the Road Fund. We are told that great concern is felt at the Ministry of Transport, and we can well believe it, because this problem is responding so slowly to the very many efforts made to solve it. We have been told the reasons for the high accident rate, but I do not believe that sufficient emphasis has been laid upon the road factor. It is obvious that this must play an enormous part. Think of the increase in the number of motor cars. In 1909, when the Road Fund was first started, motor vehicles numbered about 143,000. In 1935 there were 2,500,000, and yet the road system of this country is substantially the same. It may be said that a great deal of money has been spent on the roads, and that is true, but I still say that the road system is substantially

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    the same, because we, cannot say that we have constructed a new road system, as they have in Italy, in Germany and in America, to cope with this new traffic.
    The roads of this country were never meant to carry vehicles going at 40 to 60 miles an hour, or to carry that very large proportion of heavy traffic which used to go by rail and now goes by road. When people talk of the money spent on the roads they forget what a very high percentage of it goes for maintenance simply. It is something like £31,000,000 this year; and the expenditure has been more or less at that rate for several years past. We have been told by the Royal Commission on Traffic that the cost of maintaining old roads is considerably greater than that of maintaining new roads which have been built for modern traffic on solid foundations.
    In the Road Fund there is a revenue which was specifically raised for the purpose of making and maintaining a road system capable of carrying this new traffic, but that revenue is now to go into the common national fund. We are told that we need not feel concern about that, that it is only a financial change, and that all that can happen is that the money available will now be limited only by the will of Parliament. That is what the Chancellor of the Exchequer said. I think we may as well say quite honestly that for the next year or two at any rate the money will be limited by the will of the Chancellor of the Exchequer, whatever the position he then happens to occupy. What is his attitude likely to be on this problem? I will quote what he said, because he always makes his attitude perfectly plain not only to himself and his colleagues but to the country.
    "I do not subscribe to the theory that you can measure the safety of roads by the amount of money you spend on them. The proof of that is to be found in the fact that the more that has been spent on roads the larger has been the number of accidents."
    I suppose the more we allow the roads to fall into disrepair the fewer accidents there will be. He comes to this astonishing conclusion:
    "If you make more roads you make more opportunities for accidents."—[OFFICIAL REPORT, 28th April, 1936; col. 788, Vol. 311.]
    The Chancellor has evidently changed his mind since last year, because he then
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    said "I do not deny that by the expenditure of money you may perhaps increase safety on the roads." Evidently there has been a very great change of attitude, and I wonder what has occasioned it. I am rather inclined to think it is the enormous liability we are about to under take in respect of armaments. The Chancellor said that Parliament will vote all the money that is necessary and that the Road Fund will not suffer in any way from the taking away of the £5,250,000, because that money could not be spent any way. I am delighted that the Minister of Transport is now in his place, because I am hopeful that he will confirm in every particular that statement of the Chancellor and, indeed, I challenge him to do so. It will be very reassuring to us if he does; but is the Minister honestly prepared to say that if some of that so-called surplus were spent on widening main roads—
    The DEPUTY-CHAIRMAN (Captain Bourne): I would point out that the Amendment now before the Committee does not affect the £5,250,000.
    Miss LLOYD GEORGE: I bow to your Ruling; but I would put this further point. The Minister has launched a national safety campaign. He has asked every county to submit to him plans for a safety campaign. In December of last year I think 20 county councils in rural or semi-rural counties asked the Ministry of Transport for a retention of their percentage grants from the Road Fund because they could not undertake their part in this safety campaign unless they got further assistance from the Road Fund. Indeed, they said they could not undertake the programme which was essential if their roads were to be brought up to the minimum status of national safety prescribed by the Minister of Transport himself. The Minister received a deputation from those 20 county councils. I cannot say that he was very sympathetic, but I can say that he was very receptive, and there is a world of difference between those two attitudes.
    I think he was evidently impressed by the case made by the county councils, because when a few months later they again approached him he said he would be prepared to receive a deputation. I do not think that was an empty invitation, because he asked them to provide him with a detailed statement of the expenditure

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    involved in works of improvement and construction which they considered should be undertaken. It is interesting that he asked for all these details. He said he wanted it, "in order that the deputation may produce the very best results." That was in April, before the Budget. After the Budget, when the counties were waiting for the date for the deputation to be fixed, they received a letter from the Minister saying that the Government had come to the conclusion that it would not be possible to give any further assistance, and that it was very little use the deputation coming up at all. I do not think the Minister would have asked the county councils to go to all that trouble to provide detailed information if he really had proposed to turn them down. I am not prepared to think that he would treat local authorities in that way. But there was definitely a great change in the attitude of the Minister between those two dates, and I can only think that the one thing that made him alter his mind was that in the interval the Budget had been introduced.
    What is the position of those 20 counties to-day? Six of them say that it will be absolutely impossible for them to proceed with the improvements they must undertake if they are to conform to the minimum safety standard set up by the Minister, unless they are given a larger grant. Three counties say they cannot undertake them at present, if ever. It is not that those counties are not anxious to co-operate. Of course they are anxious to do so, but they are totally unable to do so; their burdens are far too heavy. In many cases the highway rates are intolerably heavy. This will mean serious gaps in the national safety programme. There will be black areas. Some of those black areas are in rural counties, but they are also holiday centres, where there is a great congestion of traffic in that peak time of accidents, the holiday season. I could quote one example in the 20 counties, and hon. Members could quote many other examples of places where new roads, wider roads, are urgently needed, and it is fantastic to say that if the money were there it could not be usefully spent. I hope very much that the Chancellor, under pressure from the Minister, will relent and alter his mind upon this most vital and important matter.
    6.30 p.m.
    Captain Sir WILLIAM BRASS: I am glad that my right hon. Friend the Minister of Transport has appeared upon the Treasury Bench, because he might be able to explain to us exactly what the future provision will be for the roads of this country. I was disappointed when the Financial Secretary told us that things were not going to alter as a result of what has been done. There is a certain amount of apprehension in the country that the road system may be starved in the future. I hope that the Minister will explain what is going to happen, now that the Road Fund is to disappear. Whenever new developments have been required on the roads, such as new bridges to be built or roads enlarged, the Ministry of Transport, before being able to give grants to local authorities, has had to go to the Treasury for consent. I hope that what my hon. and learned Friend said just now is not correct.
    I hope, as a result of the action of the Chancellor of the Exchequer, that in future the Minister of Transport will be able to produce Estimates, and a proper road programme which he has worked out at the Ministry of Transport for the whole year, in exactly the same way as the Admiralty Department comes to the House with a programme and Estimates for the future. The Admiralty do not have to go to the Chancellor of the Exchequer and say that they want to build a new battleship, and the Chancellor does not turn round and say that they can build only a submarine or a destroyer. That is what happens at the present time with the Ministry of Transport. If the Treasury have considered that the grants asked for by the Ministry of Transport are too much, they have not allowed the Ministry to do what they wanted to do in the way of road improvement. I hope that in the future the Minister of Transport will be able to come to the House in the same way as any other Department, and submit his Estimates and a programme for the year, and that we may have some arrangement whereby the roads of the country will be improved, not only from the point of view of traffic but from that of safety, as the hon. Lady has just said.
    All the main roads of the country should be national roads. They should

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    be taken over by the Ministry of Transport and paid for and improved by the Ministry through the Treasury. The programme for their development should be worked out by the Ministry of Transport, and a grant in toto given to the Ministry in order that that development might take place. That is a point with which I think the Minister of Transport might deal when he is explaining exactly what his future position will be as Minister of Transport vis-à-vis the present position with regard to the Treasury.
    6.35 p.m.
    Mr. EDE: I hoped that the Minister of Transport would have responded to the evident desire of the Committee that he should take part in the discussion. I do not think that anyone, other than the Minister of Transport, knows exactly what he will be in the resurrection. We understand that there is to be a resurrection, and he may take on a more glorified body than has hitherto adorned him. Noticing his absence from the House for so long, I was not at all sure that he was not entering into some more exalted position in the Government that now happens to be vacant. The President of the Board of Trade said the other day that all Members of a party had a past, but I rather gather that the Minister of Transport is more concerned about the future. When one thinks about the past of some Members of the Government, perhaps it is as well to draw a decent veil over it.
    One quite realises the poignancy with which the hon. Lady the Member for Anglesey (Miss Lloyd George) spoke, because she and this fund are children of the same father, and it well became her to shed a sisterly tear over the grave of our late departed friend. I can only hope that some of the merits she ascribed to him will be present in the mind of the Minister when he replies. Unlike most of the merits ascribed to the dead on the tombstones, these are true as well as eulogistic.
    I desire to put to the Minister the point of view of the local authorities with regard to this matter. Hitherto, we have regarded the Road Fund as a sort of measure of the minimum available from national resources for our transactions during any given period. If this fund vanishes, we have no such assurance with regard to the future. It is true that there is a slight surplus in the fund
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    which attracted the Chancellor's attention to the anomaly of the fund's existence, but, on the whole, the local authorities have regarded the fund as the measure of the resources that were available for them. The fund has had the great advantage as an indicator that it has grown with the volume of the work that it has had to discharge. That volume has now so increased that a great deal of the money that was spent a few years ago has produced works that are hardly adequate for present purposes.
    The other night, the hon. Member for Norwich (Mr. H. Strauss) said a few unkind words about a child of my own, the Kingston By-pass Road. I gather that it is not now regarded with very great favour by those who travel along it. I come along it fairly frequently myself, and I always thank God when I have got to the farther end of it without disaster. It is only a case of a good child who has turned out rather badly, owing to having excessive burdens placed upon his concrete conscience. Now, with the aid of the Minister of Transport, we have started on the task of transforming his whole character by giving him a dual road track. That will bring him back again into favour with those who have to use the road. That is true not only of that road, but of a good many of the roads which were regarded a few years ago as the last word in road construction. We have recently passed the Ribbon Development Act, and that again will throw a heavy burden upon national resources for the smooth movement of traffic. We cannot expect a good many of the areas which will have to operate that Act to be prepared to use it with great effect, unless they are encouraged to do so by the Minister.
    I have recently been in Scotland, and I have been appalled by the way in which the new by-pass roads and arterial roads, especially the one from Edinburgh to Glasgow, are being destroyed as traffic routes by the indiscriminate growth of ribbon development. Closely adjoining Edinburgh there is a series of bungalows placed by the side of that great road, and each has a motor garage, larger, in some cases, than the bungalow. What the state of traffic on these roads will be, on whatever day of the week it is that the Financial Secretary and his Sabbatarian friends allow the Scotsmen to go on it for pleasure purposes in a

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    motor car, I cannot contemplate, when we remember the situation on some of the English roads on Sunday morning.
    All these matters are engaging the earnest and anxious attention of the great highway authorities from one end of the country to the other. We are now faced with the fact that, as far as we can gather from this Clause of the Bill, and the two Sub-sections whose omission my hon. Friend has moved, we shall have to depend upon an annual statement in the Budget to know what we shall have available for us. We have been asked by the Minister of Transport to submit a five-year programme. That was part of a great scheme at the General Election, thought of just before the nation went to the poll. Now the fund from which we expected that great scheme would be financed, is wiped out. Local authorities have had bitter experience of sudden changes of policy after they have been asked to set their hands to extended programmes of public works. In 1931, local authorities were left with the problem of settling the contracts into which they had entered for land, and they were unable to get any contribution from the Treasury towards a final settlement of those claims.
    I hope that the Minister of Transport will explain to us that all is well in his Department in respect of the proposed scheme, and that the local authorities may rest assured that they will have as easy an access to him as in the past, and his specific assurances for being able to carry out the long-term programmes which they have been led to think during the past few weeks were possible. We can hardly expect the Minister to get up and tell us that something which takes power away from him is an improvement upon the scheme which left him master in his own household, and I could not expect the Minister of Transport, of all people, to say that. I hope that he will be able to reassure the great local authorities of the country, the county and county borough councils, that, in the proposed rearrangement, their five-year programme is absolutely secure and that they lose no assurances; and that both the Minister and his successor will see that it is necessary to fight the Treasury to ensure that arrangements
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    which were entered into under the old status of the Ministry shall be carried out in the new conditions.
    6.45 p.m.
    The MINISTER of TRANSPORT (Mr. Hore-Belisha): I respond at once to the invitation of the hon. Member for South Shields (Mr. Ede), and give to the local authorities throughout the country the assurance for which he asks. When I entered the House of Commons and received such a warm reception, it was being explained to me by my hon. Friend the Member for Anglesey (Miss Lloyd George) that I was the victim of an assassination. If that were a true construction of the procedure, my hon. Friend ought to have been satisfied with my absence, because it is not usual for those who are the victims of assassination to explain why they have had their throats cut. That is a duty which sometimes falls upon the slayer. In point of fact, however, the position is different. My hon. Friend made a speech which was a complaint of the present procedure. She related how local authorities were not getting all that they might expect under the existing system. If that be so, my hon. Friend ought to be the last to complain that a change is being made. All that is happening is that a democratic control of the Road Fund—which, I would remind my hon. and gallant Friend the Member for Clitheroe (Sir W. Brass), is not being abolished—is being established.
    An Estimate containing every possible detail that it can contain will be presented to Parliament. It will contain particulars of maintenance grants, of improvement grants, and all those miscellaneous particulars which are capable of being included in an Estimate of this kind. In the result, the hon. Lady's eloquence, which under the present system does not suffice to get any increased amount of money, will be powerful, on the occasion of the discussion of the Estimates, to secure that the will of Parliament shall prevail, and it will be possible for the views of Anglesey, as of every other constituency in the country, to be laid frankly before the House and to have their usual effect. [HON. MEMBERS: "Hear, hear!"] I personally have no complaint whatever to make of the change of procedure; in

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    fact, I say to the Committee that I think I shall be better off under the new procedure. My Vote will be in exactly the same position as every other Vote in a democratic Constitution, and it will be for the House of Commons to determine what shall be done in the future with regard to the roads. But I have an advantage over all other Departments, for I have a guarantee, which the Chancellor of the Exchequer has given to the House, that the five-year programme will in no sense be restricted. It happens to be the biggest programme that has ever been submitted in respect of a similar period; the submissions total over £100,000,000. Whereas, therefore, I am now restricted by revenue, in future the revenue will no longer be a restriction upon me, but only the will of Parliament itself.
    Captain STRICKLAND: If the House should not consider that enough money is being provided for the roads in any one year, will it be within the power of the House to ask for an increased Vote on the Estimate?
    Mr. HORE-BELISHA: The ordinary procedure will prevail. An Estimate will be laid before Parliament, and hon. Members will express their views upon that Estimate. Under the present system they have no opportunity of doing that. If there should be a unanimous desire on the part of the House that the resources of the country should be granted in greater measure for the purposes of the roads, the Government, with their usual sensitiveness to public opinion, will take note of that desire. Under the present system there is no opportunity at all for hon. Members to discuss the Road Fund Estimate.
    Sir W. BRASS: Will the Minister in future, as at present, have to submit to the Treasury all the little separate things for which he wants grants, or will he in the future, as I suggested in the course of my remarks, be able to do the whole thing over a year, and make a proper plan at the Ministry of Transport?
    Mr. HORE-BELISHA: Every existing Government Department is under the control of the Treasury. I am under the control of the Treasury now. I cannot embark on my own initiative, subject to no control whatever, on vast schemes of
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    expenditure. I have to obtain the consent of the Treasury to the main lines of my expenditure, but certain limits of latitude—and I do not suppose there will be any change in this position—are allowed to the Minister of Transport in the expenditure of money. I have not suffered from any unnecessary or unreasonable restrictions by the Treasury; they have allowed me a very considerable latitude. In theory, every Minister is subject to the Treasury, and in practice also, within such limits as the Chancellor of the Exchequer lays down. There will be no change. My hon. Friend seems to think that for every halfpenny I have to spend on road schemes I have to go to the Treasury, but that is not the case. The Chancellor of the Exchequer limits me on broad lines of expenditure, and any unusual demand is, of course, submitted to the Treasury.
    Sir W. BRASS: Suppose that the Minister wants to get a bridge built.
    Mr. HORE-BELISHA: Of course, one would go to the Treasury on matters of an unusual character, but there are certain broad limits of expenditure which are allowed to me. Of course one goes to the Treasury for matters outside those limits, and that procedure will continue. That is the case with every Government Department. No Minister has the right to spend money without Government control, and I could not conscientiously claim to be put in that position. On the whole, I shall be better off, and I would like local authorities to be assured—and this is the assurance I was asked to give—that they will not be restricted under the new procedure any more than they have been restricted under the old. In fact, they are more fortunate to-day than they have ever been within living memory, because they have been invited to submit their plans under the five-year programme, and no reasonable claim which has been justified on merits has been rejected. They may be reassured that there will be no restraint upon them within the limits of the five-year programme. I hope, therefore, that the House will be satisfied, as I am satisfied, that the new procedure is an improvement on the old, and ought to receive the approval of a democratic assembly.
    6.55 p.m.
    Mr. H. MORRISON: Could the Minister tell us, for the guidance of the Committee, where the power of the

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    Minister himself to build roads survives in this Clause, because we are not at all clear about it? Indeed, we are informed that it is in fact repealed.
    Mr. W. S. MORRISON: Sub-section (1, a) of Clause 27 says:
    "there shall be paid into the Fund from time to time out of moneys provided by Parliament such sums as the Minister of Transport may, with the consent of the Treasury, determine to be required for the purpose of making advances to or in conjunction with highway authorities under section eight of the Development and Road Improvement Funds Act, 1909"—
    Mr. BENJAMIN SMITH: That is not the question that my right hon. Friend submitted. The question is whether the power of the Minister himself to build roads under the new scheme has not been taken away.
    Mr. MORRISON: The hon. Member was just a little too quick. The words which are relevant, and which answer the question, are those just short of which he stopped me:
    "and for other purposes of the Fund."
    Mr. H. MORRISON: I am bound to say that we are not clear about this business of the Minister being able to build roads. There was a specific provision in Section 8 of the Development and Road Improvement Act, 1909, where Sub-section (1) reads as follows:
    "The Road Fund shall have power, with the approval of the Treasury.…
    (b) to construct and maintain any new roads."
    We are not satisfied that that power survives in Clause 27 of the present Bill. To suggest that the words "for other purposes of the fund" would include an important point of positive policy that had been laid down by Parliament seems to us to leave the situation in the greatest doubt. Consequently, we would like the Government to consider, between now and Report, whether that power is really covered, and, if not, whether they will bring forward an Amendment with a view to providing specifically that that power shall survive.
    It may be that the Government do not themselves intend to build roads, and it is not certain that any other Government will wish to do so, but it is highly likely that some Government, taking the view
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    of the hon. Member for Clitheroe (Sir W. Brass), who considers that national through roads should be maintained directly by the State, as is done in certain other countries, might wish to do it, and it is of the greatest importance that the House should not part with this Clause or the Bill unless it is satisfied that the Minister of Transport of the day will retain freedom to do that. He might wish to do it on the rather big scale proposed by the hon. Member for Clitheroe, or he might wish to do it as an experiment, or he might have to deal with a very "sticky" local authority that was not doing its duty, and might wish to penalise it by withdrawing part of its grants and to build the road out of the money he had withdrawn from the local authority for not properly discharging its highway functions. It would be a pity if the Minister were weakened in negotiating with local authorities as to what they should do on the one hand, and, on the other hand, it would be a pity if the Minister's power to build were withdrawn, in case either this or some other Minister should wish, either on grounds of general policy such as those advanced by the hon. Member for Clitheroe, or as an experiment, to build directly.
    At any rate, it appears perfectly clear that the borrowing powers of the Minister are explicitly repealed by the Clause, and again I cannot understand why the Chancellor of the Exchequer, in framing the Bill, should wish to withdraw a permissive power which might be available to the Minister in certain circumstances. I am not an enthusiast for borrowing for the sake of borrowing. My dislike of the capitalist system and its attendant usury is so firmly implanted in me that I grudge every penny of interest that is paid to any financier. But we are living in a world that is far from perfect, and there might be circumstances in which, to deal with an acute issue of unemployment, or for the purposes of big and urgent road improvement schemes that were beyond the immediate capacity of the fund—or of the revenue, because the fund is now gone—it might be desirable to borrow. It is clear from the Clause that that power of the Minister to borrow is specifically repealed, and, as far as we can see, there is no substituted power whereby the Minister may have the advantage of using the fund.

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    There is another minor repeal which is covered by these Sub-sections, and which is mentioned in Part I of the Third Schedule to the Bill. The various specific purposes for which moneys may be paid out of the Road Fund are recapitulated in the Schedule, including the rather curious position whereby the national fund is used for expenses connected with the control of London traffic. The reason is that the Minister has preferred to make London a Crown Colony in this respect, and national funds must pay the price. In the Third Schedule, paragraph 3, an exception is made:
    "but not including such expenses incurred in disseminating knowledge or otherwise informing the minds of the people with a view to promoting safety on roads as are referred to in Sub-section (1) of the said Section 115."
    The Committee will observe the charming language used in this paragraph. The language is my own, torn from the context of the 1930 Act. I was charmed when I got past the Parliamentary draftsman and incorporated in a sober British Act of Parliament the words "disseminating knowledge or otherwise informing the mind of the people." It is true that the powers were restricted to keeping them safe on the King's Highway. But why should that power be repealed? I know the Chancellor is tight for money. He is collaring all the money he can for the purposes of destruction. But this costs very little. I am not sure that it has cost anything so far, because the Minister has not availed himself of this provision. But surely in relation to injuries and fatalities on the King's Highway powers should be retained whereby money should be available to the Government in order that they may spend money in disseminating knowledge or otherwise informing the minds of the people with a view to promoting the safety of the roads. Either directly or through the National Safety First Council that power should be retained. I know the Minister's difficulties. He is only a Liberal member of the Government, and has to behave himself, but I am surprised that even a subordinate Liberal Member of the Government should have so capitulated that that power should have been repealed.
    Mr. CHAMBERLAIN: Will the hon. Gentleman say where it is repealed?
    Mr. MORRISON: It looks so to me in this Schedule, which sets out the purposes for which expenses may be met out of moneys provided by Parliament, and at the end says: "but not including such expenses" etc. I may have made a mistake, but I cannot see that I have. I have no doubt that the Chancellor, with his closer knowledge of this Bill, may be able to prove that I am wrong. If he can show that the power survives somewhere else, that may be the case. The Minister of Transport pleaded for the big change in the name of democracy. We are always pleased to hear the Government's adherence to these principles, but we cannot see that this is an improvement from the point of view of democratic control.
    As the Road Fund existed, it was collected from the users of the highways for a certain purpose. The right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) when he inaugurated the Road Fund, did it on the basis that motor transport had increased the cost of maintaining and constructing highways, and he said to the users of motor vehicles that it was fair and proper that they should be specially singled out for taxation in order that these additional costs might be met by the local authorities and the State might be in a position to make grants to the local authorities. He did it not so much as a favour to the users of motor vehicles, but as a justification for singling them out for a special form of taxation. He said it was true that in certain respects this was a new principle, but in return for it he would give them better highways, and the money should be used specifically for the construction of new highways and the maintenance of highways in good condition. That pledge was given repeatedly.
    It has been the case that the Treasury have held the view ever since that the quasi-autonomous position of this fund was constitutionally wrong, and they wanted to get hold of the revenues of the fund so that they could play ducks and drakes with it, as they can with taxation on beer, tea and tobacco, the Income Tax and so on. They wanted to get it under their control, but so long as there was a special fund on the basis that the users of motor transport were providing the money, the motor transport people had a prima facie claim on

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    the fund. It was not always worth much, because by pressure on the Minister in Governments other than the Labour Government, the Minister could be persuaded to put on the brakes, and then when there had been an accumulation of money in the fund the Treasury swooped on it and cleared the surplus. The right hon. Member for Epping (Mr. Churchill) did it first. It was done later by another Chancellor. The present Chancellor has done it with great vigour. The Minister of Transport has acquiesced every time, and is doing so now.
    So long as there was a special fund for which there was special statutory provision, the bargaining power of the Minister of Transport was infinitely stronger than it would have been if it had been ordinary revenue going into the general Exchequer pool. Whenever a Chancellor raided the Road Fund he had to do it as a specific operation. He had to try to defend himself, and he had to show cause why the fund should be raided. Consequently, the Minister of Transport was in a stronger position as the protector of that fund. We have seen the Treasury acquire £5,000,000 a year out of the fund as a theoretical luxury element in motor taxation. That was a technical breach of the promises of the right hon. Member for Carnarvon Boroughs. It is bad enough for the right hon. Member to break his own promises, but it is perhaps worse for other people to break his promises for him. For the purposes of future use I withdraw that at once. It was a purely theoretical consideration that £5,000,000 was a luxury element in motor taxation. The Treasury wanted the £5,000,000 first and found the reasons afterwards. To that extent money which was raised for the repair, maintenance and improvements of highways and bridges was diverted from that purpose and used for the purposes of general revenue.
    I am surprised that the Minister of Transport should say that this process is democracy, and that he is in a stronger position than he was before. The motor taxation duties are collected by the counties and county boroughs. They will come to the Treasury and stay there. They do not go back into the Road Fund. When the Budget is being prepared the Chancellor has to decide how much money shall be allocated for the purpose of maintaining, improving and constructing
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    highways and bridges. I have no doubt that he will consult with the Minister of Transport and will say "How much do you want?" The Minister will say, "So much." Then what happens? What happens to the President of the Board of Education. He says to the Chancellor that he wants so much, and the Chancellor says, "I am sorry you cannot have it."
    I am not grumbling. If the Chancellor was drawn from this side of the House he would have to say the same to a lot of people. Then the bargaining starts and at the end of the day the Chancellor says, "You can have so much and no more." If the President likes he can go to the Cabinet and have an argument about it, but before he goes he can work out his chances of beating the Chancellor. The Chancellor is going to win every time, and the Minister of Transport will have to take what the Chancellor will give him. He will have no moral authority to argue that so much came into the Road Fund and the onus is on the Chancellor to prove why he should take so much out of it. That is the position. In the one case he is the guardian of a fund which is set up by Statute, and the Chancellor has to make a case for raiding the fund. In the new circumstances the Chancellor has the money and the Minister goes as a supplicant, asking for as much as he can get. The Chancellor is the top dog, and he means to be the top dog over the Minister of Transport, the Foreign Secretary and everybody else he can. It is no good obscuring the point. It is for the purpose of putting the Road Fund more meticulously and carefully under the control of the Treasury. I do not deny that whenever the Minister of Transport, in this Government or in our own, wanted to spend substantial sums out of the Road Fund he had to go to the Treasury each time. I got on very well with the Treasury—I have no bias or bitterness—till the crisis came; but it is a totally different matter when you are going for sums which are part of the general Exchequer, part of the general funds of the Chancellor, where you have to make your case for the money far more severely than you would in other circumstances, instead of the Chancellor having to make a case why he could raid the fund. This is a very big and serious change. It is a departure from the policy which the House has upheld ever since 1909.

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    The proposal is regarded with much apprehension by all those concerned with motor manufacture and the use of motor vehicles. The Government cannot make concessions easily on financial Measures, and the Whips are usually active in maintaining the majority on all these things, but this is a weakening of the rights of the motoring community and a weakening of the status and position of the Minister of Transport. The motor and transport world is worried and apprehensive about it, and I think they have every right to be. I beg hon. Members opposite to remember that it is mostly Conservative voters that they are upsetting, that it is their own friends who are greatly concerned about it, and they ought to pause before they let the Government get away with this. It is true that the Minister has his five-year programme, and it may go on. I am not sure that the programme in the aggregate is a bigger one than mine in my more limited period of office. He has his five-year programme, but there were five-year programmes before the Labour Government and, when the Chancellor of the Exchequer wanted the money, he did not hesitate to interrupt them. The right hon. Gentleman has learned by now that, if in the middle of his five-year programme the present Chancellor is still in office and wants the money, he will take it. He will not worry about inconveniencing the right hon. Gentleman. So there is no guarantee whatever that the five-year programme will go on, and there is less guarantee after this change is made than before. For these reasons, and in these circumstances, I hope the Committee will support us in the omission of these two Sub-sections.
    7.18 p.m.
    Captain STRICKLAND: I think it came to the Committee as a surprise when the Financial Secretary to the Treasury announced, with all the solemnity of which he is capable, that the passing of this Clause would make no difference to the Minister of Transport. The right hon. Gentleman who has just spoken has, not for the first time, stood up for the motor industry and road users in the way that has gained him the respect of transport users, who have regarded him as a friend of their cause. We on this side are somewhat in a difficulty with regard to any opposition that we could offer to the passing of these
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    Sub-sections, because I think it is fundamentally sound that the Road Fund, as it existed, and in all the circumstances in which it was created, and for the special circumstances from which it was created, was an anomaly in our taxation, and the Chancellor has done the right thing to incorporate the whole of the taxation under his own wing. For that reason alone I shall give my support, representing, as I hope I do to some degree, the transport users of the country, to the passing of these Sub-sections into law.
    But when the Financial Secretary to the Treasury says it makes no difference to the standing of the Road Fund, I part company with him. I think it makes a very considerable difference both to the Minister of Transport and to the Road Fund itself. We are brought right up to this fundamental fact that, whereas when the Road Fund was formed there was a specific case for placing a special form of taxation on one particular form of industry for a purpose which would be for the benefit of that industry, when you cease to absorb that amount of money into the fund for that purpose and place it under the general Exchequer, you are brought face to face with the answer that must be given, an answer with which, I hope, the Chancellor will deal in his reply. Why should special taxation be imposed any longer on road transport? In the old days when we wanted roads, and wanted money to be devoted to the roads, as we all thought it was going to be, the road transport user was content—I do not say that anyone is ever too willing to pay taxation, but he was content to bear more than his share of his upkeep of the roads because he knew that he was imposing burden on his fellow-citizens which was unfair and inequitable as long as the roads needed the money.
    Now we are parting with the Road Fund as such, and it is only a quibble to say it is still in existence. It is now only the name of an office. It is only some depot through which the benevolence of the Chancellor can flow. It may be true that the Ministry of Transport is to be the cashier who does the actual paying of it, but it is only the channel now, and no longer the main principle of the taxation. If it is right in principle to tax transport as a luxury, as something to be specially picked out,

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    I claim that there has to be a reorientation of taxation so that all forms of transport shall be taxed equally for the general purposes of the Exchequer, and no longer shall the anomaly be continued by which road transport has to pay out of its pocket to subsidise its rival, to help it to lower the charges on its goods and destroy the road transport industry. That is one of the great differences that the passing of these Subsections is going to make.
    There is another thing which is very serious and which constitutes a very grave difficulty. The Minister of Transport told us that the Estimates would be laid on the Table, that the whole power of the House would be unfettered and that, if the House wanted £50,000,000 for roads, it could have it. Can it? If money is wanted for the building of schools or any other purpose the Chancellor says, "We cannot possibly put anything more on Income Tax." He will say to the Minister of Transport, "Instead of £50,000,000, you will have to take £25,000,000," and the Minister's Estimate is £25,000,000, and the House says, "No, it is essential for the safety of our roads and the welfare of our transport system that £50,000,000 should be paid." When we have the assurance that the House is to have full control of the road programme, it is not true because if the House wants to raise the £20,000,000 or £30,000,000 to £50,000,000, it is not within its province to do it. It has no power to spend the additional sum on the roads which it knows so well that it wants. That is another essential difference in the change over of the Road Fund that is taking place, because, before, the Minister could bring the programme before the House and outline what he was going to do and the House could say, "This is not enough. We want a new road from London to Portsmouth to relieve traffic and make the roads safer," and we could have debated it. That power now passes, unless we try to get rid of the Minister of Transport by reducing his salary on his own Vote. That is why it is not true to say that the position is not altered by the passing of these Sub-sections.
    I was delighted, as I am sure many on both sides of the Committee were, to hear that we were to have as full an estimate as possible of the manner in
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    which the money was to be spent. That will be a great advantage. It will be an improvement on the past. How many Members are in possession of any clear information of what the five-year plan means? How many of us know to what extent the Exchequer is going to be committed with regard to the five-year plan? One feels very much this constant niggling process of dealing with this highway authority and that, bargaining here and bargaining there and missing the great purpose of what is wanted, as was pointed out by the hon. Member for Anglesey (Miss Lloyd George), great main roads to take the traffic that is passing on them, not for the benefit solely of those who organise motor transport but for the benefit of every man, woman and child, the great main roads which should be being built now, but which are not being built. We might just as well say that the whole of the money that we have spent on Belisha beacons, safety crossings, signs and warnings has been utterly wasted, because casualties have not dropped to any appreciable extent. Indeed, those who know the roads and know the difficulties and dangers of driving know that, with an active practical motorist at the head of affairs, many of the signs could easily be abolished, including the very latest, the "Major Road Ahead. Halt" sign, which will lead to disaster after disaster. I hope the time will not come when the Minister, who assures us that he is satisfied that he is in no inferior position will feel convinced that he is shorn of the power that he has had in the past by the passing of these Sub-sections.
    This position can be remedied to a great extent. If we have, as we ought to have, the sympathy of the Chancellor of the Exchequer in a real, determined attempt to spare the utmost that he can to make our roads fit the traffic and not our traffic fit the roads, to institute a system of highways under some central board which can co-ordinate the existing loose items that we see existing in all the petty local authorities dotted over the country into one great scheme, which is going to cost a tremendous lot of money, but which will repay itself time and time again by our roads becoming safer; if he is prepared to deal with the roads, not because of the amount of money that they will cost, but will remember the pledge given to the motor industry that this fund

    889
    should be used only for the roads; if he is prepared to go on with this programme, realising that he is not drawing the money from the general body of the people of this country; but from one particular source; if he is prepared to spend that money in the way in which it should be spent, I do not think we shall regret the handing over of the Road Fund to and the collection of the taxation by the Chancellor of the Exchequer. But if he sets his face against this great improvement, and if he is niggardly in the grants that he is prepared to make and hampers the work of the Minister of Transport, I am sure that this House, irrespective of party, will rise and condemn him for his parsimony. If you were to look around the country to-day, at the Home Office, the Foreign Office, and other offices, so far as they affect this country, I doubt whether you could find any more important subject than that of our road transport, the safety of the roads, affecting as it does the lives, the happiness, and the security of our people. I think the office of the Minister of Transport should be that of a Cabinet Minister, and—
    The DEPUTY-CHAIRMAN: That does not arise on this Amendment.
    Captain STRICKLAND: I bow to your Ruling. I am afraid I have been led away by my enthusiasm for this subject. I hope we shall have an assurance from the Chancellor of the Exchequer that he will endeavour to do his utmost to make our roads complete and safe and to achieve what I think the whole country wants, namely, some Central Board to control our roads, their building, their lighting, and their safety. If we have him and the Minister of Transport working together, I am sure he will receive the support of all those to whom transport means so much.
    7.33 p.m.
    Major LLOYD GEORGE: If the hon. and gallant Member for Coventry (Captain Strickland) wants the things which he says he wants, if he wants the roads of this country in the condition in which he and the motorists want them, a very good preliminary step would be for him to vote for this Amendment, because if this opportunity is lost, it will be a very long time before he sees what he wants. We have heard to-day from the Financial Secretary to the Treasury that this
    890
    Amendment would destroy the whole structure of what is proposed. That is practically why I support it. We have heard speeches from the Chancellor of the Exchequer, and to-day from the Minister of Transport himself, giving various views on the effect of this new proposal with regard to the Road Fund, and as far as I can make out from those speeches, it will make no difference at all to the roads of this country. Well, somebody is going to lose something over it, and having read the speech with which the Chancellor introduced his Budget, I gathered that he was short of money. That, we more or less knew, but he practically justified this procedure in regard to the Road Fund, because, he said, he had to get money somewhere. If the right hon. Gentleman has to go to the Road Fund for more money, it is not a very difficult thing to see that the Minister of Transport will have so much less money with which to do the things that he wants to do than he would otherwise have had. Why do they not say straight out that they are taking money out of this fund, which Parliament, in its greater wisdom in the days gone by, decided should be allocated to a specific purpose, for purposes other than those for which it was allocated? Is not this the real position? Then not let us have these expositions as to how it will have no effect on the present programme, and so on.
    The Minister said to-day, in reply to my hon. Friend the Member for Anglesey (Miss Lloyd George), that there would be no restriction beyond the present five years plan, but there are many county councils in this country which cannot undertake a five years plan at the present time, and the right hon. Gentleman must know that a good many of the borough councils are incapable of carrying out the plan as he suggests they should. I have mentioned before my own county, which, out of a total rate of 14s. in the £, has a highway rate of 8s. 6d., and it is impossible to expect a county of that sort, which is not the only one by any means, to spend a lot more money on roads. To say that the roads of this country are not going to suffer by this procedure is quite absurd, because it is obvious, from our own experience, that much more necessary work could be done. The Minister admits that they are necessary, or he would not have asked for their proposals, but they cannot be

    891
    carried out because there is not sufficient money coming from the Exchequer to assist them. That is the present position.
    The right hon. Gentleman the Chancellor of the Exchequer said on a former occasion that the more money was spent on roads the more numerous were the accidents, and an hon. Gentleman quoted the Kingston by-pass. May I point out that the Kingston by-pass is one of the things that could have been improved by the expenditure of more money? There are other arterial roads out of London which are a perfect model—and I should like the Chancellor to see them—where the houses are 50 yards away from the road, where there is a grass verge in between, and footpaths for pedestrians, well away from the roads, separated by railings, and one-way traffic. It is an amazing thing to me that at the present time we are not allowed to go on our railways because of the danger involved. I would far, rather walk across the average railway than across the average arterial road. A train at any rate goes on a line that you can see, but on an arterial road you avoid one line of traffic and fall into another. It seems to me that the Kingston by-pass is a very poor argument to advance, because there are other things entering into that problem that destroyed the object of the by-pass. The Kingston by-pass was created to avoid a congested area, but owing to the laws of this country we have succeeded in creating another congested area to add to the first. It is no good saying that expenditure on roads has made that possible, but there are other things, just as important, that I cannot expect this Government to take much note of.
    There is one other point that I would like to make, and it is a point that has already been raised, in regard to the inequity of this system of taxation under the present arrangement. On the whole the system of taxation of this country is designed to put the burden on the backs of those best able to bear it, but here you have a section of the community—and I do not agree with the right hon. Member for South Hackney (Mr. H. Morrison) that it is confined to the Conservative party—which is taxed specially. Why should any one section of the community be taxed for general purposes? It is quite contrary to our general system
    892
    of taxation, and I think I am right in saying that this is the only body of taxpayers in history that ever proposed that they themselves should be taxed. I believe I am right in saying that they themselves proposed this tax, but they only did so on the understanding that the whole of the proceeds would be devoted to the purpose of the roads.
    I reminded the right hon. Gentleman, the last time I spoke on this subject, that the right hon. Member for West Birmingham (Sir A. Chamberlain), speaking on behalf of the whole Conservative party when the Petrol Tax was brought in, asked a specific question of the then Chancellor of the Exchequer: Was the money obtained by this tax going entirely to the upkeep of the roads, or was any of it going to the Imperial Exchequer? He said that on the answer which they got would depend whether or not they supported it, that if the whole of the money was going to the roads, the party for which he spoke would support it, but that if any of the money was going to the Imperial Exchequer, they would oppose it tooth and nail. That was the position in 1909, and here you have a body of people who incidentally have to pay their ordinary taxation and rates like everybody else, who have a special tax levied upon them to provide them with roads adequate for the enormous demands made upon them. We all know of instances where essential works cannot be carried out because the money is not available. The Minister, we know, would be only too glad to sanction far more expenditure and to give better grants to poorer districts if he had the cash. That is the real reason. The Chancellor of the Exchequer wants the money, and he is taking it by this method. It is unjust, because if he wants more money, he ought to put more taxation on the people as a whole and not take it from one particular section, who only allowed this tax to be put on, and indeed themselves suggested it, because it was to deal with a problem which they themselves had created. For these reasons I shall certainly support the Amendment.
    7.42 p.m.
    Major J. HERBERT: I should like to follow the hon. and gallant Member for Pembroke (Major Lloyd George) in regard to the inequity of taxes on motor users, and it is because of its inequity that I support the proposal in Clause 27

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    of the Bill. After all, the taxation raised from motorists last year was about £70,000,000, and out of that sum £30,000,000 came from licence duties and £40,000,000 from the Petrol Tax. The whole of the discussion to-day has been about the Road Fund, or, in other words, about the £30,000,000, and so far no mention whatever has been made of the Petrol Tax. To my mind, it is hardly logical to talk about the smaller sum and not to mention the greater. I welcome this Clause, because I feel that by this amalgamation no change does in fact take place, except for the better. After all, when the Road Fund was in existence, it was difficult to debate road questions at all, but now we have an undertaking that they can be debated on an Estimate. The May Committee on National Expenditure reported a long time ago on this question, and in paragraph 296 they stated:
    "The Road Fund has come to be regarded by successive Governments as a convenient means of financing grandiose projects without the inconvenience of obtaining Parliamentary approval and providing for the cost in the annual Budget."
    Therefore, it is much more democratic to have some method by which this House can control the expenditure and can have Estimates brought before it. The May Committee, at the beginning of the same paragraph, also proposed the abolition of the Road Fund and placing expenditure on road grants on the annual Votes of Parliament. The fact of the matter is—and this is of great importance—that ever since 1909 the Minister of Transport and the Road Fund have been under Treasury control, and they will so remain, but this House will also have a. measure of control. The new arrangement will enable the Chancellor of the Exchequer in subsequent Budgets completely to alter the system of the taxation of motorists. If, however, we stick too rigidly to the Road Fund and the present system of taxation payment into that Fund, we shall be tying the hands of the Minister to an extent which will not be wise. Possibly, some other method may be devised in order to make the effect more equitable on those who use the roads.
    By the proposed amalgamation it seems to me that the Minister of Transport will be able to make a plan ahead and to be much more certain of obtaining the money for which he asks. He can make
    894
    an arrangement at the beginning of the financial year with the Chancellor of the Exchequer rather than be dependent upon what is coming in through a particular fund. I hope that in the very near future the great difficulty of the block grant and the allocation of moneys to local authorities will be remedied in quite a different way, namely, by certain trunk roads being taken over from those local authorities so that they may be used for the benefit of the public. I realise that I cannot develop that point. For the two reasons that I have given, I welcome this Clause in the Bill.
    7.47 p.m.
    Mr. G. STRAUSS: I congratulate the hon. Member who has just spoken for being original in his argument and suggesting that the Minister of Transport will have more money to spend on the roads under the new arrangement than he has had before. That is not only an original but a startling suggestion, and it obviously cannot be borne out. The Debate has shown that there is a general fear among all parties that, whatever the theoretical justification for this change may be, and whatever the constitutional arguments may be, the real effect of bringing the Road Fund under the sole control of the Treasury will be less money spent on the roads. That opinion is held in all quarters, and that is the main argument against the proposed change. That must be the logical consequence of the change, because during the coming years the Chancellor of the Exchequer expects to spend a large amount of money on armaments. His will be the final and almost the only word in future in deciding how much money is to be spent on the roads, and the tendency on his part all the time must be to spend as little as possible on them, because the less he spends on the roads the more he will have for other purposes. Consequently, consciously or unconsciously, in carrying out his duties as Chancellor of the Exchequer he will have to obstruct to some extent the carrying out of road improvement schemes. He will be anxious to have as big a share as possible from the Road Fund for general taxation purposes, so that he will not have to put up the Income Tax and the other taxation of the country more than is necessary.
    It is a pity that the Minister of Transport came into the House rather late in the Debate and that he was not here

    895
    when the Chancellor of the Exchequer on the previous occasion was giving his reasons and explanations in regard to the change. The main claim made by the Minister of Transport to-day was contradicted entirely by the statement made by the Chancellor of the Exchequer on the previous occasion. What are the two chief justifications for the change put forward to-day by the Minister of Transport? He said that we should get the fullest details of Road Fund expenditure. By that statement he presumably means that we are going to get as much in the future as in the past. His second claim was that as a result of the proposal a democratic control of the Road Fund is being established. That is very different from what the Chancellor of the Exchequer said when the matter was before the House on 28th April. I asked him this question:
    "I should like to ask the Chancellor of the Exchequer this one question. At the moment there is published annually a very full report of the Road Fund account—the amount which came in and what was paid out—in considerable detail. Under this new arrangement will there be as full an account published as is published at the moment"?
    The Chancellor of the Exchequer went very far in replying to that question. He not only replied to it directly but he stated the consequences. He said:
    "I can only answer by leave of the House, but I should imagine not. The account to which the hon. Member refers was in order to allow the House to preserve some measure of control over the expenditure of the Road Fund. Now, it will be able to control it in the usual way."—[OFFICIAL REPORT, 28th April, 1936; col. 810, Vol. 311.]
    In other words, the control which the House has had up to now over the Road Fund is going to disappear, and we shall have only that measure of control which we have over the general expenditure of the country under the Chancellor of the Exchequer. Yet the Minister of Transport comes along to-day and tells us that a democratic control of the Road Fund is being established under this proposal. How can he justify that statement? In the existing circumstances where the Minister of Transport is responsible for the Road Fund the House has a certain control over the fund, because there is a special Minister responsible for it, but when that fund becomes lost in the mass of Departmental expenditure of
    896
    the country which comes under the Chancellor of the Exchequer, the control of the House of this particular fund, if it is not entirely lost, will very largely disappear. Therefore, it is ridiculous to justify the proposal by saying that we are going to establish a democratic control over the Road Fund. What is happening is that the control of the House and the control of the country over the fund is being very largely, if not entirely, lost by the proposal before us. Once the change is brought about it will be very difficult, if not impossible, to go back to the present state of affairs. I oppose the proposal on two grounds, that it will in effect mean under this Government less money will be spent on the roads, and that the House, instead of having control over this very vital expenditure, is quite definitely and obviously going to lose it.
    7.53 p.m.
    Mr. BEVAN: I propose to speak only for a few minutes, because the main argument has been traversed and we are waiting to hear what the Chancellor of the Exchequer has to say in reply. Having considered this matter on several occasions, quite apart from the £5,500,000 now being taken from the Road Fund, I hold the view that on general theoretical principles the proposal of the Government can easily be justified. It does not seem to me that there exists on constitutional grounds, or on grounds of general financial practice, any justification for leaving a particular form of taxation in a particular fund. I believe there will be general agreement on these benches that there can be no exception to that principle, but that is not the ground on which our Amendment has been moved. If we could be satisfied that the expenditure upon the roads was as much as the country could afford and as much as Parliament demanded, and that the expenditure on the roads was a just proportion of the general expenditure of the Government, the Amendment would not have been moved, and there would have been no opposition to the Government's proposal.
    The reason why we fear the proposal is that in the inevitable tug-of-war between a spending department and the Chancellor of the Exchequer, a valuable lever is being taken out of the hands of the spending department, especially when that spending department is one where

    897
    larger and not smaller expenditure is required. Everybody is alarmed by the list of casualties on the roads, despite the efforts of the Minister of Transport. Everyone will concede to him that in the last few years he has applied himself with very considerable energy and intelligence to this problem. No one could charge him with being lackadaisical or with sitting on his job. He has been an exceedingly active Minister of Transport. If he, with his drive and energy, still has to hand over £5,500,000 to the Chancellor of the Exchequer, with this weapon in his hand, how much more helpless will he be when it has gone? It is no use the Minister trying to convince the Committee on that point, because no one will believe him. It will be wasting the time of the Committee for the Chancellor of the Exchequer to suggest that the Minister of Transport will have more money in the future than in the past and that there will be no limitation upon him, whereas there is now a limitation by the extent of the fund. The Chancellor of the Exchequer has to answer the question, how is it that there is a surplus on the fund which he has raided, and what evidence is there that he proposes to turn over a new leaf? The assumption is that that surplus would not have been there had he not successfully resisted the Minister of Transport.
    If, on the other hand, the Minister of Transport says that that is not the ca-se, then he must explain how it is that with all this need for increased expenditure on the roads and in view of the fact that four or five county councils cannot afford to conform even to his minimum programme, there still remained that surplus on the fund. I am not asking this question in a captious spirit. The hon. and gallant Member for Monmouth (Major Herbert), who used the argument that he wanted the Road Fund money to go into the general Exchequer because more money would be available, is a member of the Monmouth County Council, of which I was a member for some years. He knows very well that that county council is unable to conform with the minimum requirements of the Minister of Transport, because they have not the money. He knows that the same thing is true in Glamorganshire, Pembrokeshire and many rural counties. He knows that it is true of Durham and Lanarkshire and
    898
    many areas which are badly hit by industrial depression. It is no use the Minister of Transport making offers of 50, 60 or even 75 per cent. grants, because those county councils are unable to assume any additional financial responsibility.
    We have been told by the Minister of Transport of schemes which have met with his approval, and we say that those schemes should receive 100 per cent. grants. He has not been able to comply with our request. Why? It is not because it has not been the practice to make 100 per cent. grants. A 100 per cent. grant was made in respect of a highway in Scotland and also in respect of roads in South Wales some years ago. I want to know what has happened in the past between the Chancellor of the Exchequer and the Minister of Transport which has obviously given the Minister of Transport a disadvantage in the combat; or is he suggesting that, in fact, he has never made proposals to the Chancellor of the Exchequer to give us additional grants? We are entitled to a reply upon this matter because we are deeply involved. Over and over again attempts have been made in this House during the last few years to try to get additional grants for the distressed areas, and I make no apology at all to the Committee for raising on this occasion what appears to be King Charles's head.
    The Government have insisted on a number of occasions that they are attempting to meet the problem in every way that is open to them. There is one way open to them. I do not suggest that it is a perfect thing in itself, but surely it is reasonable for the county councils who cannot find the funds themselves to meet the programmes which the Minister thinks are necessary to say to the Minister of Transport: "Will you give up a grant sufficiently large to enable us to carry out these works?" The Minister has hitherto said: "No." Why has he been compelled to say, "No"? Is it because he cannot persuade the Chancellor of the Exchequer or the Treasury, or because he has never made the suggestion? One of them is the guilty party. Who is it? Is it the Chancellor of the Exchequer, or is it the Minister of Transport? If it is a conspiracy between them, as my hon. Friend suggests, the outlook is alarming. Once having re-

    899
    moved this audit or check upon his efforts, this means of ascertaining what his activity is like, the conspiracy in the future will be infinitely more intimate, without any opportunity on our part to check up what he is doing.
    If I do not get a reply, we shall have to put our own construction upon it. My construction is that the Minister of Transport is a young man eager, ambitious and anxious to justify his appointment. Faced with one of the most stubborn problems with which any Minister has ever been faced, and one which arouses the universal anxiety of the people of the country, he is engaged in a daily tug-of-war with the Treasury to try to get the use of the revenue of the fund, and failing by £5,500,000 last year to do it. If that picture is a correct one, the House ought not to weaken the Minister, who has already been revealed by the figures as too weak to obtain the money necessary to discharge his job. I am not speaking derogatively or saying that the Minister has fallen down in his job, because the Chancellor of the Exchequer, the Financial Secretary and the Treasury are in a position of very great power and influence, and particularly the Chancellor of the Exchequer, who is not only himself a very determined man, but he occupies a very high position in the party which mainly supports the Government. The Minister of Transport has a very bad time indeed in his tug-of-war. I suggest, therefore, that in these circumstances a weak Minister ought not to be further weakened, and we ought to leave him with this power. I ask the Committee to insist upon this, particularly as the roads of Great Britain produce daily tragedies which might easily have been avoided were there a great and a more intelligent expenditure upon the roads. The matter has been discussed upon several occasions, and we are entitled to hear from the Chancellor of the Exchequer or the Minister of Transport which of them is the villain of the piece in this matter.
    8.5 p.m.
    Major NEVEN-SPENCE: Hon. Members who have spoken have been looking at the question from the small end of the telescope, and their gaze has been concentrated upon the effects of this Clause
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    on the great arterial roads. I want to look at it through the other end of the telescope and see where these roads end. [An HON. MEMBER: "In the cemetery."] We see all over the country a great network of unsatisfactory district roads, and the hon. Member opposite was anxious to know, as he seemed to fear, whether this was the result of less money being spent upon the roads as a whole. I am not conconcerned with that matter, but I am concerned that the money should be more equitably spent than it is at present. The difficulty that has arisen since the 1929 Act has been that the amount of money that it has been possible to raise for expenditure on district roads is very small indeed. I would quote the example of my own parish in which there are 10 miles of roads to be kept up. The product of a shilling rate in the parish is £70, and out of that money certain salaries have to be paid, and graveyards, to which the hon. Member opposite referred, have to be kept up, and we are left with roughly £3 per mile of road to keep up roads which are subject to motor transport. This is a ludicrous sum. The trouble all over Great Britain at the present time is that these district roads are steadily deteriorating. The people who live at the end of these roads as as much entitled to be considered as the people who make use of the great arterial roads.
    There are many hamlets to which there are no roads. I can quote such an instance. Thirty years ago there was a place in the East of the Island of Unst in which 10 families were living. Repeated requests were made for a road into the district. No road was put there, and to-day there is not a living soul in the place. There were 10 small holdings inhabited there at one time. These roads are nobody's baby. The Ministry of Transport will have nothing to do with them. The county councils have nothing to do with them, and these districts do not know where to turn for help. If we can appeal to the Chancellor of the Exchequer, we shall have a reasonable chance of our case being heard. It is because of that which gives us the chance which we have not at present, that I shall most certainly vote against the Amendment.
    8.9 p.m.
    Mr. CHAMBERLAIN: We have had such a wide and general Debate upon this Amendment that we may fairly be said

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    to have covered the whole Clause, and I do not complain of that, because at some time or another in the course of our discussions upon the Clause we certainly ought to debate the general principles, but I only hope, therefore, that we shall remember that we have gone over the ground pretty thoroughly, as the hon. Member for Ebbw Vale (Mr. Bevan) has said, and shall not repeat the experience, as we have a long road to follow before we arrive at the end of our Debate to-morrow evening. Some rather small matters have been touched upon, and I do not want to spend much time in answering them. I will not follow the hon. Member for Ebbw Vale in his fancy picture of tugs-of-war between my right hon. Friend and myself, because although some rumours have reached me, I can assure him that the National Government always works harmoniously. The hon. Member for North Lambeth (Mr. G. Strauss) tried to find some little inconsistency between the answer which I gave him the other day and the account which my right hon. Friend gave of the estimate which will be presented under the new system. There is no inconsistency whatever. The hon. Member asked me whether the practice of producing a road fund account would be continued and I said, "No." That, of course, is because it will no longer be required. If he means not the account, but the report which the Minister of Transport has in the past given of his activities, of course, there is no change there. That still remains part of the duties of the Minister of Transport by Statute. I would point out that it refers to matters which have already occurred and not to the future, and what the House wants to know is rather what is to happen than what has happened in the past.
    The right hon. Gentleman the Member for South Hackney (Mr. H. Morrison), in his endeavour to calculate the amount of change which is produced by this Clause, read into it and into the Schedule a great deal more than, in fact, it contains. Assuming, as I must do, that he meant seriously what he said, I must give him a serious answer. The object of Sub-section (1) and the various paragraphs of the Sub-section are to separate those parts of the expenditure which have hitherto been borne out of the Road Fund into parts which in future will be more properly
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    borne on the Minister's Vote, and parts which will still remain on the Road Fund. Those parts which are not specifically removed from the Road Fund and are incorporated in the Minister's Vote by paragraphs (b) and (c) and Part I of the Schedule, still remain in the Road Fund. The right hon. Gentleman is in error in supposing, therefore, that these are repealed because they are not transferred to the Minister's Vote. He dwelt with much fond paternal affection on the words in the Schedule:
    "but not including such expenses incurred in disseminating knowledge or otherwise informing the minds of the people."
    and seemed to think that because those words showed that those expenses were not among the expenses which, according to the reading of the Schedule, were to be paid out of moneys provided by Parliament instead of out of the Road Fund, they could no longer be incurred. That is an entirely unwarrantable assumption. There is no alteration whatever in the powers of the Minister in the matter. The powers remain, and the money will be provided as hitherto from the Road Fund and will not be transferred to the administrative expenses of the Department to which, of course, they do not belong.
    Mr. H. MORRISON: It is possible that I may be wrong upon matters which are somewhat technical, but my recollection is that the power to spend money for the purpose provided for in the Road Traffic Act, 1930, was charged upon the Road Fund. Am I not right in assuming that the Road Fund ceases to exist and that, therefore, this is a charge upon moneys provided by Parliament?
    Mr. CHAMBERLAIN: That is the fundamental error into which the right hon. Gentleman has fallen. The Road Fund does not cease to exist. What ceases to exist is the method by which the Road Fund has been fed up to now. The Road Fund will continue, but instead of being provided out of the proceeds of the licence duties, it will be provided out of Votes by Parliament. If the right hon. Gentleman will look at paragraph (a) he will see that the "Fund" is to be fed by moneys provided by Parliament, and the Fund referred to is, of course, the Road Fund.
    "… from time to time, out of moneys provided by Parliament, such sums as the

    903
    Minister of Transport may, with the consent of the Treasury, determine to be required …"
    Even a cursory reading of the Clause will show the right hon. Gentleman was in error in suggesting that the Road Fund would be abolished.
    Mr. H. MORRISON: What I am not clear about even now is why in the list on page 32 in the Third Schedule some items are to be treated in one way and other items treated in another way.
    Mr. CHAMBERLAIN: These are merely administrative expenses. It is more a matter of book-keeping than anything else; but the particular expenditure on publicity does not come under that category. With regard to borrowing on the security of the Road Fund, it is obviously inconsistent that the Minister should retain power to borrow on the Road Fund under the new method by which the Road Fund is to be maintained. The right hon. Gentleman also seemed to think that the Minister's power to construct new roads has been repealed. There again I give him the most definite assurance that no such thing has taken place. There is an Amendment on the Order Paper in the name of the hon. Member for Anglesey (Miss Lloyd George) to leave out certain words in paragraph (a) of Clause 27, and substitute the words "purposes of" which I propose to accept, not because I think it is necessary, but I imagine it will be put forward on the ground that as the Clause is drafted it may be thought that purposes not specified were no longer remaining in the Bill.
    The hon. and gallant Member for Pembroke (Major Lloyd George) asked why a particular section of the community should be taxed for general purposes. Why not? Is not that the case of any section of the community? Can the hon. and gallant Member point to any tax which is borne by the whole of the community and not by a section? This revenue is part of the general revenue of the country, and the fact that it is borne by particular people or was the subject of certain understandings, does not give them a vested right to the produce of the tax for all time. The hon. and gallant Member used the phrase, perhaps inadvertently, that
    904
    these users of the roads only consented to be taxed on certain conditions. Surely no section of the community has a right to say that it has consented to be taxed?
    Major LLOYD GEORGE: My point was that if moneys raised for specific purposes are not to be used for those purposes then, if money is required, it should be raised in the ordinary way.
    Mr. CHAMBERLAIN: You have to raise a certain amount of taxation, which varies from time to time, and people will always have different ideas as to the distribution of taxation. The people who use the roads are now a considerable proportion of the population, and if they were relieved from some part of the tax they would find that they would have to pay very much the same amount of taxation only in a different form. The point which hon. Members who are supporting the Amendment have to answer is, what justification is there for erecting the Minister of Transport into a position quite different from that occupied by any other Minister? When hon. Members say that the Minister of Transport will have to come to the Treasury and fight with the Treasury for the expenditure of money on necessary forms of expenditure, in what respect will his position be different from that of any other Minister who presides over a spending Department? I can assure hon. Members that every Minister thinks the expenditure of his Department is necessary and can make out an extremely good case for it. The Treasury are not acting for the benefit of the Treasury but for the benefit of the community as a whole. They have to consider the whole amount of money which is to be spent and how far the taxpayer is able to bear it, and if the aggregate demands of Ministers are more than the taxpayer can reasonably be expected to find the Chancellor of the Exchequer has to make such representations as he can to various Ministers to abate their requests.
    The question has been put by many hon. Members as to how far this proposal is going to reduce the amount of money which will be spent on the roads; and probably that is the consideration which weighs most heavily with those people who are interested in matters concerning the roads. The hon. Member for North

    905
    Lambeth was quite wrong in saying that the Minister of Transport could not get more money under these proposals than he got under the old system. I have not committed myself to the statement that he will get more money, because that depends on the circumstances of the time and the will of Parliament. Nobody can be dogmatic as to how far the amount of money under this new proposal will vary from the amount which would have been spent by the produce of a single tax. One thing is certain—no one can say that the produce of the tax is going to vary according to the needs of the roads. It will vary according to the number of vehicles which pay the tax.
    Mr. E. J. WILLIAMS: There is a very distinct relationship.
    Mr. CHAMBERLAIN: No, I think not. The Estimates of the Minister of Transport are based upon commitments which are entered into a long time before the money is spent. The virtue of the five-year programme is that local authorities are able to make their plans a long time ahead. Road projects cannot be carried through in a few weeks; they require a great deal of preparation and take a long time before they can be completed. I am not saying whether the Road Fund will in the future be larger or smaller than it would have been if the present system had been continued, but what I do say—I say it with particular emphasis at a time when the country is embarking upon an enormous and necessary expenditure of money on armaments—is that it is a monstrous thing to make an exception in one particular case and say that in considering how far the expenditure of the country shall be distributed among the various Departments which make demands on the Treasury, the Minister of one Department shall be taken out of the purview of the Treasury altogether, that they shall not be allowed to say
    that this Department too must pay its contribution or, if there is more money to spend, that it shall have its share of the extra money. This is merely to bring this Department into the same position as other Government Departments, and it seems to me that the case for it is absolutely overwhelming.
    8.25 p.m.
    Mr. de ROTHSCHILD: I have listened with great interest to the Chancellor of the Exchequer, but it does not seem to me that he has adequately answered the point put by my hon. and gallant Friend the Member for Pembroke (Major Lloyd George). My hon. and gallant Friend pointed out to the Chancellor that the tax is contributed by the road users and that it ought to be used for their benefit. The Chancellor said he wants to put the Ministry of Transport into the same position as other Government Departments. I would point out that all the other Government Departments deal with general matters, whereas the Ministry of Transport deals only with roads and road users.
    Mr. CHAMBERLAIN: Would the hon. Gentleman say that the Ministry of Education deals with general matters and not with education?
    Mr. de ROTHSCHILD: Certainly. The Ministry of Education deals with the education of all the children of the country, whereas the Ministry of Transport is in an exceptional position in that it deals only with a certain section of the population. It is for that reason that we urge that the taxes levied upon road users should go only for the benefit of those people.
    Question put, "That the words proposed to be left out to the word 'and,' in line 38, stand part of the Clause."
    The Committee divided: Ayes, 225; Noes, 131.

    Division No. 235.]

    AYES.

    [8.30 p.m.

    Acland-Troyte, Lt.-Col. G. J.

    Bernays, R. H.

    Brown, Rt. Hon. E. (Leith)

    Adams, S. V. T. (Leeds, W.)

    Birchall, Sir J. D.

    Browne, A. C. (Belfast, W.)

    Agnew, Lieut.-Comdr. P. G.

    Blaker, Sir R.

    Bull, B. B.

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

    Blindell, Sir J.

    Bullock, Capt. M.

    Anderson, Sir A. Garrett (C. of Ldn.)

    Bossom, A. C.

    Burghley, Lord

    Aske, Sir R. W.

    Bowater, Col. Sir T. Vansittart

    Burton, Col. H. W.

    Assheton, R.

    Bracken, B.

    Butler, R. A.

    Baldwin, Rt. Hon. Stanley

    Braithwaite, Major A. N.

    Campbell, Sir E. T.

    Balfour, G. (Hampstead)

    Brass, Sir W.

    Cartland, J. R. H.

    Balfour, Capt. H. H. (Isle of Thanet)

    Briscoe, Capt. R. G.

    Carver, Major W. H.

    Belt, Sir A. L.

    Brown, Col. D. C. (Hexham)

    Cary, R. A.

    Cazalat, Capt. V. A. (Chippenham)

    Holmes, J. S.

    Raikes, H. V. A. M.

    Chamberlain, Rt. Hn. Sir A. (Br.W.)

    Hope, Captain Hon. A. O. J.

    Ramsbotham, H.

    Chamberlain. Rt. Hn. N. (Edgb't'n)

    Hopkinson, A.

    Ramsden, Sir E.

    Channon, H.

    Hore-Bellsha, Rt. Hon. L.

    Rankin, R.

    Chapman, A. (Rutherglen)

    Horsbrugh, Florence

    Rathbone, J. R. (Bodmin)

    Christle, J. A.

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

    Rayner, Major R. H.

    Clarke, F. E.

    Hudson, R. S. (Southport)

    Reid, Sir D. D. (Down)

    Clarry, Sir Reginald

    Hulbert, N. J.

    Reid, W. Allan (Derby)

    Cook, T. R. A. M. (Norfolk N.)

    Hunter, T.

    Remer, J. R.

    Cooke, J. O. (Hammersmith, S.)

    Jackson, Sir H.

    Rickards, G. W. (Skipton)

    Cooper, Rt. Hn. T. M. (E'nburgh,W.)

    Jones, L. (Swansea, W.)

    Robinson, J. R. (Blackpool)

    Craddock, Sir R. H.

    Keeling, E. H.

    Ropner, Colonel L.

    Craven-Ellis, W.

    Kerr, H. W. (Oldham)

    Ross, Major Sir R. D. (L'derry)

    Critchley, A.

    Kerr, J. Graham (Scottish Univs.)

    Ross Taylor, W. (Woodbridge)

    Crooke, J. S.

    Kirkpatrick, W. M.

    Ruggles-Brise, Colonel Sir E. A.

    Crookshank, Capt. H. F. C.

    Lamb, Sir J. O.

    Russell, A. West (Tynemouth)

    Croom-Johnson, R. P.

    Latham, Sir P.

    Russell, S. H. M. (Darwen)

    Cross, R. H.

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

    Salmon, Sir I.

    Crossley, A. C.

    Leckie, J. A.

    Salt, E. W.

    Crowder, J. F. E.

    Leech, Dr. J. W.

    Samuel, M. R. A. (Putney)

    Culverwell, C. T.

    Lees-Jones, J.

    Sandeman, Sir N. S.

    Davies, Major G. F. (Yeovil)

    Lennox-Boyd, A. T. L.

    Sanderson, Sir F. B.

    Davison, Sir W. H.

    Levy, T.

    Sassoon, Rt. Hon. Sir P.

    Dawson, Sir P.

    Lewis, O.

    Selley, H. R.

    Denman, Hon. R. D.

    Little, Sir E. Graham

    Shaw, Major P. S. (Wavertree)

    Denville, Alfred

    Llewellin, Lieut.-Col. J. J.

    Shaw, Captain W. T (Forfar)

    Despencer-Robertson, Major J. A. F.

    Lloyd, G. W.

    Shepperson, Sir E. W.

    Dorman-Smith, Major R. H.

    Locker-Lampson, Comdr. O. S.

    Smiles, Lieut.-Colonel Sir W. D.

    Dower, Capt. A. V. G.

    Loftus, P. C.

    Smith, Bracewell (Dulwich)

    Duckworth, W. R. (Moss Side)

    Lovat-Fraser, J. A.

    Smith, L. W. (Hallam)

    Duggan, H. J.

    Lyons, A. M.

    Somervell, Sir D. B. (Crewe)

    Duncan, J. A. L.

    Mabane, W. (Huddersfield)

    Somerville, D. G. (Willesden, E.)

    Dunglass, Lord

    M'Connell, Sir J.

    Southby, Comdr. A. R. J.

    Eckersley, P. T,

    MacDonald, Rt. Hon M. (Ross)

    Spender-Clay Lt.-Cl. Rt. Hn. H. H.

    Edmondson, Major Sir J.

    Macdonald, Capt. P. (Isle of Wight)

    Spens, W. P.

    Emery, J. F.

    McKie, J. H.

    Stanley, Rt. Hon. Lord (Fylde)

    Emmott, C. E. G. C.

    Maitland, A.

    Stanley, Rt. Hon. Oliver (W'm'l'd)

    Everard, W. L.

    Makins, Brig.-Gen. E.

    Stourton, Major Hon. J. J.

    Fildes, Sir H.

    Manningham-Buller, Sir M.

    Strauss, E. A. (Southwark, N.)

    Findlay, Sir E.

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

    Strauss, H. G. (Norwich)

    Fleming, E. L.

    Markham, S. F.

    Strickland, Captain W. F.

    Fraser, Capt. Sir I.

    Mayhew, Lt.-Col. J.

    Stuart, Lord C. Crichton- (N'thw'h)

    Fremantle, Sir F. E.

    Meller, Sir R. J. (Mitcham)

    Stuart, Hon. J. (Moray and Nairn)

    Ganzonl, Sir J.

    Mellor, Sir J. S. P. (Tamworth)

    Sutcliffe, H.

    Gibson, C. G.

    Mills, Sir F. (Leyton, E.)

    Tasker, Sir R. I.

    Gluckstein, L. H.

    Mills, Major J. D. (New Forest)

    Tate, Mavis C.

    Graham, Captain A. C. (Wirral)

    Mitchell, Sir W. Lane (Streatham)

    Touche, G. C.

    Grattan-Doyle, Sir N.

    Mitcheson, Sir G. G.

    Train, Sir J.

    Gridley, Sir A. B.

    Moreing, A. C.

    Tufnell, Lieut.-Com. R. L.

    Grimston, R. V.

    Morris-Jones, Dr. J. H.

    Turton, R. H.

    Gritten, W. G. Howard

    Morrison, G. A. (Scottish Univ's.)

    Wakefield, W. W.

    Guest, Maj. Hon. O.(C'mb'rw'll, N.W.)

    Morrison, W. S. (Cirencester)

    Walker-Smith, Sir J.

    Gunston, Capt. D. W.

    Munro, P.

    Wallace, Captain Euan

    Guy, J. C. M.

    Nall, Sir J.

    Ward, Irene (Wallsend)

    Hacking, Rt. Hon. D. H.

    Neven-Spence, Maj. B. H. H.

    Warrender, Sir V.

    Hamilton, Sir G. C.

    O'Neill, Major Rt. Hon. Sir Hugh

    Wedderburn, H. J. S.

    Hannah, I. C.

    Orr-Ewing, I. L.

    Wells, S. R.

    Hannon, Sir P. J. H.

    Palmer, G. E. H.

    Williams, H. G. (Croydon, S.)

    Haslam, H. C. (Horncastle)

    Peake, O.

    Wilson, Lt.-Col Sir A. T. (Hitchin)

    Haslam, Sir J. (Bolton)

    Peat, C. U.

    Withers, Sir J. J.

    Hellqers, Captain F. F. A.

    Penny, Sir G.

    Wragg, H.

    Hepburn, P. G. T. Buchan

    Perkins, W. R. D.

    Hepworth, J.

    Petherick, M.

    TELLERS FOR THE AYES.—

    Herbert, Major J. A. (Monmouth)

    Pilkington, R.

    Lieut.-Colonel Sir A. Lambert Ward

    Herbert, Captain S. (Abbey)

    Ponsonby, Col. C. E.

    and Captain Waterhouse.

    Hills, Major Rt. Hon. J. W. (Ripon)

    Radford, E. A.

    NOES.

    Acland, Rt. Hon. Sir F. Dyke

    Brown, Rt. Hon. J. (S. Ayrshire)

    Evans, E. (Univ. of Wales)

    Acland, R. T. D. (Barnstaple)

    Buchanan, G.

    Fletcher, Lt.-Comdr. R. T. H.

    Adams, D. (Consett)

    Burke, W. A.

    Frankel, D.

    Adams, D. M. (Poplar, S.)

    Cape, T.

    Gallacher, W.

    Adamson, W. M.

    Cluse, W. S.

    Gardner, B. W.

    Ammon, C. G.

    Compton, J.

    Garro Jones, G. M.

    Anderson, F. (Whitehaven)

    Cove, W. G.

    George, Major G. Lloyd (Pembroke)

    Banfield, J. W.

    Cripps, Hon. Sir Stafford

    George, Megan Lloyd (Anglesey)

    Barnes, A. J.

    Daggar, G.

    Glbbins, J.

    Barr, J.

    Dalton, H.

    Graham, D. M. (Hamilton)

    Batey, J.

    Davies, D. L. (Pontypridd)

    Green, W. H. (Deptford)

    Bellenger, F.

    Davies, S. O. (Merthyr)

    Grenfell, D. R.

    Benson, G.

    Dobble, W.

    Griffith, F. Kingsley (M'ddl'sbro, W.)

    Bevan, A.

    Dunn, E. (Rother Valley)

    Griffiths, G. A. (Hemsworth)

    Broad, F. A.

    Ede, J. C.

    Griffiths, J. (Llanelly)

    Bromfield, W.

    Edwards, Sir C. (Bedwellty)

    Groves, T. E.

    Brooke, W.

    Evans, D. O. (Cardigan)

    Hall, G. H. (Aberdare)

    908

    909

    Hall, J. H. (Whitechapel)

    McGhee, H. G.

    Sexton, T. M.

    Hardie, G. D.

    MacLaren, A.

    Shinwell, E.

    Harris, Sir P. A.

    Maclean, N.

    Short, A.

    Henderson, A. (Kingswinford)

    Marklew, E.

    Sinclair, Rt. Hon. Sir A. (C'thn's)

    Henderson, J. (Ardwick)

    Mathers, G.

    Smith, Ben (Rotherhithe)

    Henderson, T. (Tradeston)

    Maxton, J.

    Smith, E. (Stoke)

    Holdsworth, H.

    Messer, F.

    Smith, Rt. Hon. H. B. Lees- (K'ly)

    Holland, A.

    Montague, F.

    Smith, T. (Normanton)

    Jagger, J.

    Morrison, Rt. Hon. H. (Ha'kn'y, S.)

    Sorensen, R. W.

    Jenkins, A. (Pontypool)

    Morrison, R. C. (Tottenham, N.)

    Stewart, W. J. (H'ght'n-le-Sp'ng)

    Jenkins, Sir W. (Neath)

    Muff, G.

    Strauss, G. R. (Lambeth, N.)

    Johnston, Rt. Hon. T.

    Oliver, G. H.

    Taylor, R. J. (Morpeth)

    Jones, A. C. (Shipley)

    Owen, Major G.

    Thurtle, E.

    Jones, H. Haydn (Merioneth)

    Parker, J.

    Tinker, J. J.

    Jones, Morgan (Caerphilly)

    Parkinson, J. A.

    Viant, S. P.

    Kelly, W. T.

    Pethick-Lawrence, F. W.

    Walker, J.

    Kennedy, Rt. Hon. T.

    Potts, J.

    Watkins, F. C.

    Kirkwood, D.

    Price, M. P.

    Watson, W. McL.

    Lathan, G.

    Pritt, D. N.

    Westwood, J.

    Lawson, J. J.

    Richards, R. (Wrexham)

    White, H. Graham

    Leach, W.

    Ritson, J.

    Wilkinson, Ellen

    Lee, F.

    Roberts, Rt. Hon. F. O. (W. Brom.)

    Williams, E. J. (Ogmore)

    Leonard, W.

    Roberts, W. (Cumberland, N.)

    Williams, T. (Don Valley)

    Leslie, J. R.

    Robinson, W. A. (St. Helens)

    Young, Sir R. (Newton)

    Logan, D. G.

    Rothschild, J. A. de

    Lunn, W.

    Rowson, G.

    TELLERS FOR THE NOES.—

    Macdonald, G. (Ince)

    Salter, Dr. A.

    Mr. Whiteley and Mr. Charleton.

    McEntee, V. La T.

    Seely, Sir H. M.

    8.36 p.m.
    Major LLOYD GEORGE: I beg to move, in page 26, line 38, after "cease," to insert "save as hereinafter provided."
    This Amendment is to be taken in conjunction with Amendments which appear later on the Paper, and as we have had a fairly full discussion already on the principle which it covers, I do not propose to detain the Committee further than to say that it represents an attempt to save something out of the wreck.
    Mr. W. S. MORRISON: I am in a little difficulty about this Amendment. It is obviously intended as a drafting Amendment to prepare the way for something which is to follow, but the hon. and gallant Member has not indicated precisely to what provision it is intended as a prelude. In the circumstances, it would not be possible for me to accept the Amendment.
    Major LLOYD GEORGE: There are several Amendments later on the Paper which relate to this point but the important words at this stage are, "save as hereinafter provided." Later on it is proposed to insert several provisions which would have the effect already indicated. For example, there is an Amendment on page 1012 of the Order Paper—in page 27, line 31, at the end, to insert a new Sub-section (3).
    Mr. EDE: I suggest that the Amendment might be taken in conjunction with the Amendment on page 1011 which proposes, in page 27, line 11, at the end,
    910
    to insert a proviso, the effect of which would be to guarantee to the Ministry of Transport and, what is still more important from my point of view, to the local authorities a definite sum of money for this purpose.
    The TEMPORARY CHAIRMAN (Colonel Sir Charles MacAndrew): I was under the impression that the hon. and gallant Member for Pembroke (Major Lloyd George) was moving his Amendment in conjunction with the Amendment—in page 27, line 5, after "eight," to insert:
    "and for the purpose of the payment of interest on, and the repayment of, the principal of any money borrowed under section thirteen."
    If it is to be taken in conjunction with the Amendment to which the hon. Member for South Shields (Mr. Ede) has just referred, then it is out of order, because that Amendment would increase the charge.
    Major LLOYD GEORGE: The Amendment which I have just moved is obviously one which would have to be made as a preliminary to any of the subsequent Amendments in the names of myself and my hon. Friends. The hon. Member for South Shields (Mr. Ede) has mentioned one. I mentioned another. To any of those Amendments these words would be essential.
    The TEMPORARY CHAIRMAN: The Amendment on page 1012—in page 27, line 31, to insert a new sub-section (3)—would also increase the charge, and in also out of order.
    8.40 p.m.
    Mr. W. S. MORRISON: We are in a difficulty because, obviously, I cannot accept these word; "save as hereinafter provided" at this stage, if no variation of the provisions of the Clause as it stands is to be accepted by the Committee later. In that case these words would make nonsense of the Clause. On the other hand, the hon. and gallant Member for Pembroke (Major Lloyd George) is at a disadvantage because he and his friends have later Amendments on the Paper which depend on these words. May I suggest as a convenient course that he should now withdraw this Amendment? Then if the Committee, later on, accepts any of the Amendments proposed by himself or his hon. Friends, which would make these words "save as hereinafter provided" necessary at this point, they could be inserted on the Report stage. It is obvious that we cannot have an intelligent Debate on the words "save as hereinafter provided."
    The TEMPORARY CHAIRMAN: I must point out that I am precluded from calling any Amendment which does not make sense and these later Amendments would not make sense unless these words had been inserted. I suggest that the hon. and gallant Member for Pembroke (Major Lloyd George) should link this Amendment with the Amendment in page 27, line 5, to which I have already referred, which would, at any rate, be in Order.
    Major LLOYD GEORGE: I agree to that course.
    Amendment negatived.
    8.43 p.m.
    Mr. R. ACLAND: I beg to move, in page 27, line 3, to leave out from "the," to "section" in line 5, and to insert "purposes of."
    The Minister has already intimated that he will accept this Amendment, because he has said that it is intended that the Minister of Transport shall still have power to construct roads. That however does not follow from the Clause as it is now worded. Section 8 of the 1909 Act gives the Minister power inter alia to construct new roads. What does this Clause allow the Minister to do in respect of his power to construct roads? As it stands it allows him, with the consent
    912
    of the Treasury, to make advances to highway authorities under Section 8 of the Act of 1909. If Sub-section (1, a) of the Clause stopped at "1909" it would be clear that the Clause specifically excluded the power of the Minister to construct new roads. The Financial Secretary however called attention, at an earlier stage, to the words which follow:
    "and for other purposes of the fund."
    Those are vague words. There are many purposes which one could mention, such as the making of bridges, the conduct of safety campaigns, the lighting of streets, the putting up of signs, and so forth. It is our contention that those words would be taken as applying to purposes of that kind and would not be capable, in themselves, of contradicting the specific words in the earlier part of the Clause which in our view exclude the power to construct roads. The paragraph as amended clearly puts it within the power of the Minister to determine that sums are required for the purpose of constructing roads.
    8.46 p.m.
    Mr. PETHICK-LAWRENCE: Some of my hon. Friends have their names down to this Amendment, and I had my name down to an Amendment which is intended to have a similar effect. I am glad that the Chancellor has accepted the Amendment because, in spite of what the Financial Secretary said earlier and what the Chancellor himself said, it is exceedingly doubtful whether under the words as they appear in the text of the Bill the power conferred on the Minister of Transport himself to construct and maintain roads would exist. It is true that that power might be read into the words of the Bill. But in view of the fact that the power of making advances to or in conjunction with highway authorities is singled out in the text of the Bill, it is very doubtful whether, if the text stood as it is printed, the courts would agree that the power of the Minister himself to construct and maintain roads would remain. If the Amendment is to be accepted, as I understand, there will be no doubt that all the powers that are included in Section 8 of the Development and Road Improvement Funds Act, 1909, will be perpetuated in the new form.
    Mr. W. S. MORRISON: The Government propose to accept the Amendment. We are advised that the same effect is

    913
    obtained by the words now in the Clause, but I understand from the Debate that there is widespread misgiving on the subject, and we think that that misgiving will be cleared away if we accept the Amendment, which places it beyond a shadow of doubt.
    Amendment agreed to.
    8.49 p.m.
    Mr. BENSON: I beg to move, in page 27, line 22, to leave out paragraph (d).
    The object of this Clause has been portrayed by the Chancellor of the Exchequer as an attempt to introduce financial orthodoxy into the heretical position of the Ministry of Transport. Whether that be so, or whether he was merely covering up the robbing of a hen-roost, I do not know, but his defence was that he wished to be financially orthodox. It is for similar reasons that I move the deletion of this paragraph. Although appropriations-in-aid may be very convenient for Ministers, 'they are very undesirable from a strictly financial point of view. They are undesirable because under the drafting of the original Act which permitted appropriations-in-aid, it was held by a Speaker that no reduction could be moved to an appropriation-in-aid. The result is that every penny that goes in appropriations-in-aid is taken outside the control of Parliament. That is bad. The expenses and salaries of the Ministry of Transport in this year's Estimates are about £800,000. The appropriations-in-aid in the Estimates are £700,000. That is a very large proportion of the salaries and expenses to be taken outside the control of the House. It is financially unsound, and I cannot see any serious argument why we should adopt this unsound method of appropriations-in-aid. Because of the urge towards financial orthodoxy which the Chancellor has shown in this Clause, I hope that the Financial Secretary will carry it one step further and make it an exemplary Clause for all future Chancellors to follow.
    8.52 p.m.
    Mr. W. S. MORRISON: I thank the hon. Member for his explanation because I was at some loss to divine the motive which prompted him to move to leave out this paragraph. I find that it is the laudable motive of following the strictest canons of financial orthodoxy. I am afraid I cannot go so far as the
    914
    hon. Member along the straight and narrow road that he would have us follow. The Committee will understand that the main change proposed in this Clause is the transference of this fund to votes instead of taxation. With the Road Fund in its previous condition of being fed by specially designated revenues, it was natural that any fees should come into the fund. Now that the specially designated revenues are not to go into the fund, the question arises what should be done with these particular fees. They are fees charged for various purposes, and we propose in the Clause to take them into the Vote as an appropriation-in-aid.
    I am prepared to admit what the hon. Member said about appropriations-in-aid. In general, they are a common feature of most Votes, and Parliament cannot move reductions to them for the simple reason that the money has to pass into the Exchequer on account of the Vote. It is open to Parliament, however, to reduce the main Vote if it thinks that the appropriations-in-aid are excessive. We find the same thing being done by various Departments, such as the Public Trustee Department, where fees are charged and applied as appropriations in-aid to the Vote of the Department. It is the same with the Patent Office and the Companies Winding-up Department of the Bankruptcy Court. All fees charged are treated as appropriations-in-aid, and when we are faced with the problem of how to dispose of these fees I think we should do well to follow those precedents. That purpose would be defeated if we accepted the Amendment, and therefore I regret that I cannot do so.
    8.56 p.m.
    Sir P. HARRIS: This is a matter of very great importance and I do not wish the analogies which the hon. and learned Gentleman has put forward to pass unchallenged. With very great respect to him, they are very bad analogies. The Public Trustee Department is a trading Department and the fees charged are assessed deliberately to pay the cost of the Department, and the same thing applies more or less to the Patent Office and to the Land Registration Department. They are bad examples, and I am sorry the Financial Secretary gave them, because either he has been misled,

    915
    which I think is probable, or he is misleading the Committee. It may be convenient for book-keeping purposes to let these fees go to this particular Department, but it is not a trading Department, but is doing great local government work. It is not run for a profit and does not collect fees on that basis. The hon. and learned Member, who is usually very well-informed, and whose examples are usually above suspicion, is in this case very much in error. The only excuse is that he has had a very long afternoon in the Committee and has had to defend some very bad legislation, and is driven partly by fatigue and partly by despair to bring forward very bad analogies.
    Amendment negatived.
    The TEMPORARY CHAIRMAN: I do not propose to call the Amendment standing in the name of the hon. Member for Anglesey (Miss Lloyd George) and other hon. Members, to insert a new paragraph (e), unless it can be shown that it is necessary.
    8.59 p.m.
    Mr. HOLDSWORTH: May I be allowed to explain that it is a very simple Amendment, and that the purpose of it is to ensure that any balance left in the Road Fund at the end of a financial year shall not be taken by the Treasury but left at the disposal of the Road Fund in the following year. It may be that certain works are started in the course of a year, and, as all who have served on local bodies know, for various reasons it may not be possible to complete that work during that year. The money will have been allotted for that specific purpose, and the Amendment would secure that the money was retained in the Road Fund and carried on past the end of the financial year. We have had an interesting Debate on this fund, and I do not wish to take up time, but I think the Financial Secretary will agree that there has been a genuine suspicion that adequate sums of money may not be granted for the improvement of roads, etc., under the new arrangement, and if this Amendment could be accepted—
    The TEMPORARY CHAIRMAN: Before the hon. Member can move the Amendment it will have to be proved that it is necessary. I do not think the case put up has shown that the position
    916
    is very different from that which arises in other Departments. Each financial year is a unit in itself.
    9.1 p.m.
    Mr. PETHICK-LAWRENCE: If you are thinking of ruling the Amendment out of Order, Sir Charles, may I submit that there is a considerable difference between balances which are surrendered and balances which are not surrendered? There are two classes of Votes. Votes which are annual and the unspent balances of which are surrendered to the Treasury at the end of the financial year, and other Votes, such as certain colonial development grants, where the unspent balances are not surrendered. Whether the Amendment is accepted by the Government or not there is a, distinction, and I submit that the point is one which is worthy of our discussion.
    The TEMPORARY CHAIRMAN: In view of what the hon. Gentleman has said I propose to call the Amendment.
    9.3 p.m.
    Mr. HOLDSWORTH: I beg to move, in page 27, line 27, at the end, to insert:
    "(e) any moneys standing to the credit of the Road Fund at the end of any financial year and unallocated or unspent by the Minister of Transport out of such Fund shall be carried forward to the credit of the Road Fund as at the commencement of the next succeeding financial year and any such moneys may be applied by the Minister of Transport together with the income of the Road Fund in that year for the purposes of Section eight of the Development and Road improvement Funds. Act, 1909, and for other purposes of the Fund."
    Mr. PETHICK-LAWRENCE: In arguing the point of Order, I have already had an opportunity of pointing out the very definite distinction which exists between these classes of Votes. In some cases it is the practice for the House to vote sums of money which are to be spent during the year and any balance which is unspent at the end of the year is returned to the Exchequer and ceases to belong to that particular service. If Parliament wishes that service to be continued it has to vote the money afresh from the Exchequer in the following year. There are other services in which the money provided by the House remains in the hands of the Department, even if the whole of it has not been spent in the financial year. It is of great importance in the case of the Road Fund

    917
    that there should not be a return of the unspent balances to the Treasury at the end of each year. Hitherto, as the Road Fund has not been dealt with in the way which is now proposed under this Bill, the money has remained in the Road Fund until the Treasury has definitely moved that it should be taken out, an example of that being the £5,250,000 which is to be taken out this year. We feel that if the money is kept in the Road Fund it will give the Minister of Transport greater assurance as to his position, and give even greater assurance to the local bodies which are counting upon that money being available for them, though no doubt the Treasury would not fail to implement the commitments of the Department. The principle which, as I have said, has been adopted in the case of certain Colonial grants does seem to be applicable to this case, and I hope the Financial Secretary will accept the Amendment.
    While I am on my feet there is a quite important point which I should like to raise, a point which I think has a direct connection with this Amendment. In the financial statement for the year it has been the practice, ever since the days of the right hon. Member for Epping (Mr. Churchill) as Chancellor of the Exchequer—in the year 1926 I think—to differentiate between ordinary revenue and self-balancing revenue. The sums which have appeared in the self-balancing revenue have been the sums required to meet the Post Office expenditure and the motor vehicle duties allotted to the Road Fund. I want to take this opportunity, because the question is closely associated with the question of what is to be done with the balance of the Road Fund, to ask the Financial Secretary whether he is yet in a position to say that the practice is to be continued substantially in its present form. He may want to consult his right hon. Friend because he may not have considered the point in great detail, but if he could give me an answer now I should be very much obliged, because it is an important point. If the balances are to be surrendered, it is clear that the item as it has been shown hitherto in the financial statement for the year would be improper, and there would have to be a change.
    9.7 p.m.
    Mr. W. S. MORRISON: This Amendment, which has no reference to the point
    918
    of Order which was decided, is, for the purpose which hon. Members have in view in moving it, not required. There are certain statutory funds with balances which are sometimes, or practically always, retained, but they appear on the Votes very much as appropriations-in-aid for the service next year. It is proposed to follow that precedent, in the case of the Road Fund under the new dispensation, and not to surrender the balance to the Exchequer at the end of the year, but to carry it, forward into next year. That is the convenient course which is followed with similar funds. It would be undesirable to make special statutory provision to follow this practice in the case of this fund, because it might then be argued that as it had been found necessary for Parliament to make special provision for this fund, there was some invalidity attaching to the practice with the other funds.
    One other question put by the hon. Member for East Edinburgh (Mr. Pethick-Lawrence) I would answer. He remarked that the Road Fund has hitherto appeared in our financial statement under the category of a self-balancing fund. My opinion on the question which he asked me is governed by the words of Sub-section (1) of the Clause, which says:
    "the liability to issue sums out of the Consolidated Fund of the United Kingdom to the Road Fund under Section two of the Roads Act, 1920, and any power to make advances to, or to borrow on the security of, the Road Fund, shall cease."
    It seems to me that, thereafter, the produce from the taxation, that is, the revenue, of the Road Fund, will cease to be paid to the Road Fund direct, but will go into the Exchequer, and will then have to be voted by Parliament out of the Exchequer to the Road Fund. The conclusion I have formed is that it will no longer be a self-balancing fund, in the sense in which the Post Office is, because it will have no revenue of its own, but only such revenue as Parliament gives it. I would ask the hon. Member for this reason not to press the Amendment, because it is the intention of the Government to follow the course which has been followed in the case of those funds to which he referred, namely, to follow the practice considered proper in those cases and not to surrender the funds.
    9.10 p.m.
    Sir P. HARRIS: To any other Chancellor the words of the Financial Secretary would sound sweetly reasonable, but we have many precedents, and we know that this fund has been a convenient nest-egg for this Chancellor and for his predecessors. The right hon. Gentleman the Member for Epping (Mr. Churchill) started the game. It has been said that the money voted for this Department should remain in the fund, but inevitably a hard-pressed Chancellor will he inclined to divert it to other Departments and for other purposes. I would impress upon the Financial Secretary and the Parliamentary Secretary to the Ministry of Transport the peculiar character of the fund. The Minister of Transport is a partner; he alone does not find the cost of most road improvements. A percentage of the money invariably has to be found by local authorities. Long negotiation has to go on as to the character of an improvement, the width of the road, the place for a bridge and the kind of bridge that it is to be. We have many precedents for that too: Waterloo Bridge, London Bridge, Charing Cross Bridge, the bridge at Hull and many other bridges. The same applies to roads.
    I understand that the Minister of Transport will make Estimates for his requirements for the year. He will review the need for road improvement, for new arterial roads and the construction of bridges, and will estimate that so many miles will be required. The Chancellor of the Exchequer and the Treasury will carefully scrutinise the Estimates and cut them down. From what we know of the Treasury, there is not the slightest doubt about that. The Estimates will finally be passed and come before this House to be approved. Either because of the long negotiation or because of the failure of the Minister to approve of a scheme, the whole of the money will not be spent. The purpose of the Amendment is to see that, should the money not be spent, we shall be sure of having a statutory guarantee that the money will be an extra amount over and above the Estimate for the following year, so that schemes which have been delayed and hung up because of the dilatory action of the Minister of Transport, or by the breakdown of negotiation between the Department and local authorities, should not be held up for want of funds. Looking at the history of the fund for many years, we say it
    920
    is very important that Parliament should make it clear that once the Estimates are passed and schemes are approved in principle, the money should remain there and be available next year, over and above any schemes worked out for the succeeding year.
    9.14 p.m.
    Mr. W. S. MORRISON: I should like to persuade the hon. Member for East Edinburgh (Mr. Pethick-Lawrence) to withdraw his Amendment. It has been stated that unless there is a, statutory guarantee a Chancellor of the Exchequer may be tempted to raid any balance in the fund. If the Road Fund were a separate entity there would be some temptation to raid it—[HON. MEMBERS: "And you did it!"] If now the Chancellor of the Exchequer were to raid any balance in the fund, it would be his own henroost that he would be raiding, for he would be abstracting a sum which otherwise would go as an appropriation-in-aid of the fund.
    Mr. PETHICK-LAWRENCE: I understood the Financial Secretary to say that there was no need for this Amendment because it was not only the intention of the Government, but it would be the result of carrying the Clause as it stands, that the money would not be surrendered, because the Road Fund is in a similar position to other funds in the case of which the money is not surrendered. If that be so, it makes no difference whether the proviso is in or not. I understand also that, if the Chancellor thought there was any advantage in raiding the fund on any particular occasion, he would have equal power to do so whether the proviso were in or not. Is that so?
    Mr. MORRISON: Certainly.
    Mr. PETHICK-LAWRENCE: In that case I do not see that there is any point in pressing the Amendment.
    Mr. MORRISON: The answer to both the hon. Gentleman's questions is in the affirmative, and I would again point out the disadvantage of a statutory enactment with regard to this fund, which might cast doubts on the validity of our practice with regard to other funds.
    Amendment, by leave, withdrawn.
    9.18 p.m.
    Mr. LEES-SMITH: I beg to move, in page 27, line 32, to leave out Subsection (3).

    921
    This Clause does two things. It abandons the existing machinery of the Road Fund, and, by Sub-section (3), it transfers to the Exchequer from the fund this year the sum of £5,250,000. In fact, the Sub-section contains the raid on the Road Fund for the coming year. The matter has been fully discussed, and I do not propose again to enter into the arguments. I merely move the Amendment in order that we may specifically register our opinion on this part of the Clause.
    Mr. W. S. MORRISON: In view of the terms in which the right hon. Gentleman has moved the Amendment, he will not expect me to attempt to controvert his arguments. I think he has moved the Amendment merely as a protest against what he considers to be a wrong course of action. I understand that he proposes to press the Amendment to a Division, and in that case he will not accuse me of any discourtesy if I do not make a speech on the matter.
    9.20 p.m.
    Mr. E. DUNN: I desire to stress the position of the local authorities in regard to this matter. I am not certain whether the Committee fully appreciates how the local authorities stand. I agree with the right hon. Gentleman the Member for Keighley (Mr. Lees-Smith) that the Amendment is merely to leave out the Sub-section which takes over the £5,250,000 from the fund, but I want the
    Committee to realise the position of an authority like the county council of the district which I have the honour to represent. In the West Riding of Yorkshire, the rate for highway purposes within the last 12 months is 3s. 3d. in the £ for county purposes, while for the area of my own authority the rate is 2s. 9d., making 6s. in the £ which has to be found for the maintenance of highways in the county and in that district. Not only have we seen a constant raiding of the Road Fund—I fully appreciate that in this case it is simply taking the balance into the Treasury—but I think we are entitled to protest on behalf of the small local authorities, where one-third of the rate levied in their areas in past years has been entirely for highway purposes. If the money which in successive years has been taken from the Road Fund by the Government had been usefully spent by the local authorities, I doubt very much whether the rates would have been as high as they are at present and a they have been for years past. I am violently opposed in principle, despite what has been said, not only to the raiding of the fund, but to taking under the cloak of the Chancellor himself the whole of the activities of the Road Fund, and I protest most strongly against it.
    Question put, "That the words proposed to be left out stand part of the Clause."
    The Committee divided: Ayes, 232; Noes, 125.

    Gridley, Sir A. B.

    McKie, J. H.

    Russell, S. H. M. (Darwen)

    Grimston, R. V.

    Macnamara, Capt. J. R. J.

    Salmon, Sir I.

    Gritten, W. G. Howard

    Magnay, T.

    Salt, E. W.

    Guest,Maj. Hon. O.(C'mb'rw'll,N.W.)

    Maitland, A.

    Samuel, M. R. A. (Putney)

    Gunston, Capt. D. W.

    Makins, Brig.-Gen. E.

    Sandeman, Sir N. S.

    Guy, J. C. M.

    Manningham-Buller, Sir M.

    Sanderson, Sir F. B.

    Hacking, Rt. Hon. D. H.

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

    Sassoon, Rt. Hon. Sir P.

    Hamilton, Sir G. C.

    Markham, S. F.

    Savery, Servington

    Hannah, I. C.

    Mason, Lt.-Col. Hon. G. K. M.

    Selley, H. R.

    Hannon, Sir P. J. H.

    May hew, Lt.-Col. J.

    Shaw, Major P. S. (Wavertree)

    Haslam, Sir J. (Bolton)

    Meller, Sir R. J. (Mitcham)

    Shaw, Captain W. T. (Fortar)

    Hepburn, P. G. T. Buchan-

    Mellor, Sir J. S. P. (Tamworth)

    Shepperson, Sir E. W.

    Hepworth, J.

    Mills, Sir F. (Leyton, E.)

    Smiles, Lieut.-Colonel Sir W. D.

    Herbert, Major J. A. (Monmouth)

    Mills, Major J. D. (New Forest)

    Smith, Bracewell (Dulwich)

    Herbert, Captain S. (Abbey)

    Mitcheson, Sir G. G.

    Smith, L. W. (Hallam)

    Hills, Major Rt. Hon. J. W. (Ripon)

    Moreing, A. C.

    Somerveil, Sir D. B. (Crewe)

    Holmes, J. S.

    Morris-Jones, Dr. J. H.

    Somerville, D. G. (Willesden, E.)

    Hope, Captain Hon. A. O. J.

    Morrison, G. A. (Scottish Univ's.)

    Spears, Brig.-Gen. E. L.

    Hopkinson, A.

    Morrison, W. S. (Cirencester)

    Spender-Clay, Lt.-CI. Rt. Hn. H. H.

    Hore-Belisha, Rt. Hon. L.

    Munro, P.

    Stanley, Rt. Hon. Lord (Fylde)

    Horsbrugh, Florence

    Nall, Sir J.

    Stanley, Rt. Hon. Oliver (W'm'l'd)

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

    Neven-Spence, Maj. B. H. H.

    Stourton, Major Hon. J. J.

    Hulbert, N. J.

    Nicolson, Hon. H. G.

    Strauss, H. G. (Norwich)

    Hunter, T.

    O'Neill, Major Rt. Hon. Sir Hugh

    Stuart, Hon. J. (Moray and Nairn)

    Jackson, Sir H.

    Orr-Ewing, I. L.

    Sutcliffe, H.

    James, Wing-Commander, A. W.

    Palmer, G. E. H.

    Tasker, Sir R. I.

    Jones, L. (Swansea, W.)

    Patrick, C. M.

    Tate, Mavis C.

    Keeling, E. H.

    Peake, O.

    Touche, G. C.

    Kerr, H. W. (Oldham)

    Peat, C. U.

    Tryon, Major Rt. Hon. G. C.

    Kerr, J. Graham (Scottish Univs.)

    Penny, Sir G.

    Turton, R. H.

    Kirkpatrick, W. M.

    Perkins, W. R. D.

    Wakefield, W. W.

    Lamb, Sir J. Q.

    Petherick, M.

    Walker-Smith, Sir J.

    Latham, Sir P.

    Pilkington, R

    Wallace, Captain Euan

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

    Ponsonby, Col. C. E.

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

    Leckie, J. A.

    Radford. E. A.

    Ward, Irene (Wallsend)

    Leech, Dr. J. W.

    Raikes, H. V. A. M.

    Warrender, Sir V.

    Lees-Jones, J.

    Ramsbotham, H.

    Waterhouse, Captain C.

    Lennox-Boyd, A. T. L.

    Ramsden, Sir E.

    Wedderburn, H. J. S.

    Levy, T.

    Rankin, R.

    Wells, S. R.

    Lewis, O.

    Rathbone, J. R. (Bodmin)

    Williams, C. (Torquay)

    Little, Sir E. Graham-

    Rayner, Major R. H.

    Williams. H. G. (Croydon, S.)

    Llewellin, Lieut.-Col. J. J.

    Reid. Sir D. D. (Down)

    Wilson, Lt.-Col. Sir A. T. (Hitchin)

    Lloyd, G. W.

    Reid, W. Allan (Derby)

    Windsor-Clive, Lieut.-Colonel G.

    Locker-Lampson, Comdr.O. S.

    Rickards, G. W. (Skipton)

    Wragg, H.

    Loftus, P. C.

    Robinson, J. R. (Blackpool)

    Young, A. S. L. (Partick)

    Lovat-Fraser, J. A.

    Ropner, Colonel L.

    Lyons, A. M.

    Ross, Major Sir R. D. (L'nderry)

    TELLERS FOR THE AYES.—

    M'Connell, Sir J.

    Ross Taylor, W. (Woodbridge)

    Sir James Blindell and Commander

    McCorquodale, M. S.

    Ruggles-Brise, Colonel Sir E. A.

    Southby.

    Macdonald, Capt. P. (Isle of Wight)

    Russell, A. West (Tynemouth)

    Division No. 236.]

    AYES.

    [9.23 p.m.

    Acland-Troyte, Lt.-Col. G. J.

    Burghley, Lord

    Dawson, Sir P.

    Adams, S. V. T. (Leeds, W.)

    Burton, Col. H. W.

    Denman, Hon. R. D.

    Agnew, Lieut.-Comdr. P. G.

    Campbell, Sir E. T.

    Denville, Alfred

    Albery, I. J.

    Cartland, J. R. H.

    Despencer-Robertson, Major J. A. F.

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

    Carver, Major W. H.

    Dorman-Smith, Major R. H.

    Aske, Sir R. W.

    Cary, R. A.

    Dower, Capt. A. V. G.

    Assheton, R.

    Cazalet, Capt. V. A. (Chippenham)

    Duckworth, G. A. V. (Salop)

    Baldwin, Rt. Hon. Stanley

    Chamberlain, Rt. Hn. N. (Edgb't'n)

    Duckworth, W. R. (Moss Side)

    Baldwin-Webb, Col. J.

    Channon, H.

    Dugdale, Major T. L.

    Balfour, G. (Hampstead)

    Chapman, A. (Rutherglen)

    Duggan, H. J.

    Balfour, Capt. H. H. (Isle of Thanet)

    Christle, J. A.

    Duncan, J. A. L.

    Balniel, Lord

    Clarry, Sir Reginald

    Dunglass, Lord

    Beaumont, Hon. R. E. B. (Portsm'h)

    Colville, Lt.-Col. D. J.

    Eckersley, P. T.

    Belt, Sir A. L.

    Cook, T. R. A. M. (Norfolk, N.)

    Edmondson, Major Sir J.

    Bernays, R. H.

    Cooke, J. D. (Hammersmith, S.)

    Elliot, Rt. Hon. W. E.

    Birchall, Sir J. D.

    Cooper, Rt.Hn. T. M. (E'nburgh.W.)

    Elliston, G. S.

    Blaker, Sir R.

    Courtauld, Major J. S.

    Emery, J. F.

    Bossom, A. C.

    Craddock, Sir R. H.

    Emmott, C. E. G. C.

    Bowater, Col. Sir T. Vansittart

    Craven-Ellis, W.

    Emrys-Evans, P. V.

    Bracken, B.

    Critchley, A.

    Everard, W. L.

    Braithwaite, Major A. N.

    Crooke, J. S.

    Fildes, Sir H.

    Brass, Sir W.

    Crookshank, Capt. H. F. C.

    Findlay, Sir E.

    Briscoe, Capt. R. G.

    Croom-Johnson, R. P.

    Fleming, E. L.

    Brown, Col. D. C. (Hexham)

    Cross, R. H.

    Fremantle, Sir F. E.

    Brown, Rt. Hon. E. (Leith)

    Crowder, J. F. E.

    Ganzoni, Sir J.

    Brown, Brig.-Gen. H. C. (Newbury)

    Cruddas, Col. B.

    Gibson, C. G.

    Browne, A. C. (Belfast, W.)

    Culverwell, C. T.

    Gluckstein, L. H.

    Bull, B. B.

    Davies, Major G. F. (Yeovil)

    Graham, Captain A. C. (Wirral)

    Bullock, Capt. M.

    Davison. Sir W. H.

    Grattan-Doyle, Sir N.

    NOES.

    Acland, Rt. Hon. Sir F. Dyke

    Evans, D. O. (Cardigan)

    Jones, Morgan (Caerphilly)

    Adams, D. (Consett)

    Evans, E. (Univ. of Wales)

    Kelly, W. T.

    Adams, D. M. (Poplar, S.)

    Fletcher, Lt.-Comdr. R. T. H.

    Kennedy, Rt. Hon. T.

    Adamson, W. M.

    Foot, D. M.

    Kirkwood, D.

    Ammon, C. G.

    Frankel, D.

    Lathan, G.

    Banfield, J. W.

    Gardner, B. W.

    Lawson, J. J.

    Barnes, A. J.

    Garro Jones, G. M.

    Leach, W.

    Barr, J.

    George, Major G. Lloyd (Pembroke)

    Lee, F.

    Batey, J.

    George, Megan Lloyd (Anglesey)

    Leonard, W.

    Bellenger, F.

    Gibbins, J.

    Leslie, J. R.

    Benson, G.

    Graham, D. M. (Hamilton)

    Logan, D. G.

    Bevan, A.

    Green, W. H. (Deptford)

    Lunn, W.

    Broad, F. A.

    Grenfell, D. R.

    McEntee, V. La T.

    Bromfield, W.

    Griffith, F. Kingsley (M'ddl'sbro, W.)

    McGhee, H. G.

    Brooke, W.

    Griffiths, G. A. (Hemsworth)

    Maclean, N.

    Brown, Rt. Hon. J. (S. Ayrshire)

    Griffiths, J. (Llanelly)

    MacMillan, M. (Western Isles)

    Buchanan, G.

    Groves, T. E.

    Marklew, E.

    Burke, W. A.

    Hall. G. H. (Aberdare)

    Maxton, J,

    Cape, T.

    Hall, J. H. (Whitechapel)

    Messer, F.

    Charleton, H. C.

    Hardle, G. D.

    Montague, F.

    Cluse, W. S.

    Harris, Sir P. A.

    Morrison, Rt. Hon. H. (Ha'kn'y, S.)

    Compton, J.

    Henderson, A. (Kingswinford)

    Morrison, R. C. (Tottenham, N.)

    Cove, W. G.

    Henderson, J. (Ardwick)

    Muff, G.

    Cripps, Hon. Sir Stafford

    Henderson, T. (Tradeston)

    Oliver, G. H.

    Daggar, G.

    Holdsworth, H.

    Owen, Major G.

    Dalton, H.

    Holland, A.

    Parker, J.

    Davies, D. L. (Pontypridd)

    Jagger, J.

    Parkinson, J. A.

    Davies, S. O. (Merthyr)

    Jenkins, A. (Pontypool)

    Pethick-Lawrence, F. W.

    Dobble, W.

    Jenkins, Sir W. (Neath)

    Potts, J.

    Dunn, E. (Rother Valley)

    Johnston, Rt. Hon. T.

    Price, M. P.

    Ede, J. C.

    Jones, A. C. (Shipley)

    Pritt, D. N.

    Edwards. Sir C. (Bedwellty)

    Jones, H. Haydn.(Merioneth)

    Richards, R. (Wrexham)

    Ritson, J.

    Smith, Ben (Rotherhithe)

    Watkins, F. C.

    Roberts, Rt. Hon. F. O. (W. Brom.)

    Smith, E. (Stoke)

    Watson, W. McL.

    Roberts, W. (Cumberland, N.)

    Smith, Rt. Hon. H. B. Lees- (K'ly)

    Westwood, J.

    Robinson, W. A. (St. Helens)

    Smith, T. (Normanton)

    White, H. Graham

    Rowson, G.

    Sorensen, R. W.

    Williams, E. J. (Ogmore)

    Salter, Dr. A.

    Stewart, W. J. (H'ght'n-le-Sp'ng)

    Williams, T. (Don Valley)

    Seely, Sir H. M.

    Taylor, R. J. (Morpeth)

    Young, Sir R. (Newton)

    Sexton, T. M.

    Thurtle, E.

    Shinwell, E.

    Tinker, J. J.

    TELLERS FOR THE NOES.—

    Short, A.

    Viant, S. P.

    Mr. Whiteley and Mr. Mathers.

    Sinclair, Rt. Hon. Sir A. (C'thn's)

    Walker, J.

    Question put, "That the clause as amended stand part of the bill."
    The Committee divided: Ayes, 238; Noes, 128

    Division No. 237.]

    AYES.

    [9 34 p.m.

    Acland-Troyte, Lt.-Col. G. J.

    Dower, Capt. A. V. G.

    Llewellin, Lieut.-Col. J. J.

    Adams, S. V. T. (Leeds, W.)

    Duckworth, G. A. V. (Salop)

    Lloyd, G. W.

    Agnew, Lieut.-Comdr. P. G.

    Duckworth, W. R. (Moss Side)

    Locker-Lampson, Comdr. O. S.

    Albery, I. J.

    Dugdale, Major T. L.

    Loftus, P. C.

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

    Duggan, H. J.

    Lovat-Fraser, J. A.

    Aske, Sir R. W.

    Duncan, J. A. L.

    Lyons, A. M.

    Assheton, R.

    Dunglass, Lord

    Mabane, W. (Huddersfield).

    Baldwin, Rt. Hon. Stanley

    Eckersley, P. T.

    M'Connell, Sir J.

    Baldwin-Webb, Col. J.

    Edmondson, Major Sir J.

    McCorquodale, M. S.

    Balfour, G. (Hampstead)

    Elliot, Rt. Hon. W. E.

    McKie, J. H.

    Balfour, Capt. H. H. (Isle of Thanet)

    Elliston, G. S.

    Magnay, T.

    Balneil, Lord

    Emery. J. F.

    Maitland, A.

    Beaumont, Hon. R. E. B. (Portsm'h)

    Emmott, C. E. G. C.

    Makins, Brig.-Gen. E.

    Beit, Sir A. L.

    Emrys-Evans, P. V.

    Manningham-Buller, Sir M.

    Bernays, R. H.

    Erskine Hill, A. G.

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

    Birchall, Sir J. D.

    Everard, W. L.

    Markham, S. F.

    Blaker, Sir R.

    Fildes, Sir H.

    Mason, Lt.-Col. Hon. G. K. M.

    Blindell, Sir J.

    Findlay, Sir E.

    Meller, Sir R. J. (Mitcham)

    Bossom, A. C.

    Fleming, E. L.

    Mellor, Sir J. S. P. (Tamworth)

    Bowater, Col. Sir T. Vansittart

    Fremantle, Sir F. E.

    Mills, Sir F. (Leyton, E.)

    Bracken, B.

    Ganzoni, Sir J.

    Mills, Major J. D. (New Forest)

    Braithwaite, Major A. N.

    Gibson, C. G.

    Mitcheson, Sir G. G.

    Brass, Sir W.

    Gluckstein, L. H.

    Moreing, A. C.

    Briscoe, Capt. R. G.

    Graham, Captain A. C. (Wirral)

    Morrison, G. A. (Scottish Univ's.)

    Brocklebank, C. E. R.

    Grattan-Doyle, Sir N.

    Morrison, W. S. (Cirencester)

    Brown, Col. D. C. (Hexham)

    Gretton, Col. Rt. Hon. J.

    Munro, P.

    Brown, Rt. Hon. E. (Leith)

    Gridley, Sir A. B.

    Neven-Spence. Maj. B. H. H.

    Brown, Brig.-Gen. H. C. (Newbury)

    Grimston, R. V.

    Nicolson, Hon. H. G.

    Browne, A. C. (Belfast, W.)

    Gritten, W. G. Howard

    O'Neill, Major Rt. Hon. Sir Hugh

    Bull, B. B.

    Guest,Maj. Hon. O.(C'mb'rw'll,N.W.)

    Orr-Ewing, I. L.

    Bullock, Capt. M.

    Gunston, Capt. D. W.

    Palmer, G. E. H.

    Burghley, Lord

    Guy, J. C. M.

    Patrick, C. M.

    Burton, Col. H. W.

    Hacking, Rt. Hon. D. H.

    Peake, O.

    Butler, R. A.

    Hamilton, Sir G. C.

    Peat, C. U.

    Campbell, Sir E. T.

    Hanbury, Sir C.

    Penny, Sir G.

    Cartland, J. R. H.

    Hannah, I. C.

    Perkins, W. R. D,

    Carver, Major W. H.

    Hannon, Sir P. J. H.

    Petherick, M.

    Cary, R. A.

    Haslam, Sir J. (Bolton)

    Pilkington, R.

    Cazalet, Capt. V. A. (Chippenham)

    Hepburn, P. G. T. Buchan-

    Ponsonby, Col. C. E.

    Chamberlain, Rt. Hn. N. (Edgb't'n)

    Hepworth, J.

    Radford, E. A.

    Channon, H.

    Herbert, Major J. A. (Monmouth)

    Raikes, H. V. A. M.

    Chapman, A. (Rutherglen)

    Herbert, Captain S. (Abbey)

    Ramsbotham, H.

    Christle, J. A.

    Hills, Major Rt. Hon. J. W. (Ripon)

    Ramsden, Sir E.

    Clarry, Sir Reginald

    Holmes, J. S.

    Rankin, R.

    Colville, Lt.-Col. D. J.

    Hope, Captain Hon. A. O. J.

    Rathbone, J. R. (Bodmin)

    Cook, T. R. A. M. (Norfolk, N.)

    Hopkinson. A.

    Rayner, Major R. H.

    Cooke, J. D. (Hammersmith, S.)

    Hore-Bellsha, Rt. Hon. L.

    Reed, A. C. (Exeter)

    Cooper, Rt. Hn. T. M. (E'nburgh,W.)

    Horsbrugh, Florence

    Reid, Sir D. D. (Down)

    Courtauld, Major J. S.

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

    Reid, W. Allan (Derby)

    Craddock, Sir R. H.

    Hulbert, N. J.

    Remer, J. R.

    Craven-Ellis, W.

    Hunter, T.

    Rickards, G. W. (Skipton)

    Critchley, A.

    Jackson, Sir H.

    Robinson, J. R. (Blackpool)

    Crooke, J. S.

    James, Wing-Commander A. W.

    Ropner, Colonel L.

    Crookshank, Capt. H. F. C.

    Jones, L. (Swansea, W.)

    Ross, Major Sir R. D. (L'nderry)

    Croom-Johnson, R. P.

    Keeling, E. H.

    Ross Taylor, W. (Woodbridge)

    Cross, R. H.

    Kerr, H. W. (Oldham)

    Ruggles-Brise, Colonel Sir E. A.

    Crossley, A. C.

    Kerr, J. Graham (Scottish Univs.)

    Russell, A. West (Tynemouth)

    Crowder, J. F. E.

    Kirkpatrick, W. M.

    Russell, S. H. M. (Darwen)

    Cruddas, Col. B.

    Lamb, Sir J. Q.

    Salmon, Sir I,

    Culverwell, C. T.

    Latham, Sir P.

    Salt, E. W.

    Davies, Major G. F. (Yeovil)

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

    Samuel, M. R. A. (Putney)

    Davison, Sir W. H.

    Leckie, J. A.

    Sandeman, Sir N. S.

    Dawson, Sir P.

    Leech, Dr. J. W.

    Sanderson, Sir F. B.

    Denman, Hon. R. D.

    Lees-Jones, J.

    Sassoon, Rt. Hon. Sir P.

    Denville, Alfred

    Levy, T.

    Savery, Servington

    Despencer-Robertson, Major J. A. F.

    Lewis, O.

    Selley, H. R.

    Dorman-Smith, Major R. H.

    Little, Sir E. Graham-

    Shaw, Major P. S. (Wavertree)

    Shaw, Captain W. T. (Fortar)

    Strickland, Captain W. F.

    Waterhouse, Captain C.

    Shepperson, Sir E. W.

    Stuart, Hon. J. (Moray and Nairn)

    Wedderburn, H. J. S.

    Smiles, Lieut.-Colonel Sir W. D.

    Sutcliffe, H.

    Wells, S. R.

    Smith, Bracewell (Dulwich)

    Tasker, Sir R. I.

    Williams, C. (Torquay)

    Smith, L. W. (Hallam)

    Tate, Mavis C.

    Williams, H. G. (Croydon, S.)

    Somervell, Sir D. B. (Crewe

    Touche, G. C.

    Wilson, Lt.-Col. Sir A. T. (Hitchin)

    Somerville, D. G. (Willesden, E.)

    Tryon, Major Rt. Hon. G. C.

    Windsor-Clive, Lieut.-Colonel G.

    Spears, Brig.-Gen. E. L.

    Turton, R. H.

    Wragg, H.

    Spender-Clay Lt.-CI. Ht. Hn. H. H.

    Wakefield, W. W.

    Young, A. S. L. (Partick)

    Spens, W. P.

    Walker-Smith, Sir J.

    Stanley, Rt. Hon. Lord (Fylde)

    Wallace, Captain Euan

    TELLERS FOR THE AYES.—

    Stanley, Rt. Hon. Oliver (w'm'l"d)

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

    Commander Southby and Dr.

    Stourton, Major Hon. J. J.

    Ward, Irene (Wallsend)

    Morris-Jones.

    Strauss, H. G. (Norwich)

    Warrender, Sir V.

    NOES.

    Acland, Rt. Hon. Sir F. Dyke

    Green, W. H. (Deptford)

    Muff, G.

    Adams, D. (Consett)

    Grenfell, D. R.

    Oliver, G. H.

    Adams, D. M. (Poplar, S.)

    Griffith, F. Kingsley (M'ddl'sbro, W.)

    Owen, Major G.

    Adamson, W. M.

    Griffiths, G. A. (Hemsworth)

    Parker, J.

    Ammon, C. G.

    Griffiths, J. (Llanelly)

    Parkinson, J. A.

    Banfield, J. W.

    Hall, G. H. (Aberdare)

    Pethick-Lawrence, F. W.

    Barnes, A. J.

    Hall, J. H. (Whitechapel)

    Potts, J.

    Barr, J.

    Hardie, G. D.

    Price, M. P.

    Batey, J.

    Harris, Sir P. A.

    Pritt, D. N.

    Bellenger, F.

    Henderson, A. (Kingswinford)

    Richards, R. (Wrexham)

    Benson, G.

    Henderson, J. (Ardwick)

    Ritson, J.

    Bevan, A.

    Henderson T. (Tradeston)

    Roberts, Rt. Hon. F. O. (W. Brom.,

    Broad, F. A.

    Holdsworth, H.

    Roberts, W. (Cumberland, N.)

    Bromfield, W.

    Holland, A.

    Robinson, W. A. (St. Helens)

    Brooke, W.

    Jagger, J.

    Rowson, G.

    Brown, Rt. Hon. J. (S. Ayrshire)

    Jenkins, A. (Pontypool)

    Salter, Dr. A.

    Buchanan, G.

    Jenkins, Sir W. (Neath)

    Seely, Sir H. M.

    Burke, W. A.

    Johnston, Rt. Hon. T.

    Sexton, T. M.

    Cape, T.

    Jones, A. C. (Shipley)

    Shinwell, E.

    Charleton, H. C.

    Jones, H. Haydn (Merioneth)

    Short, A.

    Cluse, W. S.

    Jones, Morgan (Caerphilly)

    Sinclair, Rt. Hon. Sir A. (C'thn's)

    Compton, J.

    Kelly, W. T.

    Smith, Ben (Rotherhithe)

    Cove, W. G.

    Kennedy, Rt. Hon. T.

    Smith, E. (Stoke)

    Cripps, Hon. Sir Stafford

    Kirkwood, D.

    Smith, Rt. Hon. H. B. Lees- (K'ly)

    Daggar, G.

    Lathan, G.

    Smith, T. (Normanton)

    Dalton, H.

    Lawson, J. J.

    Sorensen, R. W.

    Davies, D. L. (Pontypridd)

    Leach, W

    Stewart, W. J. (H'ght'n-le-Sp'ng)

    Davies, S. O. (Merthyr)

    Lee, F.

    Strauss. G. R. (Lambeth, N.)

    Dobble, W.

    Leonard, W.

    Taylor, R. J. (Morpeth)

    Dunn, E. (Rother Valley)

    Leslie, J. R.

    Thurtle, E.

    Ede, J. C.

    Logan, D. G.

    Tinker, J. J.

    Edwards, Sir C. (Bedwellty)

    Lunn, W.

    Viant, S. p.

    Evans, D. O. (Cardigan)

    McEntee, V. La T.

    Walker, J.

    Evans, E. (Univ. of Wales)

    McGhee, H. G.

    Watkins, F. C.

    Fletcher, Lt.-Comdr. R. T. H.

    MacLaren, A.

    Watson, W. McL.

    Foot, D. M.

    Maclean, N.

    Westwood, J.

    Frankel, D.

    MacMillan, M. (Western Isles)

    White, H. Graham

    Gardner, B. W.

    Marklew, E.

    Whiteley. W.

    Garro Jones, G. M.

    Maxton, J.

    Williams, E. J. (Ogmore)

    George, Major G. Lloyd (Pembroke)

    Messer, F.

    Williams, T. (Don Valley)

    George, Megan Lloyd (Anglesey)

    Montague, F.

    Young, Sir R. (Newton)

    Gibbins, J.

    Morrison, Rt. Hon. H. (Ha'kn'y. S.)

    Graham, D. M. (Hamilton)

    Morrison, R. C (Tottenham, N.)

    TELLERS FOR THE NOES.—

    Mr. Groves and Mr. Mathers.

    Clauses 28 and 29 ordered to stand part of the Bill.

    NEW CLAusE.—(Allowance in respect of earned income.)
    Section fifteen of the Finance Act, 1925 (which, as amended by section eight of the Finance (No. 2) Act, 1931, makes provision for an allowance in respect of earned incomes), shall have effect as if the word "one-fourth" were substituted for the word "one-fifth"—[Mr. Lees-Smith.]
    Brought up, and read the First time.
    9.42 p.m.
    Mr. LEES-SMITH: I beg to move, "That the Clause be read a Second time."
    928
    This Clause proposes to change the differentiation between earned and unearned Income Tax from a fifth to a fourth. It does not raise the specific issue, so to speak, between rich and poor. It deals rather with the technique of the Income Tax and it would lead to a juster incidence and make the tax a more productive instrument. We consider that the distinction between earned and unearned income should be steeper. The reason for the distinction in the rate is that earned income is of a more precarious nature than unearned. A doctor, for instance, earning £600 a year, actually pays tax on the same basis as a man with an unearned income of £480.

    929
    What the new Clause states is that the difference in the position of a person earning £600 a year and a man who is living on investments and obtains £480 a year income, is greater than is represented at present in the tax. The man obtaining £480 a year from unearned income is in every real sense far better off than the doctor earning £600 a year. The doctor may break down. He is subject to all the changes and chances of life. In that case, his whole income may disappear. A doctor has to insure, because some day he will retire. Some day he will die, and his income will disappear, whereas the man who obtains £480 from unearned income, say, from War Loan, is in a position where the income goes on whatever happens to himself. He need not insure, and he has all his time at his own disposal, to deal with as he likes. The difference between these two cases and the fact to which the new Clause calls attention is not represented by one-fifth. The difference is greater. It is well illustrated—I will not say actually illustrated—if you take the difference in their capital position. I believe I am right in saying that the value of a doctor's practice is usually three years' purchase.
    Major HILLS: Two.
    Mr. LEES-SMITH: In a case that I came across in the Recess it was three years' purchase. Therefore, a doctor earning £600 has a capital value of £1,800, on which he can depend. Take the case of the man who has £400 year from Consols, producing him 3 per cent. His total capital value is worth £16,000. That is the amount of capital required to produce £480 a year from Consols. Yet the same rate of Income Tax is paid by the man whose income, capitalised, is £1,800 and the man whose income, capitalised, is £16,000. I am not saying that that is conclusive, but it shows the extraordinary difference in the position of these two men. The new Clause says that the difference of one-fifth is not really sufficient to make the system of taxation fair to earned as distinct from unearned income.
    I put the case for the new Clause on technical grounds as well as on the grounds of equity and justice. We had a very interesting Debate in the House last week on Income Tax. I did not take part, but it was one of the best Debates
    930
    we have had. I quote that Debate in support of my new Clause, because the more you increase the differentiation in favour of earned income the more you encourage the active and visible factors in the production of wealth at the expense of the more passive recipients of the wealth which is produced by those who create earned income. The new Clause would have the effect of increasing the productivity and the yield of Income Tax. The new Clause is quite moderate. There has been a greater differentiation in times gone by than that which it proposes. When I first paid Income Tax on earned income the differentiation was one-third. One year, and I think it was a great mistake, without much discussion the differentiation was changed from one-third to only one-tenth. Ever since that time we have been going back and retracing our steps. In 1924 it was changed from one-tenth to one-sixth. Under the Labour Administration it was changed from one-sixth to one-fifth. I have no doubt that it will some day go back to one-third, and as a first step in that direction I move the new Clause, proposing that it should go back to one-fourth.
    9.50 p.m.
    Mr. GARRO JONES: I rise to support my right hon. Friend on this new Clause. We recognise that the Clause does not embody the most thorough method of reducing the taxation on earned income and increasing the taxation on unearned income. The first result of the Clause will be to deplete the total revenue in respect of the amount charged on earned income. When that depletion of revenue comes to be recouped there is no provision in the Clause which will require the recoupment to be made at the expense of unearned income. The recoupment will be made out of some general taxation, according to the inclination of the Chancellor of the Exchequer of that day, but if we move this Clause, accompanied by an expression of our intention that the reduction in the taxation on earned income should be followed by an increase in the taxation of unearned income, there is no reason whatever why the Clause should not be accepted. The recipients of unearned income have had an exceedingly prosperous time in the last few years. Industrial dividends have increased beyond their

    931
    wildest hopes. Financiers' profits have increased in a manner which, if they could be presented—
    The DEPUTY-CHAIRMAN: The hon. Member must confine himself to the purpose of the Clause, which is to reduce the rate of tax on earned income.
    Mr. GARRO JONES: With great respect, when my right hon. Friend moved the Clause you accepted from him the principle that was involved tacitly in the Clause, namely, that reduction of the taxation on earned income was with the object of increasing the taxation on unearned income. The whole trend of my right hon. Friend's speech was in that direction.
    The DEPUTY-CHAIRMAN: I did not understand the right hon. Gentleman's speech as being more than a suggestion that that might be a method of dealing with the deficiency. The hon. Member was going right into it.
    Mr. GARRO JONES: I can only say, with the greatest respect, that your vigilance was more acute when I was speaking than it was when my right hon. Friend was speaking. I trust that every hon. Member of this House, whether he speaks from the Front Benches or the back benches, will get equal latitude when you are in the Chair.
    The DEPUTY-CHAIRMAN: The hon. Member is not entitled to criticise me in that way. He must withdraw that remark.
    Mr. GARRO JONES: I expressed the hope that hon. Members on the back benches would get the same latitude as right hon. Members on the Front Benches when you are in the Chair.
    The DEPUTY-CHAIRMAN: Order. The hon. Member is now criticising the conduct of the Chair, and he must withdraw that remark.
    Mr. GARRO JONES: I certainly have no intention of withdrawing it. With the greatest respect I expressed the hope that—
    The DEPUTY-CHAIRMAN: If the hon. Member refuses to withdraw, he must leave the House.
    Mr. GARRO JONES: I have no wish to find myself in collision with the Chair, especially on a matter which cannot be held to be a vital matter of principle in regard to what we are discussing. I would say that I feel that you gave, consciously or unconsciously, a greater latitude to the right hon. Gentleman than you gave to me, but I withdraw the suggestion that you did so deliberately.
    The DEPUTY-CHAIRMAN: I am prepared to accept that, but I do not think that it is a very full withdrawal.
    9.55 p.m.
    Mr. JAGGER: I want to support the new Clause moved by my right hon. Friend the Member for Keighley (Mr. Lees-Smith), and I hope I may do so without straying beyond the limits which you have laid down, Captain Bourne. I would say broadly, to begin with, that I am motived in this support by that very high authority which desires us to temper the wind to the shorn lamb. I would make an earnest appeal to the Financial Secretary to give, by accepting this new Clause, some consideration to those people who, after all, are the bulwark of the State and who make for the well-being of the country. The people whose shares have appreciated during the last three years five, six, seven, eight, and ten-fold in capital value are not nearly so important to the country's welfare as the struggling working man or the small professional man whose sole source of wealth is in the labour of his hands or the exercise of his brains. Both of them contribute in a very real sense to the well-being of the country, and on that ground I would appeal for sympathetic consideration for this new Clause.
    There is one other consideration that I would urge, and it is that the Government should have regard to the innumberable expenses not recoverable as expense allowances under the Income Tax law, but which are inevitably incurred by the higher paid worker by hand and the lower paid proportion of the professional classes. In addition to the uncertainty of their ability to continue earning the sums in future years on which they are being taxed at present, there are very many real and irrecoverable expenses which they have to incur which are not incurred by those who live on rent, interest, and profits,

    933
    and for that further reason I strongly urge that the Financial Secretary should accept this new Clause.
    10.0 p.m.
    Mr. JAMES GRIFFITHS: May I, in supporting this new Clause, urge upon the Government to give consideration to the type of case that I have met with, as have many of my hon. Friends, often in recent months? In the areas which are so often referred to in this House as the Special Areas we have had cases brought to our attention where there may be a single wage earner, a man who may be exceptionally skilled, working in a pit or a steel works, and because he is particularly skilled and in the full bloom of his youth, he is able to earn wages above the average and thus becomes responsible for the payment of Income Tax. When a member of the same household has occasion to apply for unemployment assistance, the full wage of that son will be taken into consideration and used as part of the family income. That will be done this week and next week, and then, when the appropriate period comes, this man will be subject to Income Tax. Therefore he has to bear two kinds of burden; he has to pay Income Tax to help meet the State's activities, and at the same time he has to bear a special responsibility for the needs of his household. In that way these young men are being particularly penalised, and if the Government accepted this new Clause on that ground as well as on other grounds, it would be some measure of justice to these young men, who to-day work very hard to learn their trade, who become skilled in it, who give the best in their brains and in their bodies to their trade, and who are doubly penalised in this way.
    This decrease in the amount of tax payable would be some kind of encouragement to these young men who are trying to bear their own responsibilities and looking forward to the day when they will set up homes of their own, but who find that they have to bear this extraordinary responsibility towards their own household and at the same time pay Income Tax. I therefore appeal to the Government to give this measure of justice to the workers of this country, who find their wages lagging far behind the increases in profits that are being made. Taking the recent
    934
    wages campaign among the miners, as a result of the shilling per day granted in some areas, there may be some miners who now have to pay Income Tax and whose increased wages, therefore, will go back to the State in the form of Income Tax. If this new Clause is accepted, it will give some encouragement and relief to these young men.
    10.3 p.m.
    Mr. W. S. MORRISON: The last speaker has dealt with the effect which this new Clause would have upon certain persons in the distressed areas, but he would be the first to agree, I am sure, that this new Clause would have to be justified on a much wider ground than that, because, if passed, it will apply not only to the section of the population to which he has drawn our attention, but also all over the country, and it should therefore be justified on something like the broader argument put to us by the right hon. Member for Keighley (Mr. Lees-Smith). The right hon. Member, in moving this new Clause, made some comparisons between the relief granted to earned income in previous times and that accorded to it to-day, but it is very difficult to compare like with like in questions of relief from Income Tax, because the whole system has been changed so much of recent years, and relief has been granted to taxpayers on such different grounds, that you may get one form of relief reduced but yet the total relief to the taxpayer actually increased.
    Dealing with earned income allowance, which is the object of this new Clause, it has existed in its present form, as the right hon. Member said, since 1920, and it then followed a recommendation of the Royal Commission on Income Tax that this particular allowance should be one-tenth. At that it was fixed in the Finance Act of 1920, and that was in operation until 1925, when it was increased to one-sixth. That remained so until 1931, when it was increased to one-fifth, and at that figure it remains to-day. The right hon. Gentleman asks in this new Clause to increase the allowance from one-fifth to one-quarter, but I would remind him that to-day there have been other allowances to Income Tax payers on the lower rates of income which ought to be taken into account in measuring the real claims for this additional relief. I would particularly draw his attention to the provisions

    935
    made in this year's Finance Bill which give increased allowances to married persons, both personal allowance, and an allowance in respect of children greater than has ever been given before in a previous Finance Bill. They should be borne in mind by the Committee in weighing up the pros and cons whether or not the right hon. Gentleman's new Clause should be accepted.
    I take the second ground on which he justifies the proposal. He said with truth that one of the reasons which lies at the bottom of the difference between earned and unearned income is the assumption that there is a greater security about unearned income, and that there ought to be some account taken of that greater security by the State, and allowance ought to be made to those whose income is earned, to enable them to replace that security by some saving. That is the outlook of the right hon. Gentleman, and it is a very proper outlook. On that basis I would ask the Committee to reflect that the allowance given on that basis is one-fifth. The ordinary man with earned income who can manage to save, year after year, one-fifth of his income, I think makes a very generous saving. I have been an earned income man and have always found it difficult to save one-fifth even though I am supposed by reason of my nationality to have a bent for that particular form of thrift. If the Committee views it from the point of view of the right hon. Gentleman as to what an earned Income Tax payer should save, one-fifth is a very good allowance from that point of view. It does not end there. There is a great deal of saving by reliefs on insurance policies, and when we come to that form of saving, the Committee is well aware that there is another series of reliefs which accrue to the earned Income Tax payer because he has taken out an insurance policy. I suggest to the Committee that the present position is not an ungenerous differentiation when all the factors are taken into account, and when I say that, I would remind the Committee that the cost of the proposal would be
    £7,000,000 in a full year, and that the Budget is balanced at present on £450,000.
    10.9 p.m.
    Mr. BENSON: The argument of the hon. and learned Gentleman the Financial Secretary that it was impossible to make a real comparison between the earlier relief of one-third and the present relief of one-fifth because a large number of other reliefs have been changed or increased does not, upon the particular relief that we are discussing, seem to be a really valid argument. The relief on earned income is one which distinguishes earned income from unearned income. It is not merely a question of giving relief to people below a certain income. As far as we are concerned it is a very fundamental matter of principle, and even if in a moment of generosity the Financial Secretary or the Chancellor of the Exchequer carried all reliefs up to £1,000 a year, we should still be prepared to press for a further differentiation between earned and unearned income. We do not believe that there is any moral justification for unearned income. The whole of the wealth of the country is created by work, labour of hand and brain, and those who take out of the common stock without adding anything to it in return, are definitely parasitical. We feel that that contradistinction of position between those who are parasitical and those who are definitely adding to the wealth of the community should be marked clearly and definitely in our system of taxation. It is for that reason that we press for an increase from one-fifth to a quarter in the relief upon earned income. It is not merely a question of one relief among many. We regard this as a very fundamental relief standing in an entirely different category from the others, and we press it not merely upon the grounds of political or social expediency, but upon the more fundamental ground of principle.
    Question put, "That the Clause be read a Second time."
    The Committee divided: Ayes,.127; Noes, 246.

    Division No. 238.]

    AYES.

    [10.12.p.m.

    Acland, Rt. Hon. Sir F. Dyke

    Banfield, J. W.

    Benson, G.

    Adams, D. (Consett)

    Barnes, A. J.

    Bevan, A.

    Adams, D. M. (Poplar, S.)

    Barr, J.

    Broad, F. A.

    Adamson, W. M.

    Batey, J.

    Bromfield, W.

    Ammon, C. G.

    Bellenger, F.

    Brooke, W.

    Brown, Rt. Hon. J. (S. Ayrshire)

    Henderson, A. (Kingswinford)

    Parkinson, J. A.

    Browne, A. C. (Belfast, W.)

    Henderson, J. (Ardwick)

    Pethick-Lawrence, F. W.

    Buchanan, G.

    Henderson, T. (Tradeston)

    Potts, J.

    Burke, W, A.

    Holland, A.

    Price, M. P.

    Cape, T.

    Jagger, J.

    Pritt, D. N.

    Cluse, W. S.

    Jenkins, A. (Pontypool)

    Richards, R. (Wrexham)

    Compton, J.

    Jenkins, Sir W. (Neath)

    Ritson. J.

    Cove, W. G.

    Johnston, Rt. Hon. T.

    Roberts, Rt. Hon. F. O. (W. Brom.)

    Cripps, Hon. Sir Stafford

    Jones, A. C. (Shipley)

    Roberts, W. (Cumberland, N.)

    Daggar, G.

    Jones, H. Haydn (Merioneth)

    Robinson, W. A. (St. Helens)

    Dalton, H.

    Jones, Morgan (Caerphilly)

    Rowson, G.

    Davies, D. L. (Pontypridd)

    Kelly, W. T.

    Salter, Dr. A.

    Davies, S. O. (Merthyr)

    Kennedy, Rt. Hon. T.

    Seely. Sir H. M.

    Dobble, W.

    Kirkwood, D.

    Sexton, T. M.

    Dunn, E. (Rother Valley)

    Lathan, G.

    Shinwell, E.

    Ede, J. C.

    Lawson, J. J.

    Short, A.

    Edwards, Sir C. (Bedwellty)

    Leach, W.

    Sinclair, Rt. Hon. Sir A. (C'thn's)

    Evans, D. O. (Cardigan)

    Lee, F.

    Smith, E. (Stoke)

    Evans, E. (Univ. of Wales)

    Leonard. W.

    Smith, Rt. Hon. H. B. Lees- (K'ly)

    Fletcher, Lt.-Comdr. R. T. H.

    Leslie, J. R.

    Smith, T. (Normanton)

    Foot, D. M.

    Logan, D. G.

    Sorensen, R. W.

    Frankel, D.

    McGhee, H. G.

    Stewart, W. J. (H'ght'n-le-Sp'ng)

    Gardner, B. W.

    MacLaren, A.

    Strauss, G. R. (Lambeth, N.)

    Garro Jones, G. M.

    Maclean, N.

    Taylor, R. J. (Morpeth)

    George, Major G. Lloyd (Pembroke)

    MacMillan, M. (Western Isles)

    Thurtle, E.

    George, Megan Lloyd (Anglesey)

    MacNeill, Weir, L.

    Tinker, J. J.

    Gibbins, J.

    Mander, G. le M.

    Viant, S. P.

    Graham, D. M. (Hamilton)

    Markiew, E.

    Walker, J.

    Green, W. H, (Deptford)

    Maxton, J.

    Watkins, F. C.

    Grenfell, D. R.

    Milner, Major J.

    Watson, W. McL.

    Griffith, F. Kingsley (M'ddl'sbro. W.)

    Montague, F

    Westwood, J.

    Griffiths, G. A. (Hemsworth)

    Morrison, Rt. Hon. H. (Ha'kn'y. S.)

    White, H. Graham

    Griffiths, J. (Llanelly)

    Morrison, R. C. (Tottenham, N.)

    Whiteley, W.

    Groves, T. E.

    Muff, G.

    Williams, E. J. (Ogmore)

    Hall, G. H. (Aberdare)

    Naylor, T. E.

    Williams. T. (Don Valley)

    Hall, J. H. (Whitechapel)

    Oliver, G. H.

    Young, Sir R. (Newton)

    Hardle, G. D.

    Owen, Major G.

    Harris, Sir P. A.

    Parker, J.

    TELLERS FOR THE AYES.—

    Mr. Charleton and Mr. Mathers.

    NOES.

    Acland-Troyte, Lt.-Col. G. J.

    Cooper, Rt. Hn. T. M. (E'nburgh.W.)

    Grattan-Doyle, Sir N.

    Adams, S. V. T. (Leeds, W.)

    Courtauld, Major J. S.

    Gretton, Col. Rt. Hon. J.

    Agnew, Lieut.-Comdr. P. G.

    Craddock, Sir R. H.

    Gridley, Sir A. B.

    Albery. l. J.

    Craven-Ellis, W.

    Grimston, R. V.

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

    Critchley, A.

    Gritten, W. G. Howard

    Aske, Sir R. W.

    Crooke, J. S.

    Guest, Maj. Hon. O.(C'mb'rw'll,N.W.)

    Assheton, R.

    Crookshank, Capt. H. F. C.

    Gunston, Capt. D. W.

    Baldwin, Rt. Hon. Stanley

    Croom-Johnson, R. P.

    Guy, J. C. M.

    Baldwin-Webb, Col. J.

    Cross, R. H.

    Hacking, Rt. Hon. D. H.

    Balfour, G. (Hampstead)

    Crowder, J. F. E.

    Hanbury, Sir C.

    Balfour, Capt. H. H. (isle of Thanet)

    Cruddas, Col. S.

    Hannah, I. C.

    Balneil, Lord

    Culverwell, C. T.

    Hannon, Sir P. J. H.

    Beaumont, Hon. B. E. B. (Portsm'h)

    Davidson. Rt. Hon. Sir J. C. C.

    Haslam, Sir J, (Bolton)

    Beit, Sir A. L.

    Davies, C. (Montgomery)

    Heilgers, Captain F. F. A.

    Bernays, R. H.

    Davison, Sir W. H.

    Hepburn. P. G. T. Buchan-

    Birchall, Sir J. D.

    Dawson, Sir P.

    Hepworth, J.

    Blaker, Sir R.

    Denman, Hon. R. D.

    Herbert, Major J. A. (Monmouth)

    Blindell, Sir J.

    Denville, Alfred

    Herbert, Captain S. (Abbey)

    Bossom, A. C.

    Dorman-Smith, Major R. H.

    Hills, Major Rt. Hon. J. W. (Ripon)

    Bowater, Col. Sir T. Vansittart

    Dower, Capt. A. V. G.

    Holdsworth, H.

    Bracken, B.

    Duckworth, G. A. V. (Salop)

    Holmes, J. S.

    Bralthwaite, Major A. N

    Duckworth, W. R. (Moss Side)

    Hope, Captain Hon. A. O. J.

    Brass, Sir W.

    Dugdale, Major T. L.

    Hopkinson, A.

    Briscoe, Capt. R. G.

    Duggan. H. J.

    Hore-Belisha, Rt. Hon. L.

    Brocklebank, C. E. R.

    Duncan, J. A. L.

    Horsbrugh, Florence

    Brown, Rt. Hon. E. (Leith)

    Dunglass, Lord

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

    Brown, Brig.-Gen. H. C. (Newbury)

    Eckersley, P. T,

    Hudson, R. S. (Southport)

    Bull, B. B.

    Edmondson, Major Sir J.

    Hulbert, N. J.

    Bullock, Capt. M.

    Elliot. Rt. Hon. W. E.

    Hunter, T.

    Burghley, Lord

    Elliston, G. S.

    Jackson, Sir H.

    Burton. Col. H. W.

    Emery, J. F.

    James, Wing-commander A. W.

    Campbell, Sir E. T.

    Emmott. C. E. G. C.

    Jones, L, (Swansea, W.)

    Cartland, J. R. H.

    Emrys-Evans, P. V.

    Keeling, E. H.

    Carver, Major W. H.

    Erskine Hill, A. G.

    Kerr, H. W. (Oldham)

    Cary, R. A.

    Everard, W. L.

    Kerr, J. Graham (Scottish Univs.)

    Chamberlain, Rt. Hn. N. (Edgb't'n)

    Fildes, Sir H.

    Lamb, Sir J. Q.

    Channon, H.

    Findlay, Sir E.

    Latham, Sir P.

    Chapman, A. (Rutherglen)

    Fleming, E. L.

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

    Christie, J. A.

    Fremantle, Sir F. E.

    Leckie, J. A.

    Clarry, Sir Reginald

    Ganzonl, Sir J.

    Leech, Dr. J. W.

    Colman, N. C. D.

    Gibson, C. G.

    Lees-Jones, J.

    Colville, Lt.-Col. D. J.

    Gluckstein, L. H.

    Lennox-Boyd, A. T. L.

    Cook, T. R. A. M. (Norfolk, N.)

    Glyn, Major Sir R. G. C.

    Levy, T.

    Cooke, J. D. (Hammersmith, S.)

    Graham, Captain A. C. (Wirral)

    Lewis, O.

    938

    939

    Little, Sir E. Graham-

    Penny, Sir G.

    Somervell, Sir D. B. (Crewe)

    Llewellin, Lieut.-Col. J. J.

    Perkins, W. R. D.

    Somerville, D. G. (Willesden, E.)

    Lloyd, G. W.

    Petherick, M.

    Southby, Comdr. A. R. J.

    Locker-Lampson, Comdr. O. S.

    Pilkington, R.

    Spears, Brig.-Gen. E. L.

    Loftus, P. C.

    Ponsonby, Col. C. E.

    Spender-Clay, Lt.-Cl. Rt. Hn. H. H.

    Lovat-Fraser, J. A.

    Radford, E. A.

    Spens, W. P.

    Lyons, A. M.

    Raikes, H. V. A. M.

    Stanley, Rt. Hon. Lord (Fylde)

    Mabane, W. (Huddersfield)

    Ramsbotham, H.

    Stanley, Rt. Hon. Oliver (W'm'l'd)

    M'Connell, Sir J.

    Ramsden, Sir E.

    Stourton, Major Hon. J. J.

    McCorquodale, M. S.

    Rankin, R.

    Strauss, H. G. (Norwich)

    McKie, J. H.

    Rathbone, J. R. (Bodmin)

    Strickland, Captain W. F.

    Macnamara, Capt, J. R. J.

    Rayner, Major R. H.

    Stuart, Hon. J. (Moray and Nairn)

    Magnay, T.

    Reed, A. C. (Exeter)

    Sutcliffe, H.

    Maitland, A.

    Reid, Sir D. D. (Down)

    Tasker, Sir R. I.

    Makins, Brig.-Gen. E.

    Reid, W. Allan (Derby)

    Tate, Mavis C.

    Manningham-Buller, Sir M.

    Remer, J. R.

    Taylor, Vice-Adm. E. A. (Padd., S.)

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

    Rickards, G. W. (Skipton)

    Thomas, J. P. L. (Hereford)

    Markham, S. F.

    Robinson, J. R. (Blackpool)

    Touche, G. C.

    Mason, Lt.-Col. Hon. G. V. V.

    Ropner, Colonel L.

    Tryon, Major Rt. Hon. G. C.

    Mayhew, Lt.-Col. J.

    Ross, Major Sir R. D. (L'nderry)

    Tufnell, Lieut.-Com. R. L.

    Meller, Sir R. J. (Mitcham)

    Ross Taylor, W. (Woodbridge)

    Turton, R. H.

    Mellor, Sir J. S. P. (Tamworth)

    Ruggles-Brise, Colonel Sir E. A.

    Wakefield, W. W.

    Mills, Sir F. (Leyton, E.)

    Russell, A. West (Tynemouth)

    Walker-Smith, Sir J.

    Mills, Major J. D. (New Forest)

    Russell, S. H. M. (Darwen)

    Wallace, Captain Euan

    Mitcheson, Sir G. G.

    Salmon, Sir I.

    Ward, Irene (Wallsend)

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

    Salt, E. W.

    Warrender, Sir V.

    Morris-Jones, Dr. J. H.

    Samuel, M. R. A. (Putney)

    Waterhouse, Captain C.

    Morrison, G. A. (Scottish Univ's.)

    Sandeman, Sir N. S.

    Wedderburn, H. J. S.

    Morrison, W. S. (Cirencester)

    Sanderson, Sir F. B.

    Wells, S. R.

    Munro, P.

    Sandys, E. D.

    Williams, C. (Torquay)

    Nail, Sir J.

    Sassoon, Rt. Hon. Sir P.

    Williams, H. G. (Croydon, S.)

    Neven-Spence, Maj. B. H. H.

    Savery, Servington

    Wilson, Lt.-Col. Sir A. T. (Hitchin)

    Nicolsen, Hon. H. G.

    Selley, H. R.

    Windsor-Clive, Lieut.-Colonel G.

    O'Neill, Major Rt. Hon. Sir Hugh

    Shaw, Major P. S. (Wavertree)

    Winterton, Rt. Hon. Earl

    Orr-Ewing, I. L.

    Shaw, Captain W. T. (Forfar)

    Wragg, H.

    Palmer, G. E. H.

    Shepperson, Sir E. W.

    Young, A. S. L. (Partick)

    Patrick, C. M.

    Smiles, Lieut.-Colonel Sir W. D.

    Peake, O.

    Smith, Bracewell (Dulwich)

    TELLERS FOR THE NOES.—

    Peat, C. U.

    Smith, L. W. (Hallam)

    Lieut-Colonel Sir A. Lambert

    Ward and Major George Davies.

    NEW CLAUSE.—(Extension of s. 19 of Finance Act, 1920.)
    Section nineteen of the Finance Act, 1920 (which, as amended by Section twenty-two of the Finance Act, 1924, and Section eight of the Finance (No. 2) Act, 1931, makes provison for a deduction in respect of relative or other person taking charge of widowers' or widows' children or acting as housekeeper), shall be extended so as to apply to a person resident with an unmarried person in the capacity of housekeeper, and in the said Section the expressions "widower" and "widow" shall be deemed to include, respectively, a husband living apart from his wife and a wife living apart from her husband.—[Mr. McGhee.]
    Brought up, and read the First time.
    10.22 p.m.
    Mr. McGHEE: I beg to move, "That the Clause be read a Second time.
    We say that a young unmarried woman who establishes her own home should be allowed some deduction in respect of the housekeeper whom she employs. We suggest that she ought not to be expected to go home from her work and spend what ought to be leisure hours in looking after the house, cooking food and so on. A widow in similar circumstances would get this allowance, and it is only just that it should be extended to unmarried persons who employ housekeepers. At
    940
    the present time, if a woman having children is deserted by her husband, and goes out to work and employs a housekeeper, she gets no allowance. We maintain she ought to get an allowance, because she cannot be expected to earn sufficient to provide for her children and herself and at the same time look after those children and the home. I have in mind a case of a man having three children whose business takes him away from his home for four or five days every week. Last year his wife suddenly disappeared and he has been forced to employ a housekeeper to look after the children. He can get no statutory deduction. Obviously it is impossible for such a man to stay at home to look after the children and to go out to earn a living.
    We think that in cases where people are genuinely employing a housekeeper to look after their homes they ought to get a deduction. In the case to which I have referred the man is employing a distant relative and is doing his best in very difficult circumstances to bring up his three children, to educate them and to give them a start in life. We appeal to the Chancellor of the Exchequer to give some slight consideration to these very hard cases. This deduction of £20 or £25

    941
    would mean a great deal to these people and we urge the Chancellor by this new Clause to give some slight consideration to this very worthy class of persons.
    10.25 p.m.
    Mr. T. SMITH: I support the proposed new Clause. Last year we had a discussion on a similar Clause and I hope that the Chancellor of the Exchequer or the Financial Secretary will give the proposal more favourable consideration to-night than it received on that occasion. With regard to the extension of the housekeeper allowance to unmarried people, hon. Members in the course of the year receive many cases proving the necessity for a provision of this kind. Last year I cited the case of a woman, unmarried and out of work, who was compelled to have a housekeeper and who, because she was unmarried, could get no allowance for that housekeeper. The circumstances of life are such that all women cannot be married and many must remain spinsters all their lives. Circumstances may compel an unmarried woman to have a housekeeper, and this allowance ought to be extended to such cases. In regard to the case of married people who are separated; the right hon. Gentleman the present Secretary of State for War who was Financial Secretary last year said among other things, that if this proposal were carried it would tend to encourage married couples to separate. I have heard some absurd speeches from the right hon. Gentleman. He made one, I believe, yesterday, but I never heard a more absurd statement than that. His exact words were:
    "It would lead directly to the position that it would be to the advantage of husband and wife to separate. They would be much better off each living under a separate roof and each employing a housekeeper, than they would be if they remained together."—[OFFICIAL REPORT, 19th June, 1935; col. 510, Vol. 303.]
    Any man who makes such a statement does not understand much about married life, particularly among the working class. When working-class people separate, it is not for the purpose of getting an allowance from the Income Tax authorities. It is generally more serious than that and the Committee is entitled to hear more cogent arguments against this new Clause than those which were advanced last year. There are many men separated from their wives and compelled to employ housekeepers, not
    942
    because they particularly want to do so, but because of family circumstances and this provision ought to be extended to the husband living apart from a wife or the wife living apart from the husband. I hope the Chancellor of the Exchequer or the Financial Secretary will be big enough on this occasion to accept the new Clause. They did not oppose the proposal last year on the ground of expense, and we think that there is an anomaly here that ought to be removed.
    10.29 p.m.
    Sir JOSEPH NALL: I have no doubt that the hon. Members who have moved and supported this new Clause mean well, and there is a certain amount of force behind the case which they have put to the Committee, but I cannot think that the new Clause, as drafted, is one that ought to be approved by this Committee. If this allowance is to be granted, for instance, in respect of an unmarried person living with a married man who is separated from his wife, why not grant it in respect of a married person in the same circumstances? There is no limit to the number of domiciles which a man might keep with a separate housekeeper in each. As the Clause is drafted, it would appear that a claimant might live in one place with his wife and in another place without his wife, but with someone else, and so on, until he had no taxable income left. I suggest that the Committee should not give any sanction to a new Clause of this kind, however laudable its real intentions may be.
    10.30 p.m.
    Mr. W. S. MORRISON: I do not wish to oppose the proposed Clause on the ground that it will have the terrifying results set out by the hon. Member for Hulme (Sir J. Nall). It is one of those proposals where a strong case can be made for an extension of allowances and where one can raise hard cases. We have not, however, to decide such questions on particular hard cases, but in an endeavour to try and get a body of general law which is adequate to the general body of taxpayers. I am afraid that to go from step to step with these allowances, as has been suggested, would involve such an expenditure in the long run that it could not be accepted. Let us look at the history of this matter. It was in 1918 that the housekeeper allowance was first

    943
    granted, and it was confined to widowers with young children. The argument for giving children who have been deprived of their mother the services of a resident housekeeper and providing for an Income Tax allowance for her was very strong and one that could not be resisted. The matter was continually agitated, and the next step was made in 1924, when the allowance was given to widowers and widows, whether they had children or not. Now we are asked to extend it still further and give the housekeeper's allowance to unmarried people and to husbands and wives living apart. Why stop there?
    It may be said that we have exhausted the category, but there is no good ground for stopping anywhere unless you stop at some particular place. In the case of a husband and wife living apart, it would be almost impossible to exclude the allowance being paid to both. They are now taxed as if they are single persons and they would both be able to get the allowance. We must call a halt somewhere.
    10.25 p.m.
    Mr. BENSON: I agree with the hon. and learned Gentleman that it was very easy to put up a case for this new Clause. The difficulty seems to be to put up a case against it. We have had quoted to us the case made out last year by the present Secretary of State for War, and we have had two speeches made against the Clause. I am not sure whether the
    Financial Secretary this year has very greatly improved on the case of the Financial Secretary last year. If I understand it the case made by the hon. and gallant Member for Hulme (Sir J. Nall) is that under this Clause a man might go on collecting housekeepers until he had no income left. The Financial Secretary, going one better, suggests that people might go on collecting housekeepers until the Chancellor got no revenue left. Those are not very serious arguments. Our proposal merely is that where a person is responsible for a house and has to have a housekeeper, in other words where a man who is not married and living alone has to have a housekeeper, just as a husband has a wife to look after his house, he should have something which corresponds to—[HON. MEMBERS: "Withdraw!"] I apologise if I said anything I should not have said.
    The CHAIRMAN: I thought the remark came from another quarter.
    Mr. BENSON: Then I apologise for the other quarter. I merely suggest that where a person is more or less in the position of a married man—I am going to finish my sentence this time—he should at any rate have all the benefits of a married person's allowance.
    Question put, "That the Clause be read a Second time."
    The Committee divided: Ayes, 128; Noes, 236.

    Division No. 239.]

    AYES.

    [10.38 p.m.

    Adams, D. (Consett)

    Davies, S. O. (Merthyr)

    Henderson, J. (Ardwick)

    Adams, D. M. (Poplar, S.)

    Dobble, W.

    Henderson, T. (Tradeston)

    Adamson, W. M.

    Dunn, E. (Rother Valley)

    Holdsworth, H.

    Alexander, Rt. Hon. A. V. (H'lsbr.)

    Ede, J. C.

    Holland, A.

    Ammon, C. G.

    Edwards, Sir C. (Bedwellty)

    Jagger, J.

    Anderson, F. (Whitehaven)

    Evans, D. O. (Cardigan)

    Jenkins, A. (Pontypool)

    Banfield, J. W.

    Fletcher, Lt.-Comdr. R. T. H.

    Jenkins, Sir W. (Neath)

    Barnes, A. J.

    Foot. D. M.

    Johnston, Rt. Hon. T.

    Barr, J.

    Frankel, D.

    Jones, A. C. (Shipley)

    Batey, J.

    Gallacher, W.

    Jones, H. Haydn (Merioneth)

    Bellenger, F.

    Gardner, B. W.

    Jones, Morgan (Caerphilly)

    Benson, G.

    Garro Jones, G. M.

    Kelly, W. T.

    Bevan, A.

    George, Major G. Lloyd (Pembroke)

    Kennedy, Rt. Hon. T.

    Broad, F. A.

    George, Megan Lloyd (Anglesey)

    Kirby, B. V.

    Bromfield, W.

    Gibbins, J.

    Kirkwood, D.

    Brooke, W.

    Graham, D. M. (Hamilton)

    Lathan, G.

    Brown, Rt. Hon. J. (S. Ayrshire)

    Green, W. H. (Deptford)

    Lawson, J. J.

    Buchanan, G.

    Greenwood, Rt. Hon. A.

    Lee, F.

    Burke, W. A.

    Grenfell, D. R.

    Leonard, W.

    Cape, T.

    Griffith, F. Kingsley (M'ddl'sbro, W.)

    Leslie, J. R.

    Charleton, H. C.

    Griffiths, G. A. (Hemsworth)

    Logan, D. G.

    Cluse, W. S.

    Griffiths, J. (Llanelly)

    McGhee, H. G.

    Compton, J.

    Groves, T. E.

    MacLaren, A.

    Cove, W. G.

    Hall, G. H. (Aberdare)

    Maclean, N.

    Cripps, Hon. Sir Stafford

    Hall, J. H. (Whitechapel)

    MacMillan. M. (Western Isles)

    Daggar, G.

    Hardie, G. D.

    MacNeill, Weir, L.

    Dalton, H.

    Harris, Sir P. A.

    Mander, G. le M.

    Davies, D. L. (Pontypridd)

    Henderson, A. (Kingswinford)

    Marklew, E.

    Maxton, J.

    Richards, R. (Wrexham)

    Taylor, R. J. (Morpeth)

    Messer, F.

    Ritson, J.

    Thurtle, E.

    Milner. Major J.

    Roberts, W. (Cumberland, N.)

    Tinker, J. J.

    Montague, F.

    Robinson, W. A. (St. Helens)

    Viant, S. P.

    Morrison, Rt. Hon. H. (Ha'kn'y, S)

    Rowson, G.

    Walker, J.

    Morrison, R. C. (Tottenham, N.)

    Seely, Sir H. M.

    Watkins, F. c.

    Muff, G.

    Sexton, T. M.

    Watson, W. McL.

    Naylor, T. E.

    Short, A.

    Westwood, J.

    Oliver, G. H.

    Silkin, L.

    White, H. Graham

    Owen, Major G.

    Sinclair, Rt. Hon. Sir A. (C'thn's)

    Williams, E. J. (Ogmore)

    Parker, J.

    Smith, E. (Stoke)

    Williams, T. (Don Valley)

    Parkinson, J. A.

    Smith, Rt. Hon. H. B. Lees- (K'ly)

    Young, Sir R.(Newton)

    Pethick-Lawrence, F. W.

    Smith, T. (Normanton)

    Potts, J.

    Sorensen, R. W.

    TELLERS FOR THE AYES.—

    Price, M. P.

    Stewart, W. J. (H'ght'n-le-Sp'ng)

    Mr. Mathers and Mr. Whiteley.

    Pritt, D. N.

    Strauss, G. R.(Lambeth, N.)

    NOES

    Acland-Troyte, Lt.-Col. G. J.

    Duggan, H. J.

    Lloyd, G. W.

    Adams, S. V. T. (Leeds, W.)

    Duncan, J. A.L.

    Locker-Lampson, Comdr. O. S.

    Agnew, Lieut.-Comdr. P. G.

    Dunglass, Lord

    Loftus, P. C.

    Albery, I. J.

    Eckersley, P. T.

    Lovat-Fraser, J. A.

    Aske, Sir R. W.

    Edmondson, Major Sir J.

    Lumley, Capt. L. R.

    Assheton, R.

    Elliston, G. S.

    Lyons, A. M.

    Baldwin-Webb, Col. J.

    Emery, J. F.

    Mabane, W. (Huddersfield)

    Balfour, G. (Hampstead)

    Emmott, C. E. G. C.

    M'Connell, Sir J.

    Balfour, Capt. H. H.(Isle of Thanet)

    Emrys-Evans, P. V.

    McCorquodale, M. S

    Balneil, Lord

    Erskine Hill, A.G.

    McKie, J. H.

    Beaumont, Hon. R. E. B. (Portsm'h)

    Everard, W. L.

    Magnay, T.

    Beit, Sir A. L.

    Fildes, Sir H.

    Maitland, A.

    Bernays, R. H.

    Findlay, Sir E.

    Makins, Brig.-Gen. E.

    Birchall, Sir J. D.

    Fleming, E. L.

    Manningham-Buller, Sir M.

    Blindell, Sir J.

    Fremantle, Sir F. E.

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

    Bossom, A. C.

    Gibson, C. G.

    Markham, S. F.

    Bracken, B.

    Gluckstein, L. H.

    Mason, Lt.-Col. Hon. G. K. M.

    Braithwaite, Major A. N.

    Graham, Captain A. C.(Wirral)

    Mayhew, Lt.-Col. J.

    Brass, Sir W.

    Gretton, Col. Rt. Hon. J.

    Meller, Sir R. J. (Mitcham)

    Briscoe, Capt. R. G.

    Gridley, Sir A. B.

    Mellor, Sir J. S. P.(Tamworth)

    Brocklebank, C. E. R.

    Grimston, R. V.

    Mills, Sir F. (Leyton, E.)

    Brown, Rt. Hon. E. (Leith)

    Gritten, W. G. Howard

    Mills, Major J. D. (New Forest)

    Brawn, Brig.-Gen. H. C. (Newbury)

    Guest, Hon. I. (Brecon and Radnor)

    Mitcheson, Sir G. G.

    Browne, A. C. (Belfast, W.)

    Guest, Maj. Hon. O.(C'mb'rw'll, N.W.)

    Morris-Jones, Dr. J. H.

    Bull, B.B.

    Gunston, Capt. D. W.

    Morrison, G.A.(Scottish Univ's.)

    Bullock, Capt. M.

    Guy, J. C. M.

    Morrison, W. S. (Cirencester)

    Burghley, Lord

    Hacking, Rt. Hon. D. H.

    Munro, P.

    Butler, R. A.

    Hamilton, Sir G. C.

    Nall, Sir J.

    Campbell, Sir E. T.

    Hanbury, Sir C.

    Neven-Spence, Maj. B. H. H.

    Cartland, J. R. H.

    Hannah, I. C.

    Nicolson, Hon. H. G.

    Carver, Major W. H.

    Hannon, Sir P. J. H.

    O'Neill, Major Rt. Hon. Sir Hugh

    Cary, R. A.

    Haslam, Sir J. (Bolton)

    Orr-Ewing, I. L.

    Castlereagh, Viscount

    Hellgers, Captain F. F. A.

    Palmer, G. E. H.

    Cszalet, Thelma (Islington, E.)

    Heneage, Lieut.-Colonel A. P.

    Patrick, C. M.

    Chamberlain, Rt. Hn. N. (Edgb't'n)

    Hopburn, P. G. T. Buchan-

    Peake, O.

    Channon, H.

    Hepworth, J.

    Peat, C. U.

    Chapman, A.(Rutherglen)

    Herbert, Major J. A. (Mcnmouth)

    Penny, Sir G.

    Christie, J. A.

    Herbert, Captain S. (Abbey)

    Perkins, W. R. D.

    Clarry, Sir Reginald

    Hills, Major Rt. Hon. J. W. (Rlpon)

    Pethick-Lawrence, F. W.

    Colman, N. C. D.

    Holmes, J. S.

    Pilkington, R.

    Colville, Lt.-Col. D. J.

    Hope, Captain Hon. A. O. J.

    Ponsonby, Col. C. E.

    Cook, T. R. A. M.(Norfolk N.)

    Hopkinson, A.

    Radford, E. A.

    Cooke, J.D. (Hammersmith, S.)

    Hore-Belisha, Rt. Hon. L

    Raikes, H. V. A. M.

    Cooper, Rt. Hn. T. M. (E'nburgh,W.)

    Horsbrugh, Florence

    Ramsbotham, H.

    Courtauld, Major J.S.

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

    Ramsden, Sir E.

    Craddock, Sir R. H.

    Hudson, R.S.(Southport)

    Rathbone, J. R. (Bodmin)

    Craven-Ellis, W.

    Hulbert, N. J.

    Rayner, Major R. H.

    Critchley, A.

    Hunter, T.

    Reed, A. C. (Exeter)

    Crooke, J. S.

    Jackson, Sir H.

    Reid, Sir D. D. (Down)

    Crookshank, Capt. H. F. c.

    James, Wing-Commander A. W.

    Reid, W. Allan (Derby)

    Croom-Johnson, R. P.

    Jones, L.(Swansea, W.)

    Remer, J.R.

    Crowder, J. F. E.

    Keeling, E. H.

    Rickards, G. W. (Skipton)

    Cruddas, Col. B.

    Kerr, H.W.(Oldham)

    Robinson, J. R. (Blackpool)

    Culverwell, C. T.

    Kerr, J. Graham (Scottish Univs.)

    Ropner, Colonel L.

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

    Lamb, Sir J. Q.

    Ross, Major Sir R. D. (L'ndtrry)

    Davies, C. (Montgomery)

    Latham, Sir P.

    Ross Taylor, W. (Woodbridge)

    Davies, Major G. F.(Yeovil)

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

    Ruggles-Brise, Colonel Sir E. A.

    Davison, Sir W.H.

    Leckie, J. A.

    Russell, A. West (Tynemouth)

    Dawson, Sir P.

    Leech, Dr. J. W.

    Russell, S. H. M. (Darwen)

    Denman, Hon. R. D.

    Lees-Jones, J.

    Salmon, Sir I.

    Denville, Alfred

    Lennox-Boyd, A. T. L.

    Salt, E. W.

    Dorman-Smith, Major R. H.

    Levy, T.

    Samuel, M.R. A. (Putney)

    Dower, Capt. A. V. G.

    Lewis, O.

    Sanderson, Sir F. B.

    Duckworth, G. A. V. (Salop)

    Lindsay, K. M.

    Sandys, E. D.

    Duckworth, W. R. (Moss Side)

    Little, Sir E. Graham-

    Sassoon, Rt. Hon. Sir P.

    Dugdale, Major T. L.

    Llewellin, Lieut.-Col.J. J.

    Savery, Servington

    946

    947

    Selley, H. R.

    Strickland, Captain W. F.

    Ward, Irene (Wallsend)

    Shaw, Major P. S. (Wavertree)

    Stuart, Hon. J. (Moray and Nairn)

    Warrender, Sir V.

    Shepperson, Sir E. W.

    Sutcliffe, H.

    Waterhouse, Captain C.

    Smiles, Lieut.-Colonel Sir W. D.

    Tasker, Sir R. I.

    Wells, S. R.

    Smith, Bracewell (Dulwich)

    Tate, Mavis C.

    Williams, H. G. (Croydon, S.)

    Smith, L. W. (Hallam)

    Taylor, Vice-Adm. E. A. (Padd., S.)

    Wilson, Lt.-Col. Sir A. T. (Hitchin)

    Somervell, Sir D. B. (Crewe)

    Thomas, J. P. L. (Hereford)

    Windsor-Clive, Lieut.-Colonel G.

    Somerville, D. G. (Willesden, E.)

    Touche, G. C.

    Winterton, Rt. Hon. Earl

    Southby, Comdr. A. R. J.

    Tryon, Major Rt. Hon. G. C.

    Wragg, H.

    Spender-Clay, Lt.-Cl. Rt. Hn. H. H.

    Tufnell, Lieut.-Com. R. L.

    Young, A. S. L. (Partick)

    Stanley, Rt. Hon. Lord (Fylde)

    Turton, R. H.

    Stanley, Rt. Hon. Oliver (W'm'l'd)

    Wakefield, W. W.

    TELLERS FOR THE NOES.—

    Stourton, Major Hon. J. J.

    Walker-Smith, Sir J.

    Lieut.-Colonel Sir A. Lambert

    Strauss, H. G. (Norwich)

    Wallace, Captain Euan

    Ward and Mr. Cross.

    NEW CLAUSE.—(Deduction in certain cases in respect of dependent relative.)
    If any person who is assessable to Income Tax proves to the satisfaction of the Commissioners of Inland Revenue that during the year of assessment he had a relative living with him who had been denied, wholly or in part, unemployment allowance under Part II of the Unemployment Act, 1934, or public assistance, on the ground that the relative was being maintained wholly or partly by him, he shall be entitled to a deduction of fifty pounds in respect of his assessment.—[Mr. Bevan.]
    Brought up, and read the First time.
    10.47 p.m.
    Mr. BEVAN: I beg to move, "That the Clause be read a Second time."
    This is the fourth occasion on which an attempt has been made in the Finance Bill to amend the law with respect to the matter with which the present Clause deals. The Clause raises two issues, one of principle and one of practical importance. The Unemployment Insurance Act, 1934, creates a new category of dependants by saying that all the resources of the family shall be taken into account in determining the allowance to be given to any unemployed member of the family. It makes the unemployed member of the family dependent upon those members who may be earning a salary or wage. This is the first occasion in the history of legislation in any country when that category of dependants has been made, with the exception, of course, of the old Poor Law. It has always been the practice under the Poor Law to take the family income into account in determining the amount of public assistance, but the Unemployment Insurance Act, 1934, was the first Act of Parliament, for many years at any rate, to create a new category of legal dependants.
    Income Tax law denies the existence of that category, because, if an employed member of a family is subject to Income Tax, and says to the Inland Revenue
    948
    Officer, "I claim that my brother or sister, who is unemployed, is made a dependant of me by the Unemployment Insurance Act, 1934, and therefore I claim a rebate in respect of that brother or sister," the Inland Revenue officer says, "There is no such provision in the Income Tax law of the country, and you cannot legally regard them as dependants." That is obviously a very anomalous position—where one law makes a brother or sister a dependant, and the other law denies provision for that. The Clause says in effect that if the Unemployment Insurance Act, 1934, is allowed to remain unamended and the unemployed member of a family is made the legal dependant of the employed person then the Income Tax law should make provision for that dependency.
    I believe that it would be very difficult for Members in any part of the Committee to defend the anomalous position which I have described. Hon. Members on the opposite side of the Committee would never permit such an anomaly to exist unless the consequence of this anomaly is to unload on the shoulders of those members of the working class who are still in employment part of the burden of maintaining those who are unemployed. I had a case in my own constituency of a young woman of 25 who was a school teacher earning a salary of between £3 and £4 per week. This young girl had two brothers unemployed, and, owing to the closing down of the Ebbw Vale steelworks, these brothers have been unemployed for a long time. She was assessed for Income Tax and had to pay it. At the same time one of her brothers was wholly denied, and the other partly denied, any unemployment allowance because of the salary she was earning. Therefore she paid Income Tax on a salary she did not receive. Not merely did she not receive it, but in law she was not entitled to it. That is the point which has to be borne in mind, that the

    949
    law says that this salary could be alienated from her by the Unemployment Assistance Board and yet on that alienated salary she had to pay Income Tax.
    A domestic relationship of that description is bound to create bitter friction in a home, and there have been many instances where brothers and sisters in employment have left home, not merely because of the burden of maintaining their unemployed brothers and sisters, but because of the bitter irony of having to pay Income Tax on a salary which they would not themselves be able to enjoy, and which was used in supporting their unemployed brothers and sisters.
    Last year we had a very interesting discussion on this subject and the present Secretary of State for War, then Financial Secretary to the Treasury, made a statement. He referred to the Debate on the Finance Bill of the previous year and said:
    "The Unemployment Assistance Board has recently considered this question and has definitely decided that where, in determining the need of an applicant for unemployment allowance payments of Income Tax by a member of the household is claimed as a deduction from earnings, it will be allowed as a special expense in the assessment of household resources. I think that has gone far to meet the point raised and I hope my hon. Friend will be content with that this year.
    Mr. WHITE: Is that in force at the present time?
    Mr. COOPER: Yes."—[OFFICIAL REPORT, 19th June, 1935; col. 508, Vol. 303.]
    I have only had the report of the Unemployment Assistance Board in my hands for a very short time—it was only available this evening—and what I say now is subject to correction, because I have not had an opportunity of considering it fully, but on page 44 it refers to the treatment of earnings. I looked in vain to find any mention whatever of this undertaking. In no part of the report do they say they are prepared to take into account, in assessing the family resources, the amount of Income Tax that any earner of the family may have to pay. My hon. Friends and I have been making inquiries and we cannot find out whether the officers of the board have in fact made this allowance.
    But what to me is a more serious thing is this. Ought not the person who is liable to Income Tax to be able to plead,
    950
    even in this small concession, some statutory right to have the Income Tax disregarded. For example, if it is true that the Unemployment Assistance Board has sent round to its officers an instruction that in these cases the amount of tax payable must be deducted from the household resources before the assessment of need is made, ought not the Income Tax payer to be able to produce the document where the officer has received such an instruction? Otherwise he is quite helpless. Unfortunately these instructions to officers of the board are private and confidential. We have not access to them. Although there may be an appeal to the Unemployment Assistance Board, the appellant is unable to produce any document showing that he is entitled to this relief. The Chancellor may repeat the statement of the Secretary to the Treasury last year that this is admitted as a hardship and that he has gone some way towards meeting the practical difficulties of the case by asking the Unemployment Assistance Board to disregard part of the earnings as the income of the family. If that is the answer to be made, we claim that the Committee has a right to be informed of the words in which that instruction is given to the officers of the board, because if we are not put in possession of the actual instructions, then the unemployed man or his working brother or sister is in fact not put in possession of the right to have that left out of account, but is completely at the mercy of the officer of the board, who may or may not deny that such an instruction has been received.
    That is that narrow and practical point of some relief being given to the earner in a family of unemployed persons, but it leaves out of account entirely the question of principle to which I have already referred. It is not enough for the spokesman for the Government to say that they concede our principle but that it will raise great administrative difficulties. It was mentioned last year that at present, if there is an elderly dependant in the home, the Income Tax law provides for a rebate of £25, whereas the proposal in this Clause is for £50. You may say that that would create an anomaly and that it would be difficult in practice to administer, because the dependency might only be for a part of the year, whereas

    951
    the Income Tax relief would be for the whole year. All that we say is that if these are difficulties of administration, they throw into sharp relief the impossibility of having a means test at all without inflicting great hardships. It does not bring the law into good repute among a large number of members of the community if the excuse is made that they have to suffer a grievous injustice in order that unemployed people may be subject to the petty persecutions of the Unemployment Assistance Board.
    11.3 p.m.
    Mr. BATEY: I support the new Clause, and I do not propose to repeat any of the arguments used by the Mover of the Clause. It seems to me that the proposal is so reasonable and just that it is difficult to understand any opposition to it or the Chancellor of the Exchequer refusing to accept it. It would be wise if the Committee kept the principal point in the Clause in mind. We claim that where a young man or woman in a household has his or her earnings taken into consideration in deciding the unemployment benefit that should be paid either to the father or some other member of the household, the fact that those earnings have been reckoned should guarantee to the earner some relief of Income Tax. This matter has been raised for the last three or four years, but there is this difference between this year and former years. Since last year we have had a general election, and the Government issued a manifesto in which they pledged themselves to maintain the unity of family life. They must remember that, and here is a chance to carry that policy into effect, because there is nothing more destructive of family unity than the penalising of these young people who are in a household some member of which is unemployed. In view of the fact, that things are different this year from last year, I ask the Chancellor of the Exchequer to pay some attention to that fact and give consideration to it in his reply.
    11.5 p.m.
    Mr. HOLDSWORTH: I appeal to the Chancellor of the Exchequer to accept the new Clause. I am certain that every Member of the Committee would be grateful to him if he did accept it. I do not want to reiterate what was said by the hon. Member for Emmw Vale (Mr.
    952
    Bevan), but Members of the Committee must agree that where a young person, either a young man or a young woman, is contributing to the family income, and no allowance is made in respect of Income Tax, there is a feeling of real hardship. Everybody would appreciate a little leniency from the Chancellor of the Exchequer on this point. It seems to me to be a very grievous hardship to be asked to contribute perhaps a great part of one's income in order to keep other members of the family, and then to have no allowance for Income Tax upon that charge. Members of the Committee understand the Clause. It has been brought up year after year. I have had cases brought to my notice in my own city, and the feeling of hardship that exists. People say to me that they have given their money to the family in order to keep brother, sister or father, and then they are taxed upon their full income. It would not be a very costly concession if the Chancellor of the Exchequer gave way on this point. It would please every Member of the Committee and would give a feeling to the people outside that they are being treated with something like justice.
    11.7 p.m.
    Mr. KIRKWOOD: I would add my appeal to the Chancellor of the Exchequer. Every representative of an industrial constituency will have met with instances of this grievous injustice. The individuals who are affected and who suffer this injustice are those whom the Chancellor of the Exchequer desires to help. Take the shipbuilding and engineering industry. An individual has struggled to get into a better job than that of a shipbuilder or engineer. The engineer today has such a huge salary that there is no Income Tax on him. By paying attention to his work, going to evening classes and so on, a man may become a foreman. As a result of the man's perseverance and thrift and playing his part and making himself a better citizen, he is penalised. His son may be out of work but he is not allowed to go on the unemployment fund, and the father has to support him. But the father is not allowed any deduction from Income Tax on that account. We ask that the deduction should be fixed at £50. I have been at the Ministry of Labour recently regarding two school teachers, one in Dumbarton and the other in Clydebank.

    953
    Because they happen to be school teachers, they have to maintain their father, and there is no allowance made for that.
    Individuals who have tens of thousands of pounds with which to play get deductions on less justifiable grounds than we are submitting to the Chancellor of the Exchequer to-night. I hope that he will not harden his heart to-night as he has done upon every previous occasion. There may have been some justification for his attitude when things were not going as well with us financially as they are today, but trade is now supposed to be on the turn. Everything is going better with us than was the case a few years back. We are not in the habit of appealing to the Chancellor of the Exchequer because we have previously been turned down so often. We now come to him again, and we are knocking at the door. We hope that our knocking will not be in vain. There are thousands of decent folk who are affected in this way. They are not the rag-tag and bob tail of society, but comprise a most decent section of the community. We are appealing to the Chancellor of the Exchequer or, behalf of that section of the community whom he and his party are always boasting that they represent. Now is the day and the hour to try and justify the claim that they are always putting forward in this House.
    11.12 p.m.
    Mr. PETHICK-LAWRENCE: I am not going to appeal to the Chancellor of the Exchequer. I want to appeal to the Committee as a whole. Reference has been made to promises made at the General Election. A very large number of Members in all sections of this House stated at the election that they were prepared to consider the hardship of the family means test. We on this side of the Committee are entirely opposed to the family means test, but a great many Members who are not on these benches, without going as far as that, said that they were prepared to consider the hardship. I suggest to them that this particular hardship is a very real one. It is surely bad enough that a member of a household should be compelled to contribute to the whole of the members of the household and that they would not get any Unemployment Insurance benefit as long as one hand covered
    954
    the whole of the family. It really is outrageous if, in addition to that, the person who is making that contribution and is supporting any or all of the other members of the family should not be allowed to have any deduction of any kind in consequence of that support from their Income Tax. During various other Amendments the Financial Secretary has said that we are not dealing with the small income allowance of a single man. In the case of unearned income a man with a wife and three children has to have £400 or £500, which he has earned, before he begins to pay tax. That is correct, but in this case there will be nothing of the kind. There may be a person with three or four dependants in the household and yet he will be treated as a single person and only get the exemption of a single person. This is a very grave injustice, and I hope Members will not allow their desire to finish and get home prevent them from attempting to rectify this injustice. I do not know what the Chancellor is going to say, but if he does not accept the Amendment I appeal to the Committee as a whole to put pressure upon him to do this simple justice to people who are in great need of some provision of this kind.
    11.16 p.m.
    Mr. CHAMBERLAIN: This Clause does not lend itself to the comments of the hon. Member for Chesterfield (Mr. Benson) on a previous Amendment, the precise meaning of which escaped me, but it is one which deals with cases which in particular instances involve hardship. I will admit that the case on the face of it appears a plausible one, but nevertheless one has to remember that no system of taxation such as Income Tax can be drafted so as to provide for all possible individual cases of hardship. I make no excuse for again quoting the words of the Royal Commission in 1920, an impartial authority who gave a profound study to the whole subject and came to this conclusion:
    "We have been asked to recommend allowances for expenses arising out of illness or disability, such as travelling expenses to attendants of disabled persons; or to give compassionate rebate to persons who are compelled to maintain and pay personal attendants; or special relief to disabled persons in view of their decreased earning capacity. These claims, while differing in degree, all arise out of the personal or

    955
    domestic circumstances of the taxpayer, and, although we are conscious that in particular cases the operation of the general rule may result in individual hardship we feel that we cannot advise any general relaxation of the principles on which the tax is levied."
    That passage is applicable to the present case.
    Mr. BEVAN: No.
    Mr. CHAMBERLAIN: May I point out that the new Clause before us if it were carried would create fresh anomalies and fresh inequities. The hon. Member for Ebbw Vale (Mr. A. Bevan) has quoted the fact that, already the case of the dependent relative who is incapacitated by age or infirmity from earning his own living is met to the extent of £25, which, of course, is only half the amount mentioned in the new Clause. The hon. Member did not quote what, I think, is a still more striking case of anomaly if this new Clause were carried. These hardships are not merely confined to members of the wage-earning class, but the new Clause deals solely with persons who have been in employment which would entitle them under the Unemployment Insurance Scheme to obtain unemployment benefit; but these are not the only people who maintain dependent relatives and who do not get any allowance. Surely it would be an even greater anomaly if in one case the taxpayer whose dependent relative is eligible for unemployment benefit should receive this allowance of £50, whereas in the other case the man whose dependent relative had been in trade and not eligible for insurance should receive nothing at all.
    It is often the case that hon. Members who have their eyes fixed on a particular case of hardship which has come to their attention draft their Amendments to meet that particular case and do not see that if they were to remedy the anomaly in that case, they would only create a fresh one somewhere else. The hon. Member for Edinburgh, East (Mr. Pethick-Lawrence) said there is no allowance in these cases, but I think he has gone a little beyond the facts in making so wide and unqualified a statement, because we attempt in the administration of the Income Tax to put the most generous interpretation upon the Statutes
    956
    in order to give some relief to persons in such conditions as those we are considering. We do that, for instance, in the case of an elderly parent whom it is impossible to bring under the provision to which I have alluded, that referring to a dependant who is incapacitated by age or infirmity from earning his own living. Where there are younger brothers and sisters, it is often possible to treat them as adopted children and to obtain allowances on their behalf as well. I think we really have stretched the provisions of the Income Tax Act as far as is possible to meet cases of hardship which may arise in the circumstances which the hon. Member who moved the new Clause had in mind.
    But the case which this Clause seeks to cover is not one of an injustice under the Income Tax system. If there is any hardship at all, it arises out of the operation of the means test, and it is irrelevant to bring it up on a Finance Bill and to attempt to make a change in the structure of the Income Tax. It is a question which would be more appropriate on a discussion of the arrangements to he made for the provision of public assistance. The hon. Member for Ebbw Vale quoted some words from the speech of my right hon. Friend the Secretary of State for War last year, in which he intimated that this matter had been taken into account by the Unemployment Assistance Board, and I think the effect of what he said was that the board had given an instruction that where a wage-earner paying Income Tax claimed a deduction from earnings, the deduction should be allowed, as a deduction from the resources of the household in making the assessment of the particular applicant for relief. The hon. Member threw some doubt upon whether that instruction was in force or whether it had ever been put into operation. He said he could not find any mention of it in the Board's Report. I am not in a position to challenge that, but I can give him a definite assurance that that instruction, or words to that effect, was issued by the Board about a year ago, that it has been in operation ever since and is in operation at the present time. This shows that in the administration of the means test the Unemployment Assistance Board has endeavoured to meet this particular case of hardship. That is the appropriate place for a remedy to be found.
    11.24 p.m.
    Mr. BEVAN: Last year I do not think there was a Division on this matter because of the assurance given by the Secretary of State for War, which, of course, met only the narrow and small part of our objection. A Division was not challenged on that occasion, because the present Secretary of State for War said that the Unemployment Assistance Board had given that assurance. Is it not possible for the instruction to the officers to be made available to Members? If not, no unemployed person has any document which he can quote in his appeal against an officer who refuses—as is done in some cases—to take this concession into account. There is no reference to it in the report. One would have thought that, if this had been done at the special request of the Treasury in consequence of three Debates in the House, at least some reference would be made to the relief in this report. But there is no reference of that kind, although other and smaller categories are mentioned. A great deal of what the right hon. Gentleman said was, I thought, not relevant. These dependants would still be left in an anomalous position. These unemployed people are made the dependants of the employed worker by another Statute, which is a different thing entirely from the case of those who are not made dependants by
    a Statute. Nevertheless, if we could get a copy of the instruction, though it would not deal with the anomaly, it would go some way towards meeting our objections.
    11.27 p.m.
    Mr. CHAMBERLAIN: I can see the hon. Member's point. I have not had an opportunity of consulting the Board on the subject, but it is very likely that some difficulty might be found in agreeing to the publication of the instructions which they give to their officers and which are private. If it was once admitted that they were bound to publish these instructions, it might lead to difficulties. However, I will communicate with them on the subject. In the meantime, considering that I have publicly given this assurance and it therefore becomes a matter of public knowledge, surely, if the hon. Member or any of his friends hear of any cases which they think contradict that, it will be possible for them to raise the point in this House by means of questions, and that would make it perfectly clear that the instruction is actually in force.
    Question put, "That the Clause be read a Second time."
    The Committee divided: Ayes, 117; Noes, 202.

    Division No. 240.]

    AYES.

    [11.30 p.m.

    Adams, D. (Consett)

    Gallacher, W.

    Leslie, J. R.

    Adams, D. M. (Poplar, S.)

    Gardner, B. W.

    Logan, D. G.

    Adamson, W. M.

    Garro Jones, G. M.

    McGhee, H. G.

    Alexander, Rt. Hon. A. V. (H'lsbr.)

    George, Major G. Lloyd (Pembroke)

    MacLaren, A.

    Ammon, C. G.

    Glbbins, J.

    Maclean, N.

    Anderson, F. (Whitehaven)

    Graham, D. M. (Hamilton)

    MacMillan, M. (Western Isles)

    Aske. Sir R. W.

    Green, W. H. (Deptford)

    MacNeill, Weir, L.

    Banfield, J. W.

    Greenwood, Rt. Hon. A.

    Mander, G. le M.

    Barnes, A. J.

    Grenfell, D. R.

    Marklew, E.

    Barr, J.

    Griffith, F. Kingsley (M'ddl'sbro, W.)

    Maxton, J.

    Batey, J.

    Griffiths, G. A. (Hemsworth)

    Messer, F.

    Bellenger, F.

    Griffiths, J. (Llanelly)

    Milner, Major J.

    Benson, G.

    Hall, G. H. (Aberdare)

    Morrison, G. A. (Scottish Unlv's.)

    Bernays, R. H.

    Hall, J. H. (Whitechapel)

    Morrison, Rt. Hon. H. (Ha'kn'y, S.)

    Bevan, A.

    Hardle, G. D.

    Muff, G.

    Broad, F. A.

    Harris, Sir P. A.

    Oliver, G. H.

    Bromfield, W.

    Henderson, A. (Kingswinford)

    Parker, J.

    Brooke, W.

    Henderson, J. (Ardwick)

    Parkinson, J. A.

    Brown, Rt. Hon. J. (S. Ayrshire)

    Henderson, T. (Tradeston)

    Pethick-Lawrence, F. W.

    Buchanan, G.

    Holdsworth, H.

    Potts, J.

    Burke, W. A.

    Holland, A.

    Price, M. P.

    Cape, T.

    Jagger, J.

    Pritt, D. N.

    Charleton, H. C.

    Jenkins, A. (Pontypool)

    Richards, R. (Wrexham)

    Compton, J.

    Jenkins, Sir W. (Neath)

    Riley, B.

    Cripps, Hon. Sir Stafford

    Johnston, Rt. Hon. T.

    Ritson, J.

    Daggar, G.

    Jones, A. C. (Shipley)

    Roberts, W. (Cumberland, N.)

    Dalton, H.

    Jones, H. Haydn (Merioneth)

    Robinson, W. A. (St. Helens)

    Davies, S. O. (Merthyr)

    Kelly, W. T.

    Seely, Sir H. M.

    Dobble, W.

    Kennedy, Rt. Hon. T.

    Sexton, T. M.

    Dunn, E. (Rother Valley)

    Kirby, B. V.

    Silkin, L.

    Ede, J. C.

    Kirkwood, D.

    Sinclair, Rt. Hon. Sir A. (C'thn's)

    Edwards, Sir C. (Bedwellty)

    Lathan, G.

    Smith, Ben (Rotherhithe)

    Fletcher, Lt.-Comdr. R. T. H.

    Lawson, J. J.

    Smith, E. (Stoke)

    Foot, D. M.

    Lee, F.

    Smith, T. (Normanton)

    Frankel, D.

    Leonard, W.

    Scrensen. R. W.

    Stewart, W. J. (H'ghfn-le-Sp'ng)

    Viant, S. P.

    Williams, T. (Don Valley)

    Strauss, G. R. (Lambeth, N.)

    Watson, W. McL.

    Young, Sir R. (Newton)

    Taylor R J (Morpeth)

    Westwood J

    Thurtle, E.

    White, H. Graham

    TELLERS FOR THE AYES.—

    Tinker, J. J.

    Williams, E. J. (Ogmore)

    Mr. Whiteley and Mr. Mathers.

    NOES.

    Acland-Troyte, Lt.-Col. G. J.

    Fleming, E. L.

    O'Neill, Major Rt. Hon. Sir Hugh

    Adams, S. V. T. (Leeds, W.)

    Fremantle, Sir F. E.

    Orr-Ewing, I. L.

    Agnew, Lieut.-Comdr. P. G.

    Gibson, C. G.

    Palmer, G. E. H.

    Albery, I. J.

    Gluckstein, L. H.

    Patrick, C. M.

    Assheton, R.

    Graham Captain A. C. (Wirral)

    Peake, O.

    Atholl, Duchess of

    Gretton, Col. Rt. Hon. J.

    Peat, C. U.

    Baldwin-Webb, Col. J.

    Gridley, Sir A. B.

    Penny, Sir G.

    Balfour, G. (Hampstead)

    Grimston, R. V.

    Perkins, W. R. D.

    Balfour, Capt. H. H..(Isle of Thanet)

    Gritten, W. G. Howard

    Petherick, M.

    Balneil, Lord

    Gunston, Capt. D. W.

    Pilkington, R.

    Beaumont, Hon. R. E. B. (Portsm'h)

    Guy, J. C. M.

    Ponsonby, Col. C. E.

    Belt, Sir A. L.

    Hacking, Rt. Hon. D. H.

    Radford, E. A.

    Bllndell, Sir J.

    Hanbury. Sir C.

    Ralkes, H. V. A. M.

    Bossom, A. C.

    Hannah, I. C.

    Ramsbotham, H.

    Braithwaite, Major A. N.

    Heilgers, Captain F. F. A.

    Rankin, H

    Brass, Sir W.

    Hepburn, P. G. T. Buchan

    Rathbone, J. R. (Bodmin)

    Briscoe, Capt. R. G.

    Hepworth, J.

    Rayner, Major R. H.

    Brocklebank, C. E. R.

    Herbert, Major J. A. (Monmouth)

    Reed, A. C. (Exeter)

    Brown, Col. D. C. (Hexham)

    Herbert, Captain S. (Abbey)

    Reid, W. Allan (Derby)

    Brown, Rt. Hon. E. (Leith)

    Hills, Major Rt. Hon. J. W. (Ripon)

    Remer, J. R.

    Brown, Brig.-Gen. H. C. (Newbury)

    Holmes. J. S.

    Rickards, G. W. (Skipton)

    Browne, A. C. (Belfast, W.)

    Hope, Captain Hon. A. O. J.

    Robinson, J. R. (Blackpool)

    Bull, B. B.

    Hore-Belisha, Rt. Hon. L.

    Ropner, Colonel L.

    Bullock, Capt. M.

    Horsbrugh, Florence

    Ross, Major Sir R. D. (L'derry)

    Burghley, Lord

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

    Ross Taylor, W. (Woodbridge)

    Butler, R. A.

    Hudson, R. S. (Southport)

    Ruggies-Brise, Colonel Sir E. A.

    Campbell, Sir E. T.

    Hulbert, N. J.

    Russell, A. West (Tynemouth)

    Carver, Major W. H.

    Hunter, T.

    Salmon, Sir I.

    Cary, R. A.

    Jackson, Sir H.

    Samuel, M. R. A. (Putney)

    Castlereagh, Viscount

    James, Wing-Commander A. W.

    Sanderson, Sir F. B.

    Cazalet, Thelma (Islington, E.)

    Jones, L. (Swansea, W.)

    Savery, Servington

    Chamberlain, Rt. Hn. N. (Edgb't'n)

    Keeling, E. H.

    Selley, H. R.

    Channon, H.

    Kerr, H. W. (Oldham)

    Shaw, Major P. S. (Wavertree)

    Chapman, A. (Rutherglen)

    Kerr, J. Graham (Scottish Univs.)

    Shepperson, Sir E. W.

    Christie, J. A.

    Lamb, Sir J. Q.

    Smith, Bracewell (Dulwich)

    Clarry, Sir Reginald

    Latham, Sir P.

    Smith, L. W. (Hallam)

    Colman, N. C. D.

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

    Smithers, Sir W.

    Colville, Lt.-Col. D. J.

    Leckie, J. A.

    Southby, Comdr. A. R. J.

    Cooke, J. D. (Hammersmith, S.)

    Leech, Dr. J. W.

    Spears, Brig.-Gen. E. L.

    Cooper, Rt.Hn. T. M. (E'nburgh.W.)

    Lennox- Boyd, A. T. L.

    Spens, W. P.

    Craddock, Sir R. H.

    Levy, T.

    Stanley, Rt. Hon. Lord (Fylde)

    Craven-Ellis, W.

    Lindsay, K. M.

    Stanley, Rt. Hon. Oliver (W'm'l'd)

    Critchley, A.

    Llewellin, Lieut.-Col. J. J.

    Stourton, Major Hon. J. J.

    Crookshank, Capt. H. F. C.

    Lloyd, G. W.

    Strauss, H. G. (Norwich)

    Cross, R. H.

    Loftus, P. C.

    Strickland, Captain W. F.

    Crossley, A. C.

    Lumley, Capt. L. R.

    Sutcliffe, H.

    Crowder, J. F. E.

    Lyons, A. M.

    Tate, Mavis C.

    Cruddas, Col. B.

    Mabane, W. (Huddersfield)

    Taylor, Vice-Adm. E. A. (Padd., S.)

    Culverwell, C. T.

    McCorquodale, M. S.

    Thomas, J. P. L. (Hereford)

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

    McKie, J. H.

    Tryon, Major Rt. Hon. G. C.

    Davies, Major G. F, (Yeovil)

    Macnamara, Capt. J. R. J.

    Tufnell, Lieut.Com. R. L.

    Dawson, Sir P.

    Maitland, A.

    Wakefield, W. W.

    Duckworth, G. A. V. (Salop)

    Makins, Brig.-Gen. E.

    Walker-Smith, Sir J.

    Duckworth, W. R. (Moss Side)

    Manningham-Buller, Sir M.

    Wallace, Captain Euan

    Dugdale, Major T. L.

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

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

    Duggan, H. J.

    Markham. S. F.

    Ward, Irene (Wallsend)

    Duncan, J. A. L.

    Mason, Lt.-Col. Hon. G. K. M.

    Warrender, Sir V.

    Dunglass, Lord

    Mayhew, Lt.-Col. J.

    Waterhouse. Captain C.

    Eastwood, J. F.

    Meller, Sir R. J. (Mitcham)

    Wells, S. R.

    Eckersley, P. T.

    Mellor, Sir J. S. P. (Tamworth)

    Williams, H. G. (Croydon, S.)

    Edmondson, Major Sir J,

    Mills, Sir F. (Leyton, E.)

    Wilson, Lt.-Col. Sir A. T. (Hitchin)

    Elliston, G. S.

    Mills, Major J. D. (New Forest)

    Windsor-Clive, Lieut.-Colonel G.

    Emery, J. F.

    Mitcheson, Sir G. G.

    Wragg, H.

    Emmott. C. E. G. C.

    Moreing, A. C.

    Young, A. S. L. (Partick)

    Emrys-Evans, P. V.

    Morrison, W. S. (Cirencester)

    Erskine Hill, A. G.

    Munro, P.

    TELLERS FOR THE NOES.—

    Everard, W. L.

    Nall, Sir J.

    Mr. James Stuart and Dr. Morris-

    Fildes, Sir H.

    Neven-Spence, Maj. B. H. H.

    Jones.

    Findlay, Sir E.

    Nicolson, Hon. H. G.

    Question put, and agreed to.

    11.38 p.m.
    Mr. CHAMBERLAIN: I beg to move, "That the Chairman do report Progress, and ask leave to sit again."
    I am anxious to divide up the business so far as possible without asking the Committee to sit up late on any particular night. It is now after half-past 11, and

    961
    I think we have made very good progress to-day, and on the general understanding, to which I hope hon. Members opposite below the Gangway have no difficulty in agreeing, that we finish our business to-morrow—the new Clauses and Schedules—without sitting to an unduly late hour in the morning, I am moving to report Progress.
    Committee report Progress; to sit again To-morrow.
    The remaining Orders were read, and postponed.
    It being after Half-past Eleven of the Clock, Mr. DEPUTY-SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
    Adjourned at Twenty-one Minutes before Twelve o'Clock.