FINANCE BILL.

HC Deb 07 July 1937 vol 326 cc369-423

Considered in Committee [Progress, 1st July.]

[Captain BOURNE in the Chair.]

NEW CLAUSE.—(Agricultural property not to be aggregated with other property.) Notwithstanding anything in any Act agricultural property within the meaning of paragraph (g) of Sub-section (1) of Section twenty-two of the Finance Act, 1894, shall, for purposes of Estate Duty, be an estate by itself and shall not be aggregated with any other property and the amount of Estate Duty payable in respect thereof shall be charged at the appropriate rate payble under the scale of rates set cut in the Third Schedule to the Finance Act, 1919.—[Lieut.-Colonel Acland-Troyte.]

Brought up, and read the First time.

4.10 p.m.

Lieut.-Colonel Acland-Troyte

I beg to move, " That the Clause be read a Second time."

There is no doubt that Death Duties bear very heavily on owners of agricultural land and have a detrimental effect on agriculture generally. Although the Government have done a great deal for agriculture, the industry is not in the position in which we all desire it to be, and it cannot bear the constant drain of capital from the land caused by the Death Duties. The result of the Death Duties is that an owner either has to sell a portion of the land or the whole of it, or else he has to retain it in an impoverished condition in his own hands. If he decides to sell, the tenant has to buy the land or turn out. In any case it has to be bought by a farmer. Probably he has to buy it by means of a mortgage and has to pay as much interest on that mortgage as he would have to pay to his former landlord in rent. Not only will he have to mortgage the land and pay the interest but also has to keep his own buildings in repair and pay tithe redemption annuities and other charges. He cannot raise the full amount of money required on mortgage. Therefore, a considerable proportion of the capital which ought to be used for stocking the land has to be used to pay for the remainder of the value of the land. If, on the other hand, the owner decides to retain the land, he is in so impoverished a condition that he has not sufficient capital to make the improvements to buildings which are necessary for modern requirements, nor is he able to do the necessary repairs to the property. Masons, carpenters, woodmen and gardeners are thrown out of work, and the whole life of the village is completely dislocated.

If the new Clause is accepted it will make some alleviation of a very difficult position, although not much. All it will mean is that the Death Duties upon agricultural land will be assessed separately and will pay the smaller rate of duty on agricultural land. This new Clause does not raise any new principle, as agricultural land already pays a lower duty than other forms of property. It will be some help, but it will not go very far. It ought really to have been in addition to and not in substitution for another new Clause which has unfortunately been ruled out of order. When this matter was last brought before the House about three years ago the present Prime Minister, who was then Chancellor of the Exchequer, gave a very sympathetic reply. I know that the present Chancellor of the Exchequer has not had time since he took office to go into the matter closely. If he cannot accept the new Clause now, I hope that before his next Budget he will have time to go into the matter carefully, and that he will then be able to bring forward himself an Amendment which will go further than this new Clause and be more on the lines of the new Clause which was ruled out of order.

4.14 p.m

Brigadier-General Clifton Brown

I wish to support the Motion for the Second Reading of this Clause. This matter has been considered before. The Clause would be one way, at very little cost to the Exchequer, of helping to keep agricultural estates together without the discharge of people employed, and would help to keep capital in the land, which is so necessary now. The landowner no longer has the capital with which to pay Death Duties, and if, in a moderate way, we can help him to retain some of his capital so that he can continue to employ the workmen on his estate, it will be a great advantage to the countryside. If we can put agricultural land in a more favourable condition by giving a conces- sion of this kind, we shall be doing something in this direction.

4.16 p.m.

Mr. Assheton

I do not know whether all hon. Members realise how difficult it is for owners of agricultural properties to find the money with which to pay Death Duties. If a man inherits a property which is invested in funds or in industrial or other shares, all he has to do in order to find the money to meet the Death Duties is to sell part of his stocks or shares. The man who inherits an agricultural estate is in a very different position. He is asked by the Revenue, say, for a sum of £20,000. How is he to find that money? There are only two ways in which to find it, one is by borrowing it, and the other is by selling part of his land. If he is able to sell part of his land he may arrive at a solution of the problem or he may not. Very frequently when part of an estate is sold the whole organisation of the estate is broken up and interfered with and it is a very general detriment to the community.

Take the very much more frequent case of the owner who is unable to sell his land: he has to borrow the money on mortgage. Out of his revenues the first charge will be the payments of the interest on the mortgage, and that means that the land is being deprived of money which would most likely come back into it, and which is most needed for its improvement. Nowadays owners of agricultural land are being asked to spend a great deal of money. Take, for example, the case of dairy farming. Owners of land who have a great many dairy farms are being put to enormous expense making their buildings comply with regulations for accredited milk production. It is impossible to find the money for this when Death Duties are all the time taking the money out of the land. It is, as I said, an entirely different matter for the man who has his capital in stocks and shares. All he has to do is to sell his stocks and shares, but if he is a landowner he has to take the money out of the land, and all the money taken out of the land means that the land is less productive and the local community has to suffer. I hope, at any rate, the Chancellor of the Exchequer will consider this matter very carefully, and although I daresay he will not be able to do very much for us on this occasion, I think that any Government which seriously considers the state of agriculture must realise that this is a fundamental question.

Mr. Kirkwood

Nationalise the land.

4.20 p.m.

Sir Francis Acland

I wish to say a few words in support of the Clause. I was very much impressed by what my hon. and gallant relative the Member for Tiverton (Lieut.-Colonel Acland-Troyte) said in support of it, and I should have been even more impressed if I had been able to hear what he said more clearly, but that was not his fault. There was a certain amount of general noise going on. The point I would like to make is a very simple one, and it is in agreement with, and backs up, what was said by the hon. Gentleman the Member for Rushcliffe (Mr. Assheton). I know from my own experience how difficult it is to sell half an estate in order to pay Death Duties and to retain the rest of it as an economic unit. One has one's staff doing repairs, and, as was suggested, carrying out the reconstruction of dairy sheds and that sort of thing; so many builders, carpenters, plumbers and so on. But after two or three Death Duties have been paid, you get rapidly down to the point when, to make the estate smaller, it is utterly uneconomic to keep the staff going. That makes a real and practical difficulty for many men whose families have been hit in this way. I agree that if the holding were nationalised there would be a great deal to be said, but at present we allow private ownership to continue.

On the whole I have no doubt whatever that in the difficult times through which we have been going farmers on estates have been able to get on a good deal better than the men who are freeholders and are simply carrying on by means of their own resources. Wages compared with pre-war have gone from too to 182, and wholesale prices compared with pre-war have gone from 100 to 136, and rents compared with pre-war have gone down from 100 to 90, so that the burden has borne pretty hard on the owner who has done his best by his tenants. In view of the difficulties that have already fallen upon agricultural estates since the Death Duties were put up so high, and considering also that this matter was raised, as the hon. and gallant Member for Tiverton said, once or twice before, it would be a very useful concession if the Chancellor of the Exchequer could see his way to accept the Clause.

4.23 p.m.

Sir William Davison

I should like to associate myself with the speeches from nearly every quarter of the Committee in support of the Clause.

Mr. Kirkwood

Oh, no.

Sir W. Davison

The hon. Gentleman and his friends are only a small minority, and they must not abrogate to themselves greater influence. They only occupy a small quarter of the House. I desire to associate myself with the arguments which have come from three-quarters of the House, and I would ask the Chancellor of the Exchequer whether the policy of the Government is not inconsistent in this matter. For the last day or so we have been introducing measures to provide subsidies for agriculture to enable it to pay its way, and previously similar measures have been introduced in aid of agriculture because it is unable to pay its way and keep that large body of employment on the land which it is essential in the national interest should be kept there. Here, as has already been pointed out, is something which cripples agriculture more than anything. When the head of an estate or of a big farm is suddenly taken away by death, his successor has to find a large sum of money in the way of Death Duties. It is not only taken on the particular farm or estate, but the amount is made larger by the fact that, if there are stocks or shares or anything else, the rate of duty is taken on the whole. This is a very moderate Clause, and I hope that the Government will give it favourable consideration. There is another point concerning the unfortunate man who owns land which I raised a few weeks ago in the House. The Inland Revenue in valuing properties for Death Duties, if not always, very often consider them ripe for building, and put a very high value upon them.

The Deputy-Chairman

That would not be affected by this new Clause.

Sir W. Davison

I am pointing out that the Death Duty, which would be avoided if the proposal in the proposed Clause were carried out, is put upon a very high basis by reason of that practice.

The Deputy-Chairman

The hon. Gentleman does not seem to realise that the proposal would not affect the valuation of the land.

Sir W. Davison

I am afraid that I do, but I only say that the grievance is accentuated by the fact that these valuations are put at a very high figure although the Revenue themselves are not prepared to take the land at that high figure. That is another reason why the Government should be inclined to accept the Clause, or to give, at any rate, some assurance with regard to the future, that in these agricultural estates the burden of Death Duties, which is heavy upon the country in every regard, but is especially heavy with regard to agricultural property, should receive very careful consideration.

4.26 p.m.

Mr. Kirkwood

I hope that the Chancellor of the Exchequer will pay no attention to the landlords of this country. Ever since I came to this House, for the last 15 years, every Chancellor of the Exchequer has been subjected to the same amount of weeping by the landlords of this country. Agriculture has had £30,000,000 in subsidies, and the major portion of that money has gone to the landlords. [Interruption.] There are only two people to whom it could go, either to the agricultural worker, the producer, or to the landowner. The producer has not had it; no one can deny that. The only individual who has had it is the landowner. As I said in an interjection, the only solution whereby the landlord can be saved from this business is to take the land from him. He has no heaven-born right to the land. It is only because the working classes of this country are so tolerant that they allow the landlords to own the land.

The Deputy-Chairman

Order.

Mr. Kirkwood

I do not wish to take advantage of the Chair, but I want the Committee to understand that we on these benches are always watching the landlords. They have the brass face upon every occasion to come to this House and plead as though they were going to the poor house. We just keep our eyes on them. That is all I want to say.

4.29 p.m.

Mr. Michael Beaumont

I do not wish to follow the hon. Member for Dumbarton Burghs (Mr. Kirkwood), but I would merely say to him that if he and his colleagues are really keeping their eyes on the landlords, they cannot be keeping their eyes upon them very closely, if they seriously believe that £130,000,000, or whatever figure the hon. Gentleman mentioned, has gone into the pockets of the landlords. That has been successfully answered by the right hon. Member for North Cornwall (Sir F. Acland). I appreciate the point of the hon. Member for Dumbarton Burghs with regard to land ownership, though I do not agree with it, but if there were an argument to induce the Chancellor of the Exchequer or the Government, who do believe in private property, to look well upon this Amendment, it would be the one that the hon. Member has just used. These unwise and grossly ignorant attacks upon landowners must convince anybody that they are being badly treated.

Mr. Kirkwood

We are not ignorant.

Mr. Beaumont

I acknowledge the hon. Member's intelligence. I am not saying that he is foolish, but that he is grossly ignorant when he talks on this subject as ignorant as I should be if I started to talk about shipbuilding.

Mr. Kirkwood

We are not under cross-examination.

Mr. Beaumont

I want to add one further consideration to the plea made by my hon. Friends in support of the Clause. There has been a great deal of talk lately in this House and outside about the preservation of the countryside, and rural planning. We passed a few years ago a particularly fatuous and unworkable Measure, the Town and Country Planning Act, and I am informed that there is some suggestion of bringing forward another in the not too distant future. It is perfectly futile trying to preserve the countryside when you have this kind of burden on the rural landlord. If the Chancellor of the Exchequer could either now or at some future time give some relief in this matter it would be an inducement to rural landlords to schedule their land for all time for agricultural land, but as things are at present we are in a vicious circle. The local authorities cannot afford to pay the compensation for the scheduling and development of land as rural land and open spaces, while the rural landlord, knowing that when he dies his rela- tives will have difficulty in regard to Estate Duty, when he gets an opportunity of selling his land for development either as residential or factory land, cannot in justice to his heirs refuse to sell.

Until the question of Death Duties on rural land is finally dealt with and some alleviation is given I do not think that it will be possible to do anything really effective towards preserving the countryside. Whether we can preserve it at all under modern conditions I do not know, but I am certain that we cannot preserve it when these burdens are continually hanging over the heads of landowners.

4.33 p.m.

The Financial Secretary to the Treasury (Lieut.-Colonel Colville)

It will be convenient to the Committee if I offer a few words on the Amendment at this point. The Debate seems to be widening beyond the actual Amendment. The hon. Member for Dumbarton Burghs (Mr. Kirkwood) raised the old issue of the nationalisation of the land. While I cannot go into that question I might remind him that from the revenue point of view that proposal might be dangerous, because if you nationalise the land it cannot pay taxes to the Exchequer. My hon. and gallant Friend who moved the Amendment regarded it as a proposal for giving further relief from Estate Duty for agricultural land. The Amendment is to secure that for the purpose of Estate Duty agricultural propery should not be aggregated with other property. The law in regard to aggregation is laid down in the Finance Act, 1894, Section 4. I should like to read the relevant Section of that Act, as amended by subsequent legislation: For determining the rate of Estate Duty to he paid on any property passing on the death of the deceased. all property so passing, in respect of which Estate Duty is leviable shall be aggregated so as to form one estate, and the duty shall be levied at the proper graduated rate on the principal value thereof. The proposed new Clause—and here I am at issue with the hon. and gallant Member for Tiverton {Lieut.-Colonel Acland-Troyte)—would break new ground, in that it would make agricultural property an estate by itself, even when the deceased had an interest in it. The Clause would have a further effect, which has not been considered by the Committee. Unlike the existing relief which is given in the Finance Act, 1925, Section 23, this Clause applies not only to the agricultural value of agricultural property but to the entire value of such property, including amenity value and building value. Not only does it apply to this entire value the lower rates of Estate Duty which Section 23 of the Finance Act, 1925, only applied to the agricultural value of the property, but the entire value of the property for the purposes of aggregation will be an estate by itself. This would mean that it would operate in relief of all non-agricultural property, real or personal, which passes on death, by reason of the non-aggregation of the agricultural property for the purpose of determining the rate of duty chargeable.

I am advised—and this is a very cogent reason why my right hon. Friend cannot accept the new Clause—that it would cost nearly £2,000,000. The hon. and gallant Member for Newbury (Brigadier-General Brown) said, and I agree with him, that it is very desirable to keep as much capital as possible in agriculture, that is, in the land. The hon. and gallant Member will also agree with me that at the present time the resources of the Exchequer must be conserved in every possible way, and a proposal which would lose nearly £2,000,000 to the revenue cannot be entertained, apart from the undesirable features which I have sought to explain. I regret, therefore, that it is not possible to accept the new Clause.

4.38 p.m.

Mr. Garro Jones

The Financial Secretary has not been unkind in his reply to those hon. Members who have proposed the new Clause. I should not have risen to give additional reasons for the rejection of the Clause had not the hon. Member for South Kensington (Sir W. Davison) assumed that the silence which had been maintained on these benches before my hon. Friend the Member for Dumbarton Burghs (Mr. Kirkwood) spoke was due to acquiescence in the proposal. It was rather due to a feeling that the new Clause ought not to be taken too seriously. The hon. Member for South Kensington appeared to think that the small minority sitting on these benches is not entitled to have its views expressed. It is true that we only represent about 8,000,000 or 9,000,000 workers, and the more enlightened section of the electorate, but on the matter of agricultural land I think our views are entitled to as much weight as those of the landowners.

One point which the Minister omitted to emphasise was that in response to every argument brought forward to-day this House passed in 1925 a Measure which gave substantial relief to the holders of agricultural land in regard to Estate Duty. The Financial Secretary mentioned that fact but he skipped very lightly over it. That was the full response to the arguments addressed to us to-day. The Minister said that this Clause would include various amenity values, whereas the concession given under the Act of 1925 did not include amenity value. I think that was putting a minor interpretation upon the concession of 1925 because, for instance, a large and comfortable country house can be included in the benefits and reliefs given under the Act of 1925. That is to say, if I am the fortunate proprietor of an estate comprising 25 farms, and for the better enjoyment of my life I purchase such an estate, which includes a large mansion in the middle of it, then, in spite of the fact that no farm is attached to that mansion, I am able to count that country house as agricultural property and to secure relief upon that portion of the estate although there has not been any single act connected with agriculture carried out from that country house. Therefore, I might include £20,000, £30,000, or £40,000 which will be counted for the benefit given under the Act of 1925. An hon. Member opposite appears to scoff at that statement, but he must know as well as I do that some of these country houses are counted in at a value of £20,000, £30,000 or £40,000 for this purpose.

Mr. Assheton

I should like to know who would give £40,000 for most of the country houses?

Mr. Garro Jones

I was not speaking of the majority of country houses but of the extreme case. The average value of the type of house, which is most concerned in these Death Duties and for which the appeal is being made to-day, varies from £8,000 to £12,000, but a considerable number of country houses which derive this benefit are worth up to £40,000. A further argument was that if the estate is cut down by the necessity to find money for paying Estate Duty it will destroy the administrative organisation of the estate. That is a perfectly futile argument, because, like every other organisation, the organisation of an agricultural estate can be modified and reduced to suit the size of the estate. That argument would apply to every conceivable form of human activity, certainly industrial activity. All that has to be done is to reduce the costs and bring them into proportion with the turnover and income from the estate. There is one further method that I would suggest to hon. Members and their friends who find themselves in difficulty, and that is that they can insure against the payment of Estate Duty. That is a method as sound as any of the others which have been given. I hope that we have had an end of landed interests, posing as agricultural interests, dominating the legislative proposals of this House. It is altogether erroneous to suggest that the landed interests are synonomous with the agricultural interests. Land ownership is no essential part of the prosperity of agriculture, and I can concur in the policy mentioned by my hon. Friend the Member for Dumbarton Burghs, that the one solution of these difficulties, which cause such anxiety to the owners of landed property, would be to bring the land under national ownership and control.

4.43 p.m.

Sir Edward Grigg

I hope that the reply given by the Financial Secretary, which seemed to me very reasonable and cogent as far as the present year is concerned, does not mean that the Government will not be prepared to give further and sympathetic consideration to a new Clause of this kind in the coming year. I suggest that for a special reason. Hon. Members above the Gangway seem to be convinced that this is a plea entirely for landlords. I do not regard it as such. It is a plea on behalf of the whole agricultural industry. There is one consideration that I should like to put. The Government have been spending a great deal of money in dealing with the acute crisis in agriculture caused by the fall in prices and they have had very great success in dealing with that acute crisis. That crisis is beginning to pass and prices are beginning to rise, but all the time there has been going on in agriculture a much more fundamental crisis, which is due to the fact that the old system of providing capital in agriculture has been falling more and more into disuse and abeyance.

The lack of capital in agriculture is due to more than one cause, but one of the main causes is the incidence of Death Duties upon agricultural property, and I suggest that the time is coming when it may be important to spend money rather upon the fundamental crisis and to deal with the fundamental crisis in agriculture, even if it means spending less in the way of subsidies to meet an acute and passing crisis. If the Government say that they cannot consider this new Clause this year and that it would mean the loss of £2,000,000 to the revenue, certainly those of us who have been bringing this matter to the notice of the Government cannot complain, and for that reason I should not agree to our pressing the new Clause to-day, but I hope that the bearing of the whole of this question upon agricultural prosperity will be considered in the coming year.

4.45 p.m.

Mr. Gallacher

The intellectual hon. Member opposite who spoke before the Financial Secretary had the temerity to refer to the hon. Member for Dumbarton Burghs (Mr. Kirkwood) as being ignorant and, therefore, I rise in fear and trembling to continue the Debate. The landlords for whom the hon. Member spoke are threatened with dire poverty unless the new Clause is accepted. Is that what we are supposed to presume? Time and again we hear these pleas for these most unfortunate landlords. All sorts of pleas are being made on their behalf and all sorts of suggestions are put forward as to what should be done to meet their difficult situation. How considerate, how tender hearted, are hon. Members opposite when it comes to a question of the landowners. Hon. Members opposite do not suggest or recommend anything when a workman loses his job and goes on the means test. Do you find hon. Members opposite giving any consideration to him? If landlords are faced with such a situation that they find a difficulty in paying their way, let them cut down their mode of living. Have they ever tried that? No. All the time the landlords of this country want special privileges and to be supplied continually with funds, for which they render no service at all.

I was speaking one night at Perth, the centre of a landed district and partly agricultural, and I had some nice things to say about landlords and the land. After the meeting a gentleman who was a landowner came to me and in something of the same manner as the hon. Member has referred to the hon. Member for Dumbarton Burghs told me that I did not know what I was talking about. He said that there was this and that and the other burden on the land, and as a matter of fact that his land was a liability and he would give it away at any time. I said "Hand over the deeds; I will take it." But did he? No.

Mr. Everard

I have got some land which I would be prepared to give to the hon. Member if he would take it. There is a heavy drainage rate on it as it is under water for most of the year. I should be delighted for him to have it.

Mr. Gallacher

I shall be prepared to make arrangements to take over the land, and I shall be very pleased to accept the services which the Government propose to give in connection with land drainage. I can assure the hon. Member that if he wants to get rid of his land I will find him a taker without any difficulty. Those who talk about the pitiful plight of the landlords seem to forget the amount of money which they are able to get for their land whenever building operations are going on. The landlord pays a tax on land which is rated at £2 or £3 per acre, but when a municipality wants the land for building it is not £2 or £3 per acre which is wanted, but £200 and £300. The subsidies which have been paid by the Government, as the hon. Member for Dumbarton Burghs has said, go either to the landlord or to the mortgagee, that is to the big banks. That is where the subsidies are going. In many cases the farmer does not get it, or if he does it is only a small bit, and certainly the agricultural labourers do not get it. This proposal to relieve landowners of the responsibility for paying their taxes has nothing whatever to do with the farmer or with the agricultural labourer. It is the same old policy which has been pursued from time immemorial by the landlords, rob wherever they get a chance and refuse wherever there is an opportunity to meet their obligations. I am glad the Treasury on this occasion is not going to submit to the wailings of the landowners, and is not going to hand over to them any more money. They have been given quite enough.

4.51 p.m.

Mr. Radford

I do not propose to occupy more than a few moments because the decision of the Government has been announced by the Financial Secretary. I want to say that I think hon. Members on this side are asking the Government for more than they realise when they ask that the principle of aggregation shall be done away with in regard to a particular item of agricultural property. Since Death Duties were first imposed the principle of aggregation has been recognised, and if we assent to the exclusion of the principle of aggregation in connection with agricultural property, the argument can be advanced that a private business, of which it is difficult to dispose, left by a testator, should also be free from the principle of aggregation. A man who leaves £20,000 in agricultural land may also leave £200,000 in gilt-edge securities. Is that £20,000 agricultural estate to escape the duty? That is the immediate result if we agree that it shall not come into the estate. It has been implied in some of the arguments used by my hon. Friend on this side that in many cases the Death Duties can be paid only by raising a mortgage on the agricultural property itself. If that is so then the new Clause which they are moving will be of no value. If the estate is all that the testator is leaving there will be no benefit from aggregation.

Mr. M. Beaumont

Property does not necessarily go to one legatee. What often happens is that the funds aggregated are left to other relations and the residuary legatee is left the land.

Mr. Radford

I think the Estate Duty payable in respect of the testator's estate is not a matter for the legatees but is a matter for the trustees. At any rate, I think His Majesty's Government would look at the estate as a whole to see that the Death Duties were paid. However, I have made my point. I think my hon. Friends are asking for something of a very far-reaching character when they ask that a particular part of an estate should be exempt from the principle of aggregation, which has always ruled the application of Death Duties.

4.54 p.m.

Captain Heilgers

I want to make only one or two remarks on the observations of the hon. Member for North Aberdeen (Mr. Garro Jones). He emphasised in particular the large incomes from country houses surrounded by farms. Is that entirely true? Is it not the case that the greater part of the country is in the hands of the owner-occupier of his farm, who in many cases are very small men. I am one of them, and in the case of those who have not as much money as I have their farms, when they die, are sold to meet Death Duties.

Mr. Garro Jones

The hon. and gallant Member has missed my point. The amount of Estate Duty payable by the owner of a small farm is negligible and would not require the farm to be sold up. I was referring to large country houses which do not play any part in the agricultural administration of the estate; nevertheless, it would receive a proportion of relief from Estate Duty given under the Act of 1925.

Captain Heilgers

My point is that such estates are vanishing quickly and that the greater proportion of the country is in the hands of the small owner-occupier of farms. I do not agree with the hon. Member. If a man leaves, say, £4,000, probably his farm would have to be sold and broken up to meet Death Duties. There is one other point, although it does not really worry me very much because I am a bachelor.

Mr. Ede

While there is life there is hope.

Captain Heilgers

I thank the hon. Member for his encouragement. I live in the countryside and I see capital going from the land. One of the things which are very much hampered by this depletion of capital from the countryside is rural housing. You may see many houses going up but they are on private estates, because people cannot afford to put up houses on agricultural estates if they have to face the heavy burden of the Death Duties. I would remind hon. Members that we have to face many extra expenses in the matter of buildings. We have to put up elaborate cow-sheds to conform with the regulations to-day, and in many other ways landlords' expenses are much greater than they were before the War. I put the average outgoings of an estate to-day as something between 15s. to 17s. in the £, and that leaves extremely little margin for the landlord to carry on. If he has to find these Death Duties as well it means that the estate will have to be broken up, with dire results to the countryside.

It must be remembered that these burdens sometimes come very quickly. I have an instance in my own constituency, the Grafton Estate, a very large estate. The former Duke of Grafton died two years ago, and his grandson who succeeded him was killed in a motor accident within a year of succession. That large estate has had to face the burden of Death Duties twice within a year. In cases like this it does not mean that the landlord alone suffers but that the farmers and workers on the land suffer as well.

Lieut.-Colonel Acland-Troyte

I cannot understand how this proposal will cost £2,000,000, considering the fact that the total amount received from land is only about £2,000,000. I think there must be something wrong in the calculation of the Financial Secretary. However, in view of the figures he has given and in the hope that the Government will give further consideration to this matter and possibly bring in some alteration next year, I beg leave to withdraw my Motion.

Motion and Clause, by leave, withdrawn.

NEW CLAUSE.—(.Relief from double. Taxation.) (1) If His Majesty in Council is pleased to declare—

1. (a) that any income which is chargeable to British Income Tax is also chargeable to Income Tax payable under the law in force in any foreign state; and
2. (b) that arrangements, as specified in the declaration, have been made with the government of that foreign state with a view to the granting of relief in cases where such income is chargeable both to British Income Tax and to the Income Tax payable in the foreign state,

then, unless and until the declaration is revoked by His Majesty in Council, the arrangements specified therein shall, so far as they relate to the relief to be granted from British Income Tax, have effect as if enacted in this Act, but only if and so long as the arrangements, so far as they relate to the relief to be granted from the Income Tax payable in the foreign state, have the effect of law in the foreign state. (2) Any declaration made by His Majesty in Council under this section shall be laid before the Commons House of Parliament as soon as may be after it is made, and, if an address is presented to His Majesty by that House within 21 days on which that House has sat next after the declaration is laid before it praying that the declaration may be revoked, His Majesty in Council may revoke the declaration, and the arrangements specified in the declaration shall thereupon cease to have effect, but without prejudice to the validity of anything previously done there-under or to the making of a new declaration. (3) The obligation as to secrecy imposed by any enactment with regard to Income Tax shall not prevent the disclosure to any authorised officer of the foreign state mentioned in the declaration of such facts as may be necessary to enable relief to be duly given in accordance with the arrangements specified in the declaration.—[Mr. Peat.]

Brought up, and read the First time.

5.0 p.m.

Mr. Peat

I beg to move, "That the Clause be read a Second time."

The proposed new Clause seeks to give the Government power by Order in Council to enter into arrangements with other countries for the relief of double taxation. Such arrangements have already been entered into in specific instances with regard to shipping and agencies. The object of the proposed Clause is that the Government should take powers of a more general character to enter into arrangements for the relief of double taxation where income is subject to it. The question of double taxation has been raised in the House on many occasions and has also been the subject of very careful consideration and investigation by the League of Nations, the International Chambers of Commerce and the Federation of British Industries. When discussing this matter with hon. Members and with people outside the House, I have often been asked what double taxation is. It has been prominent in their mind that taxation is always a difficult subject, and that consequently double taxation must be doubly difficult to understand; and in those circumstances they have been apt to say that the matter is too complicated and they do not want to hear any more about it. In fact, double taxation is fatally easy to understand. Double taxation is where one income is taxed twice, by two States. The other day the Chancellor of the Exchequer, dealing with National Defence Contribution, used the example of a woman who asked her fowls whether they would prefer to be roasted or boiled: double taxation is being both roasted and boiled. I understood from the Chancellor of the Exchequer that a taxpayer could probably survive being either roasted or boiled, but I can assure him that roasting and boiling is completely fatal.

The importance of double taxation has come very much to the fore in recent times. If the Committee will permit me, I will quote one or two figures dealing with taxation in 1913–14 and the present time. In the United Kingdom in 1913–14 Income Tax was at the rate of 1s. 2d. in the £, and Surtax was, on incomes over £5,000, 6d. in the £ on the excess over £3,000. In 1936–37, Income Tax in the United Kingdom was 5s. in the £, and Surtax, on the excess over £2,000, started at 1s. 1d. in the £, rising to 7s. 2d. on the excess over £30,000 and 8s. 3d. on the excess over £50,000. In the United States of America, in 1913 the individual was taxed about 1 per cent., and in 1936 he was taxed 4 per cent. In 1913, the company was taxed 1 per cent., and in 1936 15 per cent. Surtax on the individual in 1913, on incomes over $20,000 started at 1 per cent., rising to 6 per cent., and in 1936, on incomes over $4,000, started at 4 per cent., rising to 75 per cent. Those figures speak for themselves. In 1913 and 1914 there might have been some reason for treating double taxation as of no importance, but to-day we cannot dismiss it from our minds as though it does not matter.

The new Clause which I am moving is a general Clause, but in the remarks that I make to the Committee, I shall give examples dealing with the position as between the United States of America and this country, because it is my hope that if the Government take powers in this case, they will use them in the first place as between the United States of America and this country. I will elaborate that side of my argument later. As far as I am concerned, the case is founded on two examples that I will give to the Committee. The first is that of a company, or an individual, who in times past, or even at the present time, has invested money in America. This example is of a company which invested money 50 years ago in a subsidiary company in America in order to sell its products there and to build up our export trade. That company, on every £100 profit that it makes on its American interests, pays £23 10s. in United States Federal Income Tax, and £19 in Income Tax levied by the United Kingdom on the balance which is transmitted to this country. Consequently, out of £100 profit, double taxation takes £42 10., and the miserable investor gets what remains, £57 10s. I submit that that can only be described as penal.

The other example I will give is one of the investment of brains and long years of hard work. A partnership firm in this country has for upwards of 20 years been developing a specialised patented process which has constantly been improved. Licences for the use of the patents have been granted in America to important manufacturing concerns on a royalty basis. The firm has offices in America, where it maintains a staff which is largely occupied as consultants in supervising the application of the process. Development of the American interests has been proceeding gradually, and has now come to fruition. As the partners in the English firm have a place of business in America, they are liable to be taxed as American residents on the full amount of the profits both from royalties and professional work, supervision and so on. They are thus liable both to the American normal tax and the American Surtax, which is a graduated tax varying with the amount of income. On the balance of profits remaining after payment of the American tax, they are liable to the British tax at the present 'standard rate of 5s., and British Surtax. In this particular case the aggregate taxation may, if the anticipated income is received, amount to approximately 70 per cent. The income in the immediate future is likely to be substantial, but it represents the reward of 20 years work and considerable expenditure in America which is only now becoming productive.

The result of this double taxation is that one of our best methods of getting export trade, of getting men in this country employed on the products which are sent abroad, and of very usefully investing our capital, is being strangled. It is impossible that people should be taxed to the tune of 70 per cent., or even 43 per cent., on the profits they make. This world is becoming divided and cramped by great barriers to trade, tariffs and so on; but this is a barrier which has grown very high already without the attention of the House or the country being called clearly enough to it. I believe this is one of the most sinister barriers and one which strikes at what is probably the best method we have of improving our export trade. It reacts very strongly on employment, and will certainly become most important when the domestic demand in this country falls off and we find ourselves once more calling for export markets. The United States of America have already realised the danger. American nationals who come over here are allowed relief from double taxation, and the result is that we find American concerns in this country prospering, selling their goods and going ahead in a very successful way. There is thus introduced a complete injustice as between the American business man and our own business men, who are not treated the same.

I shall be told probably that the Chancellor of the Exchequer cannot afford to give any relief from the point of view of double taxation, that the same is true in other countries, and that it is against the interest of any country that there should be relief from double taxation. In February last, I asked in the House for figures which would indicate what would be the cost if relief were given, but no figures were forthcoming. If I am to be given the same answer again, I hope it will be sustantiated by figures. In this connection, I would very much like to know what it cost this country and the Dominions when relief from double taxation within the Empire was given. That was a first-class action from the point of view of our trade generally and it has made the Empire a united trading concern. That relief from double taxation is by no means complete, as it is only to the extent of about 50 per cent., but what did it cost? Was it a very important item, and if so, what was set off against the cost? Was it the fact that Empire trade could be increased and that we could get our investments and products circulating more freely?

We are always being told that things will cost too much if they are not vitally important and of political significance. I shall be told that a little think such as this will cost too much. Cannot we for a short time get away from the dead hand of arithmetic, and look ahead and take a long view? I do not at this moment ask the Government to make this sacrifice of taxation, but simply to make a gesture to show plainly to the House and the country that they are prepared at some time or another to relieve this tremendous burden. In considering the matter, I. hope the Government will not be bowed down by the consideration of actual cost without any relation to the effects which would come from giving the relief. I believe that at the present time our trading position depends almost entirely upon our making arrangements for the future, and I think those arrangements for world peace and world trade almost entirely depend upon close co-operation between the British Empire and the United States of America.

I think that the present trend towards trade agreements and economic relationships between the Empire and the United States of America must have as an essential feature relief from double taxation. The figures which I have given to the Committee make talk of trading agreements, and the like, ridiculous. I want to see world peace, and I believe that a recovery in world trade is essential to world peace; and as I believe that recovery depends upon the situation as it may be made to exist between the Empire and the United States of America, I make a strong plea that relief from double taxation shall at least be given a chance of being put into operation by the acceptance of this proposed new Clause. In support of my arguments, I will quote from the "Times" of 29th June some remarks made by the Prime Minister of Belgium, who said: Either we seize the opportunity boldly, rise to the occasion, liberate international trade from the barriers which strangle it and go forward to a new period of prosperity, or we miss the opportunity and soon find ourselves faced with difficulties similar to those of bitter memory, which were for us the heritage of the last depression. Some hon. Members may think that I am overstating the case to-day when I say that relief from double taxation is one of the fundamental things in the freeing of international trade. From my own point of view I believe it most sincerely. In support of that I would quote Mr. Cecil Smith, President of the British Empire Chambers of Commerce, who wrote: In the meantime it has been officially decided that the British Government will participate in the forthcoming World's Fair in New York, and there is continuous talk about a reciprocal tariff treaty. I am still firmly of the opinion that both these steps for improving trade relations between America and the United Kingdom are wasted efforts—if indeed they are sincere efforts—while this taxation situation remains unaltered. There is another important feature. America is willing to enter into reciprocal arrangements and has already done so with France. She has told the world that she is ready to do so by her Revenue Act of 1936. The position in America has become dangerous, because, although they have made this offer and even partially carried it out, they are not prepared to go on for ever playing a one-sided game. I have it on the best authority that Members of Congress and public opinion generally in the United States are becoming restive. They are looking for fresh revenue and one source to which they look is the non-resident alien who is at present taxed to the tune of 10 per cent. on what is remitted to this country. There is a great deal of talk in American business circles to the effect that that should be raised as high as 35 per cent. or 40 pet cent. Such figures may be absurd, but if it were to be raised, say, to 25 per cent. or even 20 per cent., it would make an enormous difference to a large number of people who have done a great deal for the trade of this country by investing money in America in the attempt to sell their products. This Clause is supported by a considerable number of hon. Members and I believe support for it is not confined to one side of the Committee. It is supported almost unanimously by the business community. The chairman of the English Sewing Cotton Company at the annual general meeting of that company in May last referred to the position and said: The new American taxation situation is, I fear, too complicated to be gone into in detail but I assure the shareholders that out of every £100 of profit made by the American Thread Company (one of the subsidiaries) £43 is payable in American and British Income Tax. Then we find that Lord Selsdon recently stressed the effect on holding companies and said that the situation in regard to double taxation was now so serious that holding companies might be forced to move their residences from this country to other countries where they would be relieved of this burden. It may be said by hon. Members opposite that that is an idle threat, and that those companies know that it will pay them better to remain here. But when you get up as high as 70 per cent. or even 43 per cent. or whatever it happens to be, this becomes an important item beside which the National Defence Contribution pales into insignificance.

Mr. Silverman

What limit of income would have to be reached before you would have to bear double taxation to that extent?

Mr. Peat

I admit that it would be a very high figure. If you were earning 100,000 dollars you might be in the region of 60 to 70 per cent. It seems to me that the proposed new Clause is a moderate one. It does not ask the Government to take any deliberate action at present. It asks them only to continue a policy which has already been inaugurated in two specific cases, and to make that policy general. It asks the Government to arm themselves with powers to carry out those arrangements if and when the time seems ripe for doing so. I cannot conceive any good reason for not accepting the Clause. Are the Government afraid that if they accept it they will be tempted to break away from the restraining hand of Somerset House? Somerset House always says, "We are not here to legislate, but this will cost you so much." Is the Chancellor of the Exchequer afraid that he might be tempted to take a longer view than that of mere pounds, shillings and pence and the immediate result to the Treasury? I, personally, shall not be satisfied on this matter with an answer which merely says that we have made out a very interesting case but that there is nothing doing at present. An answer of that kind must be taken by the business community as a slamming of the door in the face of those who are seeking the redress of this grievance and relief from an unjust and inequitable burden.

5.22 p.m.

Sir Alan Anderson

I support the Motion. We have listened to a very full and, I think, an extremely illuminating speech from my hon. Friend the Mover, who speaks with professional knowledge of the subject. Once we get into the consideration of the details of this question the difficulties are immense, but the general point at issue is easy to grasp. I think most of us agree that direct taxation is the best form of taxation that has been or can be devised. It collects more money with less disturbance than any other form of taxation. We have led the world in this respect. By direct taxation we have produced enormous revenue and the whole world has followed our example. Everybody is doing it, more and more every year. But when direct taxation passes a certain point then injustices and inequalities which could be overlooked while a low rate of tax prevailed, become oppressive and intolerable.

I have not the knowledge possessed by my hon. Friend who spoke last, of the details of taxation, but I have been for many years personally acquainted with the difficulties of trading in several countries. We, the shipowners of Great Britain for some years past have been relieved of this burden by an agreement which was made with a previous Government and I do not think any harm has been done by that agreement while a great deal of difficulty and injustice has been prevented. Here we have another suggestion. The United States are making offers and I join with my hon. Friend in expressing an urgent desire that His Majesty's Government should in the way proposed here and in other ways as well, meet the United States halfway in trying to bring the trade of the world back to its former position and do away with the unnecessary, irritating and obstructive barriers of nationalism.

I spent last week in Berlin at the meeting of the International Chamber of Commerce. I took away from that Conference what I think was in the minds of all the people from many nations who were assembled there, namely that there is a chance now, but a chance which will not last for ever, for the two great creditor countries, working together, to lead the whole world forward in this matter if we only make a move now. But as I say we may not have that chance very long. This is one of several directions in which we can show that we are forthcoming to meet our neighbours in trade. We are asking the Government to do something to which there can be no logical objection. The only objection which can be taken to this proposal is the huckstering objection that, by being unfair in this matter we gain a little advantage to ourselves. That is a bad argument and I urgently support the plea that the Government should do away with this double taxation as quickly as possible.

5.26 p.m.

Lieut.-Colonel Colville

I rise at this stage not because I wish to stifle discussion but because my hon. Friends have raised a very important and interesting issue to which I desire to reply. The pro- posed new Clause is designed to enable arrangements to be made with foreign States for relief from double taxation where profits are liable to tax both in the foreign country and in the United Kingdom. I am doubtful whether the proposal would carry us along the road which my hon. Friends wish to travel, but before coming to the specific proposal, I wish to deal with a more general aspect of this subject. Under the existing law, subject to certain exceptions, a British concern trading in a foreign country may be liable to tax in that country on its profits and the only relief which is given from our Income Tax, in respect of that foreign taxation is the allowance of the foreign tax as a deduction in computing profits. Where a British concern is trading in any part of the Empire and is liable to Dominion or Colonial taxation on its profits, our law provides a system under which relief is given by this country up to an amount not exceeding one-half of the standard rate of British Income Tax, in respect of the double charge of tax. This arrangement for relief from double taxation applies throughout the Commonwealth.

The proposed Clause is directed, in principle, towards the institution of that or some other form of relief from double taxation in favour of British concerns trading in foreign countries. I have already mentioned that there are some exceptions to the general rule that double taxation relief is given in respect of foreign taxation and that the law already provides for relief—a fact which was, I think, referred to by the hon. Member for the City of London (Sir A. Anderson) —in the case of air transport, shipping and agency business. The Clause is indeed taken, word for word, from the existing Income Tax law In regard to those services. Under Section 18 of the Finance Act of 1923 and subsequent enactments, there is power, by Order in Council, to enter into reciprocal agreements with any country whether a foreign country or a Dominion, for the relief from taxation of profits arising from air transport, shipping and agency business. Under this provision a large number of agreements have been made with foreign countries providing for the reciprocal exemption of profits from taxation on the basis that the country in which the control of the business is situate alone charges the profits to tax. At the present time there are some 20 agreements in force with 14 different countries, including an agreement with the United States as regards shipping.

The new Clause proposes in effect to extend our powers in regard to the making of agreements so as to enable relief from double taxation to be given for all kinds of businesses and not merely for the particular ones which are covered by the Act. But here comes the difference. Unfortunately, there is no reason to believe that there is an acceptable basis on which any such general arrangement could be made with any foreign country, and I feel that it should be a condition precedent to legislation that there should be some definite idea as to what could be done. My hon. Friend the Member for Darlington (Mr. Peat) and also my hon. Friend the Member for the City of London referred to our trade agreements, of which I have had a good deal of personal experience, which has taught me that it takes two sides to make a bargain, and in this work of securing relief from double taxation that is particularly true. I hope the hon. Member will bear in mind, when he says that the Government must not be inactive, that we must have a reasonable expectation of being able to secure an agreement satisfactory to both sides, not only to the foreign country concerned, but also to ourselves.

Mr. Peat

Before my hon. and gallant Friend sits down, will he deal with what is, to my mind, the obvious invitation of the United States to enter into such an arrangement?

Lieut.-Colonel Colville

Perhaps my hon. Friend will allow me to continue. There must be some definite prospect of an agreement with foreign countries on some acceptable basis before Parliament is asked to pass legislation enabling agreements to be made, and I suggest to the Committee that until that stage is reached, it is premature to ask Parliament to give statutory powers enabling agreements to be made. Although the existing provisions for relief in the case of air transport, shipping, and agency businesses have gone a considerable way towards dealing with this problem, the discussions that have been going on for many years—and this is no new, problem, as my hon. Friend knows—particularly in the League of Nations, where this question has been examined by many committees, have not thrown up any solution of the general problem. I am advised that there is no reason for us to believe that foreign countries would accept the system of double-taxation relief which applies within the British Commonwealth, even if we were prepared to extend it to them.

Some of the solutions that have been suggested—and in this matter the Government have not been lacking in advice, which has come from many quarters—for the settlement of the general question would provide a higher measure of relief to the foreign country, at the expense of our Exchequer, than is given by our system of relief within the Empire, and any solution having that result is not one that would be acceptable to Parliament. Let me give an example. It has been suggested that this country should give the same relief as is given by the United States in favour of its businesses abroad. The United States, to digress for a moment, allow the foreign tax paid by trading concerns in respect of their profits made abroad to be set off against the United States tax payable on those profits. In the case of British concerns which are subject to double taxation within the Empire, relief is given from the United Kingdom tax only up to half the standard rate, whereas in the United States the relief is of the whole amount. It seems quite clear that any extension of the relief to foreign countries must be coordinated in some manner with the relief obtaining within the Empire, so as to ensure that no more favourable relief is given in respect of foreign trade than is given in respect of Empire trade. I hope my hon. Friend will see that there would be a real difficulty attached to extending to firms trading between this country and foreign countries a greater relief than is given to those trading within the Empire.

I must add that while for the moment we have no evidence to lead us to believe that any acceptable basis for a settlement of the general problem is in sight as regards foreign countries, the Government will be prepared to give the most careful and sympathetic consideration to any proposal that may be made for dealing with this question. The hon. Member for the City of London spoke of a chance. If there is indeed that chance of an international understanding which he believes is in sight, we should not turn away from it. We are most willing to consider any suggestion that any country might wish to make, but until we can see some prospect of reaching agreement on some acceptable principle, we do not think the time is ripe for legislation such as my hon. Friend proposes. I hope he will pay particular attention to this point, that the absence of such provision as the Clause proposes will not hinder in any way the consideration of any proposal that may be put forward for dealing with this question, but we feel that it accords more with the constitutional position of this House in relation to taxation that the Government of the day should ask for statutory powers when they are in a position to explain precisely the use to which they will be put. That is, roughly, the issue between the hon. Member and his friends and ourselves to-day. It is not that we wish to stand in the way of useful and valuable agreements, but we feel that it would be an unconstitutional way of proceeding to take these wide powers unless we are ready to explain to Parliament exactly the way in which they would be used.

5.39 p.m.

Mr. Harold Macmillan

I hope my hon. and gallant Friend will not think me unduly critical of his speech if I say that he has once again provided us with an example of those admirable briefs that the Treasury Department prepare for Ministers. He has not taken this matter very much further, and while agreeing that neither this Clause nor the procedure which he has put out constitutes any definite step towards the solution of this problem—the Clause only gives the Government powers to deal with it, and my hon. and gallant Friend says he already has those powers—I hope that he will really give serious attention to this matter and that the Government will press it forward from a slightly different point of view from any which has yet been put before us. I think that many people feel that if there is to be a recovery and a revival of world trade, one of the first and most important aspects of that problem is the restarting of foreign lendings from the City of London. It is almost inconceivable that there should be any real revival of world economy as a single unit without the return of the English practice of lending abroad, and it is undoubtedly the case, particularly with the United States in recent legislation—and possibly in amending legislation it may be more the case—that there is rather a tendency on the part of subsidiary companies to sell out their holdings in America, where they are hard hit by double taxation, and to bring their money home in order to avoid that double taxation, than any pressure on or any inducement to English firms to develop once again the traditional British practice of lending abroad on a large scale.

I think this is a very important question, and not merely from the aspect that this may be a hardship to individuals. We are all accustomed to that, and anybody who pays Income Tax, at any rate, is accustomed to the hardships that the individual has to suffer, but this is much more important from the point of view of the development of foreign lending by English people. There was a time, at the beginning of the War, when we were very glad to have mobilisable, at short notice, very large amounts of foreign investments. The foreign investments which we hold to-day are a powerful reserve in the event of any danger, and it is to the interests of this country that those foreign investments should be built up again from every point of view. Undoubtedly the present system of double taxation acts as a deterrent rather than as an encouragement to the development of business overseas. The relief which has been given in the Empire has been, as the hon. and gallant Member said, advantageous to British industry and British investments. I am sure the hon. Member who moved this Clause would not suggest that we wanted to give foreign countries a greater degree of relief than we were able to arrange within the Empire, but I think that that argument which my hon. and gallant Friend used was not very powerful. What is important is that this subject should be seriously studied from those two points of view, first, because the strength of this country is immensely enhanced by the growth and power of its foreign investments, and secondly because the re-establishment of world trade is immensely increased by the free power of money to follow invention and intelligence from one country to another.

The effects of this double taxation when applied to low rates of tax may easily be neglected. When the rates of taxation, as in pre-War days, were very low, it did not very much matter, but at the high rates of taxation which are neces sarily a part of our modern civilised States, it has become a much more pressing problem, and I hope the Government will seriously consider the question from this double point of view, that it is in the interests of this country and in the interests of the general purpose of the revival of the world as a single trading and commercial unit.

Lieut.-Colonel Colville

I am not clear whether my hon. Friend is supporting this Clause or not.

Mr. Macmillan

I wish to support the Clause, because I think that if it were added to the Bill, it would be an indication that the Government were prepared to give careful consideration to this problem. There are many problems for many years to which the Government have told us they are giving careful consideration, and nothing particular is going to be done about them, but if this Clause were added to the Bill, it would be more than that; it would be a statement to the world that the Government did intend to give the question practical consideration and to embark, if necessary, upon a series of negotiations towards that end.

5.43 p.m.

Mr. Peat

When I moved this Clause, I wanted to get from the Government an admission, first of all, of the importance of relief from double taxation and, secondly, an admission from them that they would take action to relieve double taxation as soon as the conditions were ripe for such action. I was disappointed that my hon. and gallant Friend never referred to the advisability of getting rid of double taxation. He did not admit for a moment, so far as I could gather, that it was a bad thing and an evil which we should try to eradicate. But he has said that if the Government receive an invitation and ascertain that some other nation is willing to play, then the Government will consider this matter very carefully. I have no particular faith in careful consideration on the point of double Income Tax. It has been carefully considered now for some years past, but I can only leave it there. One must accept my hon. and gallant Friend's words as to what he intends to do, and that it is a very genuine statement that the Government intend to take this matter up and to deal with it as soon as they see favourable conditions arise. May I say that I am most surprised that he does not think that the United States Revenue Act, 1936, was an obvious invitation to this country to take some steps in that direction? If that is not a sufficient invitation to him I do not know what is. However, on the understanding that the Government admit it to be a growing evil which wants remedying and that they will take steps as soon as conditions are favourable, I beg leave to withdraw the Motion.

Motion and Clause, by leave, withdrawn.

NEW CLAUSE.—(Exemption from duty of agricultural implements and raw materials.) Goods imported into the United Kingdom of the categories specified in the Schedule (Agricultural implements and raw materials to be imported free of duty) to this Act, being articles used as implements or mw materials in agricultural production, shall be imported free of any duty.—[Sir F. Acland.]

Brought up, and read the First time.

5.46 p.m.

Sir F. Acland

I beg to move, "That the Clause be read a Second time."

All the articles set out in the Schedule mentioned in the new Clause are subject to duties, and I will go through them without mentioning those which are subject to only a 10 per cent. duty. They comprise the smaller number of articles. The larger number are subject to the higher duties, and I will mention what they are. These articles are subject to the Ottawa Agreements. Superphosphate is subject to 10s. a ton or 20 per cent., whichever is greater; sulphate of ammonia, £4 a ton; sodium nitrate, 20 per cent.; soya bean meal and cake, 20 per cent.; baskets, 30 per cent.; milk churns, 15 per cent.; forks, shovels, spades, scythes, sickles, hoes, 15 per cent.; hay and grass mowers, milking machines, cream separators, butter churns, 15 per cent.; ploughs, planters and seeders, reapers and binders, sheep shearers and clipping machines, threshers and tractors, 15 per cent.; steam boilers, spray pumps, hay sweeps, harrows, tedders, hay loaders and elevators, 15 per cent.; saddlery and harness, 20 per cent.; wire, 33½ per cent.; barbed wire, 20 per cent.; wire nails, 20 per cent.; wire netting, wire fencing, and wire mesh, 30 per cent.; galvanised hexagonal wire netting, £8 per ton or 20 per cent., whichever is less; and nicotine insecticides, 20 per cent.

The object that I have in suggesting that it would be justifiable that these articles should be free from duty is this: We know that under the general system of Protection agriculture normally is not and cannot be so much helped as many other things are. It seems inevitable that that should be so, and some of us felt years ago that it was bound to be so. I used to point that out when I was talking about the probable effects of Protection on agriculture in the years 1903–5. The reason is clear that no Government of a country which is mainly industrial can allow the cost of the main articles of food generally consumed to be steeply increased because of the immediate effect of pushing up the cost of living, bringing with it as it does labour difficulties which we all understand. It is interesting to notice that even as things are, with the low duties on articles of food, the cost of food index figure has gone up between May, 1935, and May, 1937, by the equivalent of 2d. in the shilling, which is a serious increase for unemployed and poorly paid workers. The main point that I am making, that no Government can allow really heavy duties on food, will not be disputed. That being so, the least we can do is to make sure that there shall be nothing in the structure of our fiscal system which will tend to put up the prices that the farmer has to pay. He gets the thin end of the stick from the point of view of his own protection, and it is rather unfair, that being so, that he should have to pay on this large range of articles.

The matter has a slightly wider aspect than that. There are, in connection with imports of foodstuffs, not only low duties, but restrictions and quotas of various kinds, and if and when the Government come to negotiate trade agreements, as we hope they will some day, either unilaterally or otherwise, we know that more exception will be taken by other countries to the quotas and other quantitative restrictions than are taken to the duties. We shall want, therefore, to be as free as we can be to modify those quotas some of which help the agricultural industry and surely we shall be a great deal freer to modify them if we are able to say to the farmer that he is in the position of not having to pay any duties on the things he needs to carry on his industry. I believe that the agricultural community has always more to gain by general prosperity than it is likely to gain from any system of quotas or duties, or even subsidies. The time may come when it will be necessary to prolong by any means we can adopt that general prosperity which has been having lately a favourable effect on agriculturists. In that connection it is interesting to realise that the wholesale price index of agricultural produce has gone up from June, 1934, to June, 1937, by 20 points, but that only four of those points were gained in the first two years and 16 of them in the last year. That shows that the effect of one year of general prosperity is much greater than the effect of two years of quotas, restrictions and the rest of it.

In order to prolong that general prosperity it may be, necessary to try to make agreements with other countries for the mutual removal of trade restrictions. If so, it may be desirable to modify some of the quotas which are now helping agriculture. My point is that it will be possible to consider that sort of thing and to do it with a much better grace and much more with the agreement of agriculturists if, by accepting this new Clause, we can convince farmers that they are not having to pay duties on the articles they buy. It may be said in criticism of this suggestion that the amounts which are raised by these duties are very small. If that be so, it is all the more reason for taking the duties off.

It is difficult for a private Member to calculate the amount of duties which are paid by farmers on the articles in the schedule to my new Clause. The difficulty is caused by the fact that we do not get separate figures in many cases of imports from foreign countries and the Empire. The nearest figure we can get is that the farmer has to pay £3,000,000 a year duties on these articles. That figure supports my argument. I think that, seeing how little, in order to keep the cost of food reasonably low, we can help the industry by Protection, it has a real claim that it should not have the things it is bound to buy made dearer by protective duties.

5.57 p.m.

The Parliamentary Secretary to the Board of Trade (Captain Euan Wallace)

I am afraid that this new Clause is one that the Government will not be able to accept, and I propose to deal with it on rather narrower lines than those in which the right hon. Gentleman moved it. This proposal is one which would really make a basic alteration in the whole structure of our tariff system. That is the point I wish to explain, and I hope that the Committee will forgive me if I do not follow the right hon. Gentleman in his more general observations, except to say how sincerely I agree with his dictum that agriculture gains more from the general prosperity of the country than from anything else. The basis of our tariff, as laid down in the Import Duties Act, 1932, provides for three things—first, for a general ad valorem duty of 10 per cent. on goods imported from foreign countries; second, for the imposition of additional duties above the general ad valorem duty on the recommendation of the Import Duties Advisory Committee; and third, for the exemption of goods or classes of goods from duty altogether, also on the advice of the Import Duties Advisory Committee. The relative section of the Import Duties Act provides as follows: The Treasury, after receiving a recommendation from the Committee … that goods of any class or description ought to be exempted from the provisions of this section, and after consultation with the appropriate department, may by order direct that goods of all or any of the classes or descriptions specified in the recommendations shall be added to the First Schedule to this Act. The First Schedule of the Act contained a list of goods exempted entirely from the general ad valorem duty. The Act goes on to provide that in coming to their decision the Import Duties Advisory Committee shall have regard to the advisability in the national interest of restricting imports into the United Kingdom and the interests generally of trade and industry in the United Kingdom, including those of trades and industries which are consumers of goods as well as those of trades and industries which are producers of goods. Therefore, it seems to the Government that there is in existence here appropriate and adequate machinery for dealing with the matter, and that in the circumstances there is no justification for taking what is really an arbitrary list of articles and removing that list entirely from the purview of the Import Duties Advisory Committee. Such a course would be unfair to British manufacturers of the implements which have been mentioned, who might easily be faced with the im- portation of competitive goods at dumped prices. I am perfectly certain that the right hon. Gentleman, who moved this new Clause in such reasonable and moderate terms, would not wish any section of our manufacturers to suffer that kind of prejudice, particularly in view of what he said about all standing-in together. We therefore think it is better to leave things as they are, because there is in existence an expert, impartial tribunal which can consider the question in all its aspects and make recommendations accordingly; and as I have already shown, it is a statutory duty of this Committee to have regard to the interests of consumers as well as producers.

The law does already recognise that machinery, to which some part of this Clause refers, is in a special position; and Section 10 of the Finance Act, 1932, contains special provisions for the exemption of certain consignments of machinery from duty under the Import Duties Act. Therefore, so far as the items enumerated by the right hon. Gentleman are concerned with machinery, here again there is a provision in existence entitling those goods to be imported free of duty if it is shown that similar machinery is not procurable in the United Kingdom. As to oil-seed cake and maize, we cannot put oil-seed cake or flat white maize on the list, because of our existing trade agreements with India and South Africa. Maize, other than flat white, is already on the free list, and it must remain there so long as the trade agreement with Argentina is in force. For these reasons the Government feel that at best this Clause is a proposal to do certain things the merits of which I do not imagine the Committee would wish me at this moment to discuss, for which there is an effective and adequate machinery already in existence, and I must therefore ask the Committee to reject the Clause.

6.5 p.m.

Mr. Wedgwood Benn

The hon. and gallant Gentleman has explained that this new Clause touches the basis of our fiscal policy, and I should like to ask whether it is not usual, when the basis of our fiscal policy is being discussed, for the Chancellor of the Exchequer to be present. It is an extraordinary thing that he should absent himself on the occasion of this particular Clause.

The Chairman (Sir Dennis Herbert)

The hon. Member knows that that is a matter which it is beyond my power to deal with.

Mr. Benn

In that case, possibly one of the Government Whips would intimate to the Chancellor that the Committee are discussing something which is of basic importance, and ask him whether he can make it convenient to attend the discussion on his own Finance Bill.

6.6 p.m.

Mr. Dingle Foot

I had not intended to intervene in this Debate, not being a representative of an agricultural constituency, but I think somebody should say a word of protest against the reply which we have just heard from the Treasury Bench. I do not think I have ever heard a speech like it in answer to a proposal of this kind. Really, it was a most perfunctory reply to what is admitted to be a most important issue. On an issue going to the very basis of our whole fiscal policy the Committee ought not to be fobbed off by a reference to the machinery which is set up under the Act of 1932. My right hon. Friend has, as was pointed out by the Minister, raised very wide general considerations. He raised a grievance of the agricultural community which has been expressed not only from these benches but has often been voiced in agricultural Debates by hon. Members opposite. He proposes to remove the duties on the raw materials of agriculture, and the Minister simply replies that there is machinery for doing this under the Import Duties Act, 1932, and that the farmers, if they think fit, can apply to the Import Duties Advisory Committee. In the first place that committee can deal with only one commodity or one group of commodities at a time. It is exceedingly unlikely that they could judge the broader considerations which have been put forward by my right hon. Friend in moving this Clause.

The main point I want to make is that the fact that the Import Duties Advisory Committee is in existence does not mean that we can throw off on to it all the responsibilities which ought to devolve upon Parliament. It does not mean that Parliament can abdicate its responsibilities in the matter of fiscal policy and really it is not sufficient, when a proposal of this kind is made, for the Minister to get up and simply say that it is not a matter for this House to decide but one for the Import Duties Advisory Committee. These matters should be decided not by a committee of experts, however expert they may be, but by this House, and while I am entirely in favour of the merits of this new Clause, apart from that I shall go into the Lobby against the Government as a protest against the speech we have had.

6.8 p.m.

Mr. Benn

I beg to move, "That the Chairman do report Progress, and ask leave to sit again."

I am moving this Motion in view of the obvious decision of the Government that the Chancellor of the Exchequer should not be present on the occasion of the discussion of what the Minister has described as a basic part of our fiscal policy.

Captain Wallace

I am sure the Chancellor of the Exchequer has not been absent intentionally. He said to me, "Will it be all right if I go away for a

few moments?" and I thought myself competent to deal with the Clause to the satisfaction of the Committee. I am perfectly certain that the Chancellor had no idea of intentionally absenting himself on such an occasion.

Mr. Benn

I did take the opportunity of asking that the Chancellor of the Exchequer should be present. The Parliamentary Secretary to the Board of Trade has told us that he has gone out for a moment. The Parliamentary Secretary has nothing to do with the Exchequer. This is a question of finance, and the Chancellor markedly absents himself and, therefore, in accordance with the immemorial practice of this Committee, I have moved to Report Progress.

Question put, "That the Chairman do report Progress, and ask leave to sit again."

The Committee divided: Ayes, 127; Noes, 225.

Division No. 262.]	AYES.	[6.10 p.m.
Acland, Rt. Hon. Sir F. Dyke	Hall, G. H. (Aberdare)	Noel-Baker, P. J.
Acland, R. T. D. (Barnstaple)	Hall, J. H. (Whitechapel)	Paling, W.
Adams, D. M. (Poplar, S.)	Harris, Sir P. A.	Parker, J.
Alexander, Rt. Hon. A. V. (H'Isbr.)	Harvey, T. E. (Eng. Univ's.)	Parkinson, J. A.
Attlee, Rt. Hon. C. R.	Hayday, A.	Pritt, D. N.
Banfield, J. W.	Henderson, A. (Kingswinford)	Ridley, G.
Barnes, A. J.	Henderson, J. (Ardwick)	Riley, B.
Barr, J.	Henderson, T. (Tradeston)	Ritson, J.
Batey, J.	Hills, A. (Pontefract)	Roberts, Rt. Hon. F. O. (W. Brom.)
Ballenger, F. J.	Holdsworth, H.	Rothschild, J. A. de
Benn, Rt. Hon. W. W.	Hopkin, D.	Rawson, G.
Broad, F. A.	Jagger, J.	Salter, Dr. A. (Bermondsey)
Bromfield, W.	Jenkins, Sir W. (Neath)	Sanders, W. S.
Brown, C. (Mansfield)	John, W.	Seely, Sir H. M
Buchanan, G.	Johnston, Rt. Hon. T.	Sexton. T. M.
Burke, W. A.	Jones, A. C. (Shipley)	Shinwell, E.
Cape, T.	Jones, Sir H. Haydn (Merioneth)	Silverman, S. S.
Charleton, H. C.	Jones, J. J. (Silvertown)	Simpson, F. B.
Cluse, W. S.	Jones, Morgan (Caerphilly)	Sinclair, Rt. Hon. Sir A. (C'thn's)
Clynes, Rt. Hon. J. R.	Kelly, W. T.	Smith, Ben (Rotherhithe)
Cocks, F. S.	Kennedy, Rt. Hon. T.	Smith, E. (Stoke)
Cove, W. G.	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, R. J. (Westhoughton)	Leach, W.	Stephen, C.
Davies, S. O. (Merthyr)	Lee, F.	Stewart, W. J. (H'ght'n-le-Sp'ng)
Day, H.	Leonard, W.	Strauss, G. R. (Lambeth, N.)
Dobbie, W.	Leslie, J. R.	Taylor, R. J. (Morpeth)
Dunn, E. (Rother Valley)	Logan, D. G.	Thorne, W.
Ede, J. C.	Lunn, W.	Thurtle, E.
Edwards, A. (Middlesbrough E.)	Macdonald, G. (Ince)	Tinker, J. J.
Edwards, Sir C. (Bedwellty)	McEntee, V. La T.	Viant, S. P.
Evans, D. O. (Cardigan)	McGhee, H. G.	Watkins, F. C.
Fletcher, Lt.-Comdr. R. T. H.	MacLaren, A.	Watson, W. McL.
Foot, D. M.	Maclean, N.	Wedgwood, Rt. Hon. J. C.
Frankel, D.	Mainwaring, W. H.	Welsh, J. C.
Gallacher, W.	Maxton, J.	Westwood, J.
Garro Jones, G. M.	Milner, Major J.	Williams, T. (Don Valley)
Graham, D. M. (Hamilton)	Montague, F.	Windsor, W. (Hull, C.)
Green, W. H. (Deptford)	Morrison, R. C. (Tottenham, N.)	Woods, G. S. (Finsbury)
Greenwood, Rt. Hon. A	Muff, G.	Young, Sir R. (Newton)
Griffiths, G. A. (Hemsworth)	Nathan, Colonel H. L.
Griffiths, J. (Llanelly)	Naylor, T. E.	TELLERS FOR THE AYES.—
		Mr. Whiteley and Mr. Groves.
NOES.
Acland-Troyte, Lt.-Col. G. J.	Everard, W. L.	Mills, Sir F. (Leyton, E.)
Adams, S. V. T. (Leeds, W.)	Fildes, Sir H.	Mills, Major J. D. (New Forest)
Albery, Sir Irving	Fleming, E. L.	Moore-Brabazon, Lt.-Col. J. T. C.
Amery, Rt. Hon. L. C. M. S.	Fox, Sir G. W. G.	Morgan, R. H.
Anderson, Sir A. Garrett (C. of Ldn.)	Premantle, Sir F. E.	Morris, O. T. (Cardiff, E.)
Anstruther-Gray, W. J.	Furness, S. N.	Morrison, G. A. (Scottish Univ's.)
Apsley, Lord	Fyfe, D. P. M.	Munro, P.
Assheton, R.	Ganzoni, Sir J.	Neven-Spence, Major B. H. H.
Baillie, Sir A. W. M.	Gibson, Sir C. G. (Pudsey and Otley)	Nicolson, Hon. H. G.
Balfour, G. (Hampstead)	Gledhill, G.	O'Connor, Sir Terence J.
Balfour, Capt. H. H. (Isle of Thanet)	Goodman, Col. A. W.	O'Neill, Rt. Hon. Sir Hugh
Balniel, Lord	Graham, Captain A. C. (Wirral)	Orr-Ewing, I. L.
Beamish, Rear-Admiral T. P. H.	Grant-Ferris, R.	Palmer, G. E. H.
Beauchamp, Sir B. C.	Granville, E. L.	Patrick, C. M.
Beaumont, M. W. (Aylesbury)	Grattan-Doyle, Sir N.	Peat, C. U.
Beechman, N. A.	Gretton, Col. Rt. Hon. J.	Pickthorn, K. W. M.
Beit, Sir A. L.	Gridley, Sir A. B.	Pilkington, R.
Bernays, R. H.	Grimston, R. V.	Ponsonby, Col, C. E.
Birchall, Sir J. D.	Gritten, W. G. Howard	Porritt, R. W.
Boothby, R. J. G.	Guest, Lieut.-Colonel H. (Drake)	Pownall, Lt.-Col. Sir Assheton
Boulton, W. W.	Guinness, T. L. E. B.	Procter, Major H. A.
Boyce, H. Leslie	Hannah, I. C.	Radford, E. A.
Bracken, B.	Harbord, A.	Rathbone, J. R. (Bodmin)
Brass, Sir W.	Harvey, Sir G.	Rayner, Major R. H.
Briscoe, Capt. R. G.	Haslam, Henry (Horncastle)	Reid, W. Allan (Derby)
Brocklebank, Sir Edmund	Haslam, Sir J. (Bolton)	Rickards, G. W. (Skipton)
Brown, Col. D. C. (Hexham)	Heilgers, Captain F. F. A.	Robinson, J. R. (Blackpool)
Brown, Brig.-Gen. H. C. (Newbury)	Heneage, Lieut.-Colonel A. P.	Ropner, Colonel L.
Bull, B. B.	Hepburn, P. G. T. Buchan-	Ross Taylor, W. (Woodbridge)
Burton, Col. H. W.	Hepworth J.	Royds Admiral P. M. R.
Butler, R. A.	Herbert, A. P. (Oxford U.)	Russell, Sir Alexander
Campbell, Sir E. T.	Higgs, W. F.	Russell, R. J. (Eddisbury)
Cartland, J. R. H.	Hills, Major Rt. Hon. J. W. (Ripon)	Russell, S. H. M. (Darwen)
Carver, Major W. H.	Hoare, Rt. Hon. Sir S.	Salmon, Sir I.
Cary, R. A.	Holmes, J. S.	Salt, E. W.
Castlereagh, Viscount	Hope, Captain Hon. A. O. J.	Sandeman, Sir N. S.
Cayzer, Sir H. R. (Portsmouth, S.)	Hopkinson, A.	Savery, Sir Servington
Cazalet, Capt. V. A. (Chippenham)	Hore-Belisha, Rt. Hon. L.	Shaw, Major P. S. (Wavertree)
Chamberlain, Rt. Hn. N. (Edgb't'n)	Hudson, R. S. (Southport)	Simmonds, O. E.
Channon, H.	Hulbert, N. J.	Simon, Rt. Hon. Sir J. A.
Chorlton, A. E. L.	Hume, Sir G. H.	Smiles, Lieut.-Colonel Sir W. D.
Christie, J. A.	Hurd, Sir P. A.	Smith, L. W. (Hallam)
Clarke, F. E. (Dartford)	Hutchinson, G. C.	Somervell. Sir D. B. (Crewe)
Clarry, Sir Reginald	James, Wing-Commander A. W. H.	Southby, Commander A. R. J.
Cobb, Captain E. C. (Preston)	Joel, D. J. B.	Spears, Brigadier-General E L.
Colfox, Major W. P.	Jones, Sir G. W. H. (S'k N'w'gt'n)	Spans, W. P.
Colville, Lt.-Col. Rt. Hon. D. J.	Jones, L. (Swansea W.)	Stanley, Rt. Hon. Oliver (W'm'I'd)
Conant, Captain R. J. E.	Keeling, E. H.	Strauss, H. G. (Norwich)
Cooke, J. D. (Hammersmith, S.)	Kerr, H. W. (Oldham)	Sueter, Rear-Admiral Sir M.F.
Cooper, Rt. Hn. A. Duff (W'st'r S. G'gs)	Keyes, Admiral of the Fleet Sir R.	Sutcliffe, H.
Courthope, Col. Rt. Hon. Sir C. L.	Kimball, L.	Tasker, Sir. I.
Crooke, J. S.	Latham, Sir P.	Tate, Mavis C.
Crossley, A C.	Law, Sir A. J. (High Peak)	Taylor, Vice-Adm. E. A. (Padd., S.)
Crowder, J. F. E.	Leckie, J. A.	Titchfield, Marquess of
Cruddas, Col. B.	Lees-Jones, J.	Tryon, Major Rt. Hon. G. C.
Culverwell, C. T.	Leigh, Sir J.	Wakefield, W. W.
Dawson, Sir P.	Leighton, Major B. E. P.	Wallace, Capt. Rt. Hon. Euan
De Chair, S. S.	Levy, T.	Ward, Lieut.- Col, Sir A. L. (Hull)
Denman, Hon. R. D.	Lewis, D.	Ward, Irene M. B. (Wallsend)
Denville, Alfred	Lipson, D. L.	Warrender, Sir V.
Doland, G. F.	Lloyd, G. W.	Waterhouse, Captain C.
Donner, P. W.	Loyal-Fraser, J. A.	Watt, C. S. H.
Drewe, C.	Mabane, W. (Huddersfield)	Wells, S. R.
Duckworth, Arthur (Shrewsbury)	MacAndrew, Colonel Sir C. G.	Whiteley, Major J. P. (Buckingham)
Dugdale, Captain T. L.	McCorquodale, M. S.	Willams, H. G. (Croydon, S.)
Duncan, J. A. L.	MacDonald, Rt. Hon. M. (Ross)	Wilson, Lt.-Col. Sir A.T. (Hitchin)
Eastwood, J. F.	Macdonald, Capt. P. (Isle of Wight)	Windson-Clive, Lieut.-Colonel G.
Edmondson, Major Sir J.	McKie, J. H.	Winterton, Rt. Hon. Earl
Ellis, Sir G.	Macmillan, H. (Stockton-on-Tees)	Withers, Sir J. J.
Elliston, Capt. G. S	Magnay, T.	Womersley, Sir W. J.
Elmley, Viscount	Makins, Brig.-Gen. E.	Wood, Hon. C. I. C.
Emery, J. F.	Manningham-Buller, Sir M.
Emmott, C. E. G. C.	Margesson, Capt. Rt. Hon. H. D. R.
Emrys-Evans, P. V.	Maxwell, Hon. S. A.	TELLERS FOR THE NOES.—
Entwistle, Sir C. F.	Mayhew, Lt.-Col. J.	Major Sir George Davies and Mr.
Errington, E.	Meller, Sir R. J. (Mitcham)	Cross.
Evans, Capt. A. (Cardiff, S.)	Mellor, Sir J. S. P. (Tamworth)

Question again proposed, "That the 6.19 p.m. Clause be read a Second time."

Mr. Benn

I am sorry that I put the Chancellor to the trouble of returning to the Committee, but I am sure he will recognise that upon a Motion dealing with subsidies or food prices I thought it would be a good thing that the Chancellor of the Exchequer should be present to explain this very important part of the Government policy. It is, as the Parliamentary Secretary to the Board of Trade said, a basic question. It is one upon which nobody in the Committee has such great experience as the right hon. Gentleman himself. His speeches on this subject have been a liberal education and I have read and studied them for many years. In fact, I was his pupil, in his earlier and salad days, when he let himself go in complete candour on the subject. He used to publish pamphlets about it. One was entitled "The Difficulties of Tariff Reform, a speech by the right hon. Sir John Simon." This was in the old days, before the War.

The Chancellor of the Exchequer (Sir John Simon)

Which war?

Mr. Benn

It was not before the Crimean War, but before what we prematurely described as the Great War. After six years of Tory Government, the world, as the Prime Minister told us, is preparing for another great war. I wonder what the Chancellor of the Exchequer thinks of this quotation, which I choose for its literary turn and forceful expression as almost one of his best things: Tariff Reform is crumbling, and when it comes down to the dust that will be the end of the greatest imposture that has ever attempted to be foisted on the British people. That is a good general description. After the War described as the Great War, from 1914 to 1919, so that there may be no doubt in the Chancellor's mind as to what war is meant, the right hon. Gentleman was also clear—after as well as before the War, although what difference that makes I do not quite know. He said: A policy of Protection always has its votaries among greedy manufacturers and credulous Conservatives. Protection never protects the consumer "— that point was adequately made by another hon. Member— and merely raises the level of home prices by making everything more expensive. When it came to the General Election, and the right hon. Gentleman was making preparations for changing his allegiance, which he promptly proceeded to do —[Laughter.] If that laughter is directed at me I would point out that I have never changed my allegiance to my Free Trade principles—he explained that he was not contesting the election on Free Trade at all.

Mr. Mabane

Do I understand that the right hon. Gentleman who is addressing the Committee is now a Socialist?

Mr. Benn

Would it be in order, Sir Dennis, for me to deal with that interruption?

The Chairman

I am not at all sure that it would be in order, and I take the opportunity of saying that I have my doubts as to where the right hon. Gentleman's present argument is leading.

Mr. Benn

I will make that clear. My immediate point is that this change in basic policy—as it was described by the representative of the Board of Trade—was denied by the right hon. Gentleman at the critical election in 1931, because he told the electors that he was not seeking a mandate on Free Trade. That is the only relevance of my remark. Chastened by what you say, I will quote a more direct statement by the right hon. Gentleman on this Motion. He says: The Prime Miinster has admitted that Protection might bring about a rise in prices "— this is the point that is so much in order— and that the farmer would have to pay more for his agricultural machinery and his fertilisers "— those are all in the Schedule— and then, if the proceeds of the tariff were enough to go round, he was to get something back. Furthermore, about that date, the right hon. Gentleman, dealing with this Motion, said: Now we have the agriculturists crying aloud that they are being betrayed because it was proposed in this new plan. The British farmer, instead of getting any relief, was going to be penalised. Further, he has to purchase agricultural machinery or bricks "— I am not quite sure whether bricks were included— or any other production which he needed for the purpose of carrying on his business. I ought to add, in fairness to the right hon. Gentleman that this is not, of course, a Conservative and Protectionist Government. It is a national Government, and the right hon. Gentleman is there as a watchdog in order to see that the Protectionist influences of the Conservative party do not go too far. Of the followers of the right hon. Gentleman, 25 per cent., no less then eight, have posts in the Government. If the same proportion were maintained among the Conservative party, there would be 120 Conservative Members of the Government. In anticipation of his reply, I ought to say, again in fairness to him, that we recognise that his position is to put the brake upon this Protectionist policy and I hope that in his reply he will show that he is prepared to accept this proposed new Clause, and so carry out what he is really in the National Government to do.

6.26 p.m.

Sir J. Simon

I was naturally a good deal surprised when, having withdrawn for a very few minutes from the Committee at a time when we were discussing this proposed new Clause, which was very naturally dealt with by the spokesman for the Board of Trade, I was told that the right hon. Gentleman opposite was complaining, not that I was treating the Committee discourteously—

Mr. Benn

No.

Sir J. Simon

Very well—but on the principle that a Chancellor of the Exchequer should never have a cup of tea. He moved to report Progress, so I naturally came in to find out why. The right hon. Gentleman has a bulky collection of documents in front of him. He is one of the most industrious accumulators of texts and extracts. He has all of us indexed. There is not one gentleman sitting on all those benches opposite who is not in his index, and who, at a particular moment, might not find himself faced with a similar quotation. In the days when I had the good fortune—and I esteemed it great good fortune—to see the right hon. Gentleman more frequently, it was never necessary for me to keep a quotation on any subject, of any date, from any quarter. My friends would ask me: "What are you going to do?" and I would reply:. "Rummage in his files."

Mr. Benn

I am presuming that all these sheets from my diary are in order. I would point out that the rummaging did keep the right hon. Gentleman politically right.

Sir J. Simon

I make due acknowledgment to the right hon. Gentleman. He often helped me. I always noticed that the best thing about his extracts was that they did not cover the whole political field but consisted only of those which the right hon. Gentleman thought might be useful in his own political efforts in the future.

Mr. Benn

Never.

Sir J. Simon

I should like to deal with the proposed new Clause. You, Sir Dennis, have indicated that we might go a little wide, and if the right hon. Gentleman did so, perhaps I might be excused for having a little wandered from the point in making that retort. As for the Clause, all I have to say is that it deals with a very limited point. In fact, it suggests a reversal cf a decision arrived at by a very large majority, and I know of no reason why the functions which Parliament has entrusted to the Import Duties Advisory Committee should be thus curtailed. The arguments against the Clause have been most completely, admirably and succinctly stated by my right hon. and gallant Friend the Parliamentary Secretary to the Board of Trade, and I should be doing a great injustice to his argument, and exposing myself to the danger of being rebuked by the Chair for vain repetition, if I said any more.

6.30 p.m.

Mr. Hopkin

I support the proposed new Clause, and also the protest which was made by the hon. Member for Dundee (Mr. Foot) regarding the alleged reply that was made by the Parliamentary Secretary to the Board of Trade. It seems to me to be quite clear that the Parliamentary Secretary had the wrong brief, because everything that he said in speaking to that brief was quite irrelevant to the issue which is now before the Committee. He spoke, for instance, very largely of the position that is occupied by manufactured goods but looking down the list, I see that it includes such items as oats in grain, seeds, bran and pollard, sharps and middlings, oilseeds, all other feeding stuffs, and so on. The whole point of the Parliamentary Secretary's reply was that the Amendment dealt with manufactured goods, and manufactured goods only. I support the Clause because, as far as I can see, no Member representing an agricultural Division can possibly vote against it. At present the farmer, when he has to buy any feeding stuffs or machines, has to pay the highest price that the market demands, but when he sends his products into the market for sale, he sells them in a market which is totally unregulated, and in which he has to meet the fiercest competition.

Take the example of meat. To-day livestock is fetching prices, which have been mentioned in this Committee, as high as 57s. per cwt., but there is not an agricultural Member of the House who will say that, even at 57s. per cwt., there is any very great profit in it, because the cost of feeding stuffs is so high. Again, take the case of milk. Since 1934 the cost of feeding stuffs has gone up by 20 per cent. The other day a Bill was before the House dealing with the position of poultry keepers. It is quite clear that, if the prices of feeding stuffs for poultry were reduced—and they could be reduced if these import duties were taken off bran and other feeding stuffs—the position of poultry keepers would be very much better.

The Parliamentary Secretary told us that already the farmers can go to the Import Duties Advisory Committee, but they have been before that Committee several times, and each time they have failed. They have failed signally in the matter of milk. An application has been made to that Committee to deal with imports, both from the Dominions and from abroad, but it has failed. It may be right or it may be wrong, but the fact of the matter is that the farmer under these conditions is getting the worst of all possible worlds. He has to pay the highest prices when he buys his machinery and his raw products, but when he goes into the market to sell he has to meet highly competitive prices, and the competition of products from every part of the world.

Sir J. Simon

Do I understand the hon. Member to be recommending, in the circumstances, a tax on imported milk?

Mr. Hopkin

With respect, I think that that question is quite irrelevant It is irrelevant because it does not deal with the question that is now before the Com- mittee, namely: Is it right that the farmer should pay the highest price when he has to buy his raw materials, and that, when he goes into the market, he should have to meet the free competition of the rest of the world? It may be right or it may be wrong that all food should come into this country free, but from the farmer's point of view both these propositions cannot be right, and it is for that reason that I support the Clause.

6.36 p.m.

Lieut.-Colonel Heneage

I represent a constituency which is largely a farming constituency, but in Lincoln, which is not far off, they make agricultural machinery, and I say quite candidly that I should be very sorry to see agricultural machinery excluded from these duties, as it would be if this new Clause were passed. Before there was a duty on imported machinery, the manufacturers of machinery for agriculture in this country were at a very low ebb, and the result was that the farmer was entirely at the mercy of foreign imported machinery, which was going up in price. He was being victimised by the foreign importer, and the House should be made fully aware of that. Again, I am opposed to the new Clause because it would also include such articles as seeds. Various kinds of seed are grown in Lincolnshire, which are used all over the country—

Sir F. Acland

Soya beans?

Lieut.-Colonel Heneage

I am dealing at the moment with seeds. The farmers of this country used to be at the mercy of seeds grown on the Continent, mainly in Germany, and to a certain extent in France, and the encouragement of the seed-growing industry in this country has been of the greatest benefit to agriculture The same is generally true in the case of other items mentioned in the Clause—manures and so on; but I would say generally that the British agriculturist does not want to be at the mercy of the foreign producer.

6.39 p.m.

Mr. H. G. Williams

Frankly, I was surprised at the speech of the hon. Member for Carmarthen (Mr. Hopkin), who occasionally makes quite good Protectionist speeches for the benefit of agriculture. Surely, the position of agriculture would be very precarious indeed if the industry were deprived of protection. The Debate so far has been based on a false assumption, namely, the assumption that the existing duties have in fact raised the prices of the articles set forth in the Schedule. That is not true in general. I think that one case in which it might he alleged that the duty has resulted in some rise in price is that of oats, on which a duty at a very high level was imposed three years ago, because of the distressful condition which then existed among oat growers. That duty was, I think, equivalent ad valorem to about 60 per cent., but apart from that I do not think anyone can contend that the duties have raised the price of the goods. If they have not raised the price of the goods, there is no particular point in the Amendment. The Amendment means that the Mover wants to indulge in a breach of contract. There is a duty on wheat. That is by contract, under the Ottawa Agreement. Does the right hon. Gentleman propose to repeal a contractual duty? Is that the new Liberal philosophy of international friendship? I think that the Schedule as originally drafted included maize, but I am glad to see that its sponsors have modified their proposal as the result of their researches, and have put down: Maize: flat white. That also was an Ottawa duty, imposed in order to assist that particular class of maize, which comes from the Union of South Africa, but the bulk of the maize which comes into this country comes in duty free; not more than about 1 or 2 per cent. of the maize entering this country pays any duty at all. Maize is so important a feeding stuff that to a large extent it must necessarily dominate the prices of the other cereals. It exerts a controlling influence on the price of the other commodities. It is perfectly true that the prices of cereals are rising, but they are not rising in this country alone; world prices are rising, and any rise that has taken place in this country since these duties were imposed is a consequence of the general rise in world prices, for which, incidentally, hon. Members opposite were pleading a few years ago.

It is interesting to read the speeches which they and their Leader made at the time of the World Economic Conference. Viscount Samuel made a most eloquent speech in which he said it was vital that the wholesale prices of commodities should be raised, because the poverty of the primary producing countries was so great that they could not buy our goods. Incidentally, in this country there has been no rise in the prices of these commodities, with the possible exception I have mentioned, as the result of these duties, and, if the prices have not been raised, what is the purpose of proposing to abolish the duties? I noticed an interruption from the father of the Clause, if I may use such a disrespectful description of him, on the subject of soya beans. I share his regret that they are not as yet grown in large quantities in Lincolnshire, but, unless I have misread the Clause it does not propose to take any duties off oilseeds—

Sir F. Acland

I should like to point out that after line 14 of the Schedule there should be the line: Soya bean meal and cake. By a printer's error that was omitted.

Mr. Williams

Even then the right hon. Gentleman has slipped up, because these oilseed cakes are made from oilseeds the bulk of which come from tropical parts of the world—for instance, cotton seeds, palm kernels, and the seeds which schoolboys call monkey nuts, but which I think are known for trade purposes as groundnuts. All these products are quite properly dutiable when they come from foreign countries, because they afford one of the most important preferences that we can accord to our Crown Colonies. It is curious, having regard to the principles that the right hon. Gentleman holds and the theories that he bases on those principles, that he should be proposing to continue the duty on the raw material of oilseed cake while letting the cake itself come in duty-free. That is really an ingenious inverted form of protection which indicates that the Schedule was probably drawn up rather hurriedly one night in the Library—

Sir F. Acland

Surely, those articles would be covered by the general phrase "All other feeding stuffs." Cake is a feeding stuff.

Mr. Williams

So far as I am aware, not very many people in my constituency are in the habit of eating groundnuts raw. They are not generally supplied with them in that form, and certainly they are not supplied with palm kernels, which would still remain subject to this duty. The real trouble is that the Schedule appears to have been drawn up on this basis: "Let us have a rag; let us tease the Protectionists; let us shove in all the things that might be awkward to everyone, and set the farmers quarrelling with the industrialists. Then we will have a fine time." I am glad to see the right hon. Gentleman the Member for Gorton (Mr. Benn) back among us. To-day he was in his best form, not perhaps very conclusive, but very amusing, and he gave us the best ten minutes that we have had for a long time. But he did not supply us with any of those brilliant arguments in favour of Free Trade of which he showed himself such a master when he was opposing the Budget of the right hon. Gentleman the Member for Epping (Mr. Churchill). Those arguments are now out of date. The real difference between the right hon. Gentleman and the Chancellor of the Exchequer is that the Chancellor of the Exchequer has learned something, and the right hon. Gentleman has learned nothing.

6.44 p.m.

Mr. R. Acland

I rise to join issue with the two speakers from the Government Front Bench on the rather important matter of principle which they raised in answer to our proposal. With regard to the speech of the hon. and gallant Member for Louth (Lieut.-Colonel Heneage), I do not see how it is possible to say in one breath that the machinery manufacturers were being ruined by the cutthroat competition of foreigners, and in the next breath to say that the farmers were being exploited by the high prices which foreign manufacturers of machinery were charging. It seemed to me that those were the arguments that he used. Either of them might be correct, but not, I think, both.

Lieut.-Colonel Heneage

I did not pursue the argument, but the foreign importers were beginning to increase their prices and, if they had continued, they would have had the farmer at their mercy.

Mr. Acland

That is always the suggestion as to how it happens, but I think there are very few recorded cases of that actually happening. The suggestion in the hon. and gallant Gentleman's original speech was that both processes were going on at the same time. As to the hon. Member for South Croydon (Mr. H. G. Williams), I am loth to do battle with anyone of his encyclopedic knowledge of the Trade and Navigation Tables. I imagine that he must know them pretty well by heart. But, if my memory is right, we have heard hon. Members opposite who are interested in esparto grass ask to have that put on the free list because the duty was raising the price, and we have the same thing almost monthly with regard to steel.

Mr. H. G. Williams

Does the hon. Member say that the duties on steel have raised the price?

Mr. Acland

I have heard the argument on the other side that these duties ought to be taken off so that steel supplies might be forthcoming in greater quantities and at lower prices. We are going to have another Debate before the end of the Session, and we shall, no doubt, hear it then. The Chancellor of the Exchequer and the Parliamentary Secretary have said that in 1932 we passed an Act by a large majority settling certain principles and leaving details to be worked out by the Import Duties Advisory Committee. I could understand that answer if our Amendment was raising points of detail—if we were asking them to take off the duty now levied on, say, hot water bottles, on account of something particularly relating to hot water bottles, or if we were asking for the removal of the duty on barbed wire, say, on account of something particularly relating to barbed wire. But the principles have been agreed and these matters of detail are settled by the Import Duties Advisory Committee.

My point is that, although this House is not competent to discuss the details which arise under the accepted principles, surely we are competent from time to time to alter the principles, and that is what we are seeking to do in this Clause. We say that, as the result of experience of the working of certain principles, we ought to alter the principles and adopt a new one, namely, that articles used as raw materials or as machinery by agriculture ought not to be taxed. Unless this House will make a pronouncement, aye or no, on that principle, the Import Duties Advisory Committee is bound to proceed on the old principle accepted in 1932 that a certain article was a proper subject for taxation if certain things were proved. It might be permissible at the same time, in view of the rising cost of building, to propose a new principle that building materials should not be taxed, though it would be quite wrong to introduce an Amendment that door knockers should not be taxed. We are raising a question of principle that agricultural raw materials should not be taxed. That is a matter that cannot be dealt with by the Import Duties Advisory Committee. It is a matter in which agriculturists and the National Farmers' Union are interested and, before the House is asked to vote, we should like to have an answer from the Government on the question of principle that we have raised.

6.50 p.m.

Captain Heilgers

I am delighted to see the Liberal party posing as the champions of agriculture. It is a long time since I found them in that position. Their principle that agricultural machinery should not be taxed would not benefit the farmer, because, though it may be true that the prices of agricultural machinery have risen recently, they are lower to-day than when tariffs were introduced. The hon. Member for Carmarthen (Mr. Hopkin) drew attention to the question of the rise in price of feeding stuffs and pointed out that they had gone up by 20 per cent. He did not point out that if he liked to examine my farm accounts he would find that the price of cakes and other feeding stuffs that I buy is considerably less than when the tariff Act was passed. [An HON. MEMBER: "Why do you get so many subsidies?"] We do not get very many subsidies. The subsidies on housing are double those on agriculture. I am glad that they are high, but the actual subsidies on agriculture this year will amount to something less than £8,000,000. The prosperity of some of our towns depends largely on the making of agricultural machinery. Ipswich is dependent on it, and the prosperity of Ipswich to-day is wonderful

compared with what it was before tariffs came in. That prosperity is shown throughout the neighbouring countryside, because the people of Ipswich and other agricultural implement-making towns in the Eastern Counties are able to buy more of the farmers' produce.

6.53 p.m.

Mr. Charles Brown

The hon. Member for South Croydon (Mr. H. G. Williams) made a vicious attack on the Liberal party because they had moved this new Clause, and he sought to convey the impression that the free list is sacrosanct, and that the things that are on are quite right and the things that are off ought to be off. May I remind him of the occasion when he tried to get hatters' fur on the free list? That was probably due to the fact that he was very well aware that there were so many Protectionist mad hatters about.

Mr. H. G. Williams

I not only tried; I succeeded.

Mr. Attlee

Why was the hon. Member so anxious if the foreigner always pays and the price does not go up?

Mr. Williams

The hon. Gentleman has never taken the trouble to understand the elements of the problem. If you put a duty on and the whole supply is taxed because there is no internal competitive supply, obviously you pay the duty.

Mr. Brown

Seeing that the hon. Member has reminded me that he succeeded on that occasion, may I ask him how he managed to succeed?

The Chairman

That does not arise on this question.

Mr. Brown

Is it not in order for me to seek information?

The Chairman

I have ruled that the information that the hon. Member was seeking was not a matter for consideration on this Clause.

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

The Committee divided: Ayes, 125; Noes, 219.

Division No. 263.]	AYES.	[6.57 p.m.
Acland, Rt. Hon. Sir F. Dyke	Barr, J.	Buchanan, G.
Adams, D, M. (Poplar, S.)	Bellenger, F. J.	Burke W. A.
Alexander, Rt. Hon. A. V. (H'Isbr.)	Benn, Rt. Hon. W. W.	Cape, T.
Attlee, Rt. Hon. C. R.	Broad, F. A.	Charleton, H. C.
Banfield, J. W.	Bromfield, W.	Cluse, W. S.
Barnes, A. J.	Brown, C. (Mansfield)	Clynes, Rt. Hon. J. R.
Cocks, F. S.	Johnston, Rt. Hon. T.	Ritson, J.
Cove, W. G.	Jones, A. C. (Shipley)	Roberts, Rt. Hon. F. O. (W. Brom.)
Daggar, G.	Jones, Sir H. Haydn (Merioneth)	Rothschild, J. A. de
Dalton, H.	Jones, J. J. (Silvertown)	Rowson, G.
Davies, R. J. (Westhoughton)	Jones, Morgan (Caerphilly)	Salter, Dr. A. (Bermondsey)
Davies, S. O. (Merthyr)	Kelly, W. T.	Sanders, W. S.
Dobbie, W.	Kennedy, Rt. Hon. T.	Sexton, T. M.
Dunn, E. (Rother Valley)	Kirkwood, D.	Shinwell, E.
Ede, J. C.	Lathan, G.	Silverman, S. S.
Edwards, A. (Middlesbrough E.)	Lawson, J. J.	Simpson, F. B.
Edwards, Sir C. (Bedwellty)	Leach, W.	Sinclair. Rt. Hon. Sir A. (C'thn's)
Evans, D. O. (Cardigan)	Lee, F.	Smith, Ben (Rotherhithe)
Fletcher, Lt.-Comdr. R. T. H.	Leonard, W.	Smith, E. (Stoke)
Foot, D. M.	Leslie, J. R.	Smith, Rt. Hon. H. B. Lees- (K'ly).
Frankel, D.	Logan, D. G.	Smith, T. (Normanton)
Gallacher, W.	Lunn, W.	Sorensen, R. W.
Garro Jones, G. M.	Macdonald, G. (Ince)	Stephen, C.
Graham, D. M. (Hamilton)	McEntee, V. La T.	Stewart, W. J. (H'ght'n-le-Sp'ng)
Green, W. H. (Deptford)	McGhee, H. G.	Strauss, C. R. (Lambeth, N.)
Greenwood, Rt. Hon. A.	MacLaren, A.	Taylor, R. J. (Morpeth)
Grenfell, D. R.	Maclean, N.	Thorne, W.
Griffith, F. Kingsley (M'ddl'sbro, W.)	Mainwaring, W. H.	Thurtle, E.
Griffiths, G. A. (Hemsworth)	Maxton, J.	Tinker, J. J.
Groves, T. E.	Milner, Major J.	Viant, S. P.
Hall, J. H. (Whitechapel)	Montague, F.	Watkins, F. C.
Harris, Sir P. A.	Morrison, R. C. (Tottenham, N.)	Watson, W. McL.
Harvey, T. E. (Eng. Univ's.)	Muff, G.	Wedgwood, Rt. Hon. J. C.
Hayday, A.	Nathan, Colonel H. L.	Welsh, J. C.
Henderson, A. (Kingswinford)	Naylor, T. E.	Westwood, J.
Henderson, J. (Ardwick)	Owen, Major G.	Whiteley, W. (Blaydon)
Henderson, T. (Tradeston)	Paling, W.	Williams, T. (Don Valley)
Hills, A. (Pontefract)	Parker, J.	Windsor, W. (Hull, C.)
Holdsworth, H.	Parkinson, J. A.	Woods, G. S. (Finsbury)
Hopkin, D.	Price, M. P.
Jagger, J.	Richards, R. (Wrexham)	TELLERS FOR THE AYES.—
Jenkins, A. (Pontypool)	Ridley, G.	Mr. Acland and Sir Hugh Seely.
John, W.	Riley, B.
NOES.
Acland-Troyte, Lt.-Col. G. J.	Conant, Captain R. J. E.	Gridley, Sir A. B.
Adams, S. V. T. (Leeds, W.)	Cooke, J. D. (Hammersmith, S.)	Grimston, R. V.
Albery, Sir Irving	Cooper, Rt. Hn. A. Duff (W'st'r S. G'gs)	Gritten, W. G. Howard
Anderson, Sir A. Garrett (C. of Ldn.)	Courthope, Col. Rt. Hon. Sir G. L.	Guest, Lieut.-Colonel H. (Drake)
Anstruther-Gray, W. J.	Crooke, J. S.	Guinness, T. L. E. B.
Aske, Sir R. W.	Croom-Johnson, R. P	Hacking, Rt. Hon. D. H.
Assheton, R.	Crossley, A. C.	Hannah, I. C.
Astor, Major Hon. J. J. (Dover)	Crowder, J. F. E.	Harbord, A.
Astor, Viscountess (Plymouth, Sutton)	Cruddas, Col. B.	Harvey, Sir G.
Baillie, Sir A. W. M.	Culverwell, C. T.	Haslam, Henry (Horncastle)
Balfour, G (Hampstead)	Davies, Major Sir G. F. (Yeovil)	Heilgers, Captain F. F. A.
Balfour, Capt. H. H. (Isle of Thanet)	Dawson, Sir P.	Heneage, Lieut.-Colonel A. P.
Balniel, Lord	De Chair, S. S	Hepburn, P. G. T. Buchan-
Beamish, Rear-Admiral T. P. H.	Denman, Hon. R. D.	Hepworth, J.
Beauchamp, Sir B. C.	Denville, Alfred	Higgs, W. F.
Beaumont, Hon. R. E. B. (Portsm'h)	Doland, G. F.	Hills, Major Rt. Hon. J. W. (Ripon)
Beit, Sir A. L.	Donner, P. W.	Hoare, Rt. Hon. Sir S.
Bennett, Sir E. N.	Dower, Major A. V. G.	Holmes, J. S.
Bernays, R. H.	Drewe, C.	Hope, Captain Hon. A. O. J.
Boothby, R. J. G.	Duckworth, Arthur (Shrewsbury)	Hopkinson, A.
Boulton, W. W.	Eastwood, J. F.	Hore-Belisha, Rt. Hon. L.
Boyce, H. Leslie	Edmondson, Major Sir J.	Hudson, R. S. (Southport)
Brass, Sir W.	Ellis, Sir G.	Hulbert, N. J.
Briscoe, Capt. R. G.	Elliston, Capt. G. S.	Hume, Sir G. H.
Brocklebank, Sir Edmund	Elmley, Viscount	Hurd, Sir P. A.
Brown, Col. D. C. (Hexham)	Emery, J. F.	Hutchinson, G. C.
Brown, Brig.-Gen. H. C. (Newbury)	Emmott, C. E. G. C.	Inskip, Rt. Hon. Sir T. W. H.
Bull, B. B.	Emrys-Evans, P. V.	James, Wing-Commander A. W. H.
Burghley, Lord	Entwistle, Sir C. F.	Joel, D. J. B.
Burton, Cot. H. W.	Errington, E.	Jones, Sir G. W. H. (S'k N'w'gt'n)
Butler, R. A.	Evans, Capt. A. (Cardiff, S.)	Jones, L. (Swansea W.)
Campbell, Sir E. T.	Everard, W. L.	Keeling, E. H
Cartland, J. R. H.	Fildes, Sir H.	Kerr, H. W. (Oldham)
Carver, Major W. H.	Fleming, E. L.	Keyes, Admiral of the Fleet Sir R.
Cary, R. A.	Fox, Sir G. W. G.	Kimball, L.
Cayzer, Sir H. R. (Portsmouth, S.)	Furness, S. N.	Latham, Sir P.
Cazalet, Capt. V. A. (Chippenham)	Fyfe, D. P. M.	Law, Sir A. J. (High Peak)
Channon, H.	Ganzoni, Sir J.	Leckie, J. A.
Chorlton, A. E. L.	Gibson, Sir C. G. (Pudsey and Otley)	Lees-Jones. J.
Christie, J. A.	Gledhill, G.	Leigh, Sir J.
Clarke, F. E. (Dartford)	Graham, Captain A. C. (Wirral)	Leighton, Major B. E. P.
Clarry, Sir Reginald	Grant-Ferris, R.	Lennox-Boyd, A. T. L.
Cobb, Captain E. C. (Preston)	Granville, E. L.	Levy, T.
Colfox, Major W. P.	Grattan-Doyle, Sir N.	Lewis, O.
Colville, Lt.-Col. Rt. Hon. D. J.	Gretton, Col. Rt. Hon. J.	Lipson, D. L.

Lloyd, G. W.	Pickthorn, K. W. M.	Stanley, Rt. Hon. Oliver (W'm'I'd)
Lovat-Fraser, J. A.	Ponsonby, Col. C. E.	Storey, S.
Mabane, W. (Huddersfield)	Porritt, R. W.	Strauss, H. G. (Norwich)
MacAndrew, Colonel Sir C. G.	Procter, Major H. A.	Sueter, Rear-Admiral Sir M. F.
McCorquodale, M. S.	Radford, E. A.	Sutcliffe, H.
Macdonald, Capt. P. (Isle of Wight)	Rankin, Sir R.	Tasker, Sir R. I.
McKie, J. H.	Rathbone, J. R. (Bodmin)	Tate, Mavis C.
Macmillan, H. (Stockton-on-Tees)	Rayner, Major R. H.	Taylor, Vice-Adm. E. A. (Padd., S.)
Magnay, T.	Reid, W. Allan (Derby)	Titchfield, Marquess of
Makins, Brig.-Gen. E.	Rickards, G. W. (Skipton)	Wakefield, W. W.
Manningham-Buller, Sir M.	Robinson, J. R. (Blackpool)	Wallace, Capt. Rt. Hon. Euan
Margesson, Capt. Rt. Hon. H. D. R.	Ropner, Colonel L.	Ward, Lieut.-Col. Sir A. L. (Hull)
Mayhew, Lt.-Col. J.	Ross Taylor, W. (Woodbridge)	Ward, Irene M. B. (Wallsend)
Mellor, Sir J. S. P. (Tamworth)	Royds, Admiral P. M. R.	Warrender, Sir V.
Mills, Sir F. (Leyton, E.)	Russell, Sir Alexander	Waterhouse, Captain C.
Mills, Major J. D. (New Forest)	Russell, R. J. (Eddisbury)	Watt, G. S. H.
Morgan, R. H.	Russell, S. H. M. (Darwen)	Wells, S. R.
Morris, O. T. (Cardiff, E.)	Salmon, Sir I.	Whiteley, Major J. P. (Buckingham)
Morrison, G. A. (Scottish Univ's.)	Salt, E. W.	Williams, H. G. (Croydon, S.)
Munro, P.	Savery, Sir Servington	Wilson, Lt.-Col. Sir A. T. (Hitchin)
Neven-Spence, Major B. H H.	Shaw, Major P. S. (Wavertree)	Windsor-Clive, Lieut.-Colonel G.
Nicolson, Hon. H. G.	Simmonds, O. E.	Winterton, Rt. Hon. Earl
O'Connor, Sir Terence J.	Simon, Rt. Hon. Sir J. A.	Withers, Sir J. J.
O'Neill, Rt. Hon. Sir Hugh	Smiles, Lieut.-Colonel Sir W. D.	Womersley, Sir W. J.
Orr-Ewing, I. L.	Smith, L. W. (Hallam)	Wood, Hon. C. I. C.
Palmer, G. E. H.	Somervell. Sir D. B. (Crewe)	Wright, Squadron-Loader J. A. C.
Patrick, C. M.	Southby, Commander Sir A. R. J.
Peat, C. U.	Spears, Brigadier-General E. L.	TELLERS FOR THE NOES.—
Petherick, M.	Spens, W. P.	Mr. Cross and Captain Dugdale.

cc423-35
1. NEW CLAUSE.—(Exemption where the in come of an individual is not subject to Income Tax.) 5,600 words, 1 division
cc435-43
2. NEW CLAUSE.—(Abolition of Entertainments Duty on certain entertainments.) 3,251 words, 1 division