Commons Sitting of 14 July 1937

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

PRIVATE BUSINESS.
Ministry of Health Provisional Order (Tonbridge Water) Bill,
Lords Amendment considered, and agreed to.
Ministry of Health Provisional Order Confirmation (Bridlington) Bill [Lords],
Ministry of Health Provisional Order Confirmation (Guildford) Bill [Lords],
Ministry of Health Provisional Order Confirmation (Rhymney Valley Sewerage District and Western Valleys (Monmouthshire) Sewerage District) Bill [Lords],
Ministry of Health Provisional Order Confirmation (Selby) Bill [Lords],
Ministry of Health Provisional Order Confirmation (South East Essex Joint Hospital District) Bill [Lords],
Ministry of Health Provisional Order Confirmation (Tynemouth) Bill [Lords],
Read a Second time, and committed.

ORAL ANSWERS TO QUESTIONS.

  SPAIN.
  Mr. Cocksasked the Secretary of State for Foreign Affairs the dates on which the German and Italian Governments, respectively, agreed to impose a ban, respectively, on the export of arms and on the departure of volunteers to Spain; whether these pledges were given without qualification; and whether they included a ban on the despatch of aeroplanes and regular troops?
  The Secretary of State for Foreign Affairs (Mr. Eden): The German and Italian Governments notified the French Government of their adherence to the agreement regarding the prohibition of
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  the export of arms and war material to Spain on 24th August and 21st August last, respectively. Both Governments took measures to prohibit the departure of combatants from their countries to Spain as from midnight, 20th–21st February last. So far as I know, no qualifications were attached to these undertakings, which covered the despatch of aircraft and regular troops.
  Mr. Cocks: Does not the despatch of aeroplanes since that date mean that the Governments concerned have broken their pledges?
  Mr. Eden: Certainly; any despatch of aircraft since that date would be a breach of the agreement.
  Captain Cazalet: Is there any evidence to show that these pledges have been kept on one side more than on the other?
  Mr. Eden: It is not for us to assess other Governments' responsibilities; we can only answer for our own and our hands are clean.
  Lieut.-Commander Fletcher: Is it not the case that the Italian representative on the Non-Intervention Committee stated two months ago that Italy would not withdraw a single man from Spain until General Franco had been victorious?
  Mr. Cocksasked the Secretary of State for Foreign Affairs whether he will bring to the attention of the Non-Intervention Committee the cases of the German air-pilots, Hans Sobotka and Joachim Hans Wandel, brought down on the Basque front, whose papers showed that they had left Berlin on 6th April and 22nd April, respectively?
  Mr. Eden: I would refer the hon. Member to the reply which I gave to him on 21st June, to which I have nothing to add.
  Mr. Cocks: Should not this information be given to the Non-Intervention Committee, so that they may have the opportunity of asking the German Government for an explanation of the apparent breach?
  Mr. Eden: Some information about this matter was sent to us by the Spanish Government. But there was no request to communicate it to the Committee
  Mr. Noel-Baker: Is it not the purpose of the Non-Intervention Committee to secure that breaches of the agreement shall not occur?
  Mr. Eden: Yes, Sir.
  Duchess of Atholl: Is it the case that His Majesty's Government would look very seriously on a breach of the agreement?
  Mr. Eden: Yes, Sir.
  Mr. Macquisten: Why is it called the Non-Intervention Committee when it seems to do nothing else but interfere?
  Mr. Manderasked the Secretary of State for Foreign Affairs whether he is aware that Captain Cardozo and Lieut. Pembroke Stephens, representing respectively the "Daily Mail" and the "Daily Telegraph" in Spain, hold commissions in General Franco's army; whether passports have been issued to, or will continue to be issued to, these journalists; and whether equal treatment is being meted out to all in this matter?
  Mr. Eden: From such inquiries as I have been able to make, I have received no confirmation of the allegation made in the first part of the hon. Member's question. The answer to the second and third parts is Yes, Sir.
  Mr. Mander: Is it the practice of the Foreign Office to refuse visas to journalists or others fighting on either side?
  Mr. Eden: Yes, Sir.
  Mr. Mander: If I bring certain facts to the right hon. Gentleman's attention in connection with this matter, will he be good enough to look into them?
  Mr. Eden: I did make inquiries when I saw this question on the Paper, and I have given the information that I have.
  Sir Nairne Stewart Sandeman: Is it not a fact that Mr. Cockburn, of the "Daily Worker," served for a long time with the Madrid Government, while under the protection of the British Embassy?
  Mr. Manderasked the Secretary of State for Foreign Affairs whether he will give an assurance that the British Government will oppose at meetings of the Non-Intervention Committee any scheme for the withdrawal of foreigners fighting in
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  Spain unless it is based upon the withdrawal of numbers from each side proportionate to the numbers there existing, and that any consideration of the question of granting belligerent rights will only be taken up by the British Government as a sequel to such general withdrawal of foreigners?
  Mr. Eden: I would ask the hon. Member to await the publication of the proposals which, as I stated on Monday, His Majesty's Government intend shortly to place before the Non-Intervention Committee.
  Mr. Mander: Do I understand that after that date the Foreign Secretary will be willing to give an answer to this question?
  Mr. Eden: I think the hon. Gentleman will find that all relevant considerations have been borne in mind.
  Mr. Herbert Morrison: Can the right hon. Gentleman give any indication as to how soon these proposals are likely to be available?
  Mr. Eden: I understand that the Leader of the Opposition is to ask a Private Notice Question to-day.
  Sir N. Stewart Sandeman: Is it not a fact that those who have gone into Spain and have taken out naturalisation papers would be included in those figures?
  Mr. R. Aclandasked the Secretary of State for Foreign. Affairs for what reasons a passport has been refused to, among others, Lascelles Abercrombie and Sylvia Townsend Warner, who desired to attend an international conference of writers at Valencia, in of the fact that many British nationals live in safety in Madrid without the protection of any British officials; and can he give an assurance that it is not intended to sever cultural relations between this country and the Spanish Republic?
  Mr. Eden: As regards the first part of the question, I would refer the hon. Member to the reply which I gave last. Wednesday to the hon. Member for North Lambeth (Mr. G. Strauss), to which I have nothing to add. The answer to the second part is Yes, Sir.
  Mr. Acland: In view of the fact that the Belgian and Dutch delegates attended, and that the place of this function was

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  fixed for Spain as early as May, 1936, does it not create a very bad impression that these distinguished people should be refused permission?
  Mr. Eden: I hope not. We have to draw up some rules, and, if once we make exceptions, I do not know where the exceptions will stop.
  Lieut.-Commander Fletcherasked the Secretary of State for Foreign Affairs whether the recent declaration by the French Government relative to suspension of control on the Franco-Spanish frontier was taken before consulting or obtaining the agreement of this country?
  Mr. Eden: His Majesty's Government were kept fully informed beforehand of the step which the French Government proposed to take, but their agreement thereto was not sought. As I have previously stated, His Majesty's Government consider that the French Government's attitude is reasonable in view of what has happened on the Portuguese frontier.
  Lieut.-Commander Fletcher: In view of the propaganda in the German and Italian Press with a view to driving a wedge between this country and France, will the right hon. Gentleman impress upon the French Government the great importance of every step in this matter being taken in full accord with His Majesty's Government?
  Mr. Eden: This step was taken in full accord with His Majesty's Government.
  Mr. Mander: Is there any foundation for the statement that the Portuguese Government are now ready to resume supervision of the frontier?
  Mr. Eden: I would rather not comment on that at the moment.
  Brigadier-General Sir HenryCroft asked the Secretary of State for Foreign Affairs (1) whether his attention has been called to the large number of tanks which have been used by the Government of Valencia on the Madrid front during the present offensive; whether he can state the country of origin; and whether the number has increased during the last four months;
  (2) whether his attention has been called to the recent concentration of aircraft by the Valencia Government; and
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  whether these aircraft were built in Spain and, if not, what are the countries supplying the majority of these machines?
  Mr. Eden: I would refer my hon. and gallant Friend to the reply which I gave on 16th June to a question put by the hon. Member for Dewsbury (Mr. Riley) on the subject of the entry into Spain of foreign munitions and combatants, to which I have nothing to add.
  Sir H. Croft: Is it not a fact that in the Siguenza counter attack, according to the "Isvestia," it was announced that there were 100 Russian tanks taking part, and is it not also a fact that the vast majority of the aircraft taking part on the side of the Valencia Government are in fact aircraft produced by Russia and France?
  Mr. Eden: I have not seen the report in the "Isvestia" which I am afraid I do not read.
  Miss Wilkinson: Is it not a fact that there were no Russian tanks and aeroplanes until some months later?
  Sir H. Croftasked the Secretary of State for Foreign Affairs whether he is prepared to publish consular reports from all big cities in Spain, giving such information as may have been received with regard to the massacre of civilians, destruction of churches, anti-God activities, and the state of law and order in those cities?
  Mr. Eden: The value of reports of this nature must necessarily depend largely on the confidential nature of much of their contents being respected. It has not been the normal practice to publish such reports and my hon. Friend will appreciate the undesirability of departing from this practice.
  Sir H. Croft: In view of the great part which this country is taking in Spanish affairs, to preserve the peace of the world, is not Parliament justified in having reports not of a confidential nature which the right hon. Gentleman can obtain from his representatives in Spain?
  Mr. Eden: I will bear in mind what the hon. and gallant Gentleman says, but this is really a difficult matter. For one thing, methods of communication are difficult in circumstances like these, and I do not like to pledge myself.
  Mr. T. Williams: Does the right hon. Gentleman agree with this indirect attack on General Franco and his forces?
  Sir Archibald Sinclair: If the right hon. Gentleman is going to collect information from consular officers, will he consult, perhaps through the usual channels, with Members of the House as to the field over which these inquiries should range?
  Sir H. Croft: Will it be on both sides, in any event?
  Miss Rathboneasked the Secretary of State for Foreign Affairs what expenditure was incurred in evacuating refugees from Spanish ports in British warships during the earlier stages of the Spanish war; whether the refugees so evacuated were restricted to women, children, and old men; and whether, as most of them may be assumed to have been members of families in sympathy with the insurgents, he will consider taking equally effective action to assist the evacuation of refugees from Santander where evacuation has been brought almost to a standstill by the warnings given by British warships to British merchantmen chartered by the Basque Government for evacuation purposes?
  Mr. Eden: The chief expenditure incurred by His Majesty's ships in taking off refugees from Spain is in respect of fuel which up to the beginning of November last year was estimated to amount to £40,000. The answer to the second part of the question is No, Sir. As regards the last part of the question, it has repeatedly been made clear that, throughout the conflict, the humanitarian activities of His Majesty's Government including the evacuation of refugees on His Majesty's ships and the granting of protection by His Majesty's Navy, have been exercised with complete impartiality as between both parties in Spain. I cannot accept the implication that any discrimination has been or is being made in this matter. The position as regards the evacuation of refugees from Santander has been repeatedly explained, and I have nothing to add to those statements.
  Miss Rathbone: Is not the fact stated by the right hon. Gentleman that £40,000 was spent in evacuating refugees likely to lead to the supposition that not equally active steps are being taken unless the Government can take some really effective action to make the evacuation of
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  Santander more effective than it is at present?
  Mr. Rileyasked the Secretary of State for Foreign Affairs whether he can give the House any information with reference to the visit of British financiers to, General Franco's headquarters at Burgos for the purpose of negotiating a loan to General Franco; and will he give an assurance that fie Government will refuse to permit such a British loan as being contrary to their policy of non-intervention?
  Mr. Eden: So far as I am aware, no British financiers have visited General Franco's headquarters at Burgos for the purpose in question.
  Mr. Riley: Has the right hon. Gentleman seen the report in the Press that such a visit has taken place, and has he no information whether this report has any foundation at all?
  Mr. Eden: I have given the information I have, which is that I know of no foundation for it.
  Mr. De la Bère: Would it not be possible for British financiers to consider doing something for long-term credits for agriculture instead of worrying about foreign countries?
  Mr. Noel-Baker: Will the right hon. Gentleman answer the second part of the question?
  Mr. Eden: So far as I understand it, in present conditions such a loan would not be possible.
  Lieut.-Commander Fletcherasked the First Lord of the Admiralty whether he has now taken advice concerning the legal position and rights of British shipping inside Spanish territorial waters vis-à-vis Spanish insurgent naval forces; and is he able to say if such shipping when upon lawful occasions will be afforded the protection of the British Navy against attack, interference, stoppage, or capture by insurgent naval forces both inside and outside Spanish territorial waters?
  The First Lord of the Admiralty (Mr. Duff Cooper): His Majesty's Government have consistently adhered to the policy of not intervening in Spanish territorial waters as part of their policy of non-intervention in the Spanish civil war, and so far as the legal position is concerned

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  I have nothing to add to the answer given to the hon. and gallant Member on 12th July.
  Lieut.-Commander Fletcher: In view of the fact that General Franco does not enjoy belligerent rights, how can it be held that he has any right to attempt to control British shipping either inside or outside Spanish territorial waters?
  Vice-Admiral Taylor: Before the right hon. Gentleman answers that question—
  Hon. Members: Answer!
  Mr. Speaker: Is the right hon. Member prepared to answer?
  Mr. A. V. Alexander: On a point of Order. I understood that the First Lord was willing to answer the question.
  Mr. Speaker: I understand that the right hon. Gentleman is prepared to do so.
  Mr. Cooper: The question that really arises is not what are the rights of the rebel ships or the insurgent ships concerned, but what rights His Majesty's Government have to take any action inside territorial waters. I am not prepared to give a legal ruling on this question, but, broadly speaking, and from the point of view of a man of common sense, it seems to me that inside the territorial waters our position is the same as on the mainland in Spain. We cannot send into Spain to protect British subjects who are in trouble in Spain, but we reserve to ourselves the right to demand reparation if any wrong is done to them inside Spain, or outside.
  Mr. David Grenfell: Is the right hon. Gentleman aware that, in the circumstances, it is perfectly safe for any British ship to go in or out of Santander? [HON. MEMBERS: "No."] Yes. General Franco's vessels cannot get within 10 miles of the territorial limits, and, in these circumstances, is it not clear that, if His Majesty's Navy does give protection up to territorial limits, it is perfectly safe for ships to go in and out?
  Vice-Admiral Taylor: Is it not the fact that General Franco and the Spanish Government have equal rights inside territorial waters?
  Lieut.-Commander Fletcher: Mr. Speaker, may I—
  Mr. Speaker: There are 96 questions on the Paper, and I have to protect the
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  rights of other hon. Members who have questions on the Paper.
  Mr. Noel-Bakerasked the First Lord of the Admiralty whether his attention has been drawn to the provisions of the Convention on the Right of Capture at Sea adopted by the Hague Conference in 1907; whether he is aware that Article 4 of that Convention provides that ships engaged on humanitarian missions shall be immune from capture; and whether the Government will now ensure the application of this rule to vessels engaged in evacuating starving women and children from Santander?
  Mr. Eden: I have been asked to reply. In view of the decision of the Supreme Court of Hong Kong in the prize case of the "Paklat," with which the hon. Member is doubtless familiar, it would not be possible for His Majesty's Government to contend that Article 4 of the Hague Convention No. 11 is applicable to vessels engaged in evacuating women and children from Santander.
  Duchess of Athollasked the First Lord of the Admiralty whether he is aware that the harbour and territorial waters of Santander are protected by coastal batteries which include guns with a range of 10 miles, and by two destroyers, three submarines, and 12 minesweepers; that ships of other countries have entered and left the harbour since 8th July; and will he give instructions that ships of the necessary class will be near enough to the limit of the territorial waters to be able to give effective protection to British vessels carrying refugees to France?
  Miss Rathboneasked the First Lord of the Admiralty whether he accepts the statement of the Basque Government that the approaches to Santander are adequately protected by coastal batteries, destroyers, submarines, minesweepers and pilotage arrangements, and that the harbour was safely entered on 7th and 8th July by two ships and left by eight, the only ships encountering difficulties being those which did not approach the harbour directly or were fired upon from outside territorial waters; and whether he will now request British warships to relax their warnings to British merchantmen not to enter and to give them more adequate protection from outside territorial waters?
  Mr. Cooper: Whatever may be the present state of the defences of Santander, in view of the fact that two French and two British ships have recently been captured inside territorial waters in attempting to enter that port I do not consider it desirable to relax the warnings that have been issued to British merchantmen.
  Duchess of Atholl: I would ask the right hon. Gentleman whether it is not the case that the captures to which he refers took place before the date mentioned in the question, and that, therefore, the defences may have been more complete since that date? I would further ask him whether he is confident that British warships outside the territorial limit are always of the calibre necessary to deal with the insurgent warships present, and whether at the same time our ships are not too far away?
  Mr. Attlee: Is not the right hon. Gentleman aware that numerous ships have come in and out from Santander since the date which he mentioned; and is not this exactly a repetition of what we have had in the case of Bilbao, where the Government took all their information from General Franco?
  Mr. Cooper: With regard to the first part of the question of the Noble Lady and the question put by the right hon. Gentleman the Leader of the Opposition, it may interest the House to know that a British ship was captured attempting to enter Santander this morning.
  [Interruption.]
  Mr. H. Morrison: In that case, having regard to the fact that General Franco is not recognised as having belligerent rights, will the First Lord of the Admiralty tell the House what the British Navy did to protect British shipping?
  Sir A. Sinclair: Is it not rather remarkable that the news of the capture of a British ship by the rebel forces should be greeted with hilarity by hon. Members opposite?
  Mr. Wedgwood Bennasked the First Lord of the Admiralty whether, and at what stage, protection is afforded by His Majesty's Navy to British shipping suffering interference enforced by threat of gunfire from rebel Spanish naval forces?
  Mr. Cooper: As has repeatedly been made clear, His Majesty's ships will afford protection to any British ship which is interfered with by a Spanish warship on the high seas. If, however, a British ship enters Spanish territorial waters, she does so at her own risk.
  Mr. Benn: Suppose the Spanish insurgent ship is outside territorial waters and fires a shot at a British ship, what do our ships do then?
  Mr. Cooper: What I said remains the case, that the ship enters territorial waters at her own risk.
  Mr. Benn: So that our ships would not interfere with an insurgent ship which has attacked a British ship from outside territorial waters?
  Mr. Cooper: That is a hypothetical question.
  Hon. Members: "No."
  Mr. Cooper: I made it perfectly plain that the protection of British ships does not, and never has extended to territorial waters. The question of whether an attack comes from inside or outside territorial waters is another point.
  Mr. Benn: I must press the right hon. Gentleman. It is not a hypothetical case. A case has occurred during the last few days. What does the British Navy do when a rebel ship fires outside territorial waters at a British ship inside territorial waters?
  Mr. Cooper: If the enemy or the other side is in a position to capture a British ship inside territorial waters, and no other kind of attempt has been made, His Majesty's Navy does not interfere?
  Mr. Benn: Would the right hon. Gentleman kindly direct his attention to the question that I asked. If, as recently happened, a rebel ship outside territorial waters fires at a British ship, what does the Navy do?
  Mr. Cooper: I would remind the right hon. Gentleman that that case has not arisen. A foreign ship has not fired at a British ship.
  Mr. Benn: Then the right hon. Gentleman means—
  Mr. Speaker: That does not arise out of the question on the Paper.
  Miss Rathboneasked the First Lord of the Admiralty whether, in view of the action of the insurgent cruiser "Almirante Cervera" in firing while outside the three-mile limit upon or across the bows of the British Steamship "Gordonia" after is had passed that limit on its way to Santander to evacuate refugees, he will renew the warning given last April by his predecessor in office to General Franco that if his ships sink or damage a British ship even within territorial waters he will be held responsible for any claim resulting from such action?
  Mr. Eden: I have been asked to reply. The warning to which the hon. Lady refers stated that His Majesty's Government could not tolerate any interference with British shipping at sea, and pointed out that it must further be understood that any advice given to British ships at sea does not of course affect the ultimate responsibility for any damage which may be done to any British vessel even if it has disregarded such advice. The Salamanca authorities are, therefore, presumably aware of the position.
  Miss Rathbone: Does it not involve that a British ship at the worst runs no further risk than the risk of being held up, and, in view of the fact that the result of the naval warning is to enable General Franco to secure the advantage of a blockade which he has shown no proof of being able to maintain with his own forces, will not the Government consider the relaxation of these warnings?
  Mr. Eden: I am not sure that I can answer all that supplementary, but if tie hon. Lady will study my answer she will see that there is no great divergence in what I have said from what she has said in the last part of her question.
  Mr. Noel-Baker: Can the right hon. Gentleman give us any precedent where His Majesty's Government have previously granted the right to exercise the rights of blockade even in territorial waters to an insurgent who has not been recognised as a belligerent?
  Mr. Eden: I could not accept the hon. Member's definition.
  Mr. Bennasked the First Lord of the Admiralty what advice or instruc-
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  tions have been given to British ships as to obeying orders received from Spanish rebel naval forces and enforced under threat of gunfire?
  Mr. Cooper: No instructions as to obeying orders received from Spanish warships have been given to British merchant ships. They have, however, been given advice to the effect that if they decide to submit to a summons to stop by a Spanish warship belonging to either party, made when they are inside Spanish territorial waters, they should indicate their intention by making an alteration of course of at least 90° in addition to reversing engines.
  Mr. Benn: Am I to understand that the Admiralty has issued advice, which is tantamount to instructions, to merchant ships to obey the orders of the insurgents, and may I ask also whether the Admiralty have issued orders to our warships not to fire if our merchant ships are attacked within territorial waters?
  Mr. Cooper: The Admiralty have issued no orders or instructions whatever. They have merely given advice to merchantmen how they should behave inside Spanish territorial waters, just in the same way that we might give advice to British subjects how they should behave inside Spain.
  Mr. Attlee(by Private Notice) asked the Secretary of State for Foreign Affairs whether he has any statement to make with regard to the proposals for ending the deadlock of non-intervention?
  Mr. Eden: The proposals which His Majesty's Government have drawn up at the request of the Committee have been circulated to all members of the Committee this morning, and will be in the hands of the Governments during the course of the day. They will be published to-morrow morning. Meanwhile the House will appreciate that it would not be proper for me to make any statement about their contents until the Governments who entrusted His Majesty's Government with this task have had an opportunity of seeing them. I am, however, arranging for the convenience of hon. Members that the full text of the proposals shall be circulated as a White Paper with the Votes to-night.
  Mr. Attlee: Can the right hon. Gentleman say when there will be another meeting of the Non-Intervention Committee to consider these proposals in view of the admitted urgency of the matter?
  Mr. Eden: Yes, Sir. I understand on Friday.

  FRANCO-SOVIET AGREEMENT.
  Mr. Thorneasked the Secretary of State for Foreign Affairs whether he can give the House any information in connection with the Franco-Russian pact; whether it is an offensive alliance or a defensive alliance; whether, in the view of his advisers, Article 1 of the treaty is in conformity with Article 10 of the Covenant of the League of Nations; and whether he can give any other information about the matter?
  Mr. Eden: The hon. Member will find the text of the Franco-Soviet Agreement, together with other relevant information, in Command Paper 5143 of 1936. As regards the second part of the question, this Agreement is described in the protocol of signature as a mutual assistance agreement, and the case against which it provides is an unprovoked attack upon either signatory by a European State. The answer to the third part is Yes, Sir.
  Mr. Thorne: Do I understand from that answer that, in the event of aggression either by France or Germany, no action could be taken between France and Russia until the matter had been referred to the League of Nations?
  Mr. Eden: I should like to see that question on paper.
  Mr. Mander: Is not this pact entirely in accordance with the Covenant of the League of Nations?
  Mr. Eden: The hon. Gentleman will see from the first part of my reply that that is so.

  GERMANY AND RUSSIA.
  Mr. Dayasked the Secretary of State for Foreign Affairs whether he can make a statement concerning the treaties which were entered into between the German and Soviet Governments and remained in force until June, 1933, and were thereafter terminable at one year's notice?
  Mr. Eden: I would refer the hon. Member to the reply returned on gth December last to a question on this subject by the hon. Member for Plaistow (Mr. Thorne), of which I am sending the hon. Member a copy. The position, as far as I am aware, is still as described therein.
  Mr. Day: Does that refer to both the 1926 and the 1929 agreement?
  Mr. Eden: I am not sure that those are the right dates, but the hon. Member will find it all set out in the answer.

  LEAGUE OF NATIONS.

    FINANCIAL COMMITTEE.
    Mr. Arthur Hendersonasked the Secretary of State for Foreign Affairs whether he has any statement to make on the resignations of Sir Otto Niemeyer, Sir Henry Strakosch, and M. C. E. der Meulen from the League of Nations Financial Committee?
    Mr. Eden: I understand that Sir Otto Niemeyer informed the Secretary-General of the League, in his letter of resignation, that the recent decision of the council, namely, that members of the Financial Committee should be appointed for three years, with the right of re-eligibility, instead of, as hitherto, for an indefinite period, would not, in his considered opinion, enable the committee to render the same effective service as in past years. M. der Meulen expressed a similar view. Sir Henry Strakosch informed the Secretary-General of the wish of His Majesty's Government in the Union of South Africa that he should no longer be connected with the Financial Committee as a South African expert. Sir Henry Strakosch stated that the wish of the Union Government, coupled with the fact that his activities in other directions were fully taxing his energies, had reluctantly led him to the conclusion that he should resign from the committee.
    Mr. Henderson: In view of the importance of this committee, is the Foreign Secretary satisfied that the change is a good one?
    Mr. Eden: We were not very anxious to see this change, and we did postpone our decision for some time, but the members of the council as a whole wished to make it, and it has been their decision.
    Mr. De la Bère: Would it be possible now to bring in these gentlemen to consider a long-term credit policy for agriculture?

    MINORITIES, PETITIONS.
    Mr. Rileyasked the Secretary of State for Foreign Affairs how many petitions have been presented during the past five years by minorities in Europe to the Secretariat of the League of Nations; how many have been considered by the League Council; and how many have been successful and how many rejected?
    Mr. Eden: The information requested by the hon. Member involves considerable research and I will communicate it to him as soon as the necessary investigation is completed.
    Mr. Riley: Is the right hon. Gentleman not aware that over 400 petitions have been submitted by minorities, and that not more than 30 have reached the Council of the League?
    Mr. Eden: I was not aware of all that. That is why I have to make research.

    NAVAL AGREEMENTS.
    Mr. A. Hendersonasked the Secretary of State for Foreign Affairs whether he has any statement to make with reference to the Anglo-German and Anglo-Russian bilateral naval agreements?
    Mr. Eden: If the hon. Member will be good enough to repeat his question next Monday, I hope to be in a position to make a statement on the subject.

    EGYPT (POLICE).
    Sir John Mellorasked the Secretary of State for Foreign Affairs how many British officers and constables of the Egyptian City Police have up to the present time lost their employment in consequence of the provisions of the Anglo-Egyptian treaty; and whether he will make a further statement as to their re-employment?
    Mr. Eden: Eleven British officers and 81 British constables retired from the Egyptian City Police on the termination of their contracts on 31st May last. Three of the officers and 55 of the constables have now secured fresh employment.
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    Certain officers and constables are also being considered for police vacancies which have recently occurred in the Colonies. In addition, there are vacancies for seven constables in the Gibraltar dockyard police, for one sub-inspector and one constable in the Malta dockyard police, and for two Maltese constables for the Malta police. Preparations are also being made to give 20 of the constables a short course of training with the Royal Air Force in Egypt, with a view to employment in that force.

  ROYAL NAVY.

    FLEET VISITS (STORNOWAY).
    Mr. Malcolm MacMillanasked the First Lord of the Admiralty whether he will include the port of Stornoway, as in the past, among those northern ports to be visited by ships of the Fleet, in view of the dissatisfaction caused in the island, which sends many of its population to the Navy, at the proposal to cancel these visits?
    Mr. Cooper: The application from the civil authorities of Stornoway for a visit by His Majesty's Ships this year was not received until after the cruise programme of the Fleet had been settled, and though the request has been forwarded to the Commander-in-Chief, I doubt whether it will be possible to arrange at so late a date for the inclusion of such a visit. I can assure the hon. Member that any future request, provided it is received not later than 1st January, will receive careful consideration, together with similar requests from other towns, when the summer cruise programme for the year is being arranged.
    Mr. MacMillan: In view of the great contribution which these islands make to the naval service will not the right hon. Gentleman give to Stornoway priority over many of these places, and will he not give this promise without requiring requests a year in advance?

    ARMED MERCHANTMEN.
    Sir Robert Rankinasked the First Lord of the Admiralty whether any steps are being taken to amass a reasonable reserve of guns and other equipment for arming British merchantmen in the event of an emergency situation; and, if so, whether he can state that additional steps

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    are to be taken to provide facilities for training the personnel of the mercantile marine in the use of such equipment?
    Mr. Cooper: The answer to the first part of the question is in the affirmative. As regards the second part, the training of mercantile marine personnel in the use of defensive armament has been and is under active consideration.
    Mr. A. V. Alexander: Is the Admiralty continuing to take steps in connection with the building of new mercantile ships to see that they are suitable for defence?
    Mr. Cooper: That is another question.

    FRESH FRUIT SUPPLY.
    Mr. De la Bèreasked the First Lord of the Admiralty whether he will take some steps to make available a supply of. fresh fruits, such as plums, etc., for the naval depots during August, when supplies of home-grown fruit are plentiful and cheap?
    Mr. Cooper: Fruit is purchased locally as required for inclusion in the dietary of ratings at the naval depots, and supplies of home grown fruit in season are fully utilised. Fresh fruit is also available for sale to the men at the canteens.
    Mr. De la Bère: Will it be possible to give some members of the Fleet facilities for leave to visit the Vale of Evesham to view the egg plums?

    16-INCH GUNS.
    Vice-Admiral Taylorasked the First Lord of the Admiralty whether, in view of the official announcement that 16-inch guns will be mounted in the two new American 35,000-ton battleships, he can say whether it is our intention to continue to mount 14-inch guns in all new battleships?
    Lieut.-Commander Fletcherasked the First Lord of the Admiralty whether he has received any communication from the Government of the United States of America as to the adoption of the 16-inch gun in the United States of America's Navy; and whether he has any statement to make as to the effect of this decision upon the design of our own ships?
    Mr. Cooper: I am not in a position at the moment to make any statement about the effect of this decision on the design
    1240
    of our future ships, but the matter is naturally receiving very close consideration.
    Vice-Admiral Taylor: Is the right hon. Gentleman not aware that our policy in the past has been to construct ships of such size and such calibre of guns as we consider necessary, and will he revert to that policy and continue to build ships of the kind that we consider best, and not follow the example of other nations?
    Lieut.-Commander Fletcher: Is it the case that Japan has decided to instal 16-inch guns in her battleships, or has America decided to do so? Which of the two countries is it that has decided to take this step?
    Mr. A. Henderson: Is the right hon. Gentleman not of opinion that the naval policy of the United States need cause no concern to this country?

    SINGAPORE BASE (PERSONNEL, ALLOWANCES, ETC.).
    Sir Robert Youngasked the First Lord of the Admiralty whether he is aware of the extra expense to be met by those stationed at Seletar base, near Singapore; whether there have been any applications from officers for increased allowances to meet this extra expense; and what additional amount is paid to warrant officers who live in the ships?
    Mr. Cooper: The extra expenses involved for officers and men stationed permanently on shore at Singapore are recognised by the grant of Colonial allowance. Allowances are also payable to officers living in ships stationed permanently at the Singapore base, amounting, in the case of warrant officers, to £160 a year. No recent application for an increase of the rates of Colonial allowance for officers has been received.
    Sir R. Young: Do I understand from the reply of the First Lord that a proportionate allowance is made to ordinary and able-bodied seamen?
    Mr. Cooper: That is another question.
    Sir R. Youngasked the First Lord of the Admiralty the amount of wages per annum paid to dockyard men at Seletar base; whether they receive in addition free accommodation; and whether there are any other monetary allowances?
    Mr. Cooper: English dockyard workmen serving under agreement at Singapore naval base, to which I assume the hon. Gentleman refers, receive their home yard rates of pay plus charge pay and a foreign service allowance; and they are provided with free quarters. The wages of a typical married English dockyard mechanic at Singapore are:

    £ s. d.

    Basic wage

    …

    …

    2 8 0

    Bonus

    …

    …

    17 0

    Charge pay

    …

    …

    8 0

    Foreign service allowance

    …

    …

    4 13 4

    Total

    …

    …

    8 6 4*

    * a week, or £432 a year.

    A single man would receive 11s. 8d. a week less.

    TRINIDAD (LABOUR DISPUTE).
    Mr. Rileyasked the Secretary of State for the Colonies whether he can make a statement regarding the recent labour dispute in Trinidad, including the cause of the dispute, the number of persons killed and injured, and the terms of the settlement?
    Mr. Leachasked the Secretary of State for the Colonies whether he can give the figures and other particulars of the minimum wage enactment recently promulgated in Trinidad?
    The Secretary of State for the Colonies (Mr. Ormsby-Gore): The causes of the dispute will form a matter for inquiry by the commission which I propose to appoint. According to the information which I have received, the total number of persons killed during the disturbances has been 11, two of whom were police and nine rioters: three police were also injured. There has been no legal enactment of a minimum wage. As the terms of settlement, including the fixing of minimum wage rates for Government workers, involve a number of figures, I am circulating a statement in the OFFICIAL REPORT.
    Mr. Riley: Can the right hon. Gentleman say whether the dispute has been entirely settled?
    Mr. Ormsby-Gore: The workers are back at work, and it has been settled on a temporary basis. An undertaking has been given that a Commission will be
    1242
    appointed, three members to be appointed from here and two from Trinidad, to go out to Trinidad and investigate the whole matter.
    Mr. Leach: Can the right hon. Gentleman give me any figures associated with the minimum wage?
    Mr. Ormsby-Gore: No, Sir, not without notice.
    Mr. Creech Jones: Will the right hon. Gentleman consider including within the terms of reference of the Commission a question relating to the industrial rights of the workers when they are engaged in disputes?
    Mr. Ormsby-Gore: I think I have already published the Terms of Reference.
    Mr. George Griffiths: Is it not a fact that they are getting is. 8d. a day now?
    Following is the statement:
    Wages throughout the Colony were cut during the world depression, and in some instances hours were lengthened, and original wages and hours have been restored only in part. The Government wage for unskilled labour in Port of Spain was reduced from 60 cents and 70 cents to 56 cents and 60 cents, and has remained at that level. The unskilled wage outside Port of Spain was reduced to 50 cents for men and 30 cents for women. Recently there has been an estimated increase of 17 per cent. in the cost of foodstuffs and necessaries. The new minimum rates for Government workers are 72 cents in Port of Spain and 60 cents for men and 36 cents for women outside. The week has been reduced from 54 to 45 hours. Wages of Government agricultural workers remain to be settled. In April a 13 per cent. increase was given to labour at one estate. Prior to the strike the Governor was negotiating for a minimum rate of 72 cents in the oil industry. This has now been granted. Apart from agriculture, other employers have been following suit.
    The Governor has publicly asked employers to discuss with representatives of their workers any representations which the latter may wish to make. He has also undertaken that differences thereafter outstanding will be examined by the Committee of the Executive Council, and, if necessary, referred to himself. The employers have concurred in this procedure

    1243
    and the men have return to work on that understanding. The Governor reports that the Committee's mediation is proving invaluable.

    OCEAN ISLAND (PHOSPHATES).
    Mr. Creech Jonesasked the Secretary of State for the Colonies whether he will consider some modification of the present arrangement permitting the exploitation of phosphates in the Ocean Island of the Gilberts so as to increase the fee payable for the privilege, give a substantial part to the Imperial Exchequer, and a larger royalty for native welfare services and their development?
    Mr. Ormsby-Gore: On the information at present before me I do not feel justified in proposing a modification of the existing general arrangements.
    Mr. Creech Jones: In view of the prosperity of the people who are exploiting these phosphates, would it not be desirable on the part of the right hon. Gentleman to consider the creation of a welfare fund for the benefit of the inhabitants of these islands?
    Mr. Ormsby-Gore: The number of inhabitants is very small and there are funds for their progress and development. The question of contributions for the Colony as a whole may require consideration from time to time.

    INTERNATIONAL SUGAR AGREEMENT.
    Mr. Pickthornasked the Secretary of State for the Colonies whether any and, if so, which colonial legislatures have passed ordinances to implement the recent International Sugar Agreement?
    Mr. Ormsby-Gore: So far as I am aware, no such Ordinances have yet been passed, but the legislatures of Antigua, Barbados, British Guiana, Jamaica, Mauritius, and St. Lucia have expressed their intention to enact the necessary legislation, and I expect shortly to be assured of the position in the remaining Dependencies concerned.

    ZAMBESI BRIDGE.
    Mr. Dayasked the Secretary of State for the Colonies the total amount
    1244
    that has been expended to date in the negotiations and building of the lower Zambesi Bridge?
    Mr. Ormsby-Gore: The expenditure on the Bridge and the Southern Approach Railway amounts to £1,811,178, including interest during the construction period, but excluding certain items still to be brought to account, which are estimated at some £100,000.
    Mr. Day: Does that include the amount spent on local contracts?
    Mr. Ormsby-Gore: Yes, that is the total expenditure.

  PALESTINE.

    MUNICIPAL VOTING REGISTER, PETAH TIQVA.
    Mr. T. Williamsasked the Secretary of State for the Colonies whether he has received any communication concerning the Petah Tiqva (Rural Council Order), 1937; and, if so, has he any statement to make to the House?
    Mr. Creech Jonesasked the Secretary of State for the Colonies whether he can give the reasons for the imposition of new qualifications for the municipal voting register at Petah Tiqva, in Palestine; why the age has been raised from 21 to 25; why each voter must own a minimum of 10 dunums of land for three years before qualifying; why co-operative farms are granted only one vote for each 100 dunums of land; and whether he will consider the cancellation of this order issued under Section 2 of the Local Councils Ordinance?
    Mr. Ormsby-Gore: On 18th June, arising out of a question by the hon. Member for Don Valley (Mr. T. Williams), I addressed a despatch to the High Commissioner for Palestine asking for a report on this matter. I have not yet received a reply, but I have no doubt that I shall hear very shortly.
    Mr. Williams: Can the right hon. Gentleman say whether when the reply is forthcoming and he has examined it, he has power to amend the Order if he feels so disposed?
    Mr. Ormsby-Gore: Yes, I can do so.
    Mr. Macquisten: In view of the fact that it appears that the farmers there

    1245
    have a vote in accordance with the amount of land they possess, could they be given a vote in accordance with the number of cows they have, as is done by the Milk Board in Scotland?

    ROYAL COMMISSION'S REPORT.
    Mr. Manderasked the Secretary of State for the Colonies the position with regard to the submission of the Government's proposals for the future of Palestine to the Mandates Commission of the League of Nations; whether it will be necessary for a special meeting of the Council to be called as a prior step; and whether the report of the Royal Commission and British Government's policy have been officially submitted to the United States Government?
    Mr. Ormsby-Gore: I should prefer not to deal with these points by question and answer. I understand that there will shortly be an opportunity of debating the affairs of Palestine, when I shall be able to go more fully into the various questions of procedure than is possible in a reply to an oral question.
    Mr. Mander: Can the right hon. Member say whether the policy and the report have been submitted to the United States Government? That is in the latter part of the question. [HON. MEMBERS: "Why should they be?"] Because of the fact that the United States Government is a party to the mandate.
    Mr. Ormsby-Gore: Under the Convention of December, 1924, we are bound to send all documents connected with Palestine to the United States Government, and that was done.

  GOLD COAST.

    WATERWORKS ORDINANCE.
    Mr. Sorensenasked the Secretary of State for the Colonies whether he is aware of the discontent on the Gold Coast respecting the operation of the Waterworks Ordinance of March, 1934; and whether he has received any representations on the matter?
    Mr. Ormsby-Gore: The operation of the Waterworks Ordinance of 1934 was postponed and it will not be brought into force until 1st April, 1938. Apart from
    1246
    one communication, the origin of which cannot be traced, no representations regarding this decision have been received at the Colonial Office. With the hon. Member's permission I will circulate in the OFFICIAL REPORT the text of the announcement made by the Governor in the Legislative Council on 15th March.
    Following is the text:
    "39. This brings me to the question of the date of the imposition of a general water rate at Accra and elsewhere. Hon. Members will recall that the payment of such a rate was sanctioned by the Waterworks Ordinance, No. 20 of 1934, but that my predecessor, on representations being made to him that the operation of the Ordinance would cause the people hardship owing to the economic conditions then prevailing, decided that it should not be put into force until the time had arrived when the populace would be in a better position to support the additional financial burden involved. That time has now come. It has, however, been found necessary to make certain modifications to Government's original rating plans, so I will outline briefly the arrangements now decided. In municipal areas, that is to say in Accra, Kumasi, Cape Coast and Sekondi, the owner of every house of a rateable value of not less than £6 per annum will, in the first instance, be charged a general water rate of 2½ per cent., but this rate will fall to be reconsidered from time to time in the light of the rateable capacity of the municipalities concerned. It may be raised as high as 5 per cent. Payment of this rate will begin on the 1st April, 1938, and in the meantime steps will be taken to ensure that an adequate number of street fountains is provided in all quarters of the municipalities. At the same time, that is to say from the 1st April, 1938, a system of rating for water on the lines of that at present in force at Tamale will be introduced in substitution for the system of water compounds where it exists in non-municipal areas which enjoy the amenity of pipe-borne water supplies. The assessment of these water supply areas will start forthwith. A memorandum dealing fully with the whole matter will be issued in due course for general information and will be broadcast, but to avoid any possible misunderstanding, I would here and now stress the following three points: first, that Government is satisfied that the imposition of the rate will cause hardship to nobody because poor people and those householders with a rateable value of under £6 will he exempt; secondly, that the postponement of its imposition until the 1st April, 1938, is to enable Government to complete its arrangements, and for no other reason; and, thirdly, that all persons liable to the rate will be required to pay it. I feel sure that I can rely on the innate good sense and loyalty of the Gold Coast people to assist Government in this matter, more especially when it is taken into consideration that this policy is universal in every civilised community."

    LATE ODIKRO OF AKWATIA.
    Mr. Sorensenasked the Secretary of State for the Colonies whether he is aware that the Odikro of Akwatia has died in exile; whether he has information respecting the cause of death; and whether the report of the decease of this chief of the Asamangkese division is causing any unrest in the Gold Coast?
    Mr. Ormsby-Gore: I understand that the Odikro of Akwatia died on 29th May, but I have no information as to the cause of his death. I am not aware that unrest has arisen in consequence of the death of the Odikro.
    Mr. Sorensen: Can the right hon. Gentleman make inquiries respecting the decease of this gentleman?
    Mr. Ormsby-Gore: I cannot undertake to make inquiries into the cause of death of every native in West Africa.

    NIGERIA (EGBA THRONE).
    Mr. Sorensenasked the Secretary of State for the Colonies whether he is aware of a rival claim to the Egba throne made eight years ago; whether he has any record of the incident; and by what legal right the Alake of Abeokuta now occupies the Egba throne?
    Mr. Ormsby-Gore: I have no information as to any other claimant to the position of Alake of Abeokuta at the date referred to. The present Alake, who is the son of a former Alake, was unanimously nominated for office in 1920 by the Ogboni chiefs. The choice was then confirmed by the Egba Judicial Council and approved by the then Governor, Sir Hugh Clifford. During the past 17 years the Alake has proved a popular and progressive ruler.
    Mr. Sorensen: Is the right hon. Gentleman aware that in 1931–32 there was a rival claimant to this throne, and that the matter was discussed in the local newspapers? Is he not aware that the present Alake of Abeokuta is not a direct descendant of the previous occupant of the throne, and in view of these facts will he make further investigations?
    Mr. Ormsby-Gore: The facts are on record and show that the statement in the
    1248
    papers was so untrue that the Alake is a son of the previous Alake of Abeokuta. If the hon. Member has in mind the ex-Oshili, he was sentenced by a court for immoral conduct in 1925, and was ordered to leave the Egba country.
    Mr. Sorensen: Is the right hon. Gentleman not aware that in fact the rival claimant's name is Smith?

    HOSPITALS AND INSTITUTIONS (NURSING STAFFS).
    Mr. Kirbyasked the Prime Minister whether he is aware that some hospitals and institutions have difficulty in recruiting nursing staffs and that some of the difficulty is due to the working of long hours; and whether, in order to meet this difficulty facing local authorities, he will consider giving early facilities for the further stages of the Local Authorities (Hours of Employment in connection with Hospitals and Institutions) Bill?
    The Prime Minister (Mr. Chamberlain): I fear I can hold out no hope of special facilities being given for the passage of this Bill.
    Mr. Kirby: May I ask whether that reply indicates that the Government have no sympathy with the objects of the Bill?
    The Prime Minister: It merely indicates what it says.

    OFFICERS OF THE CROWN (BUSINESS APPOINTMENTS).
    Captain Harold Balfourasked the Prime Minister whether he is in a position to state the result of the examination into the question of the acceptance by officers of the Crown services of business appointments to which reference was made in paragraph 15 of the Command Paper 5451 issued last May?
    The Prime Minister: Yes, Sir. The Government have completed their study of this question, and it is proposed that a White Paper should be presented forthwith giving the conclusions which the Government have reached.

    CANTON ISLAND.
    Sir J. Mellorasked the Secretary of State for the Colonies whether his

    1249
    attention has been called to the dispute regarding British sovereignty in Canton Island, lying between Suva and Honolulu; and whether he will make a statement as to the position?
    Mr. A. Hendersonasked the Secretary of State for the Colonies whether he will make a statement as to the recent incident between the New Zealand sloop "Wellington" and the United States seaplane tender "Avocet" at Canton Island, in the Western Pacific?
    Mr. Ormsby-Gore: Canton Island, with the other islands forming the Phoenix Group, is included in the British Colony of the Gilbert and Ellice Islands, which are administered under our High Commissioner for the Western Pacific. I have been informed by the High Commissioner that, when His Majesty's ship "Wellington" recently arrived at Canton Island with an expedition from New Zealand to view the solar eclipse, the commanding officer found the United States ship "Avocet" anchored there, having on board a similar American expedition, and that he was informed by the captain of the "Avocet" that British sovereignty over the island was not admitted by the United States Government. The position thus disclosed is being considered.

    BRITISH SOMALILAND.
    Mr. Noel-Bakerasked the Secretary of State for the Colonies whether he can tell the House the purpose of the agreement recently concluded with the Italian Government concerning the use of the roads in British Somaliland?
    Mr. Ormsby-Gore: The agreement concerning grazing rights and transit trade which the hon. Member has in mind was concluded in January last, between representatives of the Government of British Somaliland and appropriate Italian authorities with the object of facilitating transit traffic between British Somaliland and adjacent territories.
    Mr. Noel-Baker: Have the Italians a right to make up roads in British Somaliland?
    Mr. Ormsby-Gore: I do not think so. The hon. Member knows that the frontier is very vaguely defined and tribes on both sides in different seasons of the year are liable to cross the border. There
    1250
    must be an interim arrangement. I cannot recollect the details.
    Mr. Noel-Baker: Can the right hon. Gentleman give an assurance that the agreement is not being used to assist the Italians in their repressive measures against the unhappy Abyssinian people?
    Mr. Ormsby-Gore: There are no Italian forces in British Somaliland, and I resent very much the insinuation of the hon. Member.
    Mr. Noel-Baker: I apologise if I have not made myself clear. Is the right hon. Gentleman aware that the Italians are, in fact, engaged in hositilities against the Abyssinians in the Ogaden, and that they have no means of transport from the Ogaden except through British Somaliland. Is the purpose of this agreement to facilitate their activities?
    Mr. Ormsby-Gore: I dispute altogether that there are no means of transport to the Ogaden except through British Somaliland, and there is no foundation for the suggestion that we have permitted Italian or any other forces to proceed through British Somaliland.

  ROYAL AIR FORCE.

    OFFICERS' WIDOWS AND DEPENDANTS (PENSIONS).
    Mr. Louis Smithasked the Under-Secretary of State for Air the system upon which pensions are granted to widows of officers killed while flying, or grants made to dependent relatives; whether such awards are based upon any percentage of the salaries received during lifetime by the deceased; and, if so, what this percentage is?
    The Under-Secretary of State for Air (Lieut.-Colonel Muirhead): I am sending my hon. Friend a copy of the relevant provisions of King's Regulations and Air Council Instructions.
    Mr. Smith: Having regard to the much greater risk run by these flying officers, does not the hon. and gallant Member consider that pensions to widows should be on a higher scale than in other circumstances?
    Mr. Smithasked the Under-Secretary of State for Air the number of fatal accidents which have occurred since the

    1251
    beginning of the year to officers of the Royal Air Force while on duty; in how many of these cases a pension has been awarded or a grant made to dependent relatives; and the average amount per annum awarded to each officer?
    Lieut.-Colonel Muirhead: As regards the first part of the question, the number of fatal accidents was 29, of which four were to officers of the Royal Navy attached to the Royal Air Force for service with the Fleet Air Arm. The awards to the dependants of these officers have been included in the information which follows, after consultation with the Admiralty, by whom the awards in respect of naval officers are made. As regards the second part, two pensions have been awarded and the award of another is under consideration. as also are three applications from parents of unmarried officers. The figures asked for in the last part are £100 per annum pension plus £200 gratuity and, in one case, £24 per annum in respect of a child.
    Mr. Smith: In thanking the hon. and gallant Member for his reply, may I ask whether he is satisfied that this apparently small amount of pension is in some cases adequate?
    Mr. Speaker: That question does not arise.

    DECEASED OFFICERS' ESTATES.
    Mr. L. Smithasked the Under-Secretary of State for Air whether he is aware that, in the case of an officer killed while flying on duty, the widow does not immediately receive even a proportion of the salary actually earned by her husband before his death, since the whole sum is withheld to ascertain any contingent liabilities; and whether, in view of the frequent embarrassment thus caused to the bereaved family, he can institute some more generous system of financial treatment?
    Lieut.-Colonel Muirhead: As regards the first part of the question, payments cannot be made from a deceased officer's estate without regard to the requirements of the Regimental Debts Act, 1893, and before ascertaining what testamentary dispositions he may have made. As regards the second part, arrangements exist for providing immediate assistance in
    1252
    suitable cases and I have no reason to believe that there is frequent embarrassment. If the hon. Member has any evidence to the contrary and will let me have it, I will gladly investigate it.

    OFFICERS' SERVANTS (MONTROSE).
    Mr. J. J. Davidsonasked the Under-Secretary of State for Air the total number of officers' servants employed at Montrose air base, and the number of officers per servant receiving attention?
    Lieut.-Colonel Muirhead: The number of officers' servants is 35 and the number of officers per servant is represented by an average figure of just over three.
    Mr. Davidson: Is the Under-Secretary of State aware that in many cases officers' servants have to give attention to as many as five officers and that their hours are much longer than the usual hours of employés in this country, and will he make representations on this matter in order to see that those officers' servants receive better conditions than at the present time?
    Lieut.-Colonel Muirhead: I am not aware of the particular conditions to which the hon. Member refers, but I will look into the matter.

    ACCIDENTS (INQUIRIES).
    Mr. Lyonsasked the Under-Secretary of State for Air how many inquiries have been held and completed consequent upon fatalities in the Royal Air Force this year to date; and how many are now pending?
    Lieut.-Colonel Muirhead: Forty-two inquiries upon flying fatalities in the Royal Air Force have been held and completed this year and three are incomplete.

  AVIATION.

    TOLLERTON (FLYING SCHOOL).
    Mr. Kellyasked the Under-Secretary of State for Air the position at Tollerton aerodrome; and whether Messrs. Marshalls have been given the authority for a flying school at Tollerton?
    Lieut.-Colonel Muirhead: In reply to the first part of the question, matters arising out of the compulsory purchase order made by the Nottingham Corporation are under consideration. The answer to the second part is in the negative.
    Mr. Kelly: May I ask if the consideration referred to in the reply means that a public inquiry is to be held, and whether Messrs. Marshall's are still under consideration for this flying school?
    Lieut.-Colonel Muirhead: The question under consideration arises from the fact that the Nottingham Corporation have altered the scope of the compulsory order for which they asked, and at the present moment consideration is being given as to whether that means another inquiry or not.
    Mr. Kellyasked the Under-Secretary of State for Air the names of all those to whom forms of tender were sent on the setting up of a flying school at Tollerton?
    Lieut.-Colonel Muirhead: Marshall's Flying School was the only firm to whom a form of tender was sent when the question of establishing the school was being explored early this year.
    Mr. Kelly: Why was there this discrimination, in view of the fact that other people were on the ground at the time and ready to undertake that work? Why were they not invited to tender? Was any tender form sent to any member of the Nottingham Corporation?
    Lieut.-Colonel Muirhead: I have said that the only people to whom forms of tender were sent were, in point of fact, the Marshall flying school, and that covers the last part of the question. With regard to discrimination, as I told the hon. Member some weeks ago, the fact that somebody happens to be on the ground at the time does not necessarily make them suitable to undertake a particular job of work. There was no discrimination. It was simply considered that the Marshall flying school were the best people to undertake that work.
    Mr. Kelly: In view of that reply and knowing that other people were on the ground, why were they not asked to tender in order to see whether they could conform with all that was demanded?
    Lieut.-Colonel Muirhead: It was not considered that they were suitable people to whom tender forms should be sent.
    Mr. Everard: Is my hon. and gallant Friend aware that the Nottingham Flying Club is a highly successful club in every way competent to carry on one of these
    1254
    schools? Why was not a tender form sent to them?
    Lieut.-Colonel Muirhead: I think I have already given a very full answer to the question on the Paper and to the Supplementary questions.

    AIRPORTS (NIGHT FLYING).
    Mr. Lyonsasked the Under-Secretary of State for Air whether he will enumerate the airports in this country at which facilities for night flying exist?
    Lieut.-Colonel Muirhead: With my hon. and learned Friend's permission, I will circulate the list in the OFFICIAL REPORT.
    Following is the list:
    Aerodromes at which facilities for night flying exist:

    Bristol (Whitchurch).

    Cardiff.

    Croydon.

    Doncaster.

    Gatwick.

    Gravesend.

    Heston.

    Leicester (Braunston Frith).

    Leicester (Ratcliffe).

    Liverpool (Speke).

    Lympne.

    Newcastle (Woolsington).

    Southampton.

  TRANSPORT.

    ROAD ACCIDENTS.
    Mr. Ellis Smithasked the Minister of Transport (1) the number of road accidents in Stoke-on-Trent during the first six months of 1930, 1936 and 1937, respectively;
    (2) the number of children under 14 years of age who were injured during 1936 on the roads in Stoke-on-Trent, Salford and Newcastle-on-Tyne, respectively?
    The Minister of Transport (Mr. Burgin): I will, with the hon. Member's permission, circulate the figures asked for in the OFFICIAL REPORT.
    Following is the information:
    The numbers of persons killed or injured in road accidents in the City of Stoke-on-Trent during the first six months of 1930, 1936 and 1937 respectively were as follow:

    Killed.

    Injured.

    1930

    …

    …

    20

    262

    1936

    …

    …

    11

    443

    1937

    …

    …

    12

    413

    The number of children under 14 years of age who were killed or injured during 1936 on the roads in Stoke-on-Trent, Salford and Newcastle, was:

    Killed.

    Injured.

    Total.

    Stoke-on-Trent

    …

    …

    6

    219

    225

    Salford

    …

    …

    2

    125

    127

    Newcastle-upon-Tyne

    …

    …

    6

    248

    254

    Mr. Davidsonasked the Minister of Transport the total number of road accidents, fatal or otherwise, in the Maryhill Division of Glasgow for the first six months of 1937?
    Mr. Burgin: Five persons were killed and 149 injured as a result of road accidents in the Maryhill Police Division of Glasgow during the six months ended 30th June, 1937.
    Mr. Davidson: Is the right hon. Gentleman aware that this shows an increase of 100 per cent. in road fatalities in this one area since 1934, and will he at least make some inquiry into the transport question in that area?
    Mr. Burgin: On the contrary, it shows a reduction.
    Mr. Palmerasked the Minister of Transport how many accidents have occurred on the road between Basingstoke and Winchester in each of the last three years; and how many of such accidents have had fatal consequences?
    Mr. Burgin: I will, with my hon. Friend's permission, circulate the figures in the OFFICIAL REPORT.
    Following is the information:
    The numbers of accidents involving personal injury which occurred on the road between Basingstoke and Winchester during each of the last three years were as follow:

    Year.

    Fatal Accidents.

    Non-Fatal Accidents.

    Total.

    1934

    …

    7

    42

    49

    1935

    …

    3

    39

    42

    1936

    …

    7

    67

    74

    RAILWAY SERVICES, NORTH STAFFORDSHIRE.
    Mr. E. Smithasked the Minister of Transport whether action can be taken to increase and improve the railway services in the North Staffordshire area?
    Mr. Burgin: I am informed by the London Midland and Scottish Railway Company that they review continually
    1256
    the train services in North Staffordshire in order to meet to the greatest possible extent the needs of the travelling public, and that improvements and adjustments are made from time to time in the various services operating in the area. The company is prepared to review specially any particular service which the hon. Member may regard as inadequate if he will so indicate.

    OMNIBUS PASSENGER SHELTERS.
    Mr. Palingasked the Minister of Transport how many of the omnibus companies have erected shelters for their passengers at suitable points in towns and villages; and whether he is satisfied with the progress being made in this direction?
    Mr. Burgin: As I explained in the reply which I gave to the hon. Member for York (Mr. Wood) on 23rd June, the provision of omnibus shelters for passengers is not within my control, and I am therefore not in a position to give the information for which the hon. Member asks.
    Mr. T. Williams: Is it the case that the Traffic Commissioners under the right hon. Gentleman's Department have no control over these combines, and will not the right hon. Gentleman use his influence with the Traffic Commissioners to make some progress in this direction?
    Mr. Burgin: I think there is a good deal of misconception behind that supplementary question. Perhaps the hon. Member will confer with me.
    Mr. Paling: Is there anybody with any powers to help these people in the matter of shelters?

    ALLANVALE BRIDGE, RIVER DEE.
    Mr. Garro Jonesasked the Minister of Transport whether he has had before him the two estimates for the construction of the Allanvale bridge over the River Dee; whether he is aware that one tender, which has not been accepted, is £27,000 less than a tender which it has been proposed to accept; and whether he will take steps to satisfy himself, before giving his sanction to the scheme, that the best tender will be accepted?
    Mr. Burgin: In circumstances which are unusual the town council has asked for my advice, and the matter is now being investigated by my technical officers.
    Mr. Garro Jones: May I have an answer to the last part of the question?
    Mr. Burgin: As the whole matter has been submitted to me for advice and the request was received on 12th July, I cannot add to the answer for the moment.

    MOTOR COACHES (PARKING, LONDON).
    Mr. Dayasked the Minister of Transport what reply was received by him from the Traffic Advisory Committee on the question of whether arrangements can be made for parking of long-distance motor coaches in districts outside the West End of London; and what action he proposes to take in the matter?
    Mr. Burgin: No reply has yet been received from the London Traffic Advisory Committee.
    Mr. Day: Can the Minister ask the Committee to expedite the early consideration of this matter?
    Mr. Burgin: Yes, Sir.

    ROAD TRAFFIC SIGNS.
    Mr. Liddallasked the Minister of Transport what instructions have been given to highway authorities in respect of the repetition of the speed de-restriction signs on de-restricted roads in built-up areas, and in respect of the restriction signs on restricted roads in areas not built up?
    Mr. Burgin: In a de-restricted length of road the smaller black and white signs are placed on each lamp-post. Restriction signs are not repeated.

    CHINA AND JAPAN.
    Mr. Attlee(by Private Notice) asked the Secretary of State for Foreign Affairs whether he has any statement to make on the situation in China?
    Mr. Eden: There was some sporadic firing in and around Peking yesterday, but my latest information is that the situation there appears to have quietened, although naturally there is an undercurrent of nervous apprehension. The Japanese Embassy in Peking announced yesterday that certain terms which they refer to as an agreement had been signed by representatives of the Hopei-Chahar
    1258
    Council and the Chinese 29th Army, and communicated to the Japanese authorities. The full text was not disclosed, but it appears to be on the lines reported in the Press this morning.
    Meanwhile I have been in touch with the Japanese and Chinese Governments. I have made clear to both that His Majesty's Government are conscious of the anxieties of the situation, which they are watching closely and have expressed to them our concern lest hasty action by either shall lead to a clash which should be avoided if the situation is handled with due caution on both sides. I have also been in consultation with the Governments of the United States of America and France as to the situation generally. We propose to continue such consultation and, in the meanwhile, His Majesty's Government will lose no opportunity that offers of making any contribution in their power towards the peaceful solution of these difficulties.

BUSINESS OF THE HOUSE.
Mr. Attlee: May I ask the Prime Minister whether he can make any statement with regard to the order of to-day's business?
The Prime Minister: It is proposed to make such progress with the Report stage of the Finance Bill as will not only ensure the completion of that stage to-morrow, but will enable us to take the Report stage of the Agriculture Bill at a reasonable hour. We must, obviously, wait and see how the business proceeds, but my right hon. and gallant Friend the Parliamentary Secretary to the Treasury will, through the usual channels, endeavour to fix a convenient time for breaking off the proceedings on the Finance Bill and taking the Report stage of the Agriculture Bill. In addition to the first two Orders to which I have already referred, we propose to take the Report stage of the Coal (Registration of Ownership) Money Resolution.
Motion made, and Question put,
"That the Proceedings on the Agriculture Bill be exempted, at this day's Sitting, from the provisions of the Standing Order (Sittings of the House)."—[The Prime Minister.]
The House divided: Ayes, 231; Noes, 108.

Division No. 285.]

AYES.

[3.50 p.m.

Acland, Rt. Hon. Sir F. Dyke

Everard, W. L.

Orr-Ewing, I. L.

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

Fildes, Sir H.

Palmer, G. E. H.

Agnew, Lieut.-Comdr. P. G.

Findlay, Sir E.

Patrick, C. M.

Albery, Sir Irving

Fleming, E. L.

Peake, O.

Alexander, Brig.-Gen. Sir W.

Furness, S. N.

Peat, C. U.

Anstruther-Gray, W. J.

Fyfe, D. P. M.

Petherick, M.

Aske, Sir R. W.

Ganzoni, Sir J.

Pickthorn, K. W. M.

Assheton, R.

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

Pilkington, R.

Atholl, Duchess of

Gluckstein, L. H.

Plugge, Capt. L. F.

Baillie, Sir A. W. M.

Goldie, N. B.

Porritt, R. W.

Baldwin-Webb, Col. J.

Goodman, Col. A. W.

Pownall, Lt.-Col. Sir Assheton

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

Grattan-Doyle, Sir N.

Procter, Major H. A.

Balniel, Lord

Gretton, Col. Rt. Hon. J.

Purbrick, R.

Baxter, A. Beverley

Gridley, Sir A. B.

Ramsay, Captain A. H. M.

Beaumont, M. W. (Aylesbury)

Grigg, Sir E. W. M.

Ramsbotham, H.

Belt, Sir A. L.

Grimston, R. V.

Ramsden, Sir E.

Bernays, R. H.

Guest, Hon. I. (Brecon and Radnor)

Rankin, Sir R.

Birchall, Sir J. D.

Guinness, T. L. E. B.

Rathbone, Eleanor (English Univ's.)

Bird, Sir R. B.

Gunston, Capt. D. W.

Rathbone, J. R. (Bodmin)

Blair, Sir R.

Guy, J. C. M.

Rawson, Sir Cooper

Bossom, A. C.

Hannah, I. C.

Rayner, Major R. H.

Brass, Sir W.

Hannon, Sir P. J. H.

Reid, J. S. C. (Hillhead)

Briscoe, Capt. R. G.

Harbord, A.

Rickards, G. W. (Skipton)

Brocklebank, Sir Edmund

Harris, Sir P. A.

Rosbotham, Sir T.

Brown, Col. D. C. (Hexham)

Haslam, H. C. (Horncastle)

Ross, Major Sir R, D. (Londonderry)

Brown, Rt. Hon. E. (Leith)

Haslam, Sir J. (Bolton)

Ross Taylor W. (Woodbridge)

Bull, B. B.

Hepworth, J.

Rothschild, J. A. de

Bullock, Capt. M.

Herbert, A. P. (Oxford U.)

Rowlands, G.

Burgin, Rt. Hon. E. L.

Herbert, Capt. Sir S. (Abbey)

Royds, Admiral P. M. R.

Burton, Col. H. W.

Higgs, W. F.

Russell, Sir Alexander

Butcher, H. W.

Holdsworth, H.

Russell, S. H. M. (Darwen)

Butler, R. A.

Hope, Captain Hon. A. O. J.

Salmon, Sir I.

Cartland, J. R. H.

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

Salter, Sir J. Arthur (Oxford U.)

Carver, Major W. H.

Hulbert, N. J.

Sandeman, Sir N. S.

Cary, R. A.

James, Wing-Commander A. W. H.

Sanderson, Sir F. B.

Castlereagh, Viscount

Keeling, E. H.

Savery, Sir Servington

Cayzer, Sir H. R. (Portsmouth, S.)

Kerr, Colonel C. I. (Montrose)

Selley, H. R.

Cazalet, Capt. V. A. (Chippenham)

Kerr, H. W. (Oldham)

Shaw, Major P. S. (Wavertree)

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

Kerr, J. Graham (Scottish Univs.)

Simmonds, O. E.

Channon, H.

Keyes, Admiral of the Fleet Sir R.

Simon, Rt. Hon. Sir J. A.

Chapman, Sir S. (Edinburgh, S.)

Kimball, L.

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

Charlton, A. E. L.

Lamb, Sir J. Q.

Smith, L. W. (Hallam)

Cobb, Captain E. C. (Preston)

Lambert, Rt. Hon. G.

Somervell. Sir D. B. (Crewe)

Colville, Lt.-Col. Rt. Hon. D. J.

Latham, Sir P.

Southby, Commander Sir A. R. J.

Conant, Captain R. J. E.

Law, Sir A. J. (High Peak)

Spears, Brigadier-General E. L.

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

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

Stewart, William J. (Belfast, S.)

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

Leighton, Major B. E. P.

Stourton, Major Hon. J. J.

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

Lennox-Boyd, A. T. L.

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

Courthope, Col. Rt. Hon. Sir G. L.

Levy, T.

Strauss, H. G. (Norwich)

Cox, H. B. T.

Liddall, W. S.

Strickland, Captain W. F.

Cranborne, Viscount

Llewellin, Lieut.-Col. J. J.

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

Croft, Brig.-Gen. Sir H. Page

Locker-Lampson, Comdr. O. S.

Sueter, Rear-Admiral Sir M F.

Crooke, J. S.

Loftus, P. C.

Sutcliffe, H.

Crookshank, Capt. H. F. C.

Lyons, A. M.

Tasker, Sir R. I.

Cross, R. H.

Mabane, W. (Huddersfield)

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

Crossley, A. C.

MacAndrew, Colonel Sir O. G.

Wakefield, W. W.

Crowder, J. F. E.

MacDonald, Rt. Hon. M. (Ross)

Wallace, Capt. Rt. Hon. Euan

Cruddas, Col. B.

McEwen, Capt. J. H. F.

Ward, Irene M. B. (Wallsend)

Culverwell, C. T.

McKie, J. H.

Wardlaw-Milne, Sir J. S.

Davies, Major Sir G. F. (Yeovil)

Maclay, Hon. J. P.

Warrender, Sir V.

Davison, Sir W. H.

Macnamara, Capt. J. R. J.

Watt, G. S. H.

De Chair, S. S.

Macquisten, F. A.

Wedderburn, H. J. S.

De la Bère, R.

Magnay, T.

Wells, S. R.

Denman, Hon. R. D.

Maitland, A.

Whiteley, Major J. P. (Buckingham)

Dodd, J. S.

Makins, Brig.-Gen. E.

Wickham, Lt.-Col. E. T. R.

Dower, Major A. V. G.

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

Williams, C. (Torquay)

Drewe, C.

Markham, S. F.

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

Duggan, H. J.

Marsden, Commander A.

Windsor-Clive, Lieut.-Colonel G.

Duncan, J. A. L.

Maxwell, Hon. S. A.

Winterton, Rt. Hon. Earl

Eastwood, J. F.

Mayhew, Lt.-Col. J.

Withers, Sir J. J.

Eden, Rt. Han. A.

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

Womersley, Sir W. J.

Elliot, Rt. Hon. W. E.

Mills, Major J. D. (New Forest)

Wright, Squadron-Leader J. A. C.

Ellis, Sir G.

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

Young, A. S. L. (Partick)

Elmley, Viscount

Morrison, Rt. Hon. W. S. (Cirencester)

Emery, J. F.

Muirhead, Lt.-Col. A. J.

Emmott, C. E. G. C.

Neven-Spence, Major B. H. H.

TELLERS FOR THE AYES.—

Emrys-Evans, P. V.

Nicolson, Hon. H. G.

Mr. James Stuart and Lieut.-

Entwistle, Sir C. F.

O'Connor, Sir Terence J.

Colonel Sir A. Lambert Ward.

Evans, D. O. (Cardigan)

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

1260

1261

NOES.

Acland, R. T. D. (Barnstaple)

Griffiths, J. (Llanelly)

Pritt, D. N.

Adams, D. (Consett)

Hall, J. H. (Whitechapel)

Riley, B.

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

Hayday, A.

Ritson, J.

Adamson, W. M.

Henderson, A. (Kingswinford)

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

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

Henderson, J. (Ardwick)

Rowson, G.

Ammon, C. G.

Henderson, T. (Tradeston)

Salter, Dr. A. (Bermondsey)

Attlee, Rt. Hon. C. R.

Hills, A. (Pontefract)

Sanders, W. S.

Banfield, J. W.

Johnston, Rt. Hon. T.

Sexton, T. M.

Barr, J.

Jones, A. C. (Shipley)

Shinwell, E.

Batey, J.

Kelly, W. T.

Short, A.

Bann, Rt. Hon. W. W.

Kennedy, Rt. Hon. T.

Silkin, L.

Bromfield, W.

Kirby, B. V.

Silverman, S. S.

Brown, C. (Mansfield)

Kirkwood, D.

Smith, Ben (Rotherhithe)

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

Lathan, G.

Smith, E. (Stoke)

Buchanan, G.

Leach, W.

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

Burke, W. A.

Lee, F.

Sorensen, R. W.

Cape, T.

Leonard, W.

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

Chater, D.

Leslie, J. R.

Taylor, R. J. (Morpeth)

Cluse, W. S.

Logan, D. G.

Thorne, W.

Clynes, Rt. Hon. J. R.

Lunn, W.

Thurtle, E.

Cocks, F. S.

Macdonald, G. (Ince)

Tinker, J. J.

Cove, W. G.

McEntee, V. La T.

Viant, S. P.

Davidson, J. J. (Maryhill)

McGhee, H. G.

Walker, J.

Davies, R. J. (Westhoughton)

MacLaren, A.

Watkins, F. C.

Davies, S. O. (Merthyr)

Maclean, N.

Watson, W. McL.

Day, H.

MacMillan, M. (Western Isles)

Wedgwood, Rt. Hon. J. C.

Dobbie, W.

Mander, G. le M.

Welsh, J. C.

Dunn, E. (Rother Valley)

Marshall, F.

Westwood, J.

Ede, J. C.

Mathers, G.

White, H. Graham

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

Messer, F.

Whiteley, W. (Blaydon)

Frankel, D.

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

Wilkinson, Ellen

Gardner, B. W.

Muff, G.

Williams, T. (Don Valley)

Garro Jones. G. M.

Noel-Baker, P. J.

Woods, G. S. (Finsbury)

Gibson, R. (Greenock)

Paling, W.

Young, Sir R. (Newton)

Green, W. H. (Deptford)

Parker, J.

Grenfell, D. R.

Parkinson, J. A.

TELLERS FOR THE NOES.—

Griffiths, G. A. (Hemsworth)

Pethick-Lawrence, Rt. Hon. F. W.

Mr. Charleton and Mr. Groves.

SEA FISH (DYEING AND COLOURING PROHIBITION).
Mr. Macquisten: I beg to move,
"That leave be given to bring in a Bill to prohibit the use of dyes or colouring matter in the preparation of herring, haddock, and other sea fish."
The Bill which I propose to introduce may seem a homely little Measure, but if it becomes law I think it will have an important bearing on the comfort and nutrition of the general body of the people. For generations herring was one of the main food supplies of the people. It was cheap, nutritious and very good to eat. It had to be supplied fresh, and in former times horsemen used to meet the herring-boats as they came in and carry the fish in saddle-bags over the hills. You will still see in country places traces of what were known as "herring roads." In those days people got their fish fresh, but that is not the case to-day. The fish goes to Billingsgate and Glasgow, and is carried all round the place. It is some days before the supplies reach the people who consume them, and carried fish is not as good as fresh fish. The same applies to the herring. It occurred to some people who knew something about the curing of other food to see
1262
whether the process of smoking would not be equally useful in preserving herring. They smoked the herring and they called these herring "keppers," that is to say, herring that would keep. [Laughter.] It is not a joke; it is a historical fact; the word "kipper" is a corruption.
There is no finer, more luscious, or more delightful bit of food than an honestly smoked kipper. It must be smoked with oak chips and smoked for a considerable period, and it takes a man with a knowledge and appreciation of his job to do it. I know one who was such an artist that he would not supply me with kippers unless the herring were of the best. His handiwork was held up to public approbation in a page of one of Stephen Leacock's books. A wonderful fellow he was, and still is, and now and again I get some kippers from him. If kippers could be got in proper condition the population would eat them in very large quantities. But what has happened with the kipper is what has happened with everything else—the usual fraudulent and foul imitators have come upon the scene. They take the herring, they do not smoke them properly, they smoke them with any old wood, if at all, and dip them in a rich brown liquid; and

1263
the fish come out looking like well smoked kippers. But they are not kippers. To those who suffer even from slight indigestion they are no good. The best kipper I have tasted in recent years was in the Rand Club in Johannesburg. Those fish had been sent all the way from Scotland. There is a magnificent opening for the Herring Board if they would take up the successful kippering of fish. They could open in the United States a market which would absorb all the surplus herring of Great Britain, if those herring were properly kippered. But these dyed things are ruining the market, and the man who turns out good kippers cannot get rid of his products. The dyed kipper is not a smoked kipper at all; it is a dipped kipper.
When I first raised this matter a lot of shops put up the notice, "No dyed kippers here"; but they soon relapsed into sin again. They say that the dyed kippers are cheaper than the others. Of course they are; they are cheaper and nastier. I put the matter before the Minister of Health of that time, and I regret to say that I got a discouraging answer from him. He said that his experts were not satisfied that dyed kippers were injurious to health. I do not know any of these experts. They may or may not bury their heads in the sand sometimes, but if they can absorb dyed kippers they must have the digestions of ostriches. If all the fish that were thrown into the sea the other day could have been properly kippered and cured they could have been sold throughout the country at a cheap rate. All these remarks apply equally to the finnan haddock. Why should it be dyed? It is just as good if not coloured. The intention there also is to pretend that it has been smoked. But it has not been smoked. This Bill ought to go through, and the Government ought to give facilities for it. It will do far more good than any Herring Board in providing people with cheap and wholesome food. I bring in the Bill not only so that the population may get wholesome food at a cheap rate, but in order that these fraudulent people may cease to dye, and that the herring trade may live.
Question put, and agreed to.
Bill ordered to be brought in by Mr. Macquisten, Mrs. Tate, and Mr. Boothby.

SEA FISH (DYEING AND COLOURING PROHIBITION.) BILL,
"to prohibit the use of dyes or colouring matter in the preparation of herring, haddocks, and other sea fish," presented accordingly, and read the First time; to be read a Second time upon Monday next, and to be printed. [Bill 199.]

MESSAGE FROM THE LORDS.
That they have agreed to,—
Ministry of Health Provisional Order (Halifax) Bill,
Ministry of Health Provisional Order (Hornsea) Bill, without Amendment.
London Passenger Transport Bill, with Amendments.

BILLS REPORTED.
SAINT PAUL'S AND SAINT JAMES' CHURCHES (SHEFFIELD) BILL [Lords].
Reported, with Amendments, from the Committee on Group L of Private Bills (with Report on the Bill).
Bill, as amended, and Report to lie upon the Table; Report to be printed.

LIVERPOOL UNITED HOSPITAL BILL [Lords].
Reported, with Amendments, from the Committee on Group L of Private Bills (with Report on the Bill).
Bill, as amended, and Report to lie upon the Table; Report to be printed.

ORDERS OF THE DAY.

  FINANCE BILL.
  As amended, considered.
  NEW CLAUSE.—(Amendment as to relief in respect of losses.)
  For the purposes of section thirty-four of the Income Tax Act, 1918 (which relates to relief in respect of certain losses), the amount of a loss sustained in a trade shall, in all cases, be computed in like manner as the profits or gains arising or accruing from the trade are computed under the rules applicable to Case 1 of Schedule D:
  Provided that—

  (a) nothing in this section shall affect the provisions of paragraph 2 of Rule 15 of the Rules applicable to Cases 1 and 11 of Schedule D (which relates to losses of assurance companies carrying on life assurance business); and

  (b) where relief is claimed by virtue of this section in respect of a loss sustained in a trade which consists wholly or partly in dealing in securities, section twelve of this Act shall apply, for the purpose of computing the amount of the loss, as if subsection (5) thereof were omitted therefrom.—[Sir J. Simon.]

  Brought up, and read the First time.
  4.7 P.m.
  The Chancellor of the Exchequer (Sir John Simon): I beg to move, "That the Clause be read a Second time."
  This is the Clause which was put on the Paper on the Committee stage, but it was, I admit, put down rather late, and as it is a technical and complicated matter it was felt generally desirable that we should withdraw the Clause at that stage so as to give hon. Members full time to consider it. It is not really a controversial matter and I hope I can explain what is involved quite simply. If you take the ordinary case of a trading company which is being assessed on its balance of profits and gains for Income Tax, and if that trading company in a particular year makes a loss of £25,000, it is entitled to make use of that loss for the purpose of reducing any Income Tax which it may otherwise have to bear in respect of its investments. Suppose that the company had investments which would in most cases have been taxed at the source and in any case would have been taxed by one method or another, the position may be that the company will have borne an actual tax on its investment income although its trading
  1290
  account shows a loss. In such circumstances the company has really been overtaxed, and it is in such circumstances entitled by the law to use its losses in this way: It can ask to have returned to it so much of the tax as it has borne on its investment income as corresponds to the figure which will be worked out by applying the rate of tax to its trading losses. That is the ordinary method.
  There is, however, the very rare case which sometimes arises, and it is this rare case which we feel that we must correct. It is the case in which a company includes in its trading operations the making of investments—a banking company, for example. If you have a banking company which has got an investment income of £100,000 but on its other business activities has suffered a loss of £25,000, its position is exactly the same as the company I have described, but with this curious difference, that since the making of investments is a part of its business it is not in that event entitled to get back anything although it has really made a trading loss. It is to secure that they shall have a similar right to reduce their liability to what is the real liability that this particular Amendment is moved. If the House will look at the words and will take my description of the Section of the Act for granted, they will see that this is what we say:
  "For the purposes of Section thirty-four of the Income Tax Act, 1918 (which relates to relief in respect of certain losses), the amount of a loss sustained in a trade shall, in all cases, be computed in like manner as the profits or gains arising or accruing from the trade are computed under the rules applicable to Case 1 of Schedule D."
  That is to say, the very unusual case which sometimes does happen of an enterprise which has got an investment income that enters into its balance of profits and losses, but which, on the other hand, has suffered a loss on the other part of its trading activities. It is now brought into line with the regular law. The number of instances in which this happens is extremely rare, and the amount of revenue involved is quite minute, but there are such cases. I see no possible justification for failing to give those enterprises the same amount of relief as would be given to any other company if the facts were similar. Coming to the provisos of the new Clause, in paragraph (a) there is a reference to the provisions of Rule 15 of the Rules

  1291
  applicable to Cases 1 and 2 of Schedule D. All that is very involved and technical, but mercifully it is described as a rule which relates to losses of assurance companies carrying on life assurance business. The proviso really does nothing more than secure that we do not by accident alter the well understood method by which life assurance companies are assessed. Under the rather recondite conduct of the Income Tax law in the case of a life assurance company a special actuarial calculation is made each year or every three years to see what is the actual burden resting on the shoulders of the company in order that that may be set against its receipts for the purpose of ascertaining what is in fact the figure to be taxed. It is an elaborate calculation which is based on actuarial reckoning. It has been well understood for years.
  Proviso (b) in the same way explains itself if the Sub-section referred to is looked at. It is directed to ensure that the losses that arise from that operation called bond-washing carried out before we changed the law shall not rank as losses for the purpose of this Section. No one wishes to reward the bond-washer by giving him a new opportunity for claiming when he has miscalculated and made a loss. There is nothing susceptible of controversy in the proposal; it is merely correcting what I believe to be an injustice.
  4.15 p.m.
  Mr. Pethick-Lawrence: Having listened to the explanation given by the Chancellor of the Exchequer, I simply rise to say that the matter is one which is highly complicated and technical, but I do not think there is any doubt that the proposals of the Government in regard to it are in the main sound and need not receive any opposition from this side.
  Question, "That the Clause be read a Second time," put, and agreed to.
  Clause read a Second time, and added to the Bill.
  NEW CLAUSE.—(Amendment as to discount on tax paid in advance.)
  Section one hundred and fifty-nine of the Income Tax Act, 1918 (which provides for an allowance of discount on tax paid in adyance under Schedule D), shall be amended by inserting at the end thereof the following Subsection:
  1292
  "(2) The Commissioners of Inland Revenue may, on application made to them in writing within one month from the date of such a payment in advance by any person, repay to him the amount of any allowance which might have been made to him under this Section if he had made a request therefor at the time of the payment. "—[Lieut.-Colonel Colville.]
  Brought up, and read the First time.
  4.16 p.m.
  The Financial Secretary to the Treasury (Lieut.-Colonel Colville): I beg to move, "That the Clause be read a Second time."
  The House will recollect that on the Committee stage the hon. Member for Twickenham (Mr. Keeling) moved a new Clause relating to the discount on tax payments made in advance, and my right hon. Friend the Chancellor of the Exchequer, while unable to accept the Clause, promised consideration of the point and indicated that he would favourably consider a provision under which, if the discount was claimed within a period of a month from the payment of tax, it would still be possible for the taxpayer to get the discount. My hon. Friend the Member for Twickenham was rather inclined to look this gift horse in the mouth a little and to suggest that the period might be longer, and also that the word "may" should be changed into the word "must," thus laying a definite duty on the Revenue authorities to pay the discount. First of all, in regard to the question of the period of time, my right hon. Friend feels that the period of a month is reasonable and is is far as he is able to go to meet his hon. Friend. With regard to the other point. the question of "may" or "must," there really seems to be no substance in this objection. I am advised that the word "may" implies, not a discretion, but an authority to make the allowance, and the Revenue Department must carry out any provision in favour of the taxpayer where the law authorises it.
  Before leaving the subject, however, I would like to make this point, that I feel that the House should know that this consideration which is being shown for the taxpayer who pays his tax before the due date is not really, from the Exchequer point of view, a very profitable one, because in fact the Exchequer can borrow on Treasury bills at the rate of perhaps ½ to ¾ per cent. per annum and is in effect paying 2½ per cent. or thereabouts

  1293
  for the use of the money which is paid in advance. As against that, there is the convenience of collecting, and we naturally wish to encourage those who wish to pay not merely on the day but before it to do so if they feel able. I may mention that the existing provision has increasingly been taken advantage of, and the figures which I have here show that in the year 1936–37 the amount of discount allowed was no less than £69,000, as against £56,000 the year before and £30,000 the year before that, which shows an increasing use of this provision. Taking all the circumstances into account, my right hon. Friend feels that, if you are going to give this discount, there does seem some substance and justification in the plea that if a taxpayer omits, when sending his cheque, to claim a discount, he should not find himself cut out from receiving that benefit. Therefore, my right hon. Friend thinks it right to insert this Clause, which allows for one month within which application may be made for these discounts to be paid.
  4.20 p.m.
  Mr. Pethick-Lawrence: Equally as to this Clause, we on this side have no objection to the proposal of the Chancellor of the Exchequer. I should like to add that I think it is quite right that the time should not be indefinite within which a taxpayer should have the right to claim, and the period of one month seems to me to be suitable. I should like to throw out a suggestion which has often struck me, and that is that if this discount is allowed to a taxpayer who pays in advance, I have never been quite clear why complete complacency should be adopted towards the taxpayer who is always in arrears with his payments. It seems to me to be a premium upon dilatory payment by the taxpayer. I know that after a time an additional charge is made, but a good deal of time is allowed to elapse, and if the Government are beginning to lose more and more on this discount, they might consider in some future year making a certain charge if more than a certain amount of time is allowed to elapse, and that that time should not be too long for the taxpayer to delay his payment of the tax. I merely throw out that suggestion to the Government.
  4.22 p.m.
  Mr. Peat: While I welcome the concession which the Chancellor of the Ex-
  1294
  chequer has made on this question of discount, I feel that it still represents something in the nature of an insult to the taxpayers of this country, who have always prided themselves on the way in which they pay their tax regularly—much more than in any other country, so far as I know—and I feel that the giving of one month for notice to be given is to a certain extent a discrimination in favour of the big taxpayer who puts his tax in the hands of an expert, mho looks after these matters with considerable care and sees to it that he does not miss the opportunity of getting his 2½ per cent. discount. A smaller tradesman, perhaps, who is not in a position to employ an expert to help him, may be entirely ignorant of this discount, or, if he is not ignorant, he may forget it. I will, therefore, press, unless it is too late, that some limit should be fixed, that is to say, that if the tax or discount should come to £5 or £6 or some figure like that, it should either be paid automatically by the Inland Revenue or the taxpayer's attention should be drawn to the fact that this discount is available to him as he has paid his tax in advance.
  Generally speaking, if 2½ per cent. is not a business proposition from the point of view of the Exchequer, why not fix a smaller figure which is a businesslike proposition and treat the whole thing on a businesslike basis, so that anybody who pays tax before the due date automatically gets discount, whether he applies for it or not? I do not want to press the Government into making any arrangement against their interests, but I feel that they should make an arrangement which is businesslike both from their point of view and from the point of view of the taxpayer.
  4.25 p.m.
  Mr. Garro Jones: I have always thought that one of the worst features of Income Tax administration is the advantage which people have who are able to employ great experts for the working out of the amount to which they are liable. The new Clause which is now being proposed perpetuates one feature of that system. Why should it be that a man who does not happen to be aware that he is entitled to 2½ per cent. discount, although he may be just as regular in his payments—in fact, he may have paid his Income Tax a week before the time

  1295
  with extreme and conscientious regularity for 20 years—as the man who is so aware, should not receive the same advantage for his prompt payment? Under this Clause there is no obligation on the collector of Income Tax to inform him of the benefit which is his for the asking. I object to that for a further reason. There is a growing feeling in this country that the Income Tax authorities do not explain to those who pay the tax the abatements and reliefs to which they are entitled, and had I been ready to take the trouble, or had it indeed been necessary—because I am sure the Chancellor of the Exchequer knows it as well as I do—I should have come armed with a long list of people who have been paying amounts for which they are not liable for years past, and which the Income Tax authorities know they are not liable to pay, and yet those authorities have not drawn their attention to these overpayments.
  It is because this new Clause is drafted in such a form that it seems almost to wink at the practice of the Income Tax authorities in not drawing the attention of the taxpayers to reliefs to which they are entitled, that I support the remarks of the hon. Member for Darlington (Mr. Peat) and ask whether the Government cannot consider, in another year, the desirability of completing this Clause into such a form that everyone who pays by the due date shall automatically receive his discount. I feel that that would be a more ingenuous and honest administration of the Income Tax, and I trust the right hon. Gentleman will give consideration to it.
  4.28 p.m.
  Mr. Maitland: I think it is true to say that in former days, when the rate of Income Tax was much lower than it is to-day, those responsible for the collection of the tax acted more as advisers of the taxpayer than they do to-day. I would like to suggest to my right hon. Friend the Chancellor of the Exchequer that he might consider sending out to each taxpayer, with the demand for taxes, the provision which is now being embodied in this Bill, so that the general taxpayer shall have notice that it is the intention of Parliament that those who are in the fortunate position of being able to pay their tax before it is due may
  1296
  have the advantage of some discount. If it is found that the rate of 2½ per cent. makes it, from the Treasury point of view, not an advantageous transaction, I cordially support the observation of the hon. Member for Darlington (Mr. Peal) and suggest that the rate should be put on such a basis as would be fair both to the Treasury and to the taxpayer.
  4.29 p.m.
  Sir John Withers: I cannot let the observations of the hon. Member for North Aberdeen (Mr. Garro Jones) pass without comment. I have had a great deal of experience in connection with the payment of Income Tax, an experience extending over 50 years, and I am bound to say that I have always found the Inland Revenue authorities extremely honest and careful in their methods. Except perhaps in cases of very small amounts, my attention has always been drawn, in the case of anything important at all, to what has been due, and I have always found the authorities very ready to adjust matters in any way possible.
  Mr. Garro Jones: I wonder whether the hon. Member has not missed my point. My only suggestion against the Income Tax authorities was that they did not regard as resting upon them the onus of drawing the attention of the taxpayer to reliefs to which he was entitled.
  Sir J. Withers: With great deference, that is exactly what the Inland Revenue authorities have done for me. They have drawn my attention to the fact that I have not deducted so and so and that I ought to have so much deduction, and I think they have always acted extremely fairly.
  4.30 p.m.
  Sir John Mellor: I cannot see any more than other hon. Members can why the Treasury should pay an uneconomic rate. It would be far better if an economic rate were fixed from time to time according to the market rates and if that amount were allowed by way of discount as a right to the taxpayer. It is most desirable that the relations between the Income Tax authorities and the taxpayers should be on a really businesslike footing. By that I mean the same sort of relationship as exists between business men in the ordinary course of business. Under Section 159 three conditions are necessary. The first is that a request has to be made

  1297
  by the taxpayer in order to get the payment. It has to be made at the time of payment and the Income Tax authorities have to approve it. I cannot think that the Amendment really improves it very much. It first says that the request must be in writing, which was not required under the Act of 1918. Then it extends the time of application to one month, and I cannot see why it should be limited to that period. Surely two or three months would be perfectly reasonable. I am rather perplexed because we have been told by the Financial Secretary that in Income Tax matters "may" implies "must." I am rather astonished at that proposition. If "may" does imply "must," why not say so in the Statute? It would be far more satisfactory because we cannot expect the taxpayer, who looks up the law, to know that in Income Tax matters "may" means "must." I hope that in another year the Chancellor will review this matter and put it on a businesslike footing.
  Question, "That the Clause be read a Second time," put, and agreed to.
  Clause read a Second time, and added to the Bill.
  NEW CLAUSE.—(Special provision as to building societies.)

  (1) The amount of the national defence contribution chargeable on the profits arising in any chargeable accounting period from the business of a building society shall not exceed one and one-half per cent. of the amount of those profits computed in accordance with the provisions of Part III of this Act, but without allowing any deduction for interest paid on money borrowed by the society from members or depositors.

  (2) For the purpose of this section the expression "building society" means a society regulated by any of the Acts regulating building societies, or a society registered under the Industrial and Provident Societies Acts, 1893 to 1928, which carries on a business of such a nature that it could have been established under any of the Acts regulating building societies, and no other business.—[Sir J. Simon.]

  Brought up, and read the First time.
  4.33 p.m.
  Sir J. Simon: I beg to move, "That the Clause be read a Second time."
  The House will recall that on the Committee stage I described the proposal which I was to make, and the House will see that the Clause which I am now moving makes the provision which I then
  1298
  sketched out. The income of a building society consists of the interest which is received on advances made to borrowers, and also of any interest it may receive on investments otherwise than by way of mortgages, such as investments in Government securities, and so on. How is that income disposed of? It is disposed of in three different ways, which I will call A, B and C. The first, which is A, is in payment of interest on loans and deposits. The second, which is B, is payment of interest on share capital. The third, which is C, is allocated to reserve and becomes undistributed income. If the National Defence Contribution were applied to building societies without any variation, it would be applied to the sum of B and C. A would be subtracted.
  This new Clause proposes to modify the charge, which will be at the rate of 1½ per cent., not on the total merely of B plus C, but on the total of A, B and C. It is estimated that the duty so payable will be about £400,000. The difference between that and the ordinary application of the tax will be about £500,000. The grounds on which we think this proposal will be justified are these. Building societies stand in a class by themselves. They are not in competition with retail traders. They are not engaged in ordinary trade activities. They play an important part in the solution and treatment of the housing problem. They have constantly been regarded by Parliament as entitled to consideration on those grounds. They were, indeed, from the beginning exempted from the Corporation Profits Tax, and from the first edition of the National Defence Contribution. The reserves which they have are not calculated to carry any additional heavy demand. I think there will be a general feeling that it will be undesirable for the rate of interest of building societies to be put up against those engaged in building their houses. While I cannot see my way to exempt the building societies altogether, this being a contribution which we have to ask from all and sundry, I think the reasons I have given justify this modified treatment.
  4.38 p.m.
  Mr. Lees-Smith: We shall accept the new Clause. Indeed, we welcome the actual result of the proposal in the diminution of the amount of charge which building societies will pay. I am not, however, in the least impressed by the actual

  1299
  formula which the Government have concocted, or with the arguments which the Chancellor of the Exchequer has just used, which appear to me to be highly sophistical. The fact is that the Chancellor is not offering this concession to building societies, as he suggests, because they help in the solution of the housing problem. All he is doing is to ensure, as far as possible, that they shall pay the same proportion of extra tax as an ordinary business or company of comparable size. All he is doing is to save them from a grave injustice which is inherent in the nature of the tax when it is applied to certain institutions, and to concoct a formula which saves them, but which does not save other institutions which we shall discuss on a later Amendment.
  This situation has arisen out of one of the inherent defects of this new tax. If the Chancellor had decided to obtain this money by imposing an extra 3d. or 4d. on the Income Tax, no problem like this would have arisen. What he has done is to impose a special species of Income Tax, but an Income Tax which contains none of those careful provisions for abatement and exemption which over a century of experience has shown are necessary to fit that tax to the need of the different kinds of institutions on which it is imposed. I agree that with an ordinary company it can be said that there is rough justice because they all may have the same proportion of persons who come within the smaller ranges of income. As soon, however, as we get to institutions which are specially designed to attract persons in the smaller ranges of income, such as building societies and others which we shall mention later, the proportion of persons in the smaller ranges of income who will be omitted from the exemptions and alleviations of Income Tax is so large that the result of the tax is not a difference in degree but a difference in kind as applied to institutions. That is the case of building societies.
  It has been shown by the Chancellor that an ordinary company will pay in tax about 20 per cent. in addition to its present Income Tax by this new National Defence Contribution. The building society whose figures I have examined,
  1300
  and which the Government have examined, comes out at 50 per cent. simply owing to the difference I have described. The difference between 20 per cent. and 50 per cent. is not a difference in degree, but a difference in kind between the two types of organisation. The result would have been that if the right hon. Gentleman had adhered to the original tax, building societies would have paid £1,000,000 out of the total of £25,000,000, which represents a far larger proportion than the proportion of their profits to the total profits of the country. As the right hon. Gentleman has suggested, they would have had to increase the rate of interest for borrowers, which I gather would have come to about one-half per cent.
  Sir J. Simon: I did not say they would have had to do so. I said that it would be unfortunate if that were the result.
  Mr. Lees-Smith: As a matter of fact, the figures which I have collected, and which have been seen by officials of the Government, show that in the case of certain societies one-half per cent. is a moderate figure. Other societies say that it would have had to be greatly exceeded. I mentioned the minimum figure which one society calculated from its own position. The Chancellor has not from the figures he has given us this afternoon given the building societies any favour as against other companies of comparable capital and size. They are to pay £400,000 and the extra over the Income Tax that they are paying is certainly not less than that extra 20 per cent. which ordinary companies are paying. The Chancellor has devised a formula, and he shows himself an old and experienced Parliamentary hand in the brevity of the explanation which he has given. His explanation was so brief that obviously nobody knows what is behind it all. If he had fully explained the formula it would have been seen that it contradicts the whole basis of the National Defence Contribution, and that it is a tax by itself. It is perfectly obvious that he decided in advance what the building societies should pay and then concocted a formula to reach that result—a formula which would include building societies but not other societies. That is obvious to anybody who has looked into the matter. Therefore, while we accept the final result

  1301
  we are under no illusions as to the purely political nature of the formula which he has devised.
  4.45 P.m.
  Mr. Holdsworth: I agree pretty well with almost every word which the right hon. Gentleman has said about this particular concession. I do not want to seem churlish, and I am very grateful to the Chancellor for having amended what was, in its first form, really a terrible charge on building societies. We were told at the outset that the National Defence Contribution was a tax upon industry as a contribution towards the armaments which most of us believe to be necessary, but building societies are not industrial companies. A building society is a mutual help society. I wish to make an observation on a point mentioned by the Chancellor when speaking of the interest on share capital. In a building society there is no such thing as share capital in the ordinary sense of the word. Shares can be withdrawn practically at any moment, the longest notice required being about one month. Its structure is entirely different from that of an ordinary company. I was very much surprised to find that in the second edition of National Defence Contribution building societies should have been included. I think it is correct, as the Chancellor said, that they were not included in the first edition.
  Sir J. Simon: It is true that I said so, but I only said it because I thought it to be so. I have been informed that, in point of fact, they were included, but the first edition of the tax was a tax upon increased profits, and therefore the practical result would have been nil in the case of building societies. I apologise for interrupting the hon. Member, but I did make the statement which he attributed to me, and it was not quite correct.
  Mr. Holdsworth: Apparently the tax would have had the effect I desired, because if building societies made no increased profits they would not have had to pay the tax. What I am concerned about, being interested in a building society, is whether such societies should have to pay anything or not. If the tax had been left as it was it would have had a very serious effect on building operations in the country. I do not think it is correct to say that mortgage rates would necessarily have risen, because the
  1302
  position would have been tackled in other ways. For instance, the depositor would have been allowed a smaller interest, and those holding shares might have had to take a smaller interest, but the most serious effect would have been that the reserves of building societies would have been depleted. I read an interesting speech made by the Prime Minister about a month ago at the annual meeting of the Building Societies' Association in which he pressed upon building societies the necessity of creating adequate reserves to meet, what I think is generally expected, a sort of tapering off in the building programme.
  I do not want to keep the House a long time, but I cannot accept the principle which seems to be laid down here that building societies are industrial institutions. I believe they are non-profit making institutions. I know that in the society with which I am connected we have never thought of its operations in terms of profit. We think of it as a society in which one class of member lends to the society in order that another class of member may borrow. It is a mutual trading society, and I am very sorry indeed that building societies should have been brought within the scope of such a tax as this, although at the same time I feel rather grateful that they are not going to be punished—the first proposal was almost a criminal punishment—and I think I must say "Thank you" for the lessened amount which building societies are called upon to pay.
  4.50 p.m.
  Major Milner: During the Committee proceedings, until the later stages were reached, the position which the Chancellor of the Exchequer was taking up regarding building societies was not quite clear, but after what we have heard this afternoon, and with the new Clause on the Paper, the position is now clear, and I think it is a very serious one from the point of view of building societies. The new Clause provides specifically that no deduction shall be made for interest paid on money borrowed by a building society from members or depositors. As I understand it that insists upon a principle which hitherto the building societies have declined to admit, and in my view rightly so. The Chancellor told us how the income of a building society, derived from interest from mortgagors and investments, was disposed of, but he

  1303
  omitted to mention the first way in which building societies dispose of their income, and that is in paying their working expenses, their office expenses, their staffs, and the conduct of their affairs generally. The Chancellor gave three other methods of diposing of the income: (a) Interest on loans and deposits, (b) payments on share capital, (c) moneys put to reserve, known as undistributed profits. In my submission the interest on loans and deposits and the payments on share capital are just as much working expenses of a building society as are the working expenses which they obviously have incurred, but which the Chancellor omitted to mention in connection with the upkeep of their offices, the payment of their staffs and the general conduct of their business.
  This new principle, which is apparently to be insisted upon, in my view inserts the thin end of the wedge, and may create a very serious position for building societies in the future. It may well be that the actual imposition upon building societies is on this occasion 1½ per cent., but it may become 3 or 5 per cent., or may extend to the whole range of Income Tax in the future. Personally, I do not think building societies need feel under any great obligation to the Chancellor in this matter. In point of fact the Chancellor is in process of establishing here a principle which hitherto, I think I am right in saying, has not been established. My hon. Friend the Member for South Bradford (Mr. Holdsworth) pointed out that share capital, so-called, in building societies is an entirely different thing from the share capital in an ordinary trading concern. It has no relation to profits. A share certificate is a mere acknowledgment of a loan, for the most part only a temporary loan made to a building society. The loan can be withdrawn at any moment. Really it is a mere contractual obligation. The society requires money on the one hand, and has to get it by borrowing, with a view to lending it out on the other hand. It has, of course, to pay interest on the money which it obtains for that purpose, and what the Chancellor is doing is to charge Income Tax on the moneys which the society has to pay as working expenses, in my submission, in order to enable it to carry out the primary and indeed the only purpose for which it
  1304
  exists. That raises a very serious question of principle, and I cannot admit for a moment that it is a proper principle. As my hon. Friend has said, building societies, like other societies which we shall consider later, are mutual bodies formed by lenders on the one hand and borrowers on the other.
  There is another factor which seems to be a most serious one. I have no precise figures, but I cannot conceive that building societies should be called upon to provide, roughly, one-fiftieth of the whole of the proceeds which it is anticipated will come from National Defence Contribution. I understand that the maximum yield is estimated at £25,000,000—probably it will be a good deal less than that, but let us take that figure. The building societies have been asked to provide £400,000, and in my submission that is a wholly disproportionate amount, and cannot be justified in relation to the total expected from industrial and other sources. We ask the Chancellor to look into the matter and to see whether, even with the concession which he professes to have made to building societies—a wholly illogical one, resting on no certain basis, solely dependent on the whim of the Chancellor from time to time—that figure of £400,000 is not a disproportionate sum to take from them having regard to the amount of income which will be obtained from other sources.
  It is obvious that the Government and the Chancellor have landed themselves into all sorts of difficulties, because they have departed from the intention of the first form of National Defence Contribution. That was understood by all of us, and by the majority of people in the country, to be intended to relate only to armament makers and others who, it was anticipated, would make profits in excess of what they had made in the last few years. A complete change has taken place in the situation, and now the Chancellor invites the House to tax associations or societies which, he admits, have a very definite social value. We have gone from one extreme to the other. Originally we were going to tax armament firms, or at any rate industry generally, on excessive profits alone. We have now come to the other end of the scale, and are taxing building societies and apparently co-operative and other societies, which the Chancellor admits

  1305
  have a definite social value. That is a serious matter, and I hope that in the case of building societies and other societies having a similar social value the Chancellor may even at this late hour reconsider the position, and consider in particular whether the amount demanded from building societies is not disproportionate to what will be contributed from other sources and whether he is doing the right thing in taxing the interest on loans and deposits which, in my submission, are the working expenses of a building society and have no relation to profits, being in that respect distinct from the ordinary shares of a limited company.
  4.58 p.m.
  Mr. Mabane: I agree with other hon. Members that this new Clause represents a very considerable concession to building societies, but I want to ask the Financial Secretary a particular question which, I think, is not unimportant. As is well known, building societies pay a compounded rate of Income Tax on their distributed income. I want to ask whether, under this Clause, a building society will be entitled to regard the amount they pay as compounded Income Tax on distributed income as an expense, or whether they will be compelled to pay National Defence Contribution on the amount they have already paid as compounded Income Tax? I think that is a matter of some importance.
  5.0 p.m.
  Lieut.-Colonel Colville: I am ready to answer that specific point. The answer is "No; they will not be able to regard it as an expense."
  Mr. Pethick-Lawrence: Am I right in thinking that National Defence Contribution is reckoned as an expense for Income Tax purposes?
  Lieut.-Colonel Colville: Yes, the right hon. Gentleman is perfectly right, but it is not so the other way round, which was how it was put to me by the hon. Member for Huddersfield (Mr. Mabane). As regards the other point—
  Mr. Holdsworth: I suggest that the right hon. and gallant Gentleman should make the first point perfectly clear.
  Lieut.-Colonel Colville: You take off National Defence Contribution for the purposes of Income Tax, and not the
  1306
  other way round. That is clear, and I thought my answer had conveyed that point.
  Mr. Mabane: I do not think that is quite the point. The way in which building societies pay Income Tax on the distributed interest is something quite different. They pay a compounded rate on the distributed income as the result of a bargain with the Treasury, to avoid repayment. What I asked was whether they are entitled to regard the amount they had paid as Income Tax on their distributed income as an expense, or whether they would have to regard it as part of their profits and to pay National Defence Contribution upon it? Suppose a building society were paying £10,000 as compounded Income Tax, would they have to pay National Defence Contribution at the rate of 1½ per cent. on the £10,000 that they had already paid as Income Tax on the distributed income?
  5.2 p.m.
  Mr. Pethick-Lawrence: A building society makes a certain profit, and according to the rule which the Chancellor of the Exchequer is introducing, they will pay National Defence Contribution on that profit. Having paid that amount as National Defence Contribution, that will be deducted. The hon. Member shakes his head, but I would remind him that you must take things in a certain order. The answer given by the right hon. and gallant Gentleman surely is this: The building society, having paid the National Defence Contribution, is entitled to deduct that before it pays its Income Tax. You must take one thing first, and the National Defence Contribution is taken first. Having paid it, it deducts it from its profits.
  Lieut.-Colonel Colville: The right hon. Gentleman is quite correct in stating the position under this Clause. I will answer the hon. and gallant Member for South-East Leeds (Major Milner) who agreed in general with the steps that had been taken with regard to the building societies I think it is the general sense of the House that we should accept them.
  5.3 p.m.
  Mr. A. V. Alexander: I cannot allow the Clause to pass without saying a word. or two upon it. The general principle of concession to building societies is one

  1307
  which we certainly shall not challenge. We think a case is made out for such a concession, but before this Clause passes into the Bill it is necessary to stress one or two of the factors which have apparently been at work in the Chancellor's mind in making the concession. We were told at the beginning of the imposition of the new form of National Defence Contribution that it was to be a straight and simple tax. None of the complications which aroused so much controversy, especially from the pundits of the City of London, were to be allowed to enter into this second edition of the National Defence Contribution. It was mentioned that there might at times be an element of rough justice, but so straight and simple was to be the form of this second edition that even that would not deter the Chancellor from his course. There was to be no question of abatements, of graduation, or anything of the kind.
  When we examine the facts in detail, we find that, whenever it suits the Chancellor, for the purpose of avoiding special points of pressure or matters of difficulty with those who most support him, he goes exactly into the direction in which he said he would not go. For example, special concessions are made to public utility funds. No one can argue upon the fact that these societies in general are in such a financial position that they ought to be excused. In regard to the building societies, no one can deny that the main reason for the concession is a social one. It was because pressure would undoubtedly arise afterwards, if there was to be an increase, because of the taxation, in the charge made to borrowers from the society, which pushed the Chancellor of the Exchequer into making this concession. When one examines the form of concession, one is more and more amazed at the departure which has taken place from the straight and simple form of taxation which the Chancellor said would be the basic principle of the second edition.
  The fact is that, for the first time that I have been able to discover in Income Tax practice—the whole of the tax is to be levied under the case rules of Income Tax—loan interest is to be brought into the charge in the case of the building societies. On what ground is that being
  1308
  done and upon what principle? Why is loan interest brought into the charge? It is an entirely new principle in Income Tax law. If the Chancellor brings into the charge loan interest in the case of building societies, what is to be done with the debenture interest? What is the difference? I could understand certain arrangements being made on special grounds within Income Tax law, but I cannot for the life of me understand what basic principle has actuated the Chancellor of the Exchequer, himself a high expert legal authority on Income Tax law. It is no use the right hon. Gentleman shaking his head and being modest about it. He has received too many large fees for his advocacy in Income Tax cases not to be an expert upon Income Tax law.
  Sir J. Simon: I have paid Income Tax on the lot.
  Mr. Alexander: A good many other hon. Members of this House would have been glad to pay the right hon. Gentleman's Income Tax—[HON. MEMBERS: "No"]—I mean with his income. We ought to have a clear explanation from him as to what principle moved him in this concession to include loan interest in the charge. In legislating in years to come, different Governments may find very interesting the precedent which he is creating to-day in bringing loan interest into the charge. We ought to know the principle that moved him in doing so.
  While we welcome the concession to building societies, made to them because of the hardships that would arise in the case of large numbers of their members who are below the usual level of taxable income, I cannot understand the Chancellor's treatment of other organisations, which are of equal social service to the nation with the building societies. There is a great body which, looked at from the point of view which the Chancellor has taken in the case of other bodies, allows deposits from shareholders up to a limit of as much as £5,000. A depositor may, therefore, at about the average rate of 3½ per cent., be receiving on his deposits over £160 a year, free of tax. I am not opposing the concession made to the building societies, in view of the large number of people within their ambit who are below the taxable limits, but if the

  1309
  Chancellor adopts a social ground for his concession in the case of the building societies, why should he resist the much more legitimate demands made on behalf of other mutual service organisations?
  When he says that one of the justifications for the concession is that building societies are not in competition with anybody, it is to suggest that the finance of house building or of house transfer by purchase in this country is dependent, upon a non-competitive basis, upon the operations of building societies, but there are numerous organisations to-day who compete with the building societies. The official representatives of the building societies would say, in regard to the National Defence Contribution: "Unless you give us more justice than you have given us in regard to the National Defence Contribution, we shall be put in an unfair position in competition with many of those with whom we compete to-day in lending money for house building." There is a wide area of competition in the business of lending money and of borrowing it for the purposes of re-lending. Solicitors' offices and friendly societies are connected with this. For reasons best known to himself, the Chancellor of the Exchequer is giving special consideration to two bodies affected by the tax, and is closing his eyes to legitimate reasons which have been given to him for the same kind of treatment being accorded to other working-class institutions. Before we allow the Clause to go without a vote into the Bill, it is necessary that our real view of the situation should be made known.
  5.14 p.m.
  Sir Irving Albery: Very interesting and important points have been raised during the discussion of this Clause. I sympathise with the object of the right hon. Gentleman, for the reasons which he himself has stated, in not wishing this tax to fall too heavily on building societies, but I cannot help feeling some anxiety at the method which he has adopted in making his concession. In the first place, he is varying the rate of tax, and that seems to be a bad principle. If it were necessary to make the concession, it would surely have been better for the rate of taxation to have remained stationary, varying the basis on which the tax is leviable. Two hon. Gentlemen opposite said that a lot of this capital is
  1310
  loan capital and that shareholders' capital is also loan capital in this respect. I could not help feeling that there should have been a different way of making the concession. Some of this income might have been exempted from the tax without infringement of the main principle on which the tax is levied. I think that, before the Clause is passed, we are entitled to hear, not merely why it was desirable to make concessions to building societies, but also on what grounds such an out-of-the-ordinary method of making them was chosen. I hope that either the Financial Secretary or the Chancellor of the Exchequer will give us some information on this matter before we come to a decision on the Clause.
  Mr. Deputy-Speaker (Captain Bourne)rose to put the Question.
  Mr. Alexander: I think we are entitled to an answer with regard to the basis of computation. We have never had that explained.
  5.16 p.m.
  Sir J. Simon: I wish to do everything that is courteous to the House, but at the same time I do not think there is any reason to prolong this discussion very much. I will certainly say what is in my mind. The income of any company for the purposes of Income Tax is assessed as a whole, without any deduction of that portion of the income which would be needed to serve a loan. There is nothing novel in that principle. If a company or any other enterprise is engaged in making a profit, say of £100,000, the circumstance that it has to use a portion, or, if you like, the whole, of that profit in paying interest on loans or deposits, is no reason why it should not be regarded as having made a profit of the gross amount. There is nothing novel or mysterious or contrary to principle, when one is seeking, as frankly I am, to give some relief to building societies, in adopting this principle. It seems to me that if we are right—and I understand that hon. and right hon. Gentlemen opposite do not dispute the worthiness of our object—in desiring to reduce the full stress of the burden of this tax upon a particular class of companies, it might be possible to do it by merely reducing the percentage without altering the total sum on which the percentage is charged, or, on the other hand, it might be done by increasing or "weighting," so to speak, some other

  1311
  element, which is income, of the sum upon which the percentage is charged.
  I came to the conclusion, after looking at the matter as well as I could with the help of my advisers, that we should get what I thought would be a fair arrangement if, on the one hand, we decreased for this purpose the total upon which the percentage is charged, not by some novel method, but by a method which exists in every Income Tax calculation that I have seen; or if, on the other hand, we reduced the percentage charged to 1½ per cent. I submit to the House that that, in the special circumstances, is a fair thing to do. I quite understand that my hon. Friend the Member for Gravesend (Sir I. Albery) wishes for more science in these matters, but it is a very difficult thing to work out, and I am not quite certain that you can always arrive at a strictly scientific solution; but if the House is of opinion, as I hope it is, and as the Opposition are unanimously, that there ought to be a substantial measure of relief for building societies, this proposal affords them a substantial relief.
  Sir I. Albery: I rather understood the Chancellor to say that there is no reason why the revenue devoted to paying interest on loans should not still be regarded as profit, but I thought that the whole basis of the tax was the calculation of profits for Income Tax purposes, and surely that is not the case here.
  Sir J. Simon: I think my hon. Friend has forgotten for the moment that, if he had to advise a company how much it had to pay in Income Tax if it had made £100,000, of which £50,000 was needed for interest on loans, he would give the company very bad advice if he said that it had only to pay Income Tax on £50,000. Naturally, it pays on £100,000. The whole of our Income Tax law is based on the principle that you have to pay Income Tax on your income, whatever you do with it.
  Mr. Alexander rose—
  Mr. Deputy-Speaker: I must remind hon. Members that we are not in Committee.
  Major Milner: Surely, the right hon. Gentleman does not say that the total income—not the total profits less the ordinary running expenses—is the gross
  1312
  amount on which tax should be paid? Surely he does not say that, if a company has to pay so much for borrowed money or any other purpose, the gross income is still the basis of Income Tax?
  Mr. Alexander: There is one point which, with the leave of the House, I should like to put to the Chancellor of the Exchequer. Does he say that, if a company which finances its business by borrowing money on which it has to pay, say, £75,000 out of a profit of £100,000, it is not allowed to deduct this payment of interest on its loan?
  5.24 p.m.
  The Attorney-General (Sir Donald Somervell): The House will remember that my right hon. Friend, in introducing this tax, explained that there was in it a principle unknown to ordinary Income Tax assessment, namely, that loan interest would be deducted. In the ordinary case it does not matter, for the purpose of the assessment of the profits of a company, whether it has debentures, or whether it has to pay mortgage interest, or whether it has to pay no interest. The main question in regard to Income Tax is what are the profits. If they have been disposed of by paying interest on borrowed money, that is no concern of the Income Tax assessor. It has been emphasised over and over again in these Debates that this deduction of loan interest is a special feature, which has nothing to do with assessment to Income Tax.
  Major Milner: If the deduction of loan interest is a special feature of this tax, why is it not allowed on the loans made by building societies?
  The Attorney-General: That point has already been discussed.
  Question, "That the Clause be read a Second time," put, and agreed to.
  Clause read a Second time, and added to the Bill.
  NEW CLAUSE.—(Provisions as to subsidiary companies.)
  (1) Where a body corporate resident in the United Kingdom is a subsidiary of another body corporate so resident (hereafter in this section referred to as "the principal company") the principal company may, by notice in writing given to the Commissioners of Inland Revenue before the expiration of any chargeable accounting period of the subsidiary or within two months thereafter, require that the provisions of Sub-section (2)

  1313
  of this Section shall apply to the subsidiary as respects that period and all subsequent chargeable accounting periods throughout which it continues to be a subsidiary of the principal company:
  Provided that, if the first chargeable accounting period of they subsidiary ended before the passing of this Act, a notice given as respects that period within two months from the passing of this Act shall have effect for the purposes of this Section as if it had been given within two months from the end of that period.
  (2) Where such a notice is given, the profits or losses arising in any chargeable accounting period to which the notice relates from the trade or business carried on by the subsidiary shall be treated, for the purpose of the provisions of this Act relating to the national defence contribution other than the provisions of paragraph 2 and sub-paragraph (2) of paragraph 3 of the Fourth Schedule to this Act, as if they were profits or lesses arising in the corresponding chargeable accounting period from the trade or business carried on by the principal company.
  (3) For the purpose of this section—

  (a) a body corporate shall be deemed to be a subsidiary of another body corporate if and so long as not less than nine-tenths of its ordinary share capital is beneficially owned by that other body corporate;

  (b) the expression "ordinary share capital" has the same meaning as in the Fourth Schedule to this Act;

  (c) a chargeable accounting period of a subsidiary shall be deemed to correspond to such chargeable accounting period of the principal company as the Commissioners of Inland Revenue may determine.—[Lieut.-Colonel Colville.]

  Brought up, and read the First time.
  5.26 p.m.
  Lieut.-Colonel Colville: I beg to move, "That the Clause be read a Second time."
  This Clause provides for the amalgamation, at the option of the company, of the profits or losses of a parent company and its subsidiary companies in a single taxable unit, and permits the losses of one of the companies concerned to be set off against the profits of the parent company or of another subsidiary company. A subsidiary company is defined in Sub-section (3, a) of the Clause as a company in which the principal company owns not less than nine-tenths of the ordinary share capital. The object is to meet the case of the business which is essentially one business in a single ownership, although in form it is carried on through the medium of one or more companies, namely, a parent company, which is generally responsible for the finance and management of the whole concern,
  1314
  and one or more subsidiary companies which carry on the actual trade. My hon. and learned Friend the Member for Ashford (Mr. Spens) had on the Paper an Amendment rather on these lines, which was not called, but we have been giving very careful consideration to the point. A provision of a similar character was included in the Corporation Profits Tax, in the Excess Profits Duty, and in the original proposal for a National Defence Contribution.
  The profits of each company are, of course, separately assessable to Income Tax as an independent trade or business, and, if there were no provision of this kind, those profits would be separately assessable to the National Defence Contribution, and each company would separately benefit by the exemption in cases in which the profits fall below £2,000 and by the scale of abatements up to £12,000. In the case, however, of the type of companies to which this Clause will mainly apply, where there is a holding company which carries on what is really one trade or business through the medium of one or more subsidiary companies, it seems reasonable that the business should be looked at as a whole, and its liability computed as if it were in fact a single business. This will enable losses in one branch of the business to be deducted from the profits made in other branches. On the other hand, there is an option, because, if the profits of a company are merged in the profits of its parent company, it will of course lose the benefit with regard to exemptions or abatement to which it would be entitled if it were separately assessed.
  Let me give an example of the type of case which seems to us to make some provision of this kind necessary. A parent company may hold all the ordinary shares in a subsidiary company, which is the concern that actually does the trading and makes the profits. The subsidiary company is assessable to National Defence Contribution on its total profits, and those profits, on reaching the parent company in the form of dividends, are, of course, exempt from further taxation. If the parent company uses part of those dividends in paying interest on its debentures—a charge which it must meet—and if it has no other profits assessable to National Defence Contribution from which it could deduct the amount of the debenture interest and the option conferred by

  1315
  the Clause is exercised, it will be able to deduct from the profits of its subsidiary company the interest paid on the debentures. Sub-section (1) of the Clause provides that:
  "Where a body corporate resident in the United Kingdom is a subsidiary of another body corporate so resident (hereafter in this section referred to as 'the principal company') the principal company may, by notice in writing given to the Commissioners of Inland Revenue before the expiration of any chargeable accounting period of the subsidiary or within two months thereafter, require that the provisions of subsection (2) of this section shall apply to the subsidiary as respects that period and all subsequent chargeable accounting periods throughout which it continues to be a subsidiary of the principal company."
  This is restricted to cases where both bodies are resident in the United Kingdom. The House will know, of course, that a company is resident in this country for purposes of Income Tax and of National Defence Contribution if it is controlled in the United Kingdom. The Clause is not intended to apply to a foreign company which is assessed to National Defence Contribution only for business carried on in this country.
  Another point is this: If the option is exercised, the provisions for the amalgamation of profits are to apply throughout the duration of the Act as from the first chargeable accounting period in respect of which the notice is given. It is considered that the principal company, having made up its mind to take advantage of this provision to secure a set-off, should not thenceforward be allowed to chop and change about so as to obtain, during periods when profits are being made, the advantage of separate assessment coupled with the benefit of the exemption or abatement provisions. The notice, of course, ceases to have effect if the subsidiary ceases to be a subsidiary. Sub-section (2) contains the effective words for granting the relief. It provides that the profits and losses of the subsidiary shall be so treated for the purpose of the provisions of the Act other than the provisions of paragraph 2 and sub-paragraph (2) of paragraph 3 of the Fourth Schedule. These paragraphs of the Schedule adapt to National Defence Contribution certain Income Tax principles which provide for the carrying forward of past losses and accumulated wear and tear. On Income Tax principles those losses would be deductible only from
  1316
  the profits of the company that suffered the losses and it would be inappropriate if, as the result of the amalgamation of profits which we are proposing to grant between parent and subsidiary, such losses for wear and tear should be deducted from the profits of another company. Deductions will continue to be granted so far as possible against the profits of the company which is entitled to deduction but a deduction against the profits of another company is precluded by the words:
  "other than the provisions of paragraph 2 and sub-paragraph (2) of paragraph 3 of the Fourth Schedule."
  If any other course were taken, there would be serious danger of evasion. A principal company, making large profits, could buy up the shares of another company which has made heavy losses in the past and so secure a set-off of those losses. That is a danger that we must guard against. The third Sub-section contains certain definitions which are clear in themselves. I believe this is a wise provision to make. If companies have the option either to take advantage of the provisions of the Clause or to remain on separate assessment and get the advantage of the abatements that are available in that case, we believe that there can be no real hardship to those companies which, as holding concerns, control and have nine-tenths of the shares of the subsidiary companies which make the profits.
  5.34 p.m.
  Mr. Alexander: This is another concession which seems to be of considerable importance, but one which I do not welcome with anything like the enthusiasm with which I welcomed the concession to building societies. When one thinks of the vast realm that is occupied by holding companies, and the extent to which financial arrangements are made for buying up subsidiary companies which have been doing well, and then you have the financial manipulation which will require perhaps a heavy service of debenture interest in the holding company, and then you find that by this arrangement you are going to give them an option—
  Lieut.-Colonel Colville: It must remain throughout the five-year period.
  Mr. Alexander: I know, but you give them the option, instead of having the profits of their best subsidiaries charged at the source upon the subsidiaries, to

  1317
  have it charged instead on the holding company. Last night I was looking through some of the results of the operations of holding companies and I took some note of the kind of position occupied by subsidiaries which were originally independent and very successful operating companies, and I can quite see, even from the very hasty glance that I had at the Stock Exchange Year Book, that this concession will be of vast importance, not to the people in the main who are really concerned with promoting productive industry, but to those who are mainly concerned in promoting financial holding companies. From that point of view it is very likely to lead to a serious depletion in the yield of the National Defence Contribution. I should not be prepared to advise my hon. Friends to accept it unless they get further arguments which will prove that my first reactions to the right hon. Gentleman's explanation are wrong. At any rate, this is certainly likely to lead to a serious depletion in the revenue that the Chancellor hopes to get and, if he wants depletion in that revenue, he would be much more socially advised to give it in other quarters, where it would be asked for than in the relief of the pockets of those who are mainly engaged in organising the finance of holding companies.
  5.36 p.m.
  Mr. Spens: I do not think there is much concession to anyone involved in the Clause. Its only object is to apply what is the fundamental basis of all taxation that, when you are taxed, you do not suffer from the form in which you hold your property or become subject to the tax. You are taxed on the real substance of the transaction. You could have one company which carried on the business of all its branches in its own hands. It would come in for the general reliefs under the different sections of the Schedule. You have another company which carries on each branch as a separate company, of which it owns 90 or 100 per cent. of the share capital. That company would suffer greater taxation. If the additional taxation was heavy, within three weeks of the coming into force of this Bill it would put whichever of those subsidiary companies it wanted into voluntary liquidation and transfer its assets back to itself and bring about exactly the same result as is provided for in the Clause. Where a parent
  1318
  company thinks it could gain an advantage by asking for all or some of its subsidiaries, which it would otherwise wind up, to be taxed as a whole, the Clause enables it to do it without the subject being put to the inconvenience and additional expense of winding-up the subsidiary companies and transferring back to itself the assets which the subsidiaries own. There is very little substance in it. It is only machinery to put on the same basis businesses carried on in one hand and businesses carried on in a series of 90 or 100 per cent. subsidiary companies, but it will save the winding-up of a number of these small companies and save the taxpayer considerable inconvenience. The right hon. Gentleman's fears are grossly exaggerated and no serious concession is being made to anyone.
  5.39 P.m.
  Mr. Mabane: I well understood, from what the Financial Secretary said, that, if two companies, one a parent and the other a subsidiary, aggregated their results for the purpose of N.D.C., then the tax free limit of £2,000 could not apply to both of them, but there is a further, and perhaps cognate point, on which I desire to put a question. My question relates particularly to director controlled companies. In the case of such companies would the provisions of what is now Section 10 of the Fourth Schedule apply to both companies, that is to say, if there are two companies, one a subsidiary of the other, and both being director-controlled companies, would the directors be entitled to make deductions from the profits in respect of salaries of directors in respect of both companies in the manner provided in Section 10 of the Fourth Schedule?
  Mr. Boothby: I had an Amendment on very much the same lines as that of the hon. and learned Member for Ashford (Mr. Spens) in order to achieve this object, and I should like to thank my right hon. Friend for making the concession in a so much clearer form than I was able to do. I would say to the right hon. Gentleman the Member for Hillsborough (Mr. Alexander) that, whether you approve in principle of holding companies or not, the companies as defined in this new Clause are in fact one concern so far as conduct of financial transactions and business generally is concerned. The simple answer is that put up by the hon. and learned Member for Ashford. You

  1319
  would involve a great deal of reconstruction, liquidation and reorganisation of companies and a great deal of expense to no purpose whatever, and I do not believe that you are going to lose any revenue from National Defence Contribution at all. It is much better, whether you approve in principle of holding companies or not, to accept the realities of the situation, which are that in fact companies, as defined in the Clause, are for all business and practical purposes one concern.
  5.42 p.m.
  Mr. Pethick-Lawrence: I am not impressed either by the speech of the hon. and learned Member for Ashford (Mr. Spens) or that of the hon. Member for East Aberdeen (Mr. Boothby). I have no objection to the Chancellor of the Exchequer deciding on one of two methods. He can either decide that all subsidiary companies are to be taken as being really part of the parent company and treated
  as such, or he can take it the other way, and we shall be satisfied. But we cannot agree without protest to their having the option to do it either way. The hon. Member for Ashford thinks that, if you do not agree, it will come to the same thing, because they will wangle it and will go first one way and then the other just as it suits them at the moment, but in making those changes they will pay considerable sums to the Exchequer, and by giving them this option you are enabling them to escape that. I shall advise my hon. Friends to vote against this concession.
  Mr. Mabane: Can I have an answer to my question?
  The Attorney-General: The answer is Yes.
  Question put, "That the Clause be read a Second time."
  The House divided: Ayes, 217; Noes, 107.

  Division No. 286.]

  AYES.

  [5.44 p.m.

  Acland, Rt. Hon. Sir F. Dyke

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

  Haslam, Sir J. (Bolton)

  Acland, R. T. D. (Barnstaple)

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

  Hepburn, P. G. T. Buchan-

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

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

  Hepworth, J.

  Agnew, Lieut.-Comdr. P. G.

  Cox, H. B. T.

  Herbert, A. P. (Oxford U.)

  Albery, Sir Irving

  Crookshank, Capt. H. F. C.

  Herbert, Capt. Sir S. (Abbey)

  Anstruther-Gray, W. J.

  Croom-Johnson, R. P.

  Higgs, W. F.

  Assheton, R.

  Crowder, J. F. E.

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

  Astor, Hon. W. W. (Fulham, E.)

  Cruddas, Col. B.

  Holdsworth, H.

  Atholl, Duchess of

  Davies, Major Sir G. F. (Yeovil)

  Holmes, J. S.

  Baillie, Sir A. W. M.

  Davison, Sir W. H.

  Hope, Captain Hon. A. O. J.

  Balniel, Lord

  Dawson, Sir P.

  Hore-Belisha, Rt. Hon. L.

  Barclay-Harvey, Sir C. M.

  De Chair, S. S.

  Horsbrugh, Florence

  Barrie, Sir C. C.

  De la Bère, R.

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

  Baxter, A. Beverley

  Denman, Hon. R. D.

  Hunter, T.

  Beechman, N. A.

  Dodd, J. S.

  James, Wing-Commander A. W. H.

  Beit, Sir A. L.

  Dower, Major A. V. G.

  Keeling, E. H.

  Bernays, R. H.

  Duggan, H. J.

  Kerr, Colonel C. I. (Montrose)

  Birchall, Sir J. D.

  Duncan, J. A. L.

  Kerr, H. W. (Oldham)

  Bird, Sir R. B.

  Eastwood, J. F.

  Kerr, J. Graham (Scottish Univs.)

  Blair, Sir R.

  Ellis, Sir G.

  Kimball, L.

  Boothby, R. J. G.

  Elmley, Viscount

  Lamb, Sir J. Q.

  Bossom, A. C.

  Emery, J. F.

  Lambert, Rt. Hon. G.

  Boulton, W. W.

  Emrys-Evans, P. V.

  Latham, Sir P.

  Bracken, B.

  Fildes, Sir H.

  Law, Sir A. J. (High Peak)

  Braithwaite, Major A. N.

  Findlay, Sir E.

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

  Brass, Sir W.

  Foot, D. M.

  Lees-Jones, J.

  Briscoe, Capt. R. G.

  Fox, Sir G. W. G.

  Leighton, Major B. E. P.

  Brocklebank, Sir Edmund

  Fromantle, Sir F. E.

  Lennox-Boyd, A. T. L.

  Brown, Rt. Hon. E. (Leith)

  Furness, S. N.

  Levy, T.

  Bull, B. B.

  Fyfe, D. P. M.

  Liddall, W. S.

  Butcher, H. W.

  Ganzoni, Sir J.

  Lindsay. K. M.

  Cartland, J. R. H.

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

  Locker-Lampson, Comdr. O. S.

  Carver, Major W. H.

  Gledhill, G.

  Loftus, P. C.

  Cary, R. A.

  Goldie, N. B.

  Mabane, W. (Huddersfield)

  Castlereagh, Viscount

  Goodman, Col. A. W.

  MacAndrew, Colonel Sir C. G.

  Cayzer, Sir C. W. (City of Chester)

  Gower, Sir R. V.

  MacDonald, Rt. Hon. M. (Ross)

  Cazalet, Thelma (Islington, E.)

  Grattan-Doyle, Sir N.

  McEwen, Capt. J. H. F.

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

  Gretton, Col. Rt. Hon. J.

  McKie, J. H.

  Channon, H.

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

  Maclay, Hon. J. P.

  Chapman, Sir S. (Edinburgh, S.)

  Grigg, Sir E. W. M.

  Macnamara, Capt. J. R. J.

  Chorlton, A. E. L.

  Guest, Hon. I. (Brecon and Radnor)

  Magnay, T.

  Cobb, Captain E. C. (Preston)

  Guy, J. C. M.

  Maitland, A.

  Colville, Lt.-Col. Rt. Hon. D. J.

  Hannah, I. C.

  Makins, Brig.-Gen. E.

  Conant, Captain R. J. E

  Harris, Sir P. A.

  Mander, G. le M.

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

  Haslam, H. C. (Horncastle)

  Manningham-Buller, Sir M.

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

  Ramsden, Sir E.

  Storey, S.

  Markham, S. F.

  Rankin, Sir R.

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

  Marsden, Commander A.

  Rathbone, J. R. (Bodmin)

  Strickland, Captain W. F.

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

  Rawson, Sir Cooper

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

  Maxwell, Hon. S. A.

  Reid, J. S. C. (Hillhead)

  Stuart, Hon. J. (Moray and Nairn)

  Mayhew, Lt.-Col. J.

  Rickards, G. W. (Skipton)

  Sueter, Rear-Admiral Sir M. F.

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

  Robinson, J. R. (Blackpool)

  Tasker, Sir R. I.

  Mills, Major J. D. (New Forest)

  Rosbotham, Sir T.

  Tate, Mavis C.

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

  Ross, Major Sir R. D. (Londonderry)

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

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

  Ross Taylor, W. (Woodbridge)

  Titchfield, Marquess of

  Morrison, Rt. Hon. W. S. (Cirencester)

  Rowlands, G.

  Wallace, Capt. Rt. Hon. Euan

  Neven-Spence, Major B. H. H.

  Royds, Admiral P. M. R.

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

  Nicolson, Hon. H. G.

  Russell, Sir Alexander

  Ward, Irene M. B. (Wallsend)

  O'Connor, Sir Terence J.

  Russell, S. H. M. (Darwen)

  Warrender, Sir V.

  O'Neill, Rt. Hon. Sir Hugh

  Sandeman, Sir N. S.

  Waterhouse, Captain C.

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

  Sanderson, Sir F. B.

  Watt, G. S. H.

  Orr-Ewing, I. L.

  Savery, Sir Servington

  Wedderburn, H. J. S.

  Palmer, G. E. H.

  Shaw, Major P. S. (Wavertree)

  Wells, S. R.

  Patrick, C. M.

  Shaw, Captain W. T. (Forfar)

  Whiteley, Major J. P. (Buckingham)

  Peaks, O.

  Simmonds, O. E.

  Williams, C. (Torquay)

  Peat, C. U.

  Simon, Rt. Hon. Sir J. A.

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

  Petherick, M.

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

  Windsor-Clive, Lieut.-Colonel G.

  Pickthorn, K. W. M.

  Smith, L. W. (Hallam)

  Winterton, Rt. Hon. Earl

  Plugge, Capt. L. F.

  Somervell. Sir D. B. (Crewe)

  Withers, Sir J. J.

  Porritt, R. W.

  Southby, Commander Sir A. R. J.

  Womersley, Sir W. J.

  Procter, Major H. A.

  Spears, Brigadier-General E L.

  Young, A. S. L. (Partick)

  Ramsay, Captain A. H. M.

  Spans. W. P.

  Ramsbotham, H.

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

  TELLERS FOR THE AYES.—

  Mr. Cross and Mr. Grimston.

  NOES.

  Adams, D. (Consett)

  Griffiths, J. (Llanelly)

  Pritt, D. N.

  Adamson, W. M.

  Hall, J. H. (Whitechapel)

  Riley, B.

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

  Harvey, T. E. (Eng. Univ's.)

  Ritson, J.

  Ammon, C. G.

  Hayday, A.

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

  Attlee, Rt. Hon. C. R.

  Henderson, A. (Kingswinford)

  Robinson, W. A. (St. Helens)

  Bonfield, J. W.

  Henderson, J. (Ardwick)

  Rowson, G.

  Barnes, A. J.

  Henderson, T. (Tradeston)

  Salter, Dr. A. (Bermondsey)

  Barr, J.

  Hills, A. (Pontefract)

  Sanders, W. S.

  Batey, J.

  Jones, A. C. (Shipley)

  Sexton, T. M.

  Benn, Rt. Hon. W. W.

  Jones, Morgan (Caerphilly)

  Shinwell, E.

  Broad, F. A.

  Kelly, W. T.

  Short, A.

  Bromfield, W.

  Kennedy, Rt. Hon. T.

  Silkin, L.

  Brown, C. (Mansfield)

  Kirby, B. V.

  Silverman, S. S.

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

  Kirkwood, D.

  Smith, E. (Stoke)

  Buchanan, G.

  Lathan, G.

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

  Burke, W. A.

  Lawson, J. J.

  Smith, T. (Normanton)

  Cape, T.

  Leach, W.

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

  Charleton, H. C.

  Lee, F.

  Taylor, R. J. (Morpeth)

  Cluse, W. S.

  Leonard, W.

  Thorne, W.

  Clynes, Rt. Hon. J. R.

  Leslie, J. R.

  Thurtle, E.

  Cocks, F. S.

  Logan, D. G.

  Tinker, J. J.

  Cove, W. G.

  Lunn, W.

  Viant, S. P.

  Cripps, Hon. Sir Stafford

  Macdonald, G. (Ince)

  Walker, J.

  Dalton, H.

  McEntee, V. La T.

  Watkins, F. C.

  Davies, R. J. (Westhoughton)

  McGhee, H. G.

  Watson, W. McL.

  Davies, S. O. (Merthyr)

  MacLaren, A.

  Wedgwood, Rt. Hon. J. C.

  Day, H.

  Maclean, N.

  Welsh, J. C.

  Debbie, W.

  Marshall, F.

  Westwood, J.

  Ede, J. C.

  Mathers, G.

  White, H. Graham

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

  Milner, Major J.

  Williams, T. (Don Valley)

  Gardner, B. W.

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

  Windsor, W. (Hull, C.)

  Garro Jones, G. M.

  Muff, G.

  Woods, G. S. (Finsbury)

  Gibson, R. (Greenock)

  Oliver, G. H.

  Young, Sir R. (Newton)

  Graham, D. M. (Hamilton)

  Paling, W.

  Green, W. H. (Deptford)

  Parker, J.

  TELLERS FOR THE NOES.—

  Grenfell, D. R.

  Parkinson, J. A.

  Mr. Whiteley and Mr. Groves.

  Griffiths, G. A. (Hemsworth)

  Pethick-Lawrence, Rt. Hon. F. W.

  Clause added to the Bill.
  Mr. Deputy-Speaker: The next new Clause selected is that in the names of the hon. Member for Gower (Mr. Grenfell) and other hon. Members.
  NEW CLAUSE.—(Personal allowance of married persons.)
  Sub-section (1) of section eighteen of the Finance Act, 1920 (which, as amended by
  1322
  section forty of the Finance Act, 1927, section eight of the Finance (No. 2) Act, 1931, section twenty of the Finance Act, 1935, and section sixteen of the Finance Act, 1936, provides for a deduction of tax on one hundred and eighty pounds in the case of married persons), shall have effect as if the words "two hundred and twenty-five pounds" were substituted for the words "one hundred and eighty pounds."—[Mr. Muff.]
  Brought up, and read the First time.
  5.53 p.m.
  Mr. Muff: I beg to move, "That the Clause be read a Second tme."
  The broad effect of the Clause is to restore the Income Tax limit to what it was pre-1931. I do not represent big business, and I cannot say that I speak with the voice of the City, but I want to put before this honourable House the case and the plaint of the inarticulate masses of the country who feel the Income Tax limit of £180 to be onerous and something which is becoming increasingly so as the years go by. I put the case of the man upon a weekly wage who sometimes is in receipt of a wage which brings him within the Income Tax limit, but who the following year is out of work and is dependent upon unemployment benefit. Because he has not paid his Income Tax based upon his earnings of the preceding year, he receives a summons to appear before the local police court to show cause why he has not paid. In my vacation I spend one week in three at a local police court in a city of some 300,000 inhabitants. Every week there are 60 to 100 cases of men summoned because they have not paid their Income Tax. My experience will be the same as that of other hon. Members who perform similar duties. I suggest to the Chancellor of the Exchequer that if he could obtain the number of summonses issued in a year against these decent working-class folk who, sometimes for the first time in their lives, are compelled to come before a bench of magistrates in fear and trembling because of the association of the police court—if a question could be put down in this House to the proper Government Department asking for the number of summonses issued in a year, the right hon. Gentleman and this House would be startled at the number of people who have to go to the police courts. The local police funds benefit from the numberless two shillings and other costs which are added, and ultimately these poor persons have to pay. I am putting the case of hundreds of thousands of folk who have had perhaps a year of comparative prosperity followed by a year when they are out of work and their incomes are reduced to unemployment levels but who still have to pay their Income Tax.
  I also ask the House to consider the position of another section of the com-
  1324
  munity, the large percentage of the population of this country—I suggest almost the backbone of the country—the men whom we call the cuff and the collar brigade. Nowadays, fortunately, the cuff has been abolished. I agree that some of these men have regular, though small incomes, but they all have to keep up appearances. The word "appearances" involves almost a tragedy in some households where you find these men with a brave wife and family trying to keep up appearances and all that that entails. This afternoon a Scottish Member introduced a Bill under the Ten Minute Rule in a semi-humourous fashion, but he put his case in a very real way—the case for having a nutritious fish called the kipper. In this middle-class household of which I am speaking, what is known as a two-eyed steak—a bloater or a kipper—is a regular article of food. To the outside world these people have to keep up appearances, and once their appearances go down these men lose their job. I put it to the Financial Secretary to the Treasury and to his Government, who have boasted that they have restored many of the cuts of 1931, that the time has arrived when we should have the 1931 level of Income Tax assessment also restored. It would be a concession which would cost money—I do not pretend to know how much it would cost—but whatever the cost it would mean a great deal to these people with small incomes. The country can well afford to make the concession.
  These working-class and middle-class folk with small incomes have borne the heat and burden of the day under the indirect taxation which this House has imposed upon them since 1931. That indirect taxation bears more hardly upon the small income man than it does upon the rich taxpayer. They pay in many cases the same amount of indirect taxation whether their income is £250 a year or £12,500 a year. The policy of the Government is to tax these people from the day they are born until they are put in their coffins and the shroud is placed upon them. [Interruption.] Even the shroud of the hon. Member for Mid Bedfordshire (Mr. Lennox-Boyd), as he will learn when he dies—[Laughter]—well, at any rate his executors will learn when they are placing a beautiful shroud on the hon. Member—and he certainly merits one of the best of shrouds—that part of it will

  1325
  be taxed. The policy of the Government has been to place increasing burdens upon the backbone of this country, and I put in a plea for the inarticulate masses who are unduly and excessively taxed, and ask for the good will of the House in the acceptance of the Clause.
  6.2 p.m.
  Mr. Tinker: I beg to second the Motion and also the appeal of my hon. Friend, who has made a human speech. The proposal is that the present Income Tax level of £180 should be restored to £225 for married couples, which would mean for a married couple a relief from taxation of about £4 per year. I can well understand the argument that in relieving the poorer class we shall be also relieving the richer class to the same extent. Against that the argument of the Socialist party is that we ought to fix for all families what is termed a living basis. The human needs should be met first before any taxation is applied. We are asking for £225 as the figure, which is certainly moderate, but in this as in other things we have to move gradually. If I had my way it would not be less than £300 for a married couple. That would be the basis on which I should start before any taxation was applied. I may be asked where I should get the taxation and I shall be told that the Budget has been fixed on a certain basis, that it has been examined and prepared by experts and that if this Clause were agreed to the whole Budget would be dislocated. I agree with that statement, but I should have no hesitation in setting about to find the money in a much better way than by taxing people of low incomes.
  I would have a steep graduated tax from the basis of £300. When people get to certain high incomes their concern is how they can spend the money. It is very bad for the human race that men should be too rich. Certain concessions have been granted. There was one concession, the man-servant tax. That may be only a small amount, but the person who employs a man-servant can very well pay a little for that privilege. However, the Chancellor of the Exchequer agreed that the time had come when he could make that concession. If there is any question of concessions being given why can we not give some little encouragement to the married couple? We are always hearing it said that the numbers of the human race are declining, and that we
  1326
  want more children. Here is an incentive. We could say to the married couple: "The State has something in mind by relieving you of a certain amount of taxation," and it would have its effect. If the Chancellor of the Exchequer cannot give way this time I hope that he will give us some prospect that on the next occasion this proposal will receive due consideration. Let us have some hopefulness that the married couple will receive encouragement from the State.
  6.6 p.m.
  Mr. H. G. Williams: I suppose there is no Amendment that on personal grounds one would be more ready to support than this one. There is no constituency the inhabitants of which would gain more than mine would gain from the acceptance of the Clause. In South Croydon there is a very large proportion of Income Tax payers who are in receipt of such incomes that this concession would be of great advantage to them. I say that before I begin to oppose the Clause. If the hon. Members opposite would do a little arithmetic first and make their speeches afterwards, not only on this subject but on a great many subjects, a very large number of the proposals they make would not be made. I have not attempted to work out the actual cost of the Clause, because it is difficult for a private individual to do so, but there are between 3,000,000 and 4,000,000 persons who pay Income Tax. Of about 7,000,000 people who are assessed, one-half escape liability because of the very generous system of allowances—;personal allowance, earned income allowance, insurance allowance, children's allowance and so on. As a result of these allowances the man whose income is in the neighbourhood of £500 a year pays less tax than in pre-War days, a very amazing situation, which is not generally realised.
  I do not think it is right that the Treasury alone should be called upon to resist these Amendments, and be called hard-hearted. Those of us who have constituents who would benefit from these concessions ought to take our part in resisting proposals which are impracticable. Between 3,000,000 and 4,000,000 people pay Income Tax and probably 2,000,000 at least would benefit from this concession. Calculated at £45 each that would mean that £90,000,000 of income

  1327
  would be excused, if my rough calculation is right. On that basis, which is not an unreasonable one, it would cost the Treasury £22,500,000 a year. The hon. Member for Leigh (Mr. Tinker) says that he would have a steep, graduated system of taxation from £300 upwards. We have it already. We have a graduated system of taxation—it does not affect me very much because I am not in the higher range of incomes—which is so oppressive as to be the cause of a good deal of the unemployment that prevails. [Laughter.] Hon. Members opposite may jeer, but the fact remains that at this moment of good trade we still have 1,400,000 people without jobs. [HON. MEMBERS: "Is that due to Income Tax?"] I am not saying that it is all due to Income Tax, but it is a curious fact that there has persisted since the War a level of unemployment that never existed in pre-War days, and the one outstanding difference in our situation is the oppressive burden of taxation.
  Hon. Members propose to make that burden still more oppressive to those with incomes of more than £300 a year. I would ask hon. Members to go to the Vote Office and get the last Report of the Commissioners of Inland Revenue and examine the position in respect of the precise class of people whom it is proposed to tax further. Let them examine their total income. Let them see what they pay in Surtax, what they pay in Income Tax, and the amount they have to provide in order to make arrangements to leave something to their successors. Let them examine the insurance premiums they have to pay, and they will find that that class is now in the position that one cannot tax them any more.
  Mr. Ellis Smith: What about Sir John Ellerman?
  Mr. Williams: It is no use hon. Members opposite becoming excited. I suggest that neither their five-year programme nor any other programme that they are going to place before the electors in regard to social reform can be financed. That is true not only of the proposals of hon. Members opposite, but it is equally true of proposals that may come from this side. You have pushed your taxation to a limit which is above
  1328
  the economic limit. Why I am objecting to this particular Amendment, which would give considerable satisfaction to a substantial number of my constituents, is that we can only pay for it either by drastic cuts in expenditure, of which I do not see much willingness on the benches opposite, or by imposing penal taxation on a class who are already economically overtaxed, or by new penal taxes on clothing, food and other commodities of that kind, which hon. Members opposite are not prepared to do. They are putting forward a proposal which cannot be carried out, and I want them to realise that that is what they are going to vote for. They will be voting for something which they would not propose if they were in office. I want hon. Members on this side to vote against this proposal, which is superficially popular, in order that we may emphasise the fact that Members of Parliament have no right to obtain cheap popularity by putting forward attractive but foolish proposals.
  6.13 p.m.
  Lieut.-Colonel Colville: The hon. Member for Leigh (Mr. Tinker) was frank, as usual. He said that he realised that this is a proposal which if it were accepted might dislocate the finances of the year. That is the case. If the proposal were accepted it would cost about £9,000,000 in a full year and about half that sum in the first year.
  Mr. Muff: The hon. Member for South Croydon (Mr. H. G. Williams) said it would cost £22,500,000.
  Lieut.-Colonel Colville: I am very grateful for the assistance of the hon. Member for South Croydon.
  Mr. Holdsworth: He only multiplied it 2½ times.
  Lieut.-Colonel Colville: It frequently happens that when proposals are made they have to be resisted by the Chancellor of the Exchequer and myself in the interests of the taxpayers. Therefore, I am very glad that my hon. Friend was able to lend his support in that way.
  Mr. Muff: Do you agree with his figures?
  Lieut.-Colonel Colville: The hon. Member who moved the Clause went into wider fields than I propose to follow

  1329
  him. He suggested that the policy of the National Government was to place heavy burdens on the backbone of the country. I would remind him that this Finance Bill imposes no new indirect taxation, which is a remarkable thing in present circumstances. I will not follow the hon. Member into the question of what the policy of the National Government has achieved. I will concentrate on the merits of the proposal now before us. I think it is necessary to say a word on the history of what has happened in regard to these allowances since 1931. In 1931 the married person's allowance was reduced from £225 to £150, and a single person's allowance from £135 to £100. By the Finance Act, 1935, the married allowance was increased to £170, a figure which more than restored in favour of the married taxpayer the old proportion as between the single and the married allowance. The Finance Act, 1936, further increased the allowance to £180, and that increase, coupled with the increase in the allowance from £50 to £60 for each child, also granted in the 1936 Finance Act, afforded a general additional relief to the taxpayer with family responsibilities.
  Apart from the question of cost, the graduation of the tax now in force is so different from what it was before 1931 that it really would be unreasonable to look for a restoration of the pre-1931 allowance for married persons regardless of the effect of other relief. Earned income relief is now higher than it was before the 1931 alteration, and the child allowance is now at a higher point than ever before, while the reduction in the charge on the first slice of taxable income from one-half to one-third of the standard rate, effected in the 1935 Finance Act, provided a new and substantial relief for the smaller taxpayer. When that history is kept in mind it will be seen that the National Government and its predecessor have done a great deal to provide allowances for the people for whom the hon. Member has made so sincere and eloquent a plea. There is the further point. The hon. Member for Leigh said that the State wanted more children. An allowance for married persons up to £225 would seem to be out of proportion with the single person's allowance of £100. Whatever view we may have on the social value of married persons, that seems to be a wide divergence in the allowances. In addition to these facts, there is the powerful and
  1330
  compelling fact of the cost which this will involve, and for these reasons we cannot accept the Clause.
  6.19 p.m.
  Mr. Leonard: I was rather surprised at the contribution to the Debate made by the hon. Member for South Croydon (Mr. H. G. Williams). It is not always we hear him asking hon. Members to support the Treasury, but on this occasion he has taken upon himself to do so. He entered into some arithmetic, which he said was rather rough. We can now agree with him that it was rather rough, for his £22,000,000 has now been reduced by the Financial Secretary to £9,000,000. He also asked us to consider the returns of the Inland Revenue Commissioners. I have not had time to do so, hut, having paid some little attention to their report, I recollect that in 1936 as against 1935 there was an increase of millionaires in this country of about 89; that is 89 persons more in 1936 were receiving £30,000 per annum income. I suggest that that is a very suitable field for the Chancellor of the Exchequer to explore. In addition, the people who earn £2,000 a year also increased by more than 2,000 in 1936 as against 1935 and, therefore, I do really think that we should adopt the hon. Member's advice and pay some attention to the returns of the Inland Revenue Commissioners. The figures I have given are from memory, but I think they are fairly correct, and they show that the incidence of taxation has not frightened them. They are making more money, and apparently are enjoying it.
  The proposal contained in the new Clause is, in my opinion, in complete accord with the guidance which has been given to the Government by all economists. They are being constantly warned by experts on social problems that they must look to the end of the boom period created by armament production, and one of the things which these economists are insisting upon is that the Government must pay some attention to ways and means which will guarantee the continuance, indeed guarantee an increase of the consuming power of the people. Therefore, while there is a sum of £9,000,000 involved we must not forget the kind of homes to which this £9,000,000 goes. It is going into the homes of those with £30,000 a year, homes which do not need to spend it. The advantages which they will get do not show themselves in any

  1331
  advantage to the nation by the money being spent. On the other hand, if the proposal were accepted, this £9,000,000 would go into those homes which must spend everything they receive, and to that extent it would be a definite advantage to the nation, and be also in line with the expert advice which the Government are receiving from all economists in this matter.
  6.24 p.m.
  Sir Stafford Cripps: One phrase was used by the Financial Secretary, which is often used on the Treasury Bench, and it is worth while trying to analyse it for a moment. He said that he was glad someone had come forward to help the Government to resist in the interests of the taxpayer this new demand. Who is the taxpayer? So far as the taxpayer in bulk is concerned, obviously this would be in the interests of the taxpayer, but so far as concerns the small number of people who may have to pay more out of large incomes obviously if the same amount of money had to be raised it would be against the interests of that small class of wealthy people. The attitude of the Treasury always seems to be that it is their function to protect the small class of the very wealthy against the very much larger class of taxpayers, who either by direct or indirect taxation are at the present time being overcharged so far as their capacity to pay is concerned.
  Lieut.-Colonel Colville: The hon. and learned Member will bear in mind that the class of people to whom he refers are better off than they were in 1931.
  Sir S. Cripps: Does the Financial Secretary suggest that it is not in their interests that they should be still better off? I should have thought that even hon. Members opposite might have realised the simple fact that if they are relieved of some of their taxation, it is in their interests.
  Lieut.-Colonel Colville: The same would hold good in 1931.
  Sir S. Cripps: Certainly. If they are relieved of taxation they are better off, and it is therefore in their interests as a class of taxpayer that they should be relieved. The question here is: Is it
  1332
  better for the community that this £9,000,000 should be collected substantially from the incomes and homes of those who have no surplus and, indeed, often hardly sufficient to supply the ordinary needs of civilisation, or should it be collected from those who have already a large excess in the way of income which enables them not only to supply those needs but to supply fresh capital or luxuries? I can understand the argument being put forward that in the circumstances of to-day it is proper that the very rich should pay less taxes in order that more capital might be provided for the expansion of munitions manufacture, but regarded from the point of view of the standards of the community as a whole the Financial Secretary cannot say that it is more desirable to take this £9,000,000 out of the homes of the poorer section of the community than out of the homes of the wealthier section of the community. That is the whole problem raised by the new Clause.
  In the collection of the necessary amount of money are you going to look to those who have large surpluses already or to those who have no surpluses at all? This request that a further concession should be made to those who are in the lowest grade of Income Tax payers is merely a request that for the good of the community this £9,000,000 should be made available for expenditure upon ordinary commodities which they are bound to buy rather than upon luxuries or new capital improvements. I should have thought it was perfectly clear from the point of view of the economist, and especially with rising prices which we have to-day, that it is eminently desirable to put as large a consuming power for ordinary commodities into the hands of people who are bound to spend their money on ordinary commodities rather than to do what the Government are doing, that is, to relieve the wealthy and to place the burden on the shoulders of those who, on the admission of the Government, are much less able to bear it. That is the whole problem, and I should have thought from the point of view of the common interests of the community, and from the point of view of the economist, indeed from any sensible point of view, that there could be no answer to this demand. The only answer comes from the Financial Secretary in

  1333
  what he calls the interests of the tax-payer, by which he means the wealthy people who support the National Government and the Conservative party.
  Question put, "That the Clause be read a Second time."
  The House divided: Ayes, 123; Noes, 211.

  Division No. 287.]

  AYES.

  [6.30 p.m.

  Acland, Rt. Hon. Sir F. Dyke

  Griffiths, J. (Llanelly)

  Parkinson, J. A.

  Acland, R. T. D. (Barnstaple)

  Groves, T. E.

  Pethick-Lawrence, Rt. Hon. F. W.

  Adams, D. (Consett)

  Hall, J. H. (Whitechapel)

  Pritt, D. N.

  Adamson, W. M.

  Harris, Sir P. A.

  Rathbone, Eleanor (English Univ's.)

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

  Harvey, T. E. (Eng. Univ's.)

  Riley, B.

  Ammon, C. G

  Hayday, A.

  Ritson, J.

  Attlee, Rt. Hon. C. R.

  Henderson, A. (Kingswinford)

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

  Banfield, J. W.

  Henderson, J. (Ardwick)

  Robinson, W. A. (St. Helens)

  Barnes, A. J.

  Henderson, T. (Tradeston)

  Rowson, G.

  Barr, J.

  Hills, A. (Pontefract)

  Salter, Dr. A. (Bermondsey)

  Batey, J.

  Johnston, Rt. Hon. T.

  Sanders, W. S.

  Benn, Rt. Hon. W. W.

  Jones, A. C. (Shipley)

  Seely, Sir H. M.

  Broad, F. A.

  Jones, Morgan (Caerphilly)

  Sexton. T. M.

  Bromfield, W.

  Kelly, W. T.

  Shinwell, E.

  Brown, C. (Mansfield)

  Kennedy, Rt. Hon. T.

  Short, A.

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

  Kirby, B. V.

  Silverman, S. S.

  Buchanan, G.

  Kirkwood, D.

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

  Burke, W. A.

  Lathan, G.

  Smith, E. (Stoke)

  Cape, T.

  Lawson, J. J.

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

  Cluse, W. S.

  Leach, W.

  Smith, T. (Normanton)

  Clynes, Rt. Hon. J. R.

  Lee, F.

  Sorensen, R. W.

  Cocks, F. S.

  Leonard, W.

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

  Cove, W. G.

  Leslie, J. R.

  Taylor, R. J. (Morpeth)

  Cripps, Hon. Sir Stafford

  Logan, D. G.

  Thorne, W.

  Dalton, H.

  Lunn, W.

  Thurtle, E.

  Davidson, J. J. (Maryhill)

  Macdonald, G. (Ince)

  Tinker, J. J.

  Davies, R. J. (Westhoughton)

  McEntee, V. La T.

  Viant, S. P.

  Davies, S. O. (Merthyr)

  McGhee, H. G.

  Walker, J.

  Day, H.

  MacLaren, A.

  Watkins, F. C.

  Dobbie, W.

  Maclean, N.

  Watson, W. McL.

  Ede, J. C.

  MacMillan, M. (Western Isles)

  Wedgwood, Rt. Hon. J. C.

  Evans, D. O. (Cardigan)

  Mainwaring, W. H.

  Welsh, J. C.

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

  Mander, G. le M.

  Westwood, J.

  Foot, D. M.

  Marshall, F.

  White, H. Graham

  Gardner, B. W.

  Milner, Major J.

  Whiteley, W. (Blaydon)

  Garro Jones, G. M.

  Montague, F.

  Williams, T. (Don Valley)

  Gibson, R. (Greenock)

  Morrison, Rt. Hon. H. (Hackney, S.)

  Windsor, W. (Hull, C.)

  Graham, D. M. (Hamilton)

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

  Woods, G. S. (Finsbury)

  Green, W. H. (Deptford)

  Muff, G.

  Young, Sir R. (Newton)

  Grenfell, D, R.

  Oliver, G. H.

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

  Paling, W.

  TELLERS FOR THE AYES.—

  Griffiths, G. A. (Hemsworth)

  Parker, J.

  Mr. Charleton and Mr. Mathers.

  NOES.

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

  Castlereagh, Viscount

  Emrys-Evans, P. V.

  Agnew, Lieut.-Comdr. P. G.

  Cayzer, Sir C. W. (City of Chester)

  Fildes, Sir H.

  Albery, Sir Irving

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

  Findlay, Sir E.

  Anstruther-Gray, W. J.

  Channon, H.

  Fox, Sir G. W. G.

  Assheton, R.

  Chorlton, A. E. L.

  Furness, S. N.

  Astor, Hon. W. W. (Fulham, E.)

  Colville, Lt.-Col. Rt. Hon. D. J.

  Fyfe, D. P. M.

  Atholl, Duchess of

  Conant, Captain R. J. E.

  Ganzoni, Sir J.

  Baillie, Sir A. W. M.

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

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

  Balfour, G. (Hampstead)

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

  Gledhill, G.

  Balniel, Lord

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

  Goldie, N. B.

  Barclay-Harvey, Sir C. M.

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

  Goodman, Col. A. W.

  Baxter, A. Beverley

  Cox, H. B. T.

  Gower, Sir R. V.

  Beit, Sir A. L.

  Cranborne, Viscount

  Grattan-Doyle, Sir N.

  Bernays, R. H.

  Crooke, J. S.

  Gretton, Col. Rt. Hon. J.

  Birchall, Sir J. D.

  Crookshank, Capt. H. F. C.

  Gridley, Sir A. B.

  Blair, Sir R.

  Croom-Johnson, R. P.

  Grigg, Sir E. W. M.

  Blaker, Sir R.

  Crossley, A. C.

  Grimston, R. V.

  Boothby, R. J. G.

  Crowder, J. F. E.

  Gritten, W. G. Howard

  Bossom, A. C.

  Cruddas, Col. B.

  Guest, Hon. I. (Brecon and Radnor)

  Boulton, W. W.

  Davies, Major Sir G. F. (Yeovil)

  Guinness, T. L. E. B.

  Bracken, B.

  Dawson, Sir P.

  Gunston, Capt. D. W.

  Brass, Sir W.

  De Chair, S. S.

  Guy, J. C. M.

  Briscoe, Capt. R. G.

  De la Bère, R.

  Hacking, Rt. Hon. D. H.

  Brown, Rt. Hon. E. (Leith)

  Denman, Hon. R. D.

  Hannah, I. C.

  Bull, B. B.

  Dodd, J. S.

  Harbord, A.

  Butcher, H. W.

  Dower, Major A. V. G.

  Haslam, H. C. (Horncastle)

  Butler, R. A.

  Elliot, Rt. Hon. W. E.

  Haslam, Sir J. (Bolton)

  Gartland, J. R. H.

  Ellis, Sir G.

  Heneage, Lieut.-Colonel A. P.

  Carver, Major W. H.

  Elmley, Viscount

  Hepburn, P. G. T. Buchan-

  Cary, R. A.

  Emery, J. F.

  Hepworth, J.

  Higgs, W. F.

  Manningham-Buller, Sir M.

  Salmon, Sir I.

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

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

  Sandeman, Sir N. S.

  Hoare, Rt. Hon. Sir S.

  Markham, S. F.

  Sanderson, Sir F. B.

  Holdsworth, H.

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

  Savery, Sir Servington

  Holmes, J. S.

  Maxwell, Hon. S. A.

  Shaw, Major P. S. (Wavertree)

  Hope, Captain Hon. A. O. J.

  Mayhew, Lt.-Col. J.

  Shaw, Captain W. T. (Forfar)

  Hore-Belisha, Rt. Hon. L.

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

  Simon, Rt. Hon. Sir J. A.

  Horsbrugh, Florence

  Mills, Major J. D. (New Forest)

  Smith, L. W. (Hallam)

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

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

  Somervell. Sir D. B. (Crewe)

  Hudson, R. S. (Southport)

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

  Southby, Commander Sir A. R. J.

  Hume, Sir G. H.

  Morrison, Rt. Hon. W. S. (Cirencester)

  Spears, Brigadier-General E. L.

  Hunter, T.

  Nall, Sir J.

  Spens. W. P.

  Jones, Sir G. W. H. (S'k N'w'gt'n)

  Neven-Spence, Major B. H. H.

  Storey, S.

  Keeling, E. H.

  Nicolson, Hon. H. G.

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

  Kerr, H. W. (Oldham)

  O'Neill, Rt. Hon. Sir Hugh

  Strauss, H. G. (Norwich)

  Kerr, J. Graham (Scottish Univs.)

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

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

  Keyes, Admiral of the Fleet Sir R.

  Orr-Ewing, I. L.

  Sueter, Rear-Admiral Sir M. F.

  Lamb, Sir J. Q.

  Palmer, G. E. H.

  Tasker, Sir R. I.

  Lambert, Rt. Hon. G.

  Patrick, C. M.

  Tate, Mavis C.

  Latham, Sir P.

  Peake, O.

  Titchfield, Marquess of

  Law, Sir A. J. (High Peak)

  Peat, C. U.

  Tryon, Major Rt. Hon. G. C.

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

  Petherick, M.

  Wallace, Capt. Rt. Hon. Euan

  Lees-Jones, J.

  Pickthorn, K. W. M.

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

  Leighton, Major B. E. P.

  Plugge, Capt. L. F.

  Ward, Irene M. B. (Wallsend)

  Lennox-Boyd, A. T. L.

  Porritt, R. W.

  Warrender, Sir V.

  Levy, T.

  Procter, Major H. A.

  Waterhouse, Captain C.

  Liddall, W. S.

  Ramsay, Captain A. H. M.

  Watt, G. S. H.

  Llewellin, Lieut.-Col. J. J.

  Ramsbotham, H.

  Wedderburn, H. J. S.

  Lloyd, G. W.

  Ramsden, Sir E.

  Wells, S. R.

  Locker-Lampson, Comdr. O. S.

  Rathbone, J. R. (Bodmin)

  Whiteley, Major J. P. (Buckingham)

  Loftus, P. C.

  Rawson, Sir Cooper

  Williams, C. (Torquay)

  Mabane, W. (Huddersfield)

  Reid, J. S. C. (Hillhead)

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

  MacAndrew, Colonel Sir C. G.

  Rickards, G. W. (Skipton)

  Windsor-Clive, Lieut.-Colonel G.

  MacDonald, Rt. Hon. M. (Ross)

  Robinson, J. R, (Blackpool)

  Winterton, Rt. Hon. Earl

  McEwen, Capt. J. H. F.

  Ropner, Colonel L.

  Withers, Sir J. J.

  McKie, J. H.

  Rosbotham, Sir T.

  Womersley, Sir W. J.

  Macmillan, H. (Stockton-on-Tees)

  Ross Taylor, W. (Woodbridge)

  Wood, Hon. C. I. C.

  Macnamara, Capt. J. R. J.

  Rowlands, G.

  Wood, Rt. Hon. Sir Kingsley

  Magnay, T.

  Royds, Admiral P. M. R.

  Young, A. S. L. (Partick)

  Maitland, A.

  Russell, Sir Alexander

  Makins, Brig.-Gen. E.

  Russell, S. H. M. (Darwen)

  TELLERS FOR THE NOES.—

  Lieut.-Colonel Kerr and Mr. Cross.

  NEW CLAUSE.—(Entertainments Duty to terminate at end of the financial year.)
  Section one of the Finance (New Duties) Act, 1916, and section one of the Finance Act, 1935 (which relate to entertainments duty) shall cease to have effect on the thirty-first day of March, nineteen hundred and thirty-eight—[Mr. A. Herbert.]
  Brought up, and read the First time.
  6.37 p.m.
  Mr. Alan Herbert: I beg to move, "That the Clause be read a Second time."
  The hon. Member for East Hull (Mr. Muff) has just taken us from the stately avenues of big business to the quiet corners of South Croydon, and I hope hon. Members will permit me to take them on to the wilds of Bohemia and the groves of Art. May I at once assure the House and the right hon. Gentleman the Chancellor of the Exchequer that this proposed new Clause is not nearly as formidable as it may at first appear? It would indeed be audacious for a shy new Member to propose the total abolition of an entire tax. The effect of this new Clause, if it is correctly drafted, would
  1336
  not be to embarrass His Majesty's Government in any way, or indeed to reduce the revenue either this year, or possibly in any other year. The effect would be that the Entertainments Duty, as at present charged, would cease to be charged at the end of the current financial year. The idea is that the Chancellor of the Exchequer, when preparing his new Budget, would be forced to say to himself, "At last, 21 years after this temporary tax was first imposed, it has, by the will of Parliament, been permitted to lapse, and now what am I to do—am I to impose it again in its present form or in some better form, or am I to impose half of it, or to impose it on some entertainments and not on others; or is there some new and delightful alternative source of revenue?" I am fortified in making this suggestion by a remark made by the last Chancellor of the Exchequer, now the Prime Minister, in his Budget speech two or three years ago, when he said:
  "For my part, I shall be glad, if my resources enable me to do so, to remodel the whole tax, because I think in its present form it is unsatisfactory in many ways, both theoretically and practically."

  1337
  That was a very important and sound observation, and the suggestion I make, humbly and timidly, is that we should now give to the new Chancellor of the Exchequer an opportunity to carry that out when he formulates his first Budget. After those words of the Prime Minister, who stated categorically that this tax is bad, both in theory and in practice, it might seem superfluous for me to say more, but the memories of all of us are so so short in these matters that I hope the House will forgive me if I say a few more words in support of the proposition that this tax is a bad tax in its essence, its principle, its incidence, its rate, and indeed in almost every other particular.
  First of all, it is a bad tax in principle and in essence. It is not a tax which protects home industries; it is not a tax which keeps out the foreigner; it is not even a tax which, like the whisky tax or the tobacco tax, discourages certain indulgences which certain people regard as vicious and harmful. Whatever we may say about this entertainment or that, this tax is a tax upon things of the mind. It is a tax upon the free communication of thought, ideas and knowledge, and to a very large extent and in a very true sense, it is a tax upon education. It is very difficult indeed to distinguish this tax from the old taxes on knowledge, as they were called, which were abolished, after a protracted and bitter struggle, only as long ago as the 1850's and the 1860's. It was in about 1850 that there ceased to be a tax upon every newspaper and every pamphlet that published news, and a tax upon advertisements, the chief source of revenue of newspapers, and upon paper, their raw material. Those taxes were rightly called taxes upon knowledge.
  It is safe to say that if anybody proposed to reimpose a tax of that sort at this stage, for instance, a tax upon books, say, 20 per cent. on the price of a 7s. 6d, novel, making a total price of 9s.—unless it was a novel by my humble self, about which nobody would bother—I think that tax would be regarded as monstrous and barbarous. Yet it is difficult to find any argument for placing taxes upon concerts, music, drama and art and not placing them on books and newspapers, for, much as I admire newspapers, to which I contribute from time to time a diffident word or two, it is very difficult to say that all
  1338
  of them are solely educational. The great "Times" itself becomes more and more an entertainment, but it would be resented very bitterly if one had to pay a halfpenny tax on a twopenny "Times."
  This is a bad tax because in selecting entertainments it makes no allowance whatever for the element of mind or, culture, or whatever one may like to call it. If a man presents "Hamlet" or "A Midsummer Night's Dream" by the poet Shakespeare—an extremely risky thing to do—it is entertainment. If a man catches a couple of live monkeys and exhibits them to the public in a cage, that is entertainment. If a man organises a great orchestra which plays the music of Bach, Beethoven and Mozart, that again is entertainment. If his flat windows command a view of the boat race or a State funeral or procession, that is, or at least used to be, entertainment. I well remember one occasion when, at a State funeral, entertainments tax was charged on those who let out rooms from which people could behold that spectacle. If a man gives the first performance of a new British symphony or opera that, again, is entertainment. If he races dogs, or keeps live lions, that is entertainment. I am not saying that some of these exhibitions are not properly taxed. What I am saying is that in a country which was really civilised it would be impossible to justify that kind of classification, which ignores any kind of element of mind or instructive quality.
  I ask hon. Members to consider how illogical is the tax. Consider the very terms of the Statute which originally imposed it. I cannot too often repeat that this tax was originally imposed under the special stress of the Great War. It was hastily devised, and it has been suffered patiently by those concerned because of the circumstances of its introduction during the Great War. But in that Statute it was recognised that a great part of entertainment might be educational, because it was laid down that where an entertainment is wholly educational in character or is not conducted for profit, no tax is chargeable. No tax is charged on a production of a play by the poet Shakespeare at the "Old Vic." That goes free, and I am delighted that it should be so, but if the same play were produced in the West End then,

  1339
  suddenly, for some obscure reason, in the eyes of the authorities it ceases to be educational, because an attempt is being made to secure a profit on the performance. But the illogicality of the whole thing proceeds to extremes when you find that even if a wretched man makes a loss on presenting a play of Shakespeare's, he still has to pay the tax. I use the term "educational" seriously, because education is not merely a matter of going to school and studying school books. It embraces the whole wide field of mental enrichment. It is impossible to ignore that consideration.
  I could give many illustrations of the various illogical results of this piece of legislation. I mention only one which is not very important, but which is good as an illustration. The House may know that all over the country there are social or literary societies which engage odd persons like myself to deliver instructive lectures. As long as the society is not conducted for the purposes of profit and the lecture is considered to be generally educational, no tax is charged. In my younger days I used to deliver a lecture which was entitled, unfortunately, "On Being Funny." There was nothing very funny about it. I have never pretended to be a funny man. I am just like the rest of us—an ordinary nice chap who seeks to do good—and this lecture was of a rather high-brow character. It set out to explain the Bergsonian theory of laughter and the essence of humour and all that kind of thing, and I can say that the laughs which that lecture excited, even on the North-East Coast, were very rare indeed. But the vigilant officer of Customs and Excise, part of whose duties it is to look after these matters on the North-East Coast, pricked up his ears when he heard of this lecture entitled "On Being Funny." He said to himself: "There is something extremely deleterious and dangerous here." So he sent a report of this event to the Customs House in Billingsgate where, I understand, there is a special department which inspects, and, if necessary, disinfects the lectures to be delivered by literary men on the North-East Coast and other places. According to common form I was requested to supply a precis of my
  1340
  lecture in order to assure the Customs House, first, that it was educational and, secondly, that it was not at all amusing. To my astonishment, knowing how little entertainment that lecture appeared to afford to the public, I was unable to convince them of the second part of the proposition. The unhappy society had to pay tax upon the lecture, and I was never invited to lecture there again. That illustrates the strange idea that anything which is at all entertaining is something in the nature of an offence on which a fine ought to be imposed.
  So much for the principle of the tax. Another objection to it is on the ground of its incidence. I must remind hon. Members of the House who are probably too much occupied with graver matters to be aware of the fact, that this tax is levied not upon profits but upon receipts. Listening to recent discussions on the National Defence Contribution which, whatever its defects, is a tax upon profits, I have wondered how the representatives of business and industry would like a tax of 20 per cent., not on what goes into the savings bank but on what comes into the till. How would they like a tax which is not even levied upon receipts while profits are being gained, but is also levied upon those receipts even where a loss is being made?
  I remember that in the old days at the Lyric Theatre in Hammersmith where I was humbly associated with the late Sir Nigel Playfair in the great work which he did there, we produced a long series of very instructive and, on the whole, beneficial plays, but nobody ever made any money there. I remember in the case of one play of mine we started with a capital of about £1,000, and it ran for five months, I am glad to say, but during most of that period losses were being made. We would have £600 of takings where the expense; were £800 and on that loss of £200. we would pay a tax of £100 to the Inland Revenue. The result was that a play would fall short of its proper normal run by four or five weeks, which was not only a disadvantage to me and to the people of the neighbourhood, but also to actors, scene-shifters and others who were deprived of employment. A big show which is running in London at the present time took £2,200 the other day. The profit was £200, but the tax paid was £450. Is there any business

  1341
  man here or any representative of industry in the country who would cheerfully consent to a tax of that kind?
  It may be said that the tax is paid by the consumer, but, in general, that is not so. Here, again, I have the authority of the late Chancellor of the Exchequer, though I cannot give the reference I will not labour these points on the present occasion. But I want hon. Members to recognise that this is a tax on receipts and a tax which is charged whether the business is making a loss or not. And it is still a tax of 20 per cent. on all entertainments, with the exception of a small area of entertainments in regard to which a much appreciated concession was made in 1935.
  To pass from material considerations, I want to say that the objections to this tax are not based on material grounds only. It is not only a question of damaging enterprise and employment, although, Heaven knows, those are important considerations. There is another form of damage as well. Here, I think, is a case in which the House of Commons can do something to improve the quality of dramatic and artistic entertainment whether in plays, in cinemas, in concerts, or in whatever form it may be. It is easy to find fault with any particular entertainment. You may say, and I am sure some hon. Members will be inclined to say here, that, judging by the last show you have seen, some particular entertainments ought to be taxed more severely, in fact taxed out of existence. Unfortunately that is not how things work. This kind of burden bears most heavily upon the better kind of entertainment. The greater the burden the greater the risk in these very speculative enterprises, and the greater the risk the greater the temptation to produce what is crude and vulgar, and, as those responsible may think, more likely to captivate the public mind.
  To take a crude illustration, it is easy to advertise a "Strip Tease" show, and all that is necessary is to have a couple of girls in a very dim light in front of a curtain. But obviously you will have to pay a great deal more than the expense involved in that kind of a how, if you engage good artists, design a good set, have good costumes and present a well-lighted, intelligent show.
  1342
  That is the real point. This is not only a question of material things but of keeping the theatre alive. I am not excepting cinemas. I am embracing the whole field of entertainment in this plea, and, as far as the theatre is concerned, I am not one of those who say that it is going to die. The question is not whether it is going to die or not, but in what form is it going to exist, and the more we can relieve it of special burdens in a specially difficult time, the more we shall be doing for it artistically as well as otherwise.
  I apologise for having detained the House so long, and I sum up my argument by saying that we object to this tax as we have objected to it for the last 21 years, first, because it was imposed as a temporary tax, and because it is one which ought to have been examined many times since. As it does not appear in the Finance Bill each year it is difficult to criticise it, and there is always the same story, that the cost of abolishing would be so much, and that hon. Members must not vote against the Government on a matter of this kind, and so on. Secondly, we object to it because it is a tax on the things of the mind, because it is a tax on receipts and not upon profits, and because it is operating against the higher quality of entertainment. I think I can address this argument with great hope to the right hon. Gentleman the new Chancellor of the Exchequer. I will not make any invidious distinctions, but I venture to say that in point of culture and appreciation of the arts, the right hon. Gentleman is not the least among his colleagues. He is a great master of the language, he is one of my constituents, and with his upbringing and background I am perfectly sure that in his secret soul he cannot persuade himself that this is a good tax. I know very well that if I were proposing to cut it out altogether in the present financial year, he would have a good reply, but I remind him that that is not our intention. Our intention is that he shall be the first Chancellor of the Exchequer to have the great opportunity and honour of saying that this barbarous tax, which has endured for 21 years, shall be by him remodelled and reshaped and made into something better.
  6.58 p.m.
  Mr. Liddall: I beg to second the Motion.

  1343
  I will give just one more instance of the extent of the burden imposed by the present duty. A certain London theatre has seating accommodation for 495 people. The Entertainment Duty paid in respect of last week's takings amounted to £247 10s. 9d., which works out at 10s. per seat. No wonder many of our theatres are having to close their doors and more and more of our theatrical people are finding it increasingly difficult to obtain employment.
  6.59 p.m.
  Sir J. Simon: The House has greatly enjoyed the speech of my hon. Friend the Member for Oxford University (Mr. Herbert). It is natural that he should raise the question of entertainment in this House and should do it so entertainingly. At the same time, nobody recognises more than I do that there is a serious purpose and a real meaning in what he has presented to the House. He makes a very entertaining proposal. He avoids the common objection that his plan would upset the finances of the year, because he suggests that this tax might go on until 31st March next year not because 31st March is the date of the Budget—which is produced some time in the month of April—but in order, I suppose, that 1st April next year might be the date on which I would find myself without his tax. I am afraid that I could not agree to that. It really is essential in our system that we should so levy the taxes which are going to be proposed as a whole at the proper time, and the proper time is when the Budget is presented in the Spring of the year, when we know what are the burdens which have to be borne. We can then consider which class of tax we may be able to dispense with. The hon. Member spoke of this as a bad tax, and seemed to think that that marks it out. But does he know a good tax? Is there a good tax?
  Mr. MacLaren: Hear, hear!
  Sir J. Simon: All taxes, in my view, are evil.
  Mr. MacLaren: Hear, hear!
  Sir J. Simon: Even that single tax which the hon. Member for Burslem (Mr. MacLaren) advocates as a cure for all evils.
  Mr. MacLaren: You said so yourself in your Liberal days.
  Sir J. Simon: There is no such thing as a good tax. When we come to survey the field, I hope that it may be my good fortune if I am Chancellor of the Exchequer not to have to provide so heavy an income from taxation, and if that is so, we will survey the field of taxation and endeavour to select which of these most painful instruments can best be dispensed with. Some hon. Members may think it more important to enlarge the relief to married persons under the Income Tax, and there may be other suggestions. We cannot very well here in advance declare that this is the one instrument in the whole collection of instruments of torture which we will here and now abolish.
  My hon. Friend made an important point when he urged that this tax has an unthinking and automatic operation. It is due on entertainments of very different kinds. He said that the quality of the entertainment should come into the calculation in some way. But can it? If, with his ingenious mind, when he has relieved us of any doubts we may have on the present merits of the marriage law, he will devote his next entertainment to producing sound proposals for classifying entertainments for the purpose of this tax, he may do a great service, but at present all that Parliament has found it possible to do is to say that educational entertainments are to be exempted. If an entertainment is provided partly for educational purposes but by a society or committee which is not conducted or established for profit, then, again, there is exemption from the tax, and that is the reason why Shakespeare provided at the "Old Vic" escapes the tax. It is not because a preference is given to any particular set of producers or players, but that after a good deal of investigation, and, I rather think, after taking the opinion of the Law Officers, the conclusion was reached that performances at the "Old Vic" were partly for educational purposes and were conducted by a society not established or conducted for profit. I agree that it is a misfortune that you should have an instrument of taxation which hits—I will not say the just and the unjust—but the finest and most beautiful examples of art and culture in exactly the same way as it hits

  1345
  very much more vulgar, less elaborate or less well contrived forms of entertainment. But how are you going to do otherwise?
  Some hon. Members tried the other day to make a refinement in the tax by making a distinction as to living entertainments. I was glad that they did. But even that does not draw the distinction between the good artist and the bad artist. This is a difficult matter, and if my hon. Friends will be good enough to look into it I shall be most interested to hear what their conclusions are, and will consider them with the greatest care. But we must recognise that this is no time to determine in advance the particular source of taxation we can dispense with next year. I hope that it may be possible to dispense with certain taxes. But I certainly could not agree that we should take this particular impost, whatever be the objections to it, and declare that it is by the judgment of the House of Commons the first on the list to go. There may be other modifications in other directions which, put in comparison, will appear more desirable to hon. Members. I am sorry not to be more obliging, and no one has enjoyed the speech of the hon. Member for Oxford University more than I have, and no one is more sorry to oppose his brilliant ideas, but I cannot be party to a proposal that the Entertainments Duty shall cease on 31st March next.
  7.8 p.m.
  Mr. Alexander: I do not propose to keep the House from coming to an early decision on this Clause. The way in which it was presented was very persuasive indeed. The Chancellor of the Exchequer has made a clear and reasoned statement in regard to some of the arguments of the hon. Member for Oxford University (Mr. Herbert). Anyone who has tried to devise a method of imposing taxation for revenue knows how difficult it is to get over some of these complex features within the tax to which the Chancellor has referred. But as I listened to the Chancellor's answer, I became more and more convinced that there was an unanswerable case for repealing the duty as a whole, because, while it is true that the operation of the duty affects very adversely those responsible for entertainments, it is also true that although we have had some relief in respect of some of the poorest classes
  1346
  of the community and in respect of the lowest-priced seats, there are people who have to pay much more than they otherwise would for an evening's entertainment even of an educational character.
  General relief is necessary—relief for those who are now being increasingly taxed in every direction. I was interested in the reference of the hon. Member for Oxford University to some of the older and more virulent forms of taxation, but under the National Government since 1932 we have seen the working classes and consumers generally taxed and taxed again, so that there is practically nothing which they taste, see or handle on which they do not have to pay a tax, and if we can persuade a leader of political thought and erudition like the hon. Member for Oxford University to lead us in our attempt to get relief from that situation we shall be glad to support him.
  7.9 p.m.
  Mr. Silverman: I have no sympathy for the suggestion that it would be right to draw some kind of distinction in this matter between the various kinds of entertainment. I hope that the Entertainments Duty will, at some early date, be abolished entirely, but I hope that the House will never commit itself to the point of view that it is right that some people should pay a tax on entertainment, because in the opinion of other people their taste in entertainment is lower than it ought to be. I see no reason why if it is wrong to charge Entertainments Duty on somebody who buys a. ticket for a high-class concert or a performance of "Hamlet," it is not equally wrong to make a child who goes to a circus on Boxing Day pay a tax for doing so. The Entertainments Duty should go, but the hon. Member for Oxford University (Mr. Herbert) is embarking on a dangerous principle if he lends his influential support to the idea that it is right to bring any form of intellectual snobbery into this question.
  7.10 p.m.
  Mr. Herbert: In view of the right hon. Gentleman's undertaking, I beg to ask leave to withdraw the Motion.
  Hon. Members: No.
  Question put, "That the Clause be read a Second time."
  The House divided: Ayes, 118; Noes, 207.

  Division No. 288.]

  AYES.

  [7.12 p.m.

  Acland, R. T. D. (Barnstaple)

  Hall, J. H. (Whitechapel)

  Parker, J.

  Adams, D. (Consett)

  Harris, Sir P. A.

  Parkinson, J. A.

  Adamson, W. M.

  Hayday, A.

  Pethick-Lawrence, Rt. Hon. F. W.

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

  Henderson, J. (Ardwick)

  Pritt, D. N.

  Ammon, C. G.

  Henderson, T. (Tradeston)

  Riley, B.

  Attlee, Rt. Hon. C. R.

  Hills, A. (Pontefract)

  Ritson, J.

  Banfield, J. W.

  Johnston, Rt. Hon. T.

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

  Barnes, A. J.

  Jones, A. C. (Shipley)

  Robinson, W. A. (St. Helens)

  Barr, J.

  Jones, Morgan (Caerphilly)

  Rawson, G.

  Benn, Rt. Hon. W. W.

  Kelly, W. T.

  Salter, Dr. A. (Bermondsey)

  Broad, F. A.

  Kennedy, Rt. Hon. T.

  Sanders, W. S.

  Bromfield, W.

  Kirby, B. V.

  Seely, Sir H. M.

  Brown, C. (Mansfield)

  Kirkwood, D.

  Sexton. T. M.

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

  Lathan, G.

  Shinwell, E.

  Buchanan, G.

  Lawson, J. J.

  Short, A.

  Burke, W. A.

  Leach, W.

  Silverman, S. S.

  Cape, T.

  Lee, F.

  Smith, E. (Stoke)

  Charleton, H. C.

  Leonard, W.

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

  Cluse, W. S.

  Leslie, J. R.

  Smith, T. (Normanton)

  Clynes, Rt. Hon. J. R.

  Logan, D. G.

  Sorensen, R. W.

  Cooks, F. S.

  Lunn, W.

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

  Cove, W. G.

  Macdonald, G. (Ince)

  Taylor, R. J. (Morpeth)

  Cripps, Hon. Sir Stafford

  McEntee, V. La T.

  Thorne, W.

  Dalton, H.

  McGhee, H. G.

  Thurtle, E.

  Davies, R. J. (Westhoughton)

  MacLaren, A.

  Tinker, J. J.

  Davies, S. O. (Merthyr)

  Maclean, N.

  Viant, S. P.

  Day, H.

  MacMillan, M. (Western Isles)

  Walker, J.

  Dobbie, W.

  Mainwaring, W. H.

  Watkins, F. C.

  Ede, J. C.

  Mander, G. le M.

  Watson, W. McL.

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

  Marshall, F.

  Welsh, J. C.

  Foot, D. M.

  Milner, Major J.

  Westwood, J.

  Gardner, B. W.

  Montague, F.

  White, H. Graham

  Garro Jones, G. M.

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

  Whiteley, W. (Blaydon)

  Graham, D. M. (Hamilton)

  Morrison, Rt. Hon. H. (Hackney, S.)

  Wilkinson, Ellen

  Green, W. H. (Deptford)

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

  Williams, T (Don Valley)

  Grenfell, D. R.

  Muff, G.

  Windsor, W. (Hull, C.)

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

  Nathan, Colonel H. L.

  Woods, G. S. (Finsbury)

  Griffiths, G. A. (Hemsworth)

  Nicolson, Hon. H. G.

  Young, Sir R. (Newton)

  Griffiths, J. (Llanelly)

  Oliver, G. H.

  Groves, T. E.

  Paling, W.

  TELLERS FOR THE AYES.—

  Mr. Alan Herbert and Mr. Mathers.

  NOES.

  Acland, Rt. Hon. Sir F. Dyke

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

  Grimston, R. V.

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

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

  Guinness, T. L. E. B.

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

  Cox, H. B. T.

  Gunston, Capt. D. W.

  Agnew, Lieut.-Comdr. P. G.

  Cranborne, Viscount

  Guy, J. C. M.

  Alexander, Brig.-Gen. Sir W.

  Crooke, J. S.

  Hannah, I. C.

  Anstruther-Gray, W. J.

  Crookshank, Capt. H. F. C.

  Hannon, Sir P. J. H.

  Asks, Sir R. W.

  Groom-Johnson, R. P.

  Harbord, A.

  Assheton, R.

  Cross, R. H.

  Harvey, Sir G.

  Astor, Hon. W. W. (Fulham, E.)

  Crossley, A. C.

  Harvey, T. E. (Eng. Univ's.)

  Atholl, Duchess of

  Crowder, J. F. E.

  Haslam, Henry (Horncastle)

  Balfour, G. (Hampstead)

  Cruddas, Col. B.

  Haslam, Sir J. (Bolton)

  Barclay-Harvey, Sir C. M.

  Davies, Major Sir G. F. (Yeovil)

  Heneage, Lieut.-Colonel A. P.

  Baxter, A. Beverley

  Dawson, Sir P.

  Hepburn, P. G. T. Buchan-

  Beaumont, M. W. (Aylesbury)

  De la Bère, R.

  Hepworth, J.

  Beechman, N. A.

  Denman, Hon. R. D.

  Higgs, W. F.

  Beit, Sir A. L.

  Dodd, J. S.

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

  Bernays, R. H.

  Dorman-Smith, Major Sir R. H.

  Hoare, Rt. Hon. Sir S.

  Birchall, Sir J. D.

  Drewe, C.

  Holdsworth, H.

  Blaker, Sir R.

  Duckworth, Arthur (Shrewsbury)

  Holmes, J. S.

  Boothby, R. J. G.

  Eastwood, J. F.

  Hope, Captain Hon. A. O. J.

  Bossom, A. C.

  Elliot, Rt. Hon. W. E.

  Hore-Belisha, Rt. Hon. L.

  Boulton, W. W.

  Ellis, Sir G.

  Horsbrugh, Florence

  Brass, Sir W.

  Elmley, Viscount

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

  Briscoe, Capt. R. G.

  Emery, J. F.

  Hudson, R. S. (Southport)

  Brown, Col. D. C. (Hexham)

  Emrys-Evans, P. V.

  Hume, Sir G. H.

  Brown, Rt. Hon. E. (Leith)

  Evans, D. O. (Cardigan)

  Hunter, T.

  Bull, B. B.

  Everard, W. L.

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

  Butler, R. A.

  Fildes, Sir H.

  Jones, Sir G. W. H. (S'k N'w'gt'n)

  Gartland, J. R. H.

  Findlay, Sir E.

  Kerr, Colonel C. I. (Montrose)

  Carver, Major W. H.

  Fleming, E. L.

  Kerr, H. W. (Oldham)

  Cary, R. A.

  Furness, S. N.

  Kerr, J. Graham (Scottish Univs.)

  Cayzer, Sir C. W. (City of Chester)

  Fyfe, D. P. M.

  Keyes, Admiral of the Fleet Sir R.

  Cayzer, Sir H. R. (Portsmouth, S.)

  Ganzoni, Sir J.

  Lamb, Sir J. Q.

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

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

  Latham, Sir P.

  Channon, H.

  Gledhill, G.

  Law, Sir A. J. (High Peak)

  Chorlton, A. E. L.

  Gower, Sir R. V.

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

  Clarke, F. E. (Dartford)

  Grattan-Doyle, Sir N.

  Lees-Jones, J.

  Colville, Lt.-Col. Rt. Hon. D. J.

  Gretton, Col. Rt. Hon. J.

  Leigh, Sir J.

  Conant, Captain R. J. E.

  Gridley, Sir A. B.

  Lennox-Boyd, A. T. L.

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

  Grigg, Sir E. W. M.

  Levy, T.

  1348

  1349

  Liddall, W. S.

  Pickthorn, K. W. M.

  Spears, Brigadier-General E. L.

  Llewellin, Lieut.-Col. J. J.

  Plugge, Capt. L. F.

  Spens, W. P.

  Lloyd, G. W.

  Porritt, R. W.

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

  Locker-Lampson, Comdr. O. S.

  Procter, Major H. A.

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

  Loftus, P. C.

  Ramsbotham, H.

  Strickland, Captain W. F.

  MacAndrew, Colonel Sir C. G.

  Ramsden, Sir E.

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

  MacDonald, Rt. Hon. M. (Ross)

  Rathbone, J. R. (Bodmin)

  Sueter, Rear-Admiral Sir M. F.

  McKie, J. H.

  Rawson, Sir Cooper

  Tasker, Sir R. I.

  Macmillan, H. (Stockton-on-Tees)

  Reid, J. S. C. (Hillhead)

  Taylor, C. S. (Eastbourne)

  Macnamara, Capt. J. R. J.

  Remer, J. R.

  Titchfield, Marquess of

  Magnay, T.

  Robinson, J. R. (Blackpool)

  Tryon, Major Rt. Hon. G. C.

  Maitland, A.

  Ropner, Colonel L.

  Wallace, Capt. Rt. Hon. Euan

  Making, Brig.-Gen. E.

  Rosbotham, Sir T.

  Ward, Irene M. B. (Wallsend)

  Manningham-Buller, Sir M.

  Ross Taylor, W. (Woodbridge)

  Wardlaw-Milne, Sir J. S.

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

  Rowlands, G.

  Warrender, Sir V.

  Markham, S. F.

  Royds, Admiral P. M. R.

  Waterhouse, Captain C.

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

  Russell, Sir Alexander

  Wells, S. R.

  Mayhew, Lt.-Col. J.

  Russell, S. H. M. (Darwen)

  Whiteley, Major J. P. (Buckingham)

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

  Salmon, Sir I.

  Williams, C. (Torquay)

  Mills, Major J. D. (New Forest)

  Sanderson, Sir F. B.

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

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

  Savery, Sir Servington

  Windsor-Clive, Lieut.-Colonel G.

  Morrison, Rt. Hon. W. S. (Cirencester)

  Salley, H. R.

  Withers, Sir J. J.

  Nall, Sir J.

  Shaw, Major P. S. (Wavertree)

  Wolmer, Rt. Hon. Viscount

  Neven-Spence, Major B. H. H.

  Shaw, Captain W. T. (Forfar)

  Womersley, Sir W. J.

  O'Neill, Rt. Hon. Sir Hugh

  Simmonds, O. E.

  Wood, Hon. C. I. C.

  Orr-Ewing, I. L.

  Simon, Rt. Hon. Sir J. A.

  Wood, Rt. Hon. Sir Kingsley

  Patrick, C. M.

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

  Young, A. S. L. (Partick)

  Peaks, O.

  Smith, L. W. (Hallam)

  Peat, C. U.

  Somervell. Sir D. B. (Crewe)

  TELLERS FOR THE NOES.—

  Petherick, M.

  Southby, Commander Sir A. R. J.

  Lieut: Colonel Sir A. Lambert

  Ward and Mr. Munro.

  NEW CLAUSE.—(Exemption from Death Duties in case of land transferred to National Trust.)

  (1) Where any estate or interest in land (in this section referred to as "the settled property") is given, devised or bequeathed by any person (in this section referred to as "the disponer") in such manner as to render the National Trust entitled indefeasibly to the settled property subject to one or more life interests created by the gift, devise or bequest, being life interests to which this section applies, but to no other interest so created, exemption from death duties shall be granted subject to and in accordance with the provisions of this section.

  (2) The life interests to which this section applies are:

  (a) a life interest (whether extending to the whole or to a part only of the rents and profits arising from the settled property, and whether or not determinable upon an event other than death) given to the disponer;

  (b) a like interest given to the spouse or a child of the disponer and commencing, so as to entitle the beneficiary as from its commencement to receipt for his own use of all the rents and profits to which it extends, on the date of the cesser of an interest given to the disponer as aforesaid;

  (c) a like interest given to the spouse or a child of the disponer and commencing as aforesaid on the date on which the gift is made;

  (d) a like interest devised or bequeathed to the spouse or a child of the disponer and commencing as aforesaid on the date of the disponer's death.

  (3) In the case of any estate duty that would, but for this provision, have been leviable in respect of the settled property or any part thereof on or with reference to the
  1350
  death after the passing of this Act of the disponer, or of a person, whether being the disponer or a spouse or child of his, to whom such an interest as aforesaid is given, devised or bequeathed, exemption shall be granted, if on the death the settled property passes, or a benefit accrues therefrom, to the National Trust, as follows, that is to say—

  (a) exemption shall be granted as to an amount of that duty (whether being the whole or a part thereof) corresponding to the extent to which the settled property passes, or a benefit accrues therefrom, to the National Trust as compared with the extent to which the settled property passes, or a benefit accrues therefrom, to any person or persons entitled to such an interest or interests as aforesaid;

  (b) for the purposes of this subsection the extent to which on a death the settled property passes, or a benefit accrues therefrom, to any person shall be computed by reference to the extent to which that person becomes on the death entitled to receive for his own use the rents and profits arising from the settled property computed as at the death:

  Provided that where the death is that of the disponer under a gift and the National Trust is immediately before the death entitled to any extent to receipt of the rents and profits of the settled property for its own use, the settled property shall be deemed to that extent to pass to the National Trust on the death;

  (c) where exemption is granted as to a part of the Estate Duty leviable on or with reference to any death, the residue thereof shall be charged and borne in like manner as if the passing on the death, or the benefit accruing on the death, as the case may be, had been a passing, or a benefit accruing, wholly to the person or persons other than the National Trust mentioned in paragraph (a) of this Subsection.

  1351

  (4) In the case of any Succession Duty that would, but for this provision, have been leviable in respect of a succession taken by the National Trust after the passing of this Act and comprising the settled property or any part thereof, exemption shall be granted as to the whole of that duty:

  Provided that the exemption from Succession Duty granted by this Subsection shall not have effect in the case of a succession conferred otherwise than by such a gift, devise or bequest as aforesaid.

  (5) The exemptions from duty conferred by the foregoing provisions of this Section shall not have effect unless within six months from the date on which the gift is made, or the date of the death of the testator, as the case may be, or, in the case of a gift madé before the date of the passing of this Act, that date, or within such extended period as the Commissioners of Inland Revenue may allow, the interest of the National Trust has been so dealt with as to be held by the Trust inalienably.

  (6) Where the requirements of Subsection (1) of Section forty of the Finance Act, 1931, are fulfilled in relation to any estate or interest in land given, devised or bequeathed by any person to the National Trust, then, if that person dies after the passing of this Act, the estate or interest shall be exempt from any duties which might under that Subsection have been remitted by the Treasury.

  (7) In this Section the expression "the National Trust" has the same meaning as in Section forty of the Finance Act, 1931.—[Mr. C. Williams.]

  Brought up, and read the First time.
  7.20 p.m.
  Mr. Charles Williams: I beg to move, "That the Clause be read a Second time."
  The Clause seems rather long, but in fact it has been worked out by certain of the bodies concerned and will, I believe, meet with the unanimous support of the House. I have been told that it is a model of Parliamentary draftsmanship, but I have also noticed that every lawyer who has talked to me about it has given a slightly different interpretation of it. At present, under certain circumstances, if land is given or devised to the National Trust, it can, with the consent of the proper authorities, be exempted from Death Duties. Under this new Clause under certain circumstances, if land is accepted by and goes ultimately to the National Trust, it will then be exempted from Death Duties; in other words, we are endeavouring, in the first place, to exempt the National Trust from the payment of Death Duties where land goes to it permanently, instead of at the
  1352
  will of the Treasury or whatever the authority is.
  Supposing a person wishes to leave to the National Trust a house or a piece of land which is of national interest, he can still carry on as the occupier for life and he can then bequeath a life interest either to his wife or to one of his children, and ultimately it goes to the National Trust. Under these provisions the National Trust, which to-day might have to pay Death Duties both on the death of the actual giver to the National Trust and on the death of the person who succeeds him—there have been definite cases where the National Trust has had to pay two Death Duties—in the future will not be in that disadvantageous position. I believe also that under this Clause there will be very little benefit to the actual giver or the person who succeeds him, though there may be some benefit. There will possibly be in some cases the benefit that the aggregate amount of Death Duties will not be as high, because you will be taking the amount given to the National Trust out of the whole estate for Death Duty purposes. But as, when you give anything to the National Trust, the whole of it becomes national property for ever and for ever, and is administered by the National Trust, I do not think that in these circumstances it can be said that the donor, who is giving away the whole of his interest, is getting any great benefit out of it, at any rate.
  I have no doubt that other people could say a great deal about the details of this Clause. All that I will say is that it is intended to carry out a very definite wish, which has been expressed by those who occupy the Front Government Bench and the responsible positions in the Opposition, that everything possible should be done to preserve for the nation national monuments which are of historic or other interest. I believe there is a very strong feeling throughout the country in favour of doing that. You have, under your National Trust, a most remarkable movement, backed by men and women of every position in this country, that is gradually absorbing many places and works of great national interest into the Trust and preserving them for the nation for all time. Under this Clause you will be attempting, I hope successfully, to remove from the National Trust one of its great difficulties, in that it has had under certain circumstances to pay Death Duties on the

  1353
  land that it has inherited. For that reason, because I believe that it will accelerate the possibility of getting more of these national monuments into the hands of the National Trust and that it will release in that way a certain amount of the Trust's money for the preservation of other memorials, I ask the House to accept this Clause in the spirit in which I have tried to move it. I think it is in the best general interests of the nation as a whole, and I believe that, from many points of view, it is an agreed Clause.
  7.26 p.m.
  Mr. Ede: I beg to second the Motion.
  It appears to be a necessary canon of Income Tax law that it shall be completely incapable of being understood by the layman. I had the same explanations tendered to me as to the meaning of this Clause as have just been given to the House by the hon. Member for Torquay (Mr. C. Williams). That was before I saw the Clause, but when I saw it I had to go back to the people who had asked me to support it and ask them whether this Clause which had appeared on the Paper was really the one about which they had spoken to me. I can only say that I rejoice that the hon. Member for Torquay is now generally supporting the Government, because I am bound to say, from my recollections of him between 1929 and 1931, that, if he had felt it his duty to cross-examine the Front Government Bench as to what this Clause meant, one would have been very wise to suspend the Eleven o'Clock Rule to-night. Assuming that this mass of verbiage really means what the hon. Member has said, and that it will effect that purpose, I cannot imagine that there is anyone in the House who will be other than a supporter of it.
  Let us recollect that when the late Lord Curzon bequeathed Bodiam Castle and another castle to the National Trust, he reduced that body to a state of abject terror because it really could not understand where it would ever find the money that would enable it to meet the claims of the Exchequer when the property passed to it; and I am sure the right hon. Gentleman the Chancellor of the Exchequer will recall that when a predecessor of his in office, the late Lord Snowden, made a concession on this matter in 1931, it was the daughter of the late Lord Curzon who seconded the Amendment which that Chancellor of the Exchequer agreed to accept. No one who has been
  1354
  to Bodiam Castle on a fine summer's afternoon and seen the extent to which it is used by hundreds of people in rational enjoyment and in getting some real understanding of the way in which our ancestors lived their lives can feel that it was anything but a very great benefit that the concession was made which allowed Bodiam Castle to he secured for the nation, and nobody but the hon. Member for Norwich (Mr. H. Strauss) would dare to be sufficiently lyrical in this House to describe the feelings that one might have had on such an occasion.
  The present concession of the law is very narrow and limited, and might be uncertain in its incidence in the event of any change of opinion at the Treasury, and, of course, a person who desires to bequeath property of this kind necessarily desires to know that when the time comes for his bequest to be taken over the condition of affairs at the Treasury shall be such as to ensure that his wishes can be carried out. Quite frankly, the more I read the new Clause, the less I understand it. I was once a member of a council whose clerk gave an explanation of a clause, and the chairman said, "Until the clerk explained it I understood what the clause meant." The more I read this new Clause, and the more eminent lawyers in the House try to explain it to me, the less it appears to me to fulfil the purposes for which it was designed. I am prepared, however, to accept in faith the views of those gentlemen. I can only say that those of us who have pressed this matter in the House for some years are hopeful that this afternoon the Chancellor will find his way open to accept the proposal and to secure a great benefit, not merely for this generation, but for a good many generations to come. Whether we like it or not, the effect of taxation and legislation during the last 40 or 50 years has been to create a grave jeopardy for some of these priceless national heritages. They have up to the moment largely been in the occupation of one class, and the majority of people have had few opportunities for seeing them. If this new Clause means that an increasing number of these heritages will be available for the country as a whole, I am sure that it will be a very good afternoon's work on the part of the House of Commons to accept it.
  7.33 P.m.
  Sir J. Simon: I am very glad that the two hon. Gentlemen have brought this matter forward. I know that there are Members in all parts of the House who are prepared to support the proposal, and I am very glad to be the Chancellor of the Exchequer to accept it. I hesitate to offer further confusion to any explanation of my hon. Friend. At any rate, my explanation shall be simple, and if it turns out to be not quite right, no doubt some learned gentleman will correct me. This is the way, at any rate, that I understand it. It has nothing to do with Income Tax, but with Estate Duties, Succession Duties and things of that sort. How does the law stand at present in relation to gifts of land to the National Trust? I assume, of course, that everybody will desire to facilitate, if we can, the passing to the National Trust of places of great beauty and architectural interest in order that they may be preserved for ever for the nation. As the law has stood since 1931, if the property is given direct to the National Trust no Estate Duty is payable which will burden that property.
  What we want to do by this new Clause is to go further. There are many cases in which the owner of property—it may be a beautiful rural property or a great historic house—does not find it possible to pass it direct to the National Trust, but is ready to do so provided there is interposed the life interest of himself, or of his widow, when he dies, or it may be of a child. The question is whether we can make any provision which will assist that arrangement by way of exemption from Estate Duty. The answer in this new Clause, which I agree is elaborate, and inevitably so, is that we can. If all that the owner does is to reserve a life interest to himself and to say that the property shall pass to the National Trust at his death, no Estate Duty will be payable, and the National Trust will receive the property without any charge of duty upon it. Suppose he says, "I want to interpose the life interest of my widow or my son or daughter, and after that it shall go for ever to the National Trust." In that case, again, this Clause gives assistance which is not given now, because, although there will have to be Death Duties paid when the property passes from the donor to the life
  1356
  interest, there will be no Death Duty to be paid when the property passes at the end of that life interest to the National Trust.
  At present the law leaves the question whether Estate Duty shall be charged or not in the case of direct gifts to the National Trust to the discretion of the Treasury. They need only decide when the occasion has actually arisen and when the death has occurred. That is very inconvenient, because, suppose the donor does not know what decision will be given and the National Trust does not know, there may be uncertainty whether he will make this disposition of his property. We, therefore, propose by this new Clause to say, "You shall not be required to pay Death Duties, and exemption will automatically be given provided that the other conditions of the Clause are fulfilled." That is the way in which I understand it.
  Perhaps I may finish by reading two sentences which, I believe, state the matter accurately. The proposal is that if a testator "A" leaves property to the Trust, but interposes a life interest to a second person "B"—a son or a daughter—Death Duty will be payable on "A's" death when the property passes to the next person, but Death Duty will not be payable on "B's" death when it passes to the Trust. That duty will be payable on "A's" death on the capital value of the estate and not on the value of "B's" life interest in it. The matter, I think, is now capable of being decided by the House. I cannot believe that in any quarter there will be any objection to it. I hope that it will result in the more constant accumulation in the hands of this great independent, impartial body, the National Trust, of things which are of great beauty and a joy for ever. It is a small matter compared with that that the House of Commons should agree to sacrifice the amount of money involved.
  7.40 P.m.
  Mr. Mander: This is a matter of great national interest, and we are all very grateful for the acceptance of the proposal by the Chancellor of the Exchequer. I am delighted that he has accepted it, because I am sure it will give great encouragement to a movement, which is developing and may grow considerably in the next few years, for people to hand

  1357
  over property of historic interest or natural beauty. There is a tendency for persons who feel that because of the Death Duties they cannot keep up their estates, to wonder whether to sell them and to give them up for development. If they are able to hand them over to the National Trust, and if they and their families are able to remain as occupiers with a right to the public to go in and see the houses as they are lived in they will be encouraged to do that, and it will be a great advantage to the nation.
  One of the advantages of the National Trust owning properties in this way is that the public, instead of going into an empty museum or a house with bare walls, are able to go in at intervals and see a house as it is lived in from day to day by an ordinary family. That is the great advantage which accrues from legislation of this kind. Owners of these places have to make up their minds between two things. It is very nice to be the owner in fee simple of a historic place and to desire to keep it up. If that is not possible, it is at least as attractive a position to be a sort of custodian or trustee for the nation—for that is what the owner and the family would be in future—as just the owner in fee simple. It is because this new Clause will give great encouragement to people who are in this difficult position to make the decision to hand the property over to the nation to keep the family association and to give the public an advantage at the same time, that I think we are doing a very fine afternoon's work in persuading the Government to accept it.
  7.42 p.m.
  Mr. Bossom: I wish to join with other hon. Members in thanking the Chancellor for accepting this new Clause. I do not want to assume a dog-in-the-manger attitude, but the inducement extended to surrender property is very small to the existing possessor, and when you consider the condition of the wife or son who may be given a life interest you find the Chancellor's interpretation does little more than is done at present. The National Trust in the past has had properties presented to it and no Death Duty has been charged. This interpretation means that after the existing owner's death, the wife or son will pay Death Duty as at present, but
  1358
  will not have the same rights over the property as the present owner enjoyed. I am in favour of that situation, under justifiable circumstances, but benefits or advantages ought to be carried further and Death Duty entirely eliminated from the property if it is to be given to the nation. Other Measures have been passed by the Government for town and country planning and the preservation of ancient monuments, and both those Measures tend to preserve for the nation magnificent sites and buildings, and that was the purpose for which they were designed, but in order that that should be accomplished the public authorities have to inflict rates to provide compensation. We have seen all over the country, however, that the authorities are not able in many cases nor are they imposing the rates to provide this compensation. It is hoped that the public will donate to the National Trust properties and thus fill in the gap in our national preservation ambitions which are not being filled by the Town and Country Planning Act and the Ancient Monuments Act at this time. I hope that next year the Chancellor will see his way to make greater inducements to those capable of making presentations to the National Trust so that this very well run organisation will have the opportunity of possessing for ever for the benefit of the nation many of these fine buildings and sites which now are in a position of risk of destruction or despoilment. I thank the Chancellor very much for what he has done, but I sincerely hope that next year he will be able to go further and so help the Acts which are not fulfilling the function everyone desires they should.
  7.44 p.m.
  Sir J. Withers: I should like to associate myself with what the last speaker has said. I regret the fact that the National Trust is not to be relieved entirely from Death Duties. However, the new Clause does a considerable piece of practical work. As a lawyer I have found it difficult to persuade anybody to leave anything to the National Trust because they have to do it out and out, either by gift or by devising it at death. This Clause does give power to interpose a life interest to a wife and, as I understand it, to one of the children, and to that extent it will facilitate matters, but I

  1359
  should have thought that the right thing to do would be to exempt the National Trust from Death Duties altogether, and simply make the life tenants pay the Succession Duties on their life interest. Subject to that I heartily congratulate the Chancellor of the Exchequer.
  Question, "That the Clause be read a Second time," put, and agreed to.
  Clause read a Second time, and added to the Bill.
  7.46 p.m.
  NEW CLAUSE.—(Exemption from Import Duty of materials used in house building.)
  Articles imported into the United Kingdom, on or after the first day of August, nineteen hundred and thirty-seven, of the categories specified in the Fifth Schedule to this Act, being articles used for the purpose of constructing houses or dwellings, shall be imported free of any duty.—[Mr. White.]
  Brought up, and read the First time.
  Mr. Graham White: I beg to move, "That the Clause be read a Second time."
  This Clause is related to the Fifth Schedule, which includes a comprehensive list of the materials used in building. I invite the House to give consideration to this new Clause, because it is a matter of public importance that no increased charges should be placed by this House upon the building industry, if that can possibly be avoided. There has been considerable anxiety about the rise in the price of building materials which has been taking place spasmodically but insistently during the last 18 months. It is proper that the House should watch very jealously anything which affects the building industry, for one thing because of its importance to the great social service of assisted house building, and bearing in mind that in many parts of the country, particularly in Scotland, there is still an urgent need for houses to be built at the lowest possible cost. And apart from that we cannot forget that the building industry has been a very important element in our national recovery. It was the core of industrial recovery and led to a very substantial reduction in unemployment, because it must be remembered that the building industry employs a very large amount of labour in proportion to the total cost of its output.
  1360
  Among many competent observers there has been speculation as to whether costs have not reached the point where a slackening in the rate of building must inevitably take place. From such inquiries as I have been able to make and from my personal knowledge I think the time has come when the rise in prices is leading to a slackening of building activities. That is certainly so in the case of commercial building. Within my own limited experience I have heard of several projected undertakings which have been postponed, and may never be put in hand, on account of the increase in costs, and that is in the last nine months only. Where building is not immediately necessary and can be undertaken when trade generally is slackening I think there is no evil in such a postponement, but it is the case that many buildings which were urgently required for commercial purposes have been postponed. Further, we know that the rise in prices is causing considerable anxiety to local authorities, who must feel concern about whether they will be able to carry through their housing schemes. The matter must also be of concern to the Government, because building costs will affect the whole of their Estimates for the Defence Services. Although we do not know the actual way in which the money is being spent, we know that a considerable proportion will be devoted to building or capital works.
  It is difficult to give accurate figures, because they vary so much in different parts of the country, but the average cost of a non-parlour three-bedroom house in this country was £338 in June of this year, as compared with £311 in June, 1936. Of that increase only £3 is due to the increased cost of labour. In Scotland, where I understand the housing situation is lamentably acute, the position is so much worse. There the cost of a house has risen by £100 between June, 1936, and June of this year. I am quoting the figures which were given in the course of a discussion in April of this year. The Government admit that they feel concern about this rise, because the Secretary of State for Scotland said that he was looking not only into the question of costs but also into the supply of materials. On that occasion I think he said that something like 60 per cent. of the rise in Scotland was due to the fact that contractors were asking higher prices because they did not want the business,

  1361
  and the reason why they did not want the business was that they were afraid; they had to protect themselves against rising prices, which in the case of some materials was at that period almost phenomenal.
  Plumbing has had a rapid and heavy rise. The cost of plumbing two months ago, though it may have receded somewhat with the decline in the price of copper, was 150 per cent. above the point touched when costs were at their lowest. That is a very serious rise indeed. My attention was drawn to a speech made by an authority on housing in Scotland, Provost Martin, at the Convention of the Royal Burghs. He went into this matter in some detail a it affects Scotland, and pointed out that the rise in lead piping was 100 per cent.; copper 50 per cent.; that cement had risen by 10s.; and so on throughout the list. It is clear there is great danger that local auhorities will be hampered in carrying out their housing scheme, and there is a danger of jams being created in the general business of the country, owing to the shortage of material and to the state of feeling, which makes people put higher and higher prices in order to protect themselves not only against an immediate rise in prices, but against rises which they anticipate will take place later, and which their experience indicates are almost certain to take place. In that same discussion Provost Martin made some observations to account for some of the rise in prices and gave a clear indication of what the remedy might be. He said:
  "I wonder whether it has come to the minds or consciences of most of the members here that tariffs are placed by the Government on steel and quite a number of other commodities."
  He was speaking before the Government, recognising the shortage of steel, had taken action to place steel in a special category.
  "These tariffs are not only increasing prices, and to that extent the Government is to blame for the increase, but they are also preventing other goods coming in from other countries, with the result that there is not the same competition as there was before, so allowing combines to charge practically any price."
  That is the situation. If this rise in prices were confined to copper, cement and one or two other materials it might be a satisfactory answer to say that the procedure of the Import Duties Advisory Committee should be adopted, but the situation has gone far beyond that, and there is a necessity now for an indication to be given of
  1362
  the policy of the country in this matter. I need not remind the House of the change in the situation which has taken place since the fiscal policy of the country was changed in 1932. At that time many other countries were putting their tariffs higher and higher as a defensive measure. There was no question then of extended trade; it was a case of trying to save what trade there was. The situation has changed vastly in these four years. Not only has equilibrium been established between supply and demand, but there is now a positive shortage where in many cases there was a glut.
  The cumulative effect of these rising prices is a serious matter to tens of thousands of people living in overcrowded dwellings and to those who are responsible for conducting the business of the country. In this Clause we suggest to the Government a way to remove the anxieties of their own Departments, including the Defence Departments, and the Housing Department of Scotland, which must be particularly anxious about the rise, as we have seen from what has taken place at Question Time throughout the whole of this year. We submit that Parliament will not be doing its duty if it allows the continuance of any increased costs which it is possible to lower.
  7.58 p.m.
  Sir Percy Harris: In seconding this new Clause I must express regret that apparently neither the Minister of Health, nor the Parliamentary Secretary to his Department, is able to be present. The Minister of Health, in his great speech in introducing his Estimates, expressed his determination to press forward with the whole of his housing programme. We are now at what is probably the most critical period of his attack on slums, and are also beginning to tackle what I consider to be an even more difficult and urgent problem, that of overcrowding. The success of that housing programme depends on our being able to build houses at rents which the slum dwellers and overcrowded people can pay. If we cannot build down to their pockets the whole housing campaign is bound to break down. The Minister of Health was conscious of it, but it is no consolation to the victims of overcrowding and slum conditions to know that he is conscious of it if he is not going to succeed. Everybody knows that the steady rise in all building materials is increasing the cost

  1363
  of housing. On top of that is the rise in interest rates. If something is not done and if Parliament remains quiescent, the building of suitable houses for the working class at rents that they can pay will be brought to a standstill in a very few months.
  In the Schedule is a list covering most of the materials used in house-building, all of which are subject to tax. If our new Clause is accepted, we shall be quite prepared, when we reach the Schedule, to accept any reasonable Amendment, if a case can be made out for leaving out this or that article. If they could all be admitted free, a great stimulus would be given to the production of houses and a substantial contribution would be made to keeping down prices to a reasonable level. I hope that the Minister will be sympathetic and that he will accept our Clause. If he shows the reasonableness which the Chancellor of the Exchequer has just shown upon another Clause, we can also be reasonable when we reach the Schedule.
  8.2 p.m.
  The Parliamentary Secretary to the Board of Trade (Captain Euan Wallace): I think it was exactly a week ago that a somewhat similar Clause to this proposed new Clause was put forward from the same benches. It was sponsored by the right hon. Member for North Cornwall (Sir F. Acland) and it referred on that occasion to agricultural machinery and foodstuffs. The arguments which I attempted to advance against accepting that new Clause upon the Committee stage apply with equal force on this occasion. If they were unpalatable to hon. Members opposite, I am afraid that they have lost none of their force in the view of His Majesty's Government. I was extremely shocked for a moment or two by the very savage attack made upon me when I sat down, and it was only later on that I realised that my reply had to be of necessity "inadequate" in order to allow the right hon. Gentleman the Member for Gorton to twit the Chancellor of the Exchequer on his conversion—I suppose the right hon. Gentleman would call it perversion—and incidentally to show the House and the country that the Chancellor of the Exchequer had moved with the times and that the right hon. Gentleman the Member for Gorton had not.
  1364
  The reply to the arguments which were put with modesty and courtesy by the two Liberal Members is exactly the same as it was last week. There already exists machinery which is not only adequate but is eminently suitable for the purpose. It was suggested that the function of the Import Duties Advisory Committee was merely to readjust a duty here and there on some particular item, but the Import Duties Advisory Committee is empowered by Statute to deal not only with particular items but with whole classes of goods and they have, within the last week or two, dealt very drastically with a very large class of steel imports into this country. The hon. Baronet the Member for South-West Bethnal Green (Sir P. Harris) referred to the Schedule which is an essential part of his proposals and he showed considerable wisdom in attempting to disarm a good deal of criticism by offering in advance to alter the Schedule in any way that the Government might like.
  Even the most cursory examination of the Schedule shows that the proposed new Clause was drawn up without any expectation that it would be accepted. For instance, the Schedule begins by referring to articles used in the production of houses and dwellings. It does not say anything about shops, cinemas or commercial buildings. What are the customs officers to do when a consignment of tiles is brought into this country? How are they to know whether the tiles will be used in the construction of a dwelling-house, a shop or a cinema? Any hon. Member who has had experience of administration would know that to attempt to follow those tiles to their destination and to the site in order to decide whether they should be exempted from duty, is practically an impossible task.
  Mr. White: We do it in the shipyards.
  Captain Wallace: We need not do it more than is necessary and in this case it would be an almost impossible task. Several other matters call for comment. There is a reference to water heaters; is that description restricted to geysers or does it include kettles? What are "garage door outfits"? What are the customs officers to do when the articles mentioned in line 23 come into the country, "plumbers, brass, stop cocks, ball valves, etc."?

  1365
  Then there is the question of timber. We have just concluded a very important and advantageous agreement with the Dominion of Canada, binding us to maintain a 10 per cent. duty on certain classes of timber. Is it suggested that we should scrap that agreement? As to tiles, the duty was approved not very long ago in this House. In putting forward their recommendation for a duty on foreign imported tiles, the Import Duties Advisory Committee said that there was an increase of imports attended by foreign price cutting below the level of the British prices, which the Committee regarded as reasonable. They thought that if they were protected by a tariff it would be possible for the United Kingdom manufacturers to make reductions in prices, and I understand that reductions were made in those prices after the order was made.
  Iron sheets are mentioned twice in this Schedule. They appear in line 21 and again in line 30 and I do not know why they should have been selected for that particular honour. These are some of the reasons which make me feel that even if we could accept the proposed new Clause, which I regret we cannot, we should have a very great deal of trouble with the Schedule. The hon. Gentleman who moved the Motion referred to the increased price of cement, but my information does not confirm that there has been an increase. My researches go to show that, although certain items undoubtedly have risen considerably, cement, tiles, bricks, slates and sheet glass are cheaper to-day than they were in 1930.
  One of two things must be true; either this is a proposal for certain minor adjustments of duty within the general tariff scheme of this country, in which case it is obviously a matter for the Import Duties Advisory Committee, or else this is a proposal which goes a long way beyond that and is the forward sap of a general attack upon our tariff system. If this is not something eminently suitable for the Import Duties Advisory Committee, it might be stigmatised as an attempt to get rid of our tariff system piecemeal and to return to a policy of free imports by stealth. That may be what the Liberal party in opposition wants, but it is not a proposition which the Government can accept. I will not weary the House with a recitation of what the tariff,
  1366
  coupled with other sound policies which have been pursued by the National Government, has achieved during the last five years. To any unprejudiced person it is clear that the Government would be unwise to scrap a system which has served us so well, and for that reason we cannot accept the new Clause.
  8.11 p.m.
  Mr. McEntee: I regret that the Minister has been unable to accept the new Clause. A few days ago, during a discussion, an hon. Member opposite referred to the Liberal party as dead, and somebody on this side retorted that we should always speak well of the dead. I do not know whether I shall be accused to-night of assisting in the resurrection of the dead in supporting the proposed new Clause, but even if that is so, I want to support it. I must express surprise at the weakness of the reply which we have just heard, the whole essence of which was that, because of certain defects in the Schedule, the Government were unable to accept it. The Schedule has been altered before and it can be altered again. The right hon. and gallant Gentleman representing the Government told us that the proper way to make this alteration would be to take the proposal to the Import Duties Advisory Committee, but if it were altered there, the Schedule would have to be altered, and if it can be altered by taking it to the Import Duties Advisory Committee it can surely be altered by the passing of the proposed new Clause.
  The issue is not related to any small question such as that referred to by the right hon. and gallant Gentleman but is whether the proposal is good for the nation. He does not deny that the prices of building materials for working-class houses are going up, although he mentioned glass and other materials, the prices of which are lower than they were in 1930. That may be so, but I wish to refer to an answer which was given to me on Thursday of last week by his colleague the Minister of Health. My question to the Minister of Health was:
  "Whether he can give figures for England and Wales showing the percentage rise in the prices of the materials used in the construction of working-class houses, the percentage rise in the wages of building trade workers, and the percentage increase in tenders for this class of house for one year to the latest possible date?"

  1367
  The Minister replied as follows:
  "The estimated percentage rise in the prices of materials used in the construction of a working-class house for the three months ended 31st March last as compared with a similar period a year previous is 7·0. The estimated percentage rise in the cost of labour used in a working-class house over the same periods is 2.8. The percentage increase on the average tender price of a non-parlour working-class house over the same period is 8.7."
  An increase of 8.7 per cent. in the price of working-class houses is a very serious thing for the people who have to live in those houses. That is evidenced by the answer given by the Minister of Health to a further question which I put to him on the same day:
  "Whether any local authorities in England and Wales have decided to postpone housing schemes or to reduce schemes already approved by them, owing to the rise in the prices of building; and will he give the names of such authorities?"
  The Minister of Health said in reply:
  "I understand that postponements have occurred in Leeds, Brighton, Southampton, Oswaldtwistle, and in the rural district of Marlborough and Ramsbury, because the tenders received were too high for acceptance."—[OFFICIAL REPORT, 8th July, 1937; cols. 549–550, Vol. 326.]
  In some important places in the country the building of working-class houses has been stopped entirely because of the increase in prices, and one can reasonably assume that, until prices fall to something like the level of a year or two ago, the building of working-class houses is not likely to be re-commenced. It occurred to me, when I saw this Clause on the Paper, that it afforded an opportunity to the Government to prove that they are really in earnest in what is said by them, particularly by the Minister of Health, with regard to the need for slum clearance and for dealing with overcrowding under the Act of 1935. I do not know how much the acceptance of this Clause would cost the Government, but I think I am right in saying that it would be a very substantial contribution towards reducing the cost of building, which is causing the building of working-class houses to be stopped to-day.
  Apart from that, I am familiar, as a member of a trade union in the building industry, with the conditions in that industry, and I can say without any hesitation that the cessation of this work is causing great concern to those engaged in
  1368
  the industry from the point of view of employment. I am surprised that the Minister seems to regard this as a trivial matter; it is not a trivial matter to those engaged in the industry. I regret very much that we cannot go to the industry and say, "Here is a proof that the Government are in earnest when they make speeches in the country and in the House of Commons and tell those who are in need of houses how much they desire to provide houses, at any rate for slum dwellers." It is no reply, if I may say so with all due respect to the Minister, to say that there are difficulties. We know that there are difficulties. Everyone knows, when a matter like this is under discussion here, that there are difficulties. But, if the Government desire to get over those difficulties, they can do so—
  Captain Wallace: I know that the hon. Member does not wish to misrepresent me. I must make it clear that we do not at all object to the Clause because there are practical difficulties. The Government cannot accept it because there is adequate machinery in existence to reduce these duties in so far as they ought to be reduced. I am not contesting what the hon. Member says about the rise in certain directions in the cost of building houses, but our contention is that there is in existence alternative and better machinery to do what he wants.
  Mr. McEntee: I think the Parliamentary Secretary will agree that, if the Government were to say they would support any application that might be made for the purpose of altering these duties, the Import Duties Advisory Committee, being a body of reasonable people willing to consider seriously any proposal made by the Government, would consider such a proposal seriously; and they would, I think, accept the Government's point of view. But the Government will not put forward that point of view. They say that there are difficulties in the way, and that, after all, the prices of certain materials have declined. That statement was meant to convey, and I think did convey, that there has not been a serious rise in the cost of building; but that is not the case. There has been a serious rise in the cost of building materials, and, as a consequence, the building of houses has been entirely stopped in many of the principal cities of the country. From

  1369
  my personal knowledge of the building trade generally, I know, and the Government know, and the Minister of Health in particular knows, that many local authorities in addition to those already quoted are very seriously concerned in regard to the future of building working-class houses and of slum clearance schemes. They have not yet come to a decision, but they are seriously considering whether they will not have to stop building. That will mean greater unemployment, and it will mean that many of those people who to-day live in slum areas will have to remain there, possibly for some years to come.
  8.24 p.m.
  Mr. David Adams: In the matter of house-building we have reached a national crisis. A considerable number of local authorities, the larger ones in particular, have petitioned the Ministry of Health for protection against the rise in costs, and there is no diversity of opinion that the Import Duties Advisory Committee are in a large measure responsible for the present situation. Dear housing is having a serious effect on the cost of living of the working classes. A house built next year is bound to bear a heavier rental than one built before this rise took place, and that means that during the existence of that house, possibly a period of 60 years, the tenants will be called upon to bear this heavier charge because of the lack of protection afforded to the municipalities by the House of Commons.
  The Parliamentary Secretary has directed attention, apparently to his satisfaction, but certainly not to the satisfaction of Members on this side of the House, to the instrument whereby all that we desire can be achieved. He tells us to go to the Import Duties Advisory Committee and, if there is a case in favour of the reduction or abolition of these duties, to present it to them. We know what ensued in the matter of steel, which he particularly mentioned. You had to have a situation which was positively alarming so far as our manufacturers were concerned. On Tyneside ships' plates were unobtainable, many works were shut down for two or three days per week, and it is common knowledge that our export trade, for lack of cheaper steel, has almost disappeared in certain directions. Indeed, certain manufacturers, on the North-East Coast in particular, have intimated that it
  1370
  was useless attempting, under the conditions in which steel was obtainable, to do any export trade whatever. A situation of that sort, in the nature of things, was bound to appeal to the Import Duties Advisory Committee and the pressure of national opinion compelled them to make a concession as far as steel is concerned.
  What possibility is there of local authorities going to the Import Duties Committee and presenting to them a case for a reduction on the very diverse commodities used in house building? They could not possibly succeed in any such campaign. What might be reasonable in the case of timber might not be reasonable in the case of other commodities. It might be easy to demonstrate that the duty on tiles should be removed and the duty on something else should continue, and only the influence of the Government itself, by the measures suggested in the Clause, would be efficient for dealing with the present position. Some progress has been made with the abolition of slum property, but few, if any, authorities have made any serious start in the matter of building to lessen overcrowding. Their work is being arrested because of the high cost of building materials.
  If the Government are serious in the matter, they are bound to deal with the situation. Local authorities are suffering from two things, high costs and the influence of combines and trading associations which are artificially forcing up prices and restricting the use of certain commodities. The Newcastle Corporation recently invited quotations for material required for the erection of house property and there were no fewer than 10 identically similar quotations, clearly indicating that the combine was at work. The only sound reason that has been advanced against the Clause is that there would be difficulties with the Dominions, but difficulties with the Dominions have been overcome before and could be overcome now. The problem confronting municipalities and the Government can only be dealt with by the drastic measures suggested in the Clause.
  8.30 p.m.
  Mr. Alexander: I hope that the hon. Members who have moved this new Clause will go to a Division upon it. The Parliamentary Secretary's reply was very unsatisfactory. I think the position in regard to the price of building materials

  1371
  cannot be controverted. At any rate, I was a member of the committee appointed by the present Prime Minister to examine the course of the price of building materials and it is no use to try to give the impression that there is no serious rise when some of us were actually watching the rise take place. While it may be true that there are other ways in which the matter could be examined, with a view to reducing the duties, it seems to me to be entirely unsatisfactory, because of the social importance of maintaining the output of housing for some considerable time to come, and the Government should, if necessary, operate the other machinery that has been referred to.
  If there is anything sincere in the quotation of alternative machinery, the Government ought to say to the Import Duties Advisory Committee, "Will you examine at once the actual prices of building materials with a view to seeing whether any action is necessary?" There is omitted from the Schedule the manufacture of steel used for working-class flats. When one considers that we are having to pay anything from 14 to 16 per cent. more for plain and compound beams and
  stanchions of the kind used in working-class flats—the Government have already conceded the principle, in respect of steel, that some reduction must be made in tariffs to meet the present high costs—I feel sure that on examination they ought to be persuaded that the principle of the Amendment is right and, if they cannot accept it in these terms, they ought to ask the Import Duties Advisory Committee to examine the whole question.
  Mr. H. G. Williams: Would the right hon. Gentleman suggest that building materials have gone up in price in the last three or four years more than the general rise of prices of commodities on a world basis?
  Mr. Alexander: In certain respects, yes. I have come across cases where the price of certain building materials is governed by at least a loose combine in which they are taking a profit, because of the tariff, of from 22 to 25 per cent. not on capital, but on turnover, and it is time that something was done.
  Question put, "That the Clause be read a Second time."
  The House divided: Ayes, 112; Noes, 198.

  Division No. 289.]

  AYES.

  [8.33 p.m.

  Adams, D. (Consett)

  Groves, T. E.

  Parker, J.

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

  Hall, J. H. (Whitechapel)

  Parkinson, J. A.

  Adamson, W. M.

  Harvey, T. E. (Eng. Univ's.)

  Pethick-Lawrence, Rt. Hon. F. W.

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

  Hayday, A.

  Pritt, D. N.

  Ammon, C. G.

  Henderson, J. (Ardwick)

  Riley, B.

  Attlee, Rt. Hon. C. R.

  Henderson, T. (Tradeston)

  Ritson, J.

  Banfield, J. W.

  Hills, A. (Pontefract)

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

  Barnes, A. J.

  Holdsworth, H.

  Robinson, W. A. (St. Helens)

  Barr, J.

  Johnston, Rt. Hon. T.

  Rawson, G.

  Batey, J.

  Jones, A. C. (Shipley)

  Sanders, W. S.

  Benn, Rt. Hon. W. W.

  Jones, Morgan (Caerphilly)

  Sexton, T. M.

  Broad, F. A.

  Kelly, W. T.

  Shinwell, E.

  Bromfield, W.

  Kennedy, Rt. Hon. T.

  Silverman, S. S.

  Brown, C. (Mansfield)

  Kirkwood, D.

  Smith, E. (Stoke)

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

  Lawson, J. J.

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

  Burke, W. A.

  Leach, W.

  Smith, T. (Normanton)

  Cape, T.

  Lee, F.

  Scrensen, R. W.

  Charleton, H. C.

  Leonard, W.

  Stephen, C.

  Chater, D.

  Leslie, J. R.

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

  Cluse, W. S.

  Logan, D. G.

  Taylor, R. J. (Morpeth)

  Clynes, Rt. Hon. J. R.

  Lunn, W.

  Thorne, W.

  Cocks, F. S.

  Macdonald, G. (Ince)

  Thurtle, E.

  Cove, W. G.

  McEntee, V. La T.

  Tinker, J. J.

  Cripps, Hon. Sir Stafford

  McGhee, H. G.

  Walker, J.

  Dalton, H.

  MacLaren, A.

  Watkins, F. C.

  Davidson, J. J. (Maryhill)

  Maclean, N.

  Watson, W. McL.

  Davies, S. O. (Merthyr)

  MacMillan, M. (Western Isles)

  Welsh, J. C.

  Dobbie, W.

  Mainwaring, W. H.

  Westwood, J.

  Ede, J. C.

  Marshall, F.

  White, H. Graham

  Foot, D. M.

  Mathers, G.

  Whiteley, W. (Blaydon)

  Gardner, B. W.

  Maxton, J.

  Williams, T. (Don Valley)

  Garro Jones, G. M.

  Milner, Major J.

  Windsor, W. (Hull, C.)

  Gibson, R. (Greenock)

  Montague, F.

  Woods, C. S. (Finsbury)

  Graham, D. M. (Hamilton)

  Morrison, Rt. Hon. H. (Hackney, S.)

  Young, Sir R. (Newton)

  Green, W. H. (Deptford)

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

  Grenfell, D. R.

  Muff, G.

  TELLERS FOR THE AYES.—

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

  Noel-Baker, P. J.

  Sir Percy Harris and Sir Hugh

  Griffiths, G. A. (Hemsworth)

  Oliver, G. H.

  Seely.

  Griffiths, J. (Llanelly)

  Paling, W.

  NOES.

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

  Gluckstein, L. H.

  Perkins, W. R. D.

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

  Gower, Sir R. V.

  Petherick, M.

  Agnew, Lieut.-Comdr. P. G.

  Grattan-Doyle, Sir N.

  Pickthorn, K. W. M.

  Albery, Sir Irving

  Grigg, Sir E. W. M.

  Plugge, Capt. L. F.

  Anstruther-Gray, W. J.

  Grimston, R. V.

  Porritt, R. W.

  Apsley, Lord

  Gritten, W. G. Howard

  Procter, Major H. A.

  Aske, Sir R. W.

  Gunston, Capt. D. W.

  Raikes, H. V. A. M.

  Assheton, R.

  Guy, J. C. M.

  Ramsbotham, H.

  Astor, Viscountess (Plymouth, Sutton)

  Hacking, Rt. Hon. D. H.

  Ramsden, Sir E.

  Atholl, Duchess of

  Hannah, I. C.

  Rankin, Sir R.

  Baillie, Sir A. W. M.

  Hannon, Sir P. J. H.

  Rathbone, J. R. (Bodmin)

  Baldwin-Webb, Col. J.

  Harbord, A.

  Rawson, Sir Cooper

  Balfour, G. (Hampstead)

  Harvey, Sir G.

  Rayner, Major R. H.

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

  Haslam, Henry (Horncastle)

  Reed, A. C. (Exeter)

  Barclay-Harvey, Sir C. M.

  Haslam, Sir J. (Bolton)

  Reid, J. S. C. (Hillhead)

  Baxter, A. Beverley

  Heneage, Lieut.-Colonel A. P.

  Remer, J. R.

  Beauchamp, Sir B. C.

  Hepworth, J.

  Rickards, G. W. (Skipton)

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

  Herbert, Major J. A. (Monmouth)

  Robinson, J. R. (Blackpool)

  Beechman, N. A.

  Higgs, W. F.

  Ropner, Colonel L.

  Bernays, R. H.

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

  Rosbotham, Sir T.

  Blaker, Sir R.

  Holmes, J. S.

  Ross, Major Sir R. D. (Londonderry)

  Boothby, R. J. G.

  Hope, Captain Hon. A. O. J.

  Ross Taylor, W. (Woodbridge)

  Bossom, A. C.

  Horsbrugh, Florence

  Rowlands, G.

  Boulton, W. W.

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

  Royds, Admiral P. M. R.

  Brass, Sir W.

  Hudson, R. S. (Southport)

  Russell, Sir Alexander

  Briscoe, Capt. R. G.

  Hume, Sir G. H.

  Russell, S. H. M. (Darwen)

  Brown, Col. D. C. (Hexham)

  Hunter, T.

  Salmon, Sir I.

  Bull, B. B.

  James, Wing-Commander A. W. H.

  Salt, E. W.

  Butcher, H. W.

  Jones, Sir G. W. H. (S'k N'w'gt'n)

  Sanderson, Sir F. B.

  Campbell, Sir E. T.

  Kerr, Colonel C. I. (Montrose)

  Savory, Sir Servington

  Cartland, J. R. H.

  Kerr, J. Graham (Scottish Univs.)

  Salley, H. R.

  Carver, Major W. H.

  Kimball, L.

  Shaw, Major P. S. (Wavertree)

  Cary, R. A.

  Lamb, Sir J. Q.

  Shaw, Captain W. T. (Forfar)

  Cazalet, Thelma (Islington, E.)

  Latham, Sir P.

  Simmonds, O. E.

  Clarry, Sir Reginald

  Law, Sir A. J. (High Peak)

  Simon, Rt. Hon. Sir J. A.

  Colville, Lt.-Col. Rt. Hon. D. J.

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

  Smith, L. W. (Hallam)

  Conant, Captain R. J. E.

  Leighton, Major B. E. P.

  Somervell. Sir D. B. (Crewe)

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

  Lennox-Boyd, A. T. L.

  Southby, Commander Sir A. R. J.

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

  Levy, T.

  Spans. W. P.

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

  Liddall, W. S.

  Storey, S.

  Courthope, Col. Rt. Hon. Sir G. L.

  Llewellin, Lieut.-Col. J. J.

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

  Craven-Ellis, W.

  Loftus, P. C.

  Strauss, H. G. (Norwich)

  Crooke, J. S.

  Lyons, A. M.

  Strickland, Captain W. F.

  Crookshank, Capt. H. F. C.

  Mabane, W. (Huddersfield)

  Stuart, Hon. J. (Moray and Nairn)

  Croom-Johnson, R. P.

  MacAndrew, Colonel Sir C. G.

  Sutcliffe, H.

  Cross, B. H.

  MacDonald, Rt. Hon. M. (Ross)

  Tasker, Sir R. I.

  Crossley, A. C.

  McEwen, Capt. J. H. F.

  Tate, Mavis C.

  Cruddas, Col. B.

  McKie, J. H.

  Taylor, C. S. (Eastbourne)

  Davies, Major Sir G. F. (Yeovil)

  Magnay, T.

  Thomas, J. P. L.

  Dawson, Sir P.

  Maitland, A.

  Tryon, Major Rt. Hon. G. C.

  Denman, Hon. R. D.

  Makins. Brig.-Gen. E.

  Turton, R. H.

  Dodd, J. S.

  Manningham-Buller, Sir M.

  Wallace, Capt. Rt. Hon. Euan

  Dorman-Smith, Major Sir R. H.

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

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

  Drewe, C.

  Markham, S. F.

  Wardlaw-Milne, Sir J. S.

  Duckworth, Arthur (Shrewsbury)

  Mayhew, Lt.-Col. J.

  Waterhouse, Captain C.

  Edge, Sir W.

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

  Wells, S. R.

  Ellis, Sir G.

  Mills, Major J. D. (New Forest)

  Whiteley, Major J. P. (Buckingham)

  Elmley, Viscount

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

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

  Emery, J. F.

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

  Windsor-Clive, Lieut.-Colonel G.

  Everard, W. L.

  Morrison, Rt. Hon. W. S. (Cirencester)

  Withers, Sir J. J.

  Fildes, Sir H.

  Muirhead, Lt.-Col. A. J.

  Womersley, Sir W. J.

  Findlay, Sir E.

  Nicholson, Hon. H. G.

  Wood, Hon. C. I. C.

  Fleming, E. L.

  O'Connor, Sir Terence J.

  Young, A. S. L. (Partick)

  Fyfe, D. P. M.

  O'Neill, Rt. Hon. Sir Hugh

  Ganzoni, Sir J.

  Orr-Ewing, I. L.

  TELLERS FOR THE NOES.—

  Gibson, C. G. (Pudsey and Otley)

  Peake, O.

  Mr. Munro and Mr. Furness.

  Gledhill, G.

  Peat, C. U.

  Ordered,
  "That further Consideration of the Bill, as amended, be now adjourned."—(Captain Margesson.]
  Bill, as amended, to be further considered To-morrow.

  AGRICULTURE BILL.
  As amended, considered.
  CLAUSE 1.—(Exchequer contributions towards purchases of lime and basic slag.)
  Mr. Deputy-Speaker (Sir Dennis Herbert): The first Amendment I have to call is that in the name of the hon. Member for Normanton (Mr. T. Smith) in page 2, line 22.
  Mr. T. Williams: May I ask whether the new Clause—(Rents not to be raised in consequence of Act)—on the Order Paper is not to be called?
  Mr. Deputy-Speaker: It is not selected.
  Mr. Williams: May I submit to you that Clause 5 in Part 1 of this Measure lays down a stipulation that no tenant about to remove can take advantage of increased contributions due to the subsidy made by the Government towards lime and basic slag. This new Clause is designed to do exactly the same thing with regard to subsidies or guarantees for oats, barley and wheat, and, in these circumstances, since, although the wording is not identical, the principle is exactly the same, may I not submit to you, that this Clause, being parallel with Clause 5, should be strictly in order?
  Mr. Deputy-Speaker: I did not say it is not in order. I said it is not selected, and I am afraid that I must ask the House to accept that as a decision.
  8.44 p.m.
  Mr. T. Smith: I beg to move, in page 2, line 22, to leave out "each," and to insert "the Commons."
  The House will be aware that last week, when this Bill was in Committee, I moved the same Amendment and as a result of the discussion the Minister of Agriculture agreed to consider it and make a statement when the Bill was in the Report stage. There are one or two things upon which this House is agreed. First of all, that another place has no control whatever over matters of finance—that is a matter entirely within the jurisdiction of this House—and that the functions and privileges of this House should be safeguarded and not surrendered to another place in any shape or faun. The history of procedure in this House shows that over a long period of time certain agitations took place and certain principles were established which, I think, this House ought not to give away at all. This proviso deals with the prescribed date, and while it may be true, as the Minister of Pensions said, that the proviso includes policy and finance, there is no doubt that it does include finance, which is a matter entirely for this House. Therefore, I hope the Minister of Agriculture will be able to accept the Amendment and to assure the House that he is not in any shape
  1376
  or form surrendering to another place anything which does not belong to them. In order that he may verify the matter, I move the Amendment.
  Mr. Leonard: I beg to second the Amendment.
  8.46 p.m.
  The Attorney-General: It was suggested in the discussion the other day that the House would like me to deal with the point raised by this Amendment. I therefore rise to accede to the generally expressed wish of the House to deal with the Amendment, which undoubtedly raises a point of importance. I need not say that my right hon. Friend is as jealous as any Member of the House of the privileges of this House in connection with finance. The first point that requires to be borne in mind is that the prescribed date, which under this proviso can be extended, is the date at which, unless action is taken under the proviso, the scheme embodied in this Bill would come to an end. It may be that in the discussion that took place the other day that was not quite clearly in the minds of one or two hon. Members. Possibly it was not clearly in the mind of the hon. Member for Dundee (Mr. Foot). If I am wrong in that assumption, perhaps he will correct me. I think he was not quite clear that it is a question of a resolution extending the scheme beyond the date prescribed in the Bill, and that unless that Resolution is passed this part of the Act comes to an end.
  What would be the position if the proviso was not in this Bill and the Ministers who, under the proviso, are entrusted with the duty of bringing an order before the House, came to the conclusion that, having regard to agricultural conditions, the scheme should be extended for a further year or two years? Undoubtedly, in those circumstances they would have to bring in a Bill, if the proviso was not in. If this present Bill was limited absolutely to the three years and the Minister in the future, whoever he may be, who was in charge of the Ministry of Agriculture when those three years elapsed, came to the conclusion that in the interests of agriculture what has been taking place during the three years ought to be extended for a further period, his only course would be to bring in a Bill. The right hon. Member for Gorton (Mr.

  1377
  Benn) shakes his head. Evidently I cannot have made myself clear, To me it is as clear as a pikestaff. If Parliament passes an Act which brings a scheme into operation for three years only and the Government of the day at the end of those three years think that the scheme ought to be continued for a further period, the only means by which they can obtain that result is by bringing in a Bill.
  Mr. Croom-Johnson: I think the difficulty in understanding has arisen because my hon. and learned Friend has used the expression "Bill," whereas the situation which he is envisaging is that the Bill which has become an Act of Parliament is for a fixed period of three years, without the proviso, and that it was intended by the Minister of the future to extend the duration of the Act of Parliament for a further period of time. I think my hon. and learned Friend used the word "Bill" by a slip of the tongue.
  The Attorney-General: There must have been some misunderstanding. The proviso enables an alternative machinery to be adopted for extending for a further period the scheme embodied in this Bill. If the proviso was not there a Bill would have to be introduced, and I do not think any one would suggest that the other place would not have a perfect right to throw out such a Bill. The legislative right of the other place to reject a Measure has never been questioned and is absolute, subject to the fact that in the case of those Bills which are Money Bills in the strict terms of the Parliament Act, they become law in spite of such rejection. When another place makes an Amendment with regard to a Bill which is not a Money Bill, if that Amendment affects finance this House can assert its privilege, but it has never been suggested, and it is not our Constitution, that in the case of a Bill which involves finance but is not a Money Bill within the Parliament Act, the other place has not a perfect constitutional right to reject it. That being so, the position that is brought about by the proviso is simply that if it is thought desirable to extend the scheme embodied in this Bill for a further period that extension should be brought about by a Resolution instead of by an extending Bill.
  Mr. Dingle Foot: Surely, sub-paragraph (b) does not refer to the extension of the scheme, although the scheme may be
  1378
  dependent on the payment of money. It simply deals with the period within which money may be paid.
  The Attorney-General: Yes, money to be paid for a specific purpose. The hon. Member's whole point in his speech was that the extension dealt with money and that the scheme dealt with the payment of money, but unless you have authority to expend the money the scheme necessarily comes to an end. I agree with the hon. Member that the form of the Resolution does not involve the position that the whole scheme should be extended, but the result is the same, because the scheme does depend upon the expenditure of money. I think, therefore, that what I have said is a perfectly fair analysis of the effect of what will be brought about by the Resolution. If the same result were sought to be obtained by the introduction of a Bill no one could dispute that the other place would have the right to reject the Bill, and, therefore I suggest to the House that the procedure in this Bill does not involve any infringement of the established privileges of this House, because it is in effect only conferring on the other place the right of rejection as to the extension by Resolution of this policy a right which they would undoubtedly have if the extension was to be provided for by a Bill.
  But I do not think the matter ends there. Although the privileges of this House in all matters of finance are undoubted and have been laid down on many occasions, it has also been the practice that these privileges should not in all cases be asserted where the subject-matter is not strictly and solely financial, but where questions of legislative policy are involved, and in some cases may be the primary consideration. In these cases it is in accordance with our Constitution that the other place should have their rights as the other House of the Legislature to express their opinions by amendments and insertions of provisions.
  Mr. Wedgwood Benn: The hon. and learned Gentleman is no doubt aware that in all such cases Mr. Speaker draws the attention of the House to the fact and a special entry is made in the Journals of the House.
  The Attorney-General: I am well aware of that. The first point I made is the answer to the Amendment, but I think it is also right that we should consider

  1379
  this other slightly different point of view. I was saying, and nothing that the right hon. Member has said is inconsistent with it, that it has frequently been the practice of this House not to assert its Privilege in cases—
  Mr. Benn: To waive is the expression.
  The Attorney-General: Well, it has been the practice to waive its Privilege in cases where the subject-matter is not strictly and solely financial but involves questions of policy which, in accordance with our Constitution, it is thought right by this House that the other place should express its views and record its opinions by way of Amendments and insertions. In the case of this proviso I suggest to the House that the considerations which will move this House and another place in considering whether the scheme should be extended will be rather the state of the fields than the condition of the national finances, and if that is so then I suggest to the House that it will be perfectly proper and in accordance with our Constitution that in a matter involving the state of agriculture and the condition of that industry it would be in no way inconsistent with the attitude which this House has adopted towards its privileges in the past to insert a proviso which will enable the other place to express and record its view on this question. The question will be whether, having regard to what the scheme may have done in the three years it has been in operation, and having regard to the state of agriculture at that time, it should or should not be extended by a Resolution being passed enabling moneys to be expended for a further period.
  On both these grounds I suggest to the House that the proviso in the Bill so far from being in conflict with our constitutional principles and particularly in regard to the privileges which this House jealously guards, is in accordance with those principles and is, in effect, merely giving a right to reject a policy which right has never been questioned. Further, on the second ground, that if it be an Amendment which is in the area of Privilege it is in an area in which this House has thought proper to waive its Privilege. The hon. Member for Dundee referred in his speech to the Parliament Act. It is not for me to make any pronouncement as to whether Mr. Speaker
  1380
  may or may not certify this Bill as a Money Bill, but I think I shall probably carry hon. Members of the House with me and shall not be guilty of any impropriety if I suggest that this Bill without question is not a Money Bill under the Parliament Act. I hope the matter will be considered in the light of the considerations I have put before the House. For the reasons I have given we do not regard this as in any way conflicting with the privileges of this House, and we think the proviso is in accordance with our Constitution and is reasonable, having regard to the subject-matter.
  9.2 p.m.
  Mr. Benn: I do not think we have ever heard a weaker case put forward by the Treasury Bench in defence of the privileges of this House. What is the proviso in the Bill? A money grant is to be made to farmers for certain purposes. The Bill says that the grant may be extended for a further two years. The Bill further gives to the House of Lords the power to prevent the grant being made. A clearer case of interference in financial matters could not possibly be established. If the Minister of Agriculture wishes the grant to be continued for another two years and the House of Lords says "No," he cannot do it. I should have thought that there could not be a clearer case of interference by the House of Lords in money matters. He also says that this is the only way in which it can be done. Surely, he cannot have consulted the Parliamentary draftsman. Surely some Estimate could have been put down. You need not redraft the Bill. You can lay an Estimate, as was done in the case of a building grant to schools. The Estimate being itself an Act of Parliament authorises the expenditure for which you are asking. Therefore, on the one hand, the case of interference by the other House is clear and, on the other hand. the contention of the Attorney-General that there is no other way of doing it does not hold water. I want to put it this way to the Attorney-General. If such an Amendment as this had been made in the Bill when it was before the House of Lords there is no question that Mr. Speaker would have ruled it as being a privileged Amendment. The hon. Member for Dundee (Mr. Foot) quoted the famous resolution of 1678, which is comprehensive to the last degree:

  1381
  "The ends, purposes, considerations, conditions, limitations and qualifications of such grants, which ought not to be changed or altered by the Douse of Lords."
  That is a perfectly clear statement and all the Rulings which have been given since then have been based upon it. If the Attorney-General will look up the records he will find Ruling after Ruling by the Chair that any attempt by the House of Lords to alter the purpose or distribution of a grant is a breach of the privileges of this House. Therefore, if this Amendment had been made in another place there is no question that Mr. Speaker would have informed the House that it was a breach of Privilege. It is not, of course, a breach of Privilege because it does not come from another place. It is concocted here; and that makes it worse. The Minister for Pensions was the first speaker on this matter for the Government. He said that this is legislation, and that inasmuch as we are asking the other House to pass the various stages of the Bill, surely if we have a consequential resolution or an ancillary resolution to the Bill, we should ask them to do the same thing with it. That overlooks the whole point, which is that although the other place is asked to pass the major stages of the Bill, the moment they put their fingers into financial matters, it is a breach of Privilege. The whole of that argument falls to the ground.
  The second argument of the Attorney-General was that it is customary for the House to waive its Privilege. It is a very majestic affair to waive a Privilege of the House of Commons. Mr. Speaker rises and tells us that it is a matter of Privilege, and if the House decides to waive its Privilege, a special entry is made by the Clerk in the Journals in order that nothing should be lost of what we have won after years and years and centuries and centuries of battle against the House of Lords. Now the Attorney-General says that since this has been done, we should make it permanent. He says, "Let us have a permanent waiving of the privileges of the House of Commons in this Bill." Although this question arises on what is a small point, it is really a very important thing, for the moment this House relinquishes its control over expenditure to another place, it relinquishes its sole control over the Executive.
  1382
  It is true that the other place is concurrent in some ways with this House in the matter of legislation, but if we give to the House of Lords power to withhold grants, it affects the Estimates. Suppose the House of Lords starts to reject the Estimates, what would be the position of a Government that had not the support of the House of Lords? If we concede the principle that the House of Lords is to have power to say "No" when the Government wishes certain expenditure to take place and the House of Lords does not agree, it is a first step towards giving the House of Lords power to control Supply, which means control over the executive power of the Government.
  Some people think that this is an old-fashioned issue which has not any relevance to conditions to-day, but I would like to draw the attention of the Attorney-General to a question of Privilege which arose on a very vital matter when the Labour Government was in office. In 1930 the Labour Government introduced an Unemployment Insurance Bill, which contained two important things. One was the abolition of the Clause about not genuinely seeking work, and the other was a substantial increase in the benefits paid. What did the House of Lords do, and what would they do assuming that they had the power which the Attorney-General now wishes to give them as a permanence? They said that that Bill was to come to an end on 31st March, 1931, and when this House objected, the Government was faced with the alternative of sacrificing that useful piece of social legislation or consenting to what the other place wanted to do. In the end, they got over the matter by a little quibble, extending it to 1933, but that was an example of the House of Lords attempting to exercise the power which the Attorney-General wants to give them. The Labour Government at that time had no majority in this House; it was weak, and had to give way, or it would have lost the Bill. But when it had given way, some remarks were made in another place to which I would like to draw attention. Lord Salisbury said:
  "The truth was that if this doctrine of Privilege was pressed to the limits to which some authorities wished to press it, their lordships would be unable to amend any Bill because every Bill to some extent touched upon the burdens of the taxpayer or rate-

  1383
  payer. Therefore, he was unable to accept this plea of Privilege."
  That was after Mr. Speaker had ruled that a question of Privilege was involved. When the controversy had ended and an Amendment was put forward which finally attuned the views of the two Houses, Lord Salisbury made one or two final remarks on the controversy:
  "He would respectfully say to the Labour Party that in the case of a political party, as in that of an individual, it was not always a good thing to have your own way."
  Whoever the electors might send to this House, Lord Salisbury told us in another place that it is not always good for the Labour Party to have its own way. He went on:
  "He hoped they had now established that Privilege could not be asserted successfully against the reasonable action of the House of Lords."
  This contest is not a settled contest; it is a living issue which has to be fought every day and at every stage. We know perfectly well that while this Government is in power, its friends are in another place, but the moment the electors decide to put in power another government which has not the support of the other place, right hon. Gentlemen opposite hope to use the other place as a means of countering the wishes of the electorate. Therefore, although it is true that this is only a small Amendment which deals with a comparatively minor matter, I contend that it touches a great matter of Privilege and a great many rights of the Commons, and that we should make a determined resistance to the opinion of the Government.
  9.12 p.m.
  Mr. Foot: My hon. and learned Friend the Attorney-General was good enough to refer to some remarks I made at an earlier stage, and he said that I had not made it clear that the purpose of the proviso with which we are now concerned was to extend the time. I was rather surprised to hear that remark, because I endeavoured, at any rate, to make that clear in my earlier speech. I said:
  "Let us suppose that by the appointed day, 31st July, 1940, no payments have been made. Then, in order for there to be any charge at all upon public funds provided by this House, there would have to be a Resolution of each House of Parliament"—[OFFICIAL REPORT, 8th July, 1937; col. 596, Vol. 326.]
  1384
  I endeavoured to make clear what was the purpose of the proviso. The Attorney-General went on to make what I thought was a rather remarkable statement. He said that if the proviso were not there, a Bill would have to be introduced and the other place would have the power to throw out such a Bill. It is a very serious thing to challenge the Law Officer on a matter of this kind, but in my submission that would not be so.
  As I pointed out in an interjection, this Sub-section does not deal with extending the scheme. It is true that the scheme is dependent upon the finance, but there is no time limit imposed upon the scheme in this Clause. The only time limit that is imposed is on the payment of money, which may be up to the prescribed date, and the time may be extended for two years according to the terms of the proviso. Therefore, if there were not the proviso and if a Bill had to be introduced, it would be simply a Money Bill. Consequently, my submission is that under the terms of the Act, the other place would be quite powerless to reject it or to amend it in any way. Perhaps the Attorney-General will correct me if I am wrong. If it were a Bill simply extending the time during which money could be paid, it would certainly be accepted by Mr. Speaker as being a Money Bill. That seems to me to be the main point here.
  The other point that was made by the Attorney-General was that we frequently waived our Privilege in this House. As the right hon. Gentleman the Member for Gorton (Mr. Benn) said, we are very careful in waiving our Privilege to assert its existence, and there is a very considerable distinction between waiving our Privilege and in doing so asserting that the Privilege is there, and putting a provision in a Statute which goes some way to destroy that Privilege altogether. That is what we are doing as far as this Bill is concerned. My hon. and learned Friend did me the honour to refer to the arguments which I used earlier, but he did not mention my principal argument, which was the Resolution of 1678. The right hon. Gentleman the Member for Gorton has already referred to the closing words of that Resolution. I draw attention to the opening words:
  "That all aids and supplies and aids to His Majesty in Parliament are the sole gift of the Commons."

  1385
  I do not think it has been disputed that what is proposed in this proviso is contrary to the terms of that Resolution. If His Majesty's Government are determined to destroy some part of the traditions of this House and to give up a Privilege which we have maintained for almost three centuries, they ought to come here and say so outright, instead of trying to slip it through in this way. I find it difficult to understand why this Amendment has not been accepted. It is not as if the hon. Members who have moved it were in any way jeopardising the purposes of the Bill. As long as this Parliament lasts, the Government will have no difficulty in securing a majority in either House. In any case, there is no particular opposition to this part of the Bill in any part of the House and, that being so, it is not likely that they would have any difficulty. The purposes of the Bill would not be impaired in any way. But the fact that the Government are prepared to put a provision of this kind into their legislation, shows that although they have been compelled for all these years to accept the Parliament Act, a great many hon. and right hon. Gentlemen opposite would like to destroy it altogether.
  9.18 p.m.
  Sir S. Cripps: One naturally asks oneself why the Government are so anxious to maintain this proviso in this form. In the earlier Debate on this subject the Minister of Agriculture said he had not been apprised of the point, that he was anxious to have an opportunity of considering it and that he would consider it. There are two possible explanations. One is that the Government desire to I ave such a proviso in order that its effect—whatever that may be and I shall deal later with that point—shall be a permanent part of our law. The other, and the more charitable, and, I think, probably the true explanation is, that this provision was put into the Bill without a realisation of its effect and that now the forces on the Front Bench are being called upon to support it simply because it is there. I say with all seriousness that I hope the Ministers in charge of the Bill will not approach this grave problem—and whatever view they may take of it, it is a grave problem—with that inflexibility of mind which is represented by the view that because this is in the Bill they must support it. We sometimes fail to
  1386
  realise that in this country we have a flexible Constitution, built up by legislation of all kinds and the customs and practice of our Parliament. This proviso in an Agriculture Bill is just as much a constitutional provision as if it had all the full-blown aroma of the Statute of Westminster itself. Therefore, in approaching a problem such as this, it is essential to realise that we are legislating upon our Constitution. Whether this proposal is desirable or undesirable that is what we are doing, and it is distressing to note that so few people are interested in legislation upon our Constitution—not even at the moment the hon. and learned Gentleman the Attorney-General.
  It is necessary to see exactly what this proposal means. The hon. and learned Gentleman said its effect was much the same as that of a Bill. But owing to the technicalities of our Parliamentary procedure, many of which have been placed there to protect the rights of the Commons, you cannot consider one form of procedure as if it were the equivalent of another. We are dealing here with a Resolution by this House and by the House of Lords. Let me deal with the point as it concerns a Resolution in the other place. Under this proviso, a substantive Resolution will have to be brought forward in the other place. What is to be the form of that Resolution? It will have to be a Resolution approving of the continuance of payments by the Government under this scheme. Is it customary to originate in another place, a Resolution of a financial character, affecting payments by the Government? When one examines what this proposal means, one observes at once that it creates a precedent of a most dangerous kind. It puts on the Statute Book a provision to the effect that a Resolution can originate in another place dealing with the power of the Government to grant money—in other words, a Resolution of Supply.
  It is not even a question of a Resolution being passed here and then going to another place to be approved or rejected. It is to be an original Resolution passed in another place and that is where, if I may say so with respect, the analogy of the hon. and learned Gentleman completely breaks down. There can be no possible doubt that such a Resolution must be a Resolution dealing with the supplies granted to the Crown. It cannot

  1387
  deal with anything else. Its express purpose as stated in the Bill is to extend the period of grant. That is to say, its operative and only effect is to say that there shall be granted for the service of the Crown a certain amount during the next 12 months. Does the hon. and learned Gentleman seriously suggest that we should make it a legislative enactment and part of the Constitution of this country, that such a Resolution can be passed in another place? That is the problem which he has to face. Surely this is not the occasion for raising a problem of that enormous constitutional magnitude. We, the Commons for nearly 300 years since 1678 have, time after time, asserted our sole right as regards this matter of Supply and now, quite casually, as it were, in a proviso to a Clause in a Bill of this kind, we are asked to make a legislative enactment to the effect that the other House has the right and, indeed, the duty to pass an original Resolution dealing with the granting of Supplies to the Crown.
  I cannot think that the right hon. Gentleman, or those who drafted this Clause, really had the intention of putting this enormous constitutional issue into this Bill. I rather think that they took the view which the hon. and learned Gentleman has put forward, that this is nothing but the equivalent of a new Bill. It is just because it is not the equivalent of a new Bill that this is so dangerous to the privileges of this House. If a new Bill is exactly the same, let us have the new Bill, and do not let us have a sacrifice of our privileges by substituting a Money Resolution for a Bill. Whatever the fate of that Bill might be under the Parliament Act, we need not discuss that now. It would be a matter for Mr. Speaker to decide—I have little doubt how he would decide—but it would be for him to decide as protector of the privileges of the Commons. But as regards this Resolution, he has no decision as protector of the privileges of the Commons because the Government take away that protection by the form of the proviso, and I do most earnestly beg that this form of proviso should not be permitted to become part of our law, because if it is we are making an inroad into those very precious privileges which the common people of this country have fought for centuries to gain and to preserve.
  9.27 p.m.
  Mr. H. G. Williams: I speak as one of those who hate the Parliament Act and would like to see it repealed and replaced by something quite different. But having said that and bearing in mind that the Parliament Act is the law of the land, I want to reinforce the appeal made by the hon. and learned Gentleman opposite. I have been through every change of thought on this subject. When we had the Debate the other night I came to the conclusion that the right hon. Gentleman opposite was on a false trail for the reason that the other place would have had full powers in respect of a Bill and that if they had it was stupid of us to object to them having these powers in respect of a Resolution. But I think that there is no doubt that the other place would not have full powers in respect of a Bill. Sub-section (2) of Section 1 of the Parliament Act, 1911, reads as follows:
  "A Money Bill means a public Bill which in the opinion of the Speaker of the House of Commons contains only provisions dealing with all or any of the following subjects, namely"—
  And then I miss a lot of words which do not matter—
  "the appropriation"—
  Here I miss other words—
  "of public money."
  That is all we need concern ourselves with for the purpose of this Debate.
  This Resolution deals only with the appropriation of public money during a specified period. In other words, the effect of the Resolution would be to say that the Government may, notwithstanding the other provisions of the Agriculture Act, 1937, expend public money during the year ended 31st March, 1941, or 1942, which otherwise they would not be authorised to expend. In other words, they would pass a Resolution which authorised expenditure during a period which otherwise would be not authorised. Clearly if that were put in a Bill, such a Bill would be a money Bill. If it is a money Bill this House is entitled to say to another place at the end of a month, "As you have not passed it, it is to be presented to His Majesty for Royal Assent." Another place would have no power to reject such a Bill. If that is so the Government should not raise a constitutional issue in the wrong place. The time will come when I hope to go into the Lobby in opposition to all those I am agreeing with

  1389
  to-night in an effort to alter the Parliament Act and to make the Constitution more intelligent. But so long as it is the Constitution is entirely improper to attempt to alter it in this way.
  I would make a most earnest appeal to those in charge of the Bill to give way on this, which does not matter in the least as far as agriculture is concerned. It is merely by a chance of drafting that it has been put in this way. I am sure that the Parliamentary draftsmen, the Ministry, and the Parliamentary Secretary were not thinking in the least of the Parliament Act but only of increasing the fertility of the land of Britain and of nothing else. Therefore, I am certain that the Minister, who is a very good Minister, an intelligent Minister, who is adding glory to himself every day, will have more glory if on this issue he takes the constitutional point of view.
  Mr. T. Williams: May I ask whether the Minister is going to reply?
  9.33 P.m.
  The Minister of Agriculture (Mr. W. S. Morrison): I propose to, and if now is a convenient moment to do so, I shall reply at once. I was deferring my reply because I thought hon. Gentlemen opposite wished to continue the Debate. I was out of the House when this question was raised the other day and I promised to consider it. I have considered it with the utmost care. I approach the problem not from the point of view of any party feeling or with any desire to support the Government or controvert the Opposition, delightful as these activities are normally to me, but as a Member of the House of Commons anxious that none of its privileges shall be whittled away and also anxious that we shall approach a constitutional matter in the proper spirit. The right hon. Member for Gorton (Mr. Benn) apparently quarrels with the powers of the House of Lords as they are at the moment. He instanced, as depicting the background of his mind, the Unemployment Bill of the Government of which he was a distinguished Member, and he said that in its powers there, the House of Lords was able to act in a manner of which he disapproved.
  Mr. Benn: The Minister has mistaken the point. The Government having waived their privileges, the House of Lords were in a position to do this.
  Mr. Morrison: I want to make it clear that we are dealing in this question with the Constitution as it is at the moment, and I am sure that the House would wish us to approach it from that point of view and not from the point of view of trying to alter the Constitution in our discussion of what is a detail of the Bill. The hon. and learned Member for East Bristol (Sir S. Cripps) said he could imagine only two reasons for our attitude, the first of which was that we should desire a provision like this to become a permanent part of our legislation and constitutional practice; but I would point out that the proviso itself has no great permanence, because it says:
  "the prescribed date may be postponed for not more than two successive periods,"
  and I would ask the House to reflect on the position that will arise when the two years are up. It will be necessary then for the Minister of Agriculture, if he wishes to continue to subsidise the practice of applying lime and slag to the soil, to bring in a Bill for that purpose, and it would be subject to full discussion. In all these matters I think the question is one that is capable of a great deal of argument one way and the other. It is very hard to find a case of a Bill of a political character designed to effect certain political purposes which does not carry with it some financial burden; there are only certain Bills which are purely financial, and these are those which are enumerated in the Parliament Act. I would like to deal for a moment with the Parliament Act point, to which my hon. Friend the Member for South Croydon (Mr. H. G. Williams) referred, and to Sub-section (2) of Section 1, which defines a Money Bill. My hon. Friend quite properly missed out a lot of the description of such Bills, but I want the House to follow me if I carry it a little further. It reads:
  "A Money Bill means a Public Bill which in the opinion of the Speaker of the House of Commons contains only provisions dealing with all or any of the following subjects.…"
  I lay stress on the word "only," because the framers of the Parliament Act did not wish to lay it down that a Bill was a Money Bill if it contained financial provisions. It was only when it contained financial provisions to the exclusion of everything else that it was a Money Bill, in the view of the framers of that Act. The hon. Member for South Croydon

  1391
  picked out of the various financial epithets "the appropriation .… of public money." My view of the Act is that that refers to the Appropriation Bill. the Appropriation Act, which comes at the end of every Session and puts the finishing touch to the long procedure of the financial control of this House. If I take the narrower meaning that the hon. Member attaches to the words, every Bill that applies public money for any purpose whatsoever will be a Money Bill.
  Sir S. Cripps: Surely the right hon. Gentleman has forgotten his own limitation—"only." The other Bills with which he is now dealing contain a mass of other things.
  Mr. Morrison: It was founding myself on the word "only" that I made the proposition that that refers to the Appropriation Act. What is this Bill? It appropriates public money in a narrow sense, but for a certain definite purpose, namely, the application of lime and slag to the soil. There is no power in any Minister at present to use public money for this purpose, and it is not until this Bill reaches the Statute Book that such a power will exist, and so really what is of importance in this Clause is the lime and the slag and not the money. It has been said many times in debate that after the two years' postponement a Bill would be necessary for the purpose of continuing to apply lime and slag to the soil, but surely it is a matter which is by no means automatic, that we should continue to apply lime and slag to the soil as a matter of agricultural policy.
  As a matter of fact, I myself, in the course of the preparation of this Measure, met a great many people who disagreed with it, not from the point of view of the money involved, but who pointed out, with some truth, the danger of applying lime in the wrong places, who said that slag is not such a useful form of fertiliser as superphosphate, and who urged various arguments of a purely agricultural character against the proposal. This clearly makes it one of those Bills in which policy and finance go hand in hand. If this House desires that farmers shall be assisted in putting lime and slag on the soil, it has, first of all, to choose the two fertilisers. If it agrees with me about that, then it has to provide the necessary funds. Surely, the first point being so
  1392
  important, being really the object of this part of the Measure, being a matter of agricultural policy which is to be enshrined in a Bill, in the first place, it is only natural and proper that the other place should be asked its opinion whether or not within the three years this is a desirable agricultural policy.
  If I thought that we were creating an entirely new precedent in what we are doing, I should view it with a great deal more suspicion than in fact I do, but in my recollection there is similar legislation to which the House has recently agreed. Under the Cattle Industry (Emergency Provisions) Act, 1935, the Order extending the period in respect of which the cattle subsidy was to be paid was made subject to a Resolution by each House of Parliament, and surely that is an admirable illustration of what I am saying. The question of whether or not the livestock industry should continue to be assisted and encouraged is a matter of agricultural policy. There are many people—I am not one of them—who believe that we should neglect a livestock policy in favour of an exclusively arable policy, which is a matter on which the other House is entitled to express an opinion. Similarly, I may say, the Order fixing the date of expiry of the Unemployment Assistance (Temporary Provisions) (Extension) Act, 1935, was made the subject of a Resolution by each House.
  Mr. Foot: But surely that was when public money should cease to be paid, not when a new charge should be imposed?
  Mr. Lawson: The 1935 Unemployment Act was merely a Consolidation Act.
  Mr. Morrison: That may he so, but both these things involve public money, and certainly the first one does. Perhaps the hon. Member for Dundee (Mr. Foot) may draw a distinction between ceasing to pay public money and continuing to pay it, but from the point of view of what is to be—
  Mr. Foot: Is it not a distinction which this House has already drawn?
  Mr. Morrison: No, but I would ask the hon. Member to follow me. If I were to accept the constitutional position that he has put before the House, I would say that it would be a breach of Privilege; I would say, if he were right,

  1393
  that to fix the date of expiry of the Unemployment Assistance (Temporary Provisions) Act and to say that we shall stop this temporary provision, would be a breach of Privilege on the part of the other place, but there is nothing of the kind involved, and to say that the other House, if it disagrees with this House over a matter which involves some financial practice, is committing a breach of Privilege is quite unjustifiable.
  Mr. Benn: Mr. Speaker ruled that, when they set a limit to an operation such as that in the Unemployment Insurance Act. It is a Ruling in the Journals of the House. But can the right hon. Gentleman give an example from some other Government than his own?
  Mr. Morrison: If the right hon. Gentleman will allow me, I would rather talk about matters which are entirely within my own recollection. This is a matter in regard to which this House has already expressed its concurrence, and surely I am entitled to ask this House to agree with us in this view of the doctrine and to support the view which it has itself established in the two instances which I have quoted.
  Now I would ask the House again to look at this Clause. As I say, I have formed my own view upon it, and I think I am right in forming that view. The hon. and learned Member for East Bristol and the right hon. Member for Gorton have drawn attention to Subsection (3) and have said that there is no mention in it or in the proviso of the purpose for which the money is to be spent. The real emphasis, in their view, is upon the continuation of the expenditure. A closer examination of the provision does not bear that out. The Subsection says:
  "Contributions shall not be made under this section towards any cost incurred."
  To find out what "contributions" under this Sub-section means, we have to turn to Sub-section (1), where it will be found that:
  "the Ministers may in accordance with a scheme made by them with the approval of the Treasury, make contributions out of moneys provided by Parliament towards the cost incurred by any occupier of agricultural land in the United Kingdom in acquiring and transporting any quantity, not being less than two tons, of lime or basic slag."
  1394
  and so on. The purposes for which the money is to be expended are the gist of the matter. Sub-section (3), by making it quite clear that it refers to contributions under this Clause, means that the contributions are only those in respect of lime and slag. I cannot follow the right hon. Gentleman the Member for Gorton when he refers to the possibility that the other place might reject a motion to postpone the prescribed date, this House at the same time agreeing that it ought to be postponed. That would, no doubt, be a conflict between the two Houses, but it would be resolved in the usual manner.
  Mr. Benn: The Minister must be aware that if a resolution is passed in the other House saying one thing and a resolution is passed in this House saying something else, there is no usual manner for resolving it. It is different in the case of a Bill, but when there are contrary resolutions the whole thing falls.
  Mr. Morrison: It is a matter upon which accommodation must be come to. If I understand the right hon. Gentleman's argument aright, it is that because the other place can come to a conclusion different from that of this House, then there is something fundamentally wrong in the Constitution.
  Mr. Benn: The right hon. Gentleman is mistaken. The point really is this: This business of resolutions in both Houses is cropping up, according to the right hon. Gentleman's own statement, only under his own Government, and he is creating a clumsy, shoddy and impossible procedure between the two Houses. A Bill can be canvassed between the two Houses by the ancient procedure, but if there is a clash of resolutions there is no sort of procedure for accommodating the the two Houses.
  Mr. Morrison: I am certain it will be no more difficult to resolve such a clash than it is in the case of a Bill.
  Sir S. Cripps: Will the right hon. Gentleman take the case where no resolution is brought forward in the other place?
  Mr. Morrison: The hon. and learned Gentleman asks me to use my imagination, but I cannot imagine, if a Minister desires to postpone the appointed day, that he would not see that the resolution

  1395
  was brought forward in the other place. The Government are able to have their policy expressed in both places. The right hon. Gentleman also referred to the Estimates and expressed the opinion that they were Acts of Parliament. I cannot see that, because an Act of Parliament is an Act of both Houses, and the other House has nothing to do with Estimates.
  Mr. Benn: Is it necessary that someone should tell a Minister of the Crown at this stage that the Estimates become the Appropriation Bill, which passes through both Houses?
  Mr. Morrison: I said that earlier. The true constitutional position is that unless the approval of Parliament is given to this purpose of applying lime and slag to the soil, no Department can prepare an Estimate for that purpose. It has to be sanctioned by Parliament before it can figure in the Estimates. As I understood the right hon. Gentleman's argument, it is that if the Minister of Agriculture wished to apply any new policy of this character, all he had to do was to bring an Estimate before the House of Commons for a sum of money for the application of lime, superphosphate, kainit, potassium and all those things, and if he did that he would be in order. He would however, have to have the authority of Parliament before he could do it. Unless Parliament says that a Minister can expend money on such a purpose, it cannot be done. The process cannot be initiated. The Diseases of Animals Act of 1894 authorises the Minister to expend money for a specific purpose, and until that step has been taken by Parliament there is no power vested in him. This is a matter on which hon. Members opposite evidently take a different view from that which I have tried to put forward, and I do not see that I can convince them that their view is wrong and that mine is right. I can assure the House that if I thought this was in any way a matter infringing on the real privileges of this House, I should not advocate it. It is because I believe it is perfectly in accord with the privileges of the House that I ask the House to reject the Amendment.
  9.52 p.m.
  Mr. T. Williams: May I ask the right hon. Gentleman a simple question? A
  1396
  highly technical constitutional problem may sometimes be easily resolved by a simple question. The money involved in this policy Measure will obviously find its way into the Estimates. Will the right hon. Gentleman agree or disagree that in another place they can interfere with the money involved in this policy Measure once the money appears in the Estimates?
  Mr. Morrison: I would like to answer the hon. Gentleman, but I should like him to develop his argument, for that is a more convenient method of elucidating a point than cross-examination. The Estimates, of course, are passed by this House.
  Mr. Williams: I think the right hon. Gentleman will agree that the money involved here will come in the Estimates and that there will be no power to change or modify them in any particular in another place. That being the case, the procedure embodied in Sub-section (3) is really a new procedure, whatever the Attorney-General or the Minister of Agriculture may say. My right hon. Friend the Member for Gorton (Mr. Benn), my hon. and learned Friend the Member for East Bristol (Sir S. Cripps), and the hon. and learned Member for Dundee (Mr. Foot) each put a very simple case. The Attorney-General suggested that there were two phases of this problem—policy and finance. Policy having been decided, finance becomes involved, and as they have no power in another place to interfere with finance once policy has been settled, there is an end of that. This Sub-section, however, gives all the power to another place to decide the "yea" or "nay" of any decision taken by His Majesty's Government here. We are deciding a policy for three years. If at the end of three years this House decides to continue the policy for a further two years, another place will be able, under this Sub-section, to prevent it. Is not that a precedent? Is that in accordance with general procedure in this House—that another place should be able to prevent this House from carrying out a policy which has previously been adopted, whether it refers to the liming of land or anything else? As I see it, this Sub-section gives another place the power not only to stultify a Government but to sabotage its policy. Imagine

  1397
  a Socialist Government deciding to subsidise housing for a period and taking power to extend the subsidy beyond the first period if circumstances required it. Another place would be given the power to prevent the continuance of that subsidy, another place would have power to prevent any scheme originating here being prolonged, whether it involves finance or not.
  None of the submissions of the Attorney-General or the Minister has shaken my belief in the case submitted by my right hon. Friend the Member for Gorton, and I am convinced that this Subsection has been put into the Bill to avoid the necessity for another Bill three years hence, should agriculture then require a further supply of cheap lime and basic slag. During the past three years we have had one or two examples of how this policy involves the Government in unpleasant scenes. What happened in the case of the beef cattle subsidy? In 1934 a Measure was passed granting a subsidy for beef cattle. The Government had to present another Bill in nine months; in three months more they had to come forward with a third Bill; and in another 12 months we had yet a further Bill. They have more recently passed what they call their long-term Measure for agriculture and that gives a fourth extension. This Sub-section is intended, apparently, to short-circuit the necessity for presenting a succession of Bills. It is to be done by the simple process of a substantive Resolution, but there is this difference, that their Lordships in another place may declare that there shall be no extension and in that case there will be no extension. The right hon. Gentleman is not only not preserving the right of this House to waive its Privilege on financial questions but is giving away a Privilege which the House now has.
  Let me suggest a remote case, because remote cases are necessary to illustrate fine points on a Constitutional issue. Assume there is a Labour Government in office and they desire to deal with conditions as regards housing or agriculture or anything else, over a certain period, with power to prolong that period. The Labour Government, knowing the constitution of another place, and realising that its assent might not be given in a couple of years' time, would legislate for the maximum period, lest their Lordships should deprive them of their right by refusing to pass a substantive Resolution.
  1398
  It seems to me pretty clear that either the intention of this Sub-section is sinister or, as my right hon. Friend the Member for East Bristol said, that the Government were unconscious of what was being done, and I hope that now that the Minister appreciates the full significance of it he will not hesitate to withdraw it. If at the end of three years it is felt that this policy of liming ought to be continued for a further two years all that will be required will be a one-clause Bill to extend Part 1 of this Measure. That would give the Government everything they require, and their Lordships would have no power to-throw that Bill out, because it would be a Money Bill, even though based upon policy. I do not see how that could affect the speed of legislation. In any case we have had only two precedents quoted for the course now suggested, the cattle subsidy and a similar Measure which crept through the House during the past three or four years, and it is time that we now stopped and decided not to forfeit any further Privileges of this House. I hope the right hon. Gentleman will see fit, after due consideration, to accept the Amendment of my hon. Friend the Member for Normanton and think again before he gives away any Privileges of this House.
  10.2 p.m.
  Sir Francis Acland: I have been listening to this Debate with rather mixed feelings, because, resisting the natural impulse to sleep on a hot evening like this, my mind has almost automatically gone back to the days, now 21 years ago, when I had a great deal of sympathy with the Ministers representing agriculture in this House. I was one of them at the time, and they found themselves in a very awkward corner and could not see a way out. But though I feel the best will in the world towards the Minister in his difficulty there is only one argument which he used which at all influenced me, namely, that there is a precedent for what it is now proposed to do in a Bill already on the Statute Book, I think the Livestock Bill. If there are wrong precedents that is no reason for increasing them by putting another on the Statute Book. I could not agree with him in any other arguments he put before the House. He said that if we did not proceed by resolution, as the Bill proposes, it would be necessary to proceed by another Bill, and

  1399
  that then one would have to look principally at the purpose of the Bill, and one would find that the purpose, namely, to continue payments on account of lime and basic slag, so much exceeded the mere fact of continuing the grant, that it would not be regarded as a Money Bill. That is all very well, but let us think over this question a little, and compare this Clause, with its statement that the Minister may make contributions towards the cost incurred by farmers in acquiring lime or basic slag, with similar Clauses in the Special Areas (Amendment) Act which the Government insisted, against the views of Members of Parliament below the Gangway, must be treated as a Money Bill, preceded by the Financial Resolution, and all the rest of it. I would like to quote a couple of the commanding and substantive words of the Clause—
  Mr. W. S. Morrison: I interrupt merely for the purpose of clarification. When the right hon. Gentleman says that the Government insisted upon regarding that as a Money Bill, I would point out that there is a difference between a Money Bill for the purpose of the Parliament Act and a Money Bill for the purposes of this House.
  Sir F. Acland: Oh.
  Mr. Morrison: To make it clear, would the right hon. Gentleman indicate whether he referred to a Money Bill for the purpose of the Parliament Act or a Bill founded upon a Financial Resolution?
  Sir F. Acland: I do not think it is for this House to dogmatise. It is for Mr. Speaker to say for what purpose it should be regarded as a Money Bill. I think the provisions contained in the Special Areas (Amendment) Act, 1937—
  "The Commissioners may agree to provide .…financial assistance by means of contributions towards rent, Income Tax, or rates.…"
  and
  "The Commissioners may .…make a grant towards any expenses incurred in the repair or improvement of streets,"
  are quite as definitely primarily connected with the conditions of the grant as the provision which we are considering here.
  I come back to the argument, which I felt was not adequately answered, put
  1400
  by the hon. and learned Member for East Bristol (Sir S. Cripps), namely, that, as the Bill stands, what would have to be brought forward in another place would be a Resolution approving a continuance of payments. That Resolution is never brought forward in vacuo, but it is always a question of the purpose for which the grants are made. That is the essence of the problem. When we come to consider what the House has said on these matters, we come right up against something which ought still to have great validity with us, that Resolution of ours in 1678, namely, that it was the
  "sole right of the Commons to appoint the conditions of such grants."
  What is more essentially a condition than the period within which a grant shall continue? If that is confined exclusively and is reserved specially for the Commons, it does not seem to be in any way right, whatever may have been inadvertently put into the Livestock Bill, that that should now be given away, when proper attention has been drawn to it. It is true that the Resolution of 1678 deals specifically with Bills, but we have altered our procedure since then. We have enlarged it and made it more elastic. We proceed in these money matters sometimes by Bill and sometimes by Resolution, but one cannot argue that, because of that, the Resolution of 1678 has no applicability.
  I still suggest, although I listened to the Minister very carefully, that this House having said that it is for us to appoint the conditions of grants, it is for this House to appoint the period within which grants shall be made. In the Bill we definitely suggest that it shall be for another place, as well as this place, but another place essentially, to appoint the period within which these grants shall be made, and thus to make a considerable breach in the traditional privileges of this House.
  10.11 p.m.
  Sir Joseph Lamb: We have already passed a Financial Resolution. I am under the impression that a Financial Resolution runs for five years and not for three. It is true that the other place may possibly have the opportunity of preventing us from spending the money but Privilege exists with the present Bill. Unless they pass the Bill we cannot spend any money under the Resolution which

  1401
  we have already passed. As the Financial Resolution covers a period of five years and not three, I do not think that we are increasing the power of the other House with it.
  Mr. Foot: I desire to put a point to you, Mr. Speaker, and to ask whether you can give your opinion as to whether, if this proviso became law, questions of Privilege would not or might not arise.
  Mr. Speaker: The Clause and the proviso appear by themselves not in any way to raise a question of Privilege, because the powers which are given to the other place would, if they exercised them, indicate only the acceptance of the continuance of the policy set out in the Clause. On the other hand, if the other place went beyond the powers which the Clause gives, a question of Privilege would arise, and when the matter came back to this House it would be within the power of this House either to waive that privilege or to insist upon it. Under the Clause and the proviso that follows it, there does not seem to be anything in the nature of Privilege.
  10.12 p.m.
  Sir S. Cripps: Further to that point, may I ask this question: Suppose a Resolution were to be brought forward in the other place, that a further sum of money be granted to His Majesty to defray the expenses of this scheme under this Clause, for a period of 12 months, would that be a matter which would be a breach of the privileges of this House?
  Mr. W. S. Morrison: To that point of Order—
  Sir S. Cripps: It is not a point of Order. I am asking Mr. Speaker a question and I resent the right hon. Gentleman getting up before Mr. Speaker has had an opportunity of answering my question.
  Mr. Morrison: I have no desire to speak at all—
  Sir S. Cripps: Mr. Speaker, I am on my feet. May I ask respectfully if I may have a reply?
  10.13 p.m.
  Mr. Speaker: The reply to the hon. and learned Gentleman is included in the reply which I gave to the hon. Member for Dundee (Mr. Foot). It is a question of going beyond the powers of this Clause, in which case a question of Privilege might arise
  Mr. Benn: Suppose this Sub-section were not passed at all and the other place limited the grant which this House had made; would you consider that to be a breach of Privilege?
  Mr. Speaker: The original Clause, as it stands, gives the other place certain powers merely to endorse the continuance of a certain policy. If they go beyond that, a question of Privilege might arise.
  Mr. Benn: With great respect, I suggest that I have not made myself clear. Suppose that no authorisation were given under this Sub-section. If the other place, without such authorisation, proposed to reduce the grant suggested by this House, would not that be a breach of the Privilege of this House?
  Mr. Speaker: Of course, that would be so. If the other place did that without particular authorisation from this House, that naturally becomes a matter of breach of Privilege.
  10.15 p.m.
  Mr. Garro Jones: On a point of Order. May I draw your attention to a phrase in the proviso which may give us a clue to the true nature of the proposal, and which I think has not yet been considered either by yourself or by the Minister? The proviso says:
  "Provided that the prescribed date may be postponed for not more than two successive periods of one year each by orders made by the Minister with the consent of the Treasury …"
  Those appear to be significant words. For what purpose can they be imported into this Clause unless it be to imply that the matter in question is a purely financial one over which the Treasury has special jurisdiction? May I ask whether that does not indicate that this case is within the zone of finance and the privileges of this House?
  Mr. Speaker: Possibly it might be interpreted in that way, but the proviso only deals with the other House agreeing to the continuance of a particular policy.
  Mr. Garro Jones: Then may I ask the Minister to explain to the House why it is that the consent of the Treasury has to be obtained on a matter which comes within the zone of policy rather than within the zone of finance?
  10.16 p.m.
  Mr. W. S. Morrison: Perhaps, with the leave of the House, I may answer the hon. Member's question. I must apologise to the hon. and learned Member for East Bristol (Sir S. Cripps) if I acted in any way as I should not have done in trying to intervene while he was asking his question. My purpose now is to answer the hon. Member for Aberdeen North (Mr. Garro Jones). The hon. and learned Member for East Bristol asked whether the other House could alter a sum of money. The proviso, however, gives no power to alter a sum of money, but only to allow money that is available to be expended. It is a question of policy, and not a question of Estimates, over which this House has direct control. It is a question of the ordinary Parliamentary attitude with regard to a policy being pursued and money being expended. It is usual in Acts of Parliament, and has been so for a long time when there is a policy which affects the expenditure of money, in general, to ensure control of public funds, that the assent of the Treasury is obtained to a continuance of the policy. The Treasury is in the position, and has been for a long time in this country, of knowing the resources of the country with greater exactitude than any other Department, and clearly one must provide that the policy can only be continued when there are funds available for its continuance. I think that that is the answer to the question of the hon. Member.
  10.18 p.m.
  Sir J. Lamb: May I, Mr. Speaker, ask your Ruling on this point? If the House, as in this case, has passed a Financial Resolution covering a period of five years, while the Bill we are now discussing only operates for three years, would not the Financial Resolution cover the second period of two years?
  Mr. Speaker: I think that that is fairly obvious, because "three" is less than "five."
  Sir J. Lamb: My point is as to whether the Financial Resolution does not cover the two periods, and that consequently there would be no question of Privilege.
  Mr. Speaker: That point is covered by the answer I have already given.
  Sir J. Lamb: Then there is no question of privilege.
  10.19 p.m.
  Mr. James Griffiths: The proviso calls for two Resolutions, one by this House and one by the other House. The point was raised just now as to what would happen if this House passed a Resolution and the other House did not.
  Mr. Speaker: Then the Orders would not come into operation, since the proviso requires a Resolution of each House.
  Mr. Griffiths: Then, if the House of Commons at the appropriate date passes a Resolution to continue the payment of money, and the House of Lords refuses to do so, that will mean that the House of Lords is refusing to continue payments which this House desires to continue?
  Sir J. Lamb: Which it has already granted.
  Mr. Speaker: It is a question of continuing the policy, and, unless the House of Lords exercises its function, the policy cannot be continued.
  Mr. Griffiths: As I understand it, the proviso makes provision, not for changing the policy, but merely for continuing the policy, for continuing the money payments. As I understand it, it is not suggested that at the end of this period the question whether it is wise or unwise to continue cannot be raised, but that all that can be discussed is whether the money can be voted for a further period.
  Mr. Speaker: The question is the policy.
  10.21 p.m.
  Sir S. Cripps: May I point out that under this Clause the Land Fertility Scheme, which embodies the policy, can continue. It is only a question as to whether the contributions in respect of the scheme may continue beyond the first three years. The scheme continues, anyway. The question is whether the contributions are to be continued. I suggest that that question is entirely one of finance and money.
  Mr. Speaker: I do not myself quite see how the scheme could be continued.
  Sir S. Cripps: The suggestion is that it could be continued by getting a contribution from the farmers towards financing one another by co-operative measures instead of getting the finance from the Government. The scheme could continue amongst farmers financed by farmers.

  1405
  This is a question of contributions coming from the Government to finance the scheme and what is in question in the proviso is whether the Government shall continue financing the scheme, and not the farmers.
  Mr. Speaker: In that case, of course, it would not be this scheme but another scheme.
  Sir S. Cripps: May I point out that this scheme can contain terms which are to be decided upon by the Minister, and we do not know that the Minister might not decide upon such terms. They are not laid down and restricted in the Act itself.
  Mr. Speaker: I do not know about that. The scheme seems to me to depend on the provision of a certain amount of money.
  Mr. Benn: Would it be accurate to say that if this House wished to vote the money for the scheme and the other House refused to pass an Address, we should not be allowed to vote the money?
  Mr. Speaker: We should be allowed to vote the money. We could override anything that the other House did in matters of Finance.
  Mr. Garro Jones: Before the Clause is disposed of, I should like to utter a protest against the ridiculous position in which we are being placed. The proposition is that if a question of finance is dominated by some theoretical policy, that
  takes the question out of the exclusive jurisdiction of the House. I regard that as inflammable ground, and I hope it will not be allowed to rest where it is.
  Mr. Foot: I understood you, Sir, to say that if under this proviso we voted the money and the other House declines to vote it, we could override the other House. Could we under the machinery of this proviso possibly override the other place when a Resolution by them is made necessary to continue the subsidy?
  Mr. Speaker: If we voted the money and the other House refused it, a question of Privilege would at once arise in the ordinary course.
  Sir S. Cripps: If we have by the proviso given the other House the power by Resolution to stop this expenditure of money, should we not then be bound by the Act of Parliament which we have passed, and should we not be unable to observe our Privilege because of the terms of the proviso?
  Mr. Speaker: As far as I understand it, the question that the other place is deciding is not the money question in itself, but the continuance of a particular policy which makes the whole difference.
  Question put, "That the word 'each' stand part of the Bill."
  The House divided: Ayes, 221; Noes, 121.

  Division No. 290.]

  AYES.

  [10.25 p.m.

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

  Campbell, Sir E. T.

  Doland, G. F.

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

  Cartland, J. R. H.

  Dorman-Smith, Major Sir R. H.

  Agnew, Lieut.-Comdr. P. G.

  Carver, Major W. H.

  Dower, Major A. V. G.

  Albery, Sir Irving

  Cary, R. A.

  Drewe, C.

  Anstruther-Gray, W. J.

  Castlereagh, Viscount

  Duckworth, Arthur (Shrewsbury)

  Aske, Sir R. W.

  Cayzer, Sir C. W. (City of Chester)

  Duncan, J. A. L.

  Assheton, R.

  Cayzer, Sir H. R. (Portsmouth, S.)

  Eckersley, P. T.

  Astor, Viscountess (Plymouth, Sutton)

  Cazalet, Thelma (Islington, E.)

  Eden, Rt. Hon. A.

  Atholl, Duchess of

  Cazalet, Capt. V. A. (Chippenham)

  Edge, Sir W.

  Bailie, Sir A. W. M.

  Channon, H.

  Ellis, Sir G.

  Baldwin-Webb, Col. J.

  Carry, Sir Reginald

  Elmley, Viscount

  Balfour, G. (Hampstead)

  Cobb, Captain E. C. (Preston)

  Emery, J. F.

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

  Colville, Lt.-Col. Rt. Hon. D. J.

  Emrys-Evans, P. V.

  Barclay-Harvey, Sir C. M.

  Conant, Captain R. J. E.

  Errington, E.

  Barrie, Sir C. C.

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

  Everard, W. L.

  Baxter, A. Beverley

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

  Fildes, Sir E.

  Beauchamp, Sir B. C.

  Courthope, Col. Rt. Hon. Sir G. L.

  Findlay, Sir E.

  Beaumont, M. W. (Aylesbury)

  Cox, H. B. T.

  Fleming, E. L.

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

  Craven-Ellis, W.

  Furness, S. N.

  Beechman, N. A.

  Crooke, J. S.

  Fyfe, D. P. M.

  Boothby, R. J. G. Crookshank,

  Capt. H. F. C.

  Ganzoni, Sir J.

  Boulton, W. W.

  Croom-Johnson, R. P.

  Gibson, Sir C. G. (Pudsey and Otley)

  Boyce, H. Leslie

  Cross, R. H.

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

  Brass, Sir W.

  Crossley, A. C.

  Gledhill, G.

  Briscoe, Capt. R. G.

  Crowder, J. F. E.

  Gluckstein, L. H.

  Brocklebank, Sir Edmund

  Cruddas, Col. B.

  Grant-Ferris, R.

  Brown, Col. D. C. (Hexham)

  Dawson, Sir P.

  Greene, W. P. C. (Worcester)

  Bull, B. B.

  Denman, Hon. R. D.

  Gridley, Sir A. B.

  Butcher, H. W.

  Dodd, J. S

  Grigg, Sir E. W. M.

  Grimston, R. V.

  Maitland, A.

  Russell, Sir Alexander

  Gritten, W. G. Howard

  Makins, Brig.-Gen. E.

  Russell, S. H. M. (Darwen)

  Guest, Hon. I. (Brecon and Radnor)

  Manningham-Buller, Sir M.

  Salmon, Sir I.

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

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

  Salt, E. W.

  Guinness, T. L. E. B.

  Markham, S. F.

  Sanderson, Sir F. B.

  Gunston, Capt. D. W.

  Marsden, Commander A.

  Savery, Sir Servington

  Guy, J. C. M.

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

  Scott, Lord William

  Hacking, Rt. Hon. D. H.

  Mayhew, Lt.-Col. J.

  Salley, H. R.

  Hannah, I. C.

  Meller, Sir R. J. (Mitcham)

  Shaw, Major P. S. (Wavertree)

  Hannon, Sir P. J. H.

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

  Shaw, Captain W. T. (Forfar)

  Harbord, A.

  Mills, Major J. D. (New Forest)

  Simmonds, O. E.

  Haslam, H. C. (Horncastle)

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

  Smith, L. W. (Hallam)

  Haslam, Sir J. (Bolton)

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

  Somervell, Sir D. B. (Crewe)

  Heilgers, Captain F. F. A.

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

  Southby, Commander A. R. J.

  Heneage, Lieut.-Colonel A. P.

  Morrison, Rt. Hon. W. S. (Cirencester)

  Spans, W. P.

  Hepworth, J.

  Muirhead, Lt.-Col. A. J.

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

  Herbert, Major J. A. (Monmouth)

  Munro, P.

  Storey, S.

  Higgs, W. F.

  Nicolson, Hon. H. G.

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

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

  O'Connor, Sir Terence J.

  Strauss, H. G. (Norwich)

  Holmes, J. S.

  O'Neill, Rt. Hon. Sir Hugh

  Strickland, Captain W. F.

  Hope, Captain Hon. A. O. J.

  Orr-Ewing, I. L.

  Stuart, Hon. J. (Moray and Nairn)

  Horsbrugh, Florence

  Patrick, G. M.

  Sueter, Rear-Admiral Sir M. F.

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

  Peake, O.

  Sutcliffe, H.

  Hudson, R. S. (Southport)

  Peat, C. U.

  Tasker, Sir R. I.

  Hulbert, N. J.

  Perkins, W. R. D.

  Tate, Mavis C.

  Hume, Sir G. H.

  Petherick, M.

  Taylor, C. S. (Eastbourne)

  Hunter, T.

  Pickthorn, K. W. M.

  Thomas, J. P. L.

  James, Wing-Commander A. W. H.

  Plugge, Capt. L. F.

  Tryon, Major Rt. Hon. G. C.

  Jones, Sir G. W. H. (S'k N'w'gt'n)

  Porritt, R. W.

  Turton, R. H.

  Kerr, J. Graham (Scottish Univs.)

  Procter, Major H. A.

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

  Kimball, L.

  Raikes, H. V. A. M.

  Ward, Irene M. B. (Wallsend)

  Latham, Sir P.

  Ramsbotham, H.

  Wardlaw-Milne, Sir J. S.

  Law, Sir A. J. (High Peak)

  Ramsden, Sir E.

  Warrender, Sir V.

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

  Rankin, Sir R.

  Waterhouse, Captain C.

  Lees-Jones, J.

  Rathbone, J. R. (Bodmin)

  Wells, S. R.

  Leighton, Major B. E. P.

  Rayner, Major R. H.

  Whiteley, Major J. P. (Buckingham)

  Levy, T.

  Reed, A. C. (Exeter)

  Williams, C. (Torquay)

  Liddall, W. S.

  Reid, J. S. C. (Hillhead)

  Windsor-Clive, Lieut.-Colonel G.

  Llewellin, Lieut.-Col. J. J.

  Reid, W. Allan (Derby)

  Wise, A. R.

  Loftus, P. C.

  Remer, J. R.

  Womersley, Sir W. J.

  Lyons, A. M.

  Rickards, G. W. (Skipton)

  Wood, Hon. C. I. C.

  Mabane, W. (Huddersfield)

  Robinson, J. R. (Blackpool)

  Young, A. S. L. (Partick)

  MacAndrew, Colonel Sir C. G.

  Ropner, Colonel L.

  McCorquodale, M. S.

  Ross, Major Sir R. D. (Londonderry)

  TELLERS FOR THE AYES.—

  McKie, J. H.

  Ross Taylor, W. (Woodbridge)

  Major Sir George Davies and

  Maclay, Hon. J. P.

  Rowlands, G.

  Lieut.-Colonel Kerr.

  Magnay, T.

  Royds, Admiral P. M. R.

  NOES.

  Acland, Rt. Hon. Sir F. Dyke

  Garro Jones, G. M.

  McEntee, V. La T.

  Acland, R. T. D. (Barnstaple)

  Gibson, R. (Greenock)

  McGhee, H. G.

  Adams, D. (Consett)

  Graham, D. M. (Hamilton)

  MacLaren, A.

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

  Green, W. H. (Deptford)

  Maclean, N.

  Adamson, W. M.

  Greenwood, Rt. Hon. A.

  MacMillan, M. (Western Isles)

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

  Grenfell, D. R.

  Mainwaring, W. H.

  Ammon, C. G.

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

  Mander, G. le M.

  Anderson, F. (Whitehaven)

  Griffiths, G. A. (Hemsworth)

  Marshall, F.

  Attlee, Rt. Hon. C. R.

  Griffiths, J. (Llanelly)

  Maxton, J.

  Banfield, J. W.

  Groves, T. E.

  Milner, Major J.

  Barnes, A. J.

  Hall, J. H. (Whitechapel)

  Montague, F.

  Barr, J.

  Harris, Sir P. A.

  Morrison, Rt. Hon. H. (Hackney, S.)

  Batey, J.

  Harvey, T. E. (Eng. Univ's.)

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

  Bann, Rt. Hon. W. W.

  Hayday, A.

  Muff, G.

  Broad, F. A.

  Henderson, A. (Kingswinford)

  Noel-Baker, P. J.

  Bromfield, W.

  Henderson, J. (Ardwick)

  Oliver, G. H.

  Brown, C. (Mansfield)

  Henderson, T. (Tradeston)

  Paling, W.

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

  Hills, A. (Pontefract)

  Parker, J.

  Buchanan, G.

  Holdsworth, H.

  Parkinson, J. A.

  Burke, W. A.

  Johnston, Rt. Hon. T.

  Pethick-Lawrence, Rt. Hon. F. W.

  Cape, T.

  Jones, A. C. (Shipley)

  Pritt, D. N.

  Cluse, W. S.

  Jones, Morgan (Caerphilly)

  Ritson, J.

  Clynes, Rt. Hon. J. R.

  Kelly, W. T.

  Robinson, W. A. (St. Helens)

  Cocks, F. S.

  Kennedy, Rt. Hon. T.

  Rowson, G.

  Cove, W. G.

  Kirby, B. V.

  Salter, Sir J. Arthur (Oxford U.)

  Cripps, Hon. Sir Stafford

  Kirkwood, D.

  Seely, Sir H. M.

  Dalton, H.

  Lathan, G.

  Sexton, T. M.

  Davidson, J. J. (Maryhill)

  Lawson, J. J.

  Shinwell, E.

  Davies, S. O. (Merthyr)

  Leach, W.

  Silkin, L.

  Dobbie, W.

  Lee, F.

  Silverman, S. S.

  Dunn, E. (Rother Valley)

  Leonard, W.

  Smith, E. (Stoke)

  Ede, J. C.

  Leslie, J. R.

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

  Foot, D. M.

  Logan, D. G.

  Smith, T. (Normanton)

  Frankel, D.

  Lunn, W.

  Sorensen, R. W.

  Gardner, B. W.

  Macdonald, G. (Ince)

  Stephen, C.

  1408

  1409

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

  Watson, W. McL.

  Williams, T. (Don Valley)

  Taylor, R. J. (Morpeth)

  Welsh, J. C.

  Windsor, W. (Hull, C.)

  Thurtle, E.

  Westwood, J.

  Woods, G. S. (Finsbury)

  Tinker, J. J.

  White, H. Graham

  Young, Sir R. (Newton)

  Walker, J.

  Whiteley, W. (Blaydon)

  Watkins, F. C.

  Wilkinson, Ellen

  TELLERS FOR THE NOES.—

  Mr. Mathers and Mr. Charleton.

  CLAUSE 3.—(Supplementary provisions as to contents of the Land Fertility Scheme.)
  10.35 p.m.
  Mr. Croom-Johnson: I beg to move, in page 3, line 6, to leave out "an approved supplier," and to insert:
  "a supplier of lime or basic slag approved by such authority and in accordance with such procedure as may be provided by the scheme."
  The Amendment deals with a question which was raised originally by the hon. Member for South Croydon (Mr. H. G. Williams) in connection with the position of approved suppliers and that part of the Bill which deals with the supply of lime and basic slag. The hon. Member proposed to leave out the provision in the Bill that only approved suppliers should be allowed to deal with these commodities. The suggestion I made was that instead of doing that we should provide for a right of appeal by these individuals if they do not obtain approval under the scheme. It was then pointed out that there was nothing in the Bill which provided machinery by which anyone was to obtain approval, and that until that had been done it would not be right to deal with the question of a right of appeal. Nor indeed is the right of appeal, perhaps, the best method of dealing with a body which is not a tribunal and which does not give judicial determinations. The words of the Act are an attempt to meet the situation. The intention is to provide a procedure under which approval may be obtained, and also to provide a procedure in cases when approval is not obtained. The Minister gave an undertaking, subject to this point being dealt with, that in the scheme there would be a provision that any person aggrieved should have what I will not call a right of appeal, but a second chance of going to somebody else to make his complaint. I understand that the Minister is prepared to repeat that assurance once the power is given which I am seeking to do by the Amendment.
  Mr. H. G. Williams: I beg to second the Amendment.
  10.40 p.m.
  Mr. W. S. Morrison: In Committee I admitted that there was a chance, although I did not admit that the chance was very high, that somebody might be removed from the approved list of suppliers either through inadvertence or for some other reason, and that it would be desirable to make provision for that. The Amendment proposed by my hon. and learned Friend the Member for Bridgwater (Mr. Groom-Johnson) helps towards that end. I can give the House an assurance on this matter. I will see that the scheme provides that the two Ministers concerned shall approve all applicants on the recommendation of the Land Fertility Committee and that aggrieved applicants shall have an opportunity of making representations direct to the Minister before he makes any final decision. The scheme would probably say, as a matter of form, that any such representations should be addressed to the Minister of Agriculture, the Home Secretary, the Secretary of State for Scotland, or the Minister of Agiculture for Northern Ireland, as the case might be. I accept the Amendment.
  Amendment agreed to.
  CLAUSE 4.—(Exchequer grants for defraying land drainage expenses in England and Wales.)
  10.42 p.m.
  Mr. Georǵe Griffiths: I beg to move, in page 10, line 38, at the end, to insert:
  "Provided that such conditions shall include a condition that the wages paid to persons employed on any drainage scheme for which a grant is made shall be not less than the wages customarily paid by the drainage authority for similar work."
  After the long-drawn-out legal battle which we have had, I want to bring the House back to the bread-and-butter side of this Bill. Any hon. Member who was in the House on Monday night, or who has read the OFFICIAL REPORT for Monday, was no doubt greatly surprised when he found that the Department of Agriculture, behind the back of the Minister, had issued a circular to the authorities who are to carry out this work next

  1411
  winter fixing a maximum wage, that maximum wage being the minimum wage of the agricultural worker. That is to be the maximum wage for the people who carry out this drainage work. The Amendment I have moved is to provide not for a maximum wage, but a minimum wage. Certain conditions apply to the authorities who are to carry out this drainage work. We ask that there shall be another condition, that the men who are to do the work shall have at least" sufficient wages to give them sufficient food to give them sufficient strength to perform that work. We are asking that the minimum wage shall be not less than the wages that are customarily paid by the drainage authority for similar work.
  The Minister has accepted an Amendment moved by the hon. and learned Member for Bridgwater (Mr. Croom-Johnson), and I do not see why he should not accept this Amendment. If the circular that has been issued is carried out, it will mean that there will be thousands of men doing this work who will receive a wage as low as 33s. 3d. a week. Rent, clothes, food and perhaps some travelling expenses to the place where they work would have to be paid out of that sum. I would like to read that portion of the circular which fixes the maximum wage. It says:
  "The wages paid will be restricted to the local agricultural rates, except in the case of schemes that are in the vicinity of big towns or industrial areas where hgher wages are general. In such cases the rate of wages will be that commonly recognised in the district for the type of work involved."
  But where the schemes are not close to towns or industrial areas, there is a direct instruction here that the wages shall not be more than the agricultural rate. Let me give the House a few of the agricultural wages rates which were fixed on 21st June last and will remain in operation until next year. The Agricultural Wages Board has sanctioned a minimum wage in Derbyshire of 37s. 6d. which represents a rise of 1s.1½ a week. In Lancashire—and there are agricultural and rural districts in Lancashire as well as industrial districts—agricultural wages have been fixed at 34s. 6d. for a week of 54 hours. In Holland in Lincolnshire the agricultural wages for able-bodied people over 21 years of age have been fixed at 33s. a week. Up to 21st June
  1412
  last it was 32s. Imagine paying that wage to an able-bodied man who is giving of his best to produce the necessities of life. Yet the Minister has acquiesced in a circular which tells the drainage authorities that the people who do this drainage work in Lincolnshire are not to have more than 33s. a week—and I emphasise the fact that that is a maximum in their case and not a minimum.
  In Staffordshire agricultural wages have been fixed at 34s. There are industrial areas in that county and in those areas the drainage workers may be paid the rate which is customarily paid there for drainage work but in the rural areas they cannot receive the customary rate for drainage work. They are to be paid no more than the wage of the agricultural worker. In Sussex which is not as industrialised as parts of the North like the West Riding, the minimum wage of the agricultural labourer is 33s. 3d. When this Bill is put into operation next October, the drainage workers in the rural areas of Sussex, which is only just across the fields here from the House of Commons, will get 33s. 3d. a week and not a penny more. The West Riding of Yorkshire is a very big county. It is industrialised, it is urbanised and it is also to some extent ruralised. [An HON. MEMBER: "And paralysed."] Not yet. But in the West Riding on these drainage schemes it will be possible to have two or three different standards of wages for the same work. Round Rotherham, Don Valley, Normanton and the Hemsworth Division, they will be paid the customary wage for drainage work because they are in an urban area, but down Selby way and to the east of Pontefract they will be paid the maximum allowed to agricultural workers. One man in the West Riding may he doing drainage work for £2 10s. in one field while another man in the next field, because he is in a rural area, will be getting only 35s. 6d. The Minister can at least accept this Amendment and agree that these men shall get not less than the customary wage. I hope he will say, "All right, Hemsworth, I accept it."
  10.51 p.m.
  Mr. Watkins: I beg to second the Amendment.
  I do not think that I need traverse the discussion which took place on Monday

  1413
  night. The Minister of Agriculture has never before found himself in such an undignified and sorry position as he found himself in on Monday. The hon. Member for Ashton-under-Lyne (Mr. Simpson) intimated that he was aware of the existence of this circular, and instead of the Minister accepting in good faith what was told him he poured scorn on the representations of my hon. Friend and referred to the speech of my hon. Friend as being a mere figment of the imagination and something which had no existence in fact. I then quoted the exact words from the circular, which quite accidentally came into my hands. It is rather an unsavoury feature of this matter, that if this circular had not accidentally come into the hands of a Member of the Opposition, the House would have passed this Clause, and would never have known that this work was to be carried out under sweated conditions of labour. But by a fortunate accident we were able to bring the matter before the House. After a threat by an hon. Member on the Liberal benches that they would keep the Debate going until the circular was produced, and after the Minister had again said that the circular had no existence in fact, the circular was produced and it was found that it contained this unfair, ungenerous and miserly restriction on the payment of this important work.
  These men will be restricted, unless that circular is withdrawn, to the minimum rates obtaining in the rural areas, which provide nothing for travelling expenses and are altogether too low. I have made some inquiries in the last day or so about the rate of pay for this work in some of the Home counties with which I am familiar. In one county the rate is 1s. 1½d. per hour. In another county it is 1s. 2d. That on a 48-hour week gives a weekly wage of 54s. or 56s. If the hours per week are 54 and not 48, that will bring the weekly wage to somewhere in the region of £3. After the Minister had denied the existence of the circular and had then been compelled to admit its existence and to read its terms and conditions to the House—
  Mr. W. S. Morrison: I never denied the existence of the circular. Surely the hon. Member would be the last person to misrepresent me. I only said, what was the truth, that I knew nothing of it.
  Mr. Watkins: If I put the case too strongly, I withdraw, because no case is ever improved by over-statement. The written words contain much, but the tone of voice in which the Minister used those words led us to suppose that he was denying the existence of the circular. [HON. MEMBERS: "No!"] However, that has all gone by now. The circular does exist, and its ungenerous terms are the facts that we are attacking. Before the Minister interrupted me, I was going to say something that would probably be less displeasing to him than the words to which he objected. He concluded the Debate by saying:
  "I will examine the position again with a desire to see that fair rates of wages are paid to men employed on these works."—[OFFICIAL REPORT, 12th July, 1937; col. 962, Vol. 326.]
  Now we accept that. If the Minister will pay fair rates of wages, it will meet our case, but we claim that the fair rates of wages can only be, in the words of the Amendment:
  "not less than the wages customarily paid by the drainage authority for similar work."
  There is an element of the Fair Wages Clause in this matter, and, as I said on Monday night, I hope the Minister will try not to get a differential between one district and another, so that men who are doing the same work in different parts of the same county, one set of men close to or inside an industrial area and another group of men in a rural area, shall not be paid a different rate of pay. That would be contrary, in my judgment, to all fair treatment. If there is a very small differential, no one will grumble, but the rate of pay for the work ought roughly to be the same, whether it is done in an industrial or in a rural area.
  10.58 p.m.
  Mr. Holdsworth: It does not seem to me that this Amendment will cover the whole of a county, even if it is accepted. It only asks that the wages shall be the wages customarily paid by the drainage authority, but it may be that there are two such authorities in one county, paying different wages, and I am surprised at the mildness of the request in the Amendment. I do not think the Minister denied the existence of the circular, but he said he knew nothing about it, and that seems to be a very bad thing indeed. However, I do not want to deal with that point. I support the Amendment as

  1415
  perfectly reasonable and, in fact, far more reasonable than I should have expected, because, as I say, I think that under it there can be differentiation in a county. If a drainage authority is paying a certain wage at present for certain specific work, I do not think it ought to be allowed, under a Bill which gives a subsidy, to get off at a cheaper rate than it is already paying for this work. I do not think that a drainage authority receiving a subsidy for specific work ought to be able under the terms of the circular to get the same work done at a cheaper rate than that at which they are getting it done now. The Amendment should be accepted because there should not be a lowering of the customary wages for this work as a result of the passing of the Bill.
  11.1 p.m.
  Mr. Muff: I should like to emphasise the difficulties which the Minister will create unless he accepts the Amendment. I am a member of the Yorkshire Ouse Catchment Board which operates over the three Ridings, although the West Riding has to foot the bill. If the Minister does not meet us he will place the Yorkshire Ouse Catchment Board in an awkward position seeing that they operate in the East Riding and also in the North Riding. They have 31 internal catchment boards adjacent to the River Dement and the River Ouse, and we are preparing schemes in anticipation of this Bill being passed. We are preparing a scheme for the River Foss which is adjacent to and at times floods the city of York. We shall be able to pay the rate we are at present paying. We have prevented serious floods in other parts of the North and East Ridings. We are getting on with our schemes for internal catchment boards, and we are paying 1s. 3½d. an hour. We cannot pay one man that rate in one district and a few miles away expect another man to work contentedly on the same work at 50 per cent. less wages but with the same outgoings. The Minister's predecessor made our position as difficult as he could, and we expect the present Minister to try and bring a little peace and harmony into our work. We are trying to do a great work and we are doing it under great difficulties. If the Minister cannot see his way to accept the principle of the Amendment, he will make the work of the
  1416
  Yorkshire Ouse Catchment Board most difficult.
  11.4 p.m.
  Sir F. Acland: It is difficult to discuss this Amendment without remembering the discussion we had on Monday on what was then an alleged circular and which has proved to be a real circular. That discussion, acrimonious as it was at times, has left no mark on our Statute Book. What we are considering now is an Amendment to the Bill, and it seems to me to be one which cannot be regarded as anything except an ordinary and commonplace direction that reasonable wages should be paid for this sort of work. It is an extraordinarily mild affair. I cannot imagine anything much milder. If, for instance, the drainage authority is the county council, and if the county council has been accustomed to pay for this sort of work the same wages as that received by roadmen, and if, as is sometimes the case, roadmen's wages are only 2s. above the agricultural minimum, they will be entitled under this Amendment to pay the same sort of wage when they resume and intensify drainage work. To accept this Amendment is merely to say that the authorities which get these grants shall not pay less than they normally would do if they were not getting the grants. Nothing could be more reasonable than that, and as the acceptance of the Amendment would bury the hatchet of the controversy we had on Monday to the satisfaction of everybody concerned I hope that it may be accepted.
  11.6 p.m.
  The Minister of Pensions (Mr. Ramsbotham): I have listened with great interest to the moderate and temperate speeches in support of this Amendment, and I share the pleasure of the hon. Member for Hemsworth (Mr. G. Griffiths) that we have escaped from the constitutional intricacies which perplexed us just now into the open fields of Sussex, the West Riding and elsewhere. In regard to the actual Amendment, the question before us is one of administration, and, so far as I know, matters of this kind, involving the administration of drainage expenditure, have not appeared in previous drainage Acts. I have been at some pains to look into the history of previous Circulars. Those Circulars have a long lineage. They go back to 1921 and have been issued by successive Governments since that date

  1417
  and under various measures for drainage, including the Land Drainage Act, 1930.
  Mr. G. Griffiths: Were those Circulars issued before the Acts were passed, or afterwards?
  Mr. Ramsbotham: I do not think that is very material to the point, because they are Circulars which govern the rate of wages in the various districts, and that is the point of the hon. Member's Amendment. What I meant to point out is that in no case have directions of this kind been put into an Act of Parliament, and the procedure has invariably been by means of Circulars. I will not weary the House by reading extracts from a pile of Circulars, but, broadly speaking, the principle laid down in this Circular which has caused a certain amount of criticism, not to say abuse, is the same principle which has been contained in all the Circulars from 1921 onwards, including the Circular issued by the party opposite when they were in office in 1924 and again in 1929.
  Mr. Silverman: Is the hon. Gentleman saying that the Circular of which the Minister of Agriculture said the other night that he had never heard is a type of circular which has been repeatedly issued over the last 16 years?
  Mr. Kelly: Do these Circulars make reference to drainage work undertaken as part of civil engineering work, for which a higher rate than that mentioned tonight will have to be paid?
  Mr. Ramsbotham: I did not want to weary the House with these Circulars, but since the hon. Member for Rochdale mentions the point, I will quote from the Circular of 25th June, 1924, one for which the Government of his party was responsible. It says:
  "The weekly earnings of an unskilled worker for a week's work shall not be less than the weekly earnings of unskilled agricultural labourers as fixed by the Conciliation Committee."
  It goes on to say:
  "The pay for an unskilled worker shall be a guaranteed minimum wage of not less than £1."
  At that time conciliation committees were in existence for agricultural wages, because the Agricultural Wages Act was not then in operation. It would have been impossible for the Government of that day to lay down a minimum wage, so
  1418
  what they did was to lay down that the work must not be at less than that for unskilled labour as fixed by the conciliation committee for the district in which the work was to be done.
  Mr. Kelly: Which conciliation committee?
  Mr. Ramsbotham: Those which were in existence before the Agricultural Wages Act came into existence. If the hon. Gentlemen wish me to go further into this Circular I can do so, but perhaps they will take it from me that, broadly speaking, the principle laid down there, and the similar principle in the 1921 Circular has ever since governed the issue of these instructions to local authorities by all parties.
  Miss Wilkinson: If this Circular of 1924 refers to unskilled workers, it is to the unskilled workers of the district. That is a very different thing from saying that an unskilled worker might be governed by any conciliation boards, or trade boards or trade union agreements. Surely it must be agricultural, which is the lowest of the unskilled worker.
  Mr. Leach: Have any previous circulars contained such words as those in the circular under discussion, that wages not more than a certain figure were to be paid?
  Mr. Ramsbotham: I do not think that the hon. Lady has quite appreciated what this much-criticised circular says. It says that wages paid shall be restricted to local agricultural rates, except in the vicinity of the big towns or industrial areas, where higher rates are general. She will appreciate that it is in rural districts that the policy of this circular is applied. This is based on previous circulars and merely follows the policy of the Government ever since. As regards the industrial areas, and indeed, in the case of which the hon. Member for Hemsworth spoke, where you get workers in the towns, or in Sussex or in the West Riding, the rate of wages would be that commonly recognised in the district for the type of work involved. To come now to the position of the agricultural district itself—
  Mr. Leach rose—
  Mr. Ramsbotham: I will give way to the hon. Member a little later.
  Mr. Leach: Would the hon. Gentleman answer the question which I put?
  Mr. Ramsbotham: Perhaps the hon. Gentleman will repeat it in a minute when I have finished my argument. The object of the Clause is to benefit the land and the labourer. We are faced with a very serious shortage of agricultural labour; whatever the reason may be, we know it is a fact. We also know that agricultural labour is to a very considerable extent seasonal work. There is very little unemployment in the summer; there may be even a shortage of labour; while there is a certain amount of inevitable unemployment in the winter. I think the House will agree that it is a benefit to the agricultural labourer who cannot find employment in the winter because of seasonal conditions, to have an occupation of this kind by him in the rural districts which keeps him in work the whole time. For that reason it seems to me that the circulars and the policy which we have adopted are quite justified, so that we can keep the agricultural worker on the farm and pay him the rates agreed to by the agricultural committee or it may be the wages of the district. The agricultural rate paid is not the minimum; it may be higher than that laid down by the Agricultural Wages Act. I would like the House to appreciate the position in which agriculture finds itself. The object of the Clause is to help the land and the labourer, and I think that in the circumstances it will be found to be reasonable that the proposals of the circular should be carried out.
  One difficulty that would arise from the acceptance of this Amendment would be that there might be a large authority covering a very considerable area, including some urban and some rural land, and in such a case, under the terms of the Amendment, there would be a uniform rate right through the whole district. [Interruption.] That is what I read the Amendment to mean. If that be not the intention, then there is really not a great deal beween us. We agree in principle that a standard rate should be paid in urban and industrial areas, and that there should be, in the rural and remoter areas, another rate, according to the agricultural rate prevailing there. If that be the case, I would say to the hon. Member and his Friends that this is a matter purely of administration. I cannot accept the
  1420
  Amendment because I cannot tell exactly what its effect would be, but I suggest that the hon. Member should not press it, realising that in principle there is not a great deal between us.
  11.17 p.m.
  Mr. T. Williams: I am very disappointed with the Minister's reply. Two hon. Members below the Gangway have already charged us with modesty, and I must confess that we have tried to provide an Amendment which would be acceptable to the Minister and would not do any injustice. The Minister's last argument was that there might be a large authority covering a wide area of both urban and rural land, and that, if this Amendment were accepted, the same wage would have to be paid both in urban and in rural areas. But Clause 14 does not apply to these drainage authorities at all. The grants under Clause 14 can only be given to small drainage committees other than catchment boards. They are all internal drainage committees operating in a very small, circumscribed area, and the Minister's argument would not apply to them at all. The interpretation given in Section 81 of the Land Drainage Act, 1930, excludes absolutely the large drainage boards, and refers exclusively to the smaller drainage committees who alone are referred to in Clause 14. The Amendment does not ask for any maximum, or any guarantees, or anything static apart from the wages customarily paid in the area for this kind of work.
  I can conceive of a case in my own Division. There must be a great many local drainage committees operating between Doncaster and the remote parts of my Division, in an area which is largely rural, although in the adjoining mining districts catchment boards are operating. The catchment boards are empowered to pay such wages as they think the peculiarly heavy work calls for, but in an adjoining field where a local drainage committee is operating, under one interpretation of that circular which has been issued they could pay the minimum rate. You may have two persons doing the same work in adjoining fields, one receiving 45s. and the other 33s. a week. It will not bear looking into. I suggested last week that we ought not to talk exclusively in terms of Gloucester or Sussex. We ought to bear in mind the possible reactions in urban and semi-urban areas where these drainage schemes will be

  1421
  undertaken. I do not think the Amendment calls for a long Debate. It ought to have been accepted almost without a word. I hope the House will not hesitate to register its opinion fairly quickly and I am hopeful that some hon. Members opposite may see not only the modesty but the fairness of the Amendment. The circular, involving agricultural wages in semi-rural areas, will have the effect of turning an urban worker into a rural worker and, for unemployment benefit, it will have the effect of turning him out of one scheme into another, a wholly undesirable thing when the work is of a purely temporary nature. If the Amendment were accepted, I do not think that transfer could or would take place. I ask the right hon. Gentleman, therefore, to amend the circular and not to be content to go back to 1924 or even 1930. We are living in 1937, and we ought to adopt 1937 policy with regard to employés, whatever the work may be. I hope the right hon. Gentleman will not just depend upon a circular issued 17 or even 13 years ago but will do the fair thing, because it is a fair thing.
  11.23 p.m.
  Mr. Acland: I have been equally disappointed with the hon. Member. We have heard something about seasonal work in agriculture. I think the figures of agricultural unemployment insurance show that 5.1 per cent. were unemployed in the depth of winter and 3.5 per cent. to-day, which is not particularly seasonal. I do not think much of a point can be made about that. The main point is that, if the Amendment be defeated, in a county which is now paying 35s. for drainage work and in which the agricultural wage is 33s., the effect of the circular will be to bump the wages down to 35s. if they want the grant, because the drainage is to be restricted to the local agricultural wage in order to qualify for the grant. I think there are several reasons why men on drainage work should be paid rather more than the agricultural wage. There is very similar work being undertaken by Government authority now in which they are paid slightly more. The Forestry Commission pays 36s., or 25. higher than the county rate, whichever is the greater, because when the county rate of 33s. is fixed there will customarily be added to that, certain harvesting bonuses which the Forestry worker
  1422
  does not get and the drainage worker will not get.
  There are two more points. The first is, that the forestry worker and the drainage worker will customarily have to travel a good deal further to their place of employment than the agricultural worker, and even in these days there are still certain advantages, whether small concessions of land or gifts in kind from an employer, which a good many of our agricultural workers receive, but which the forestry workers do not receive and the drainage workers will not receive. Therefore, there is no reason why the county rate of wages for drainage workers should be bumped down to the agricultural wage. And there is a bigger question than this. Does the Minister want this work to be done or not? Because, really, in a matter of this kind, the Government may propose, but, thank Heaven, there are workmen who in the last resort are able to dispose of this matter. There is an acute shortage of agricultural labour just now. Is the Minister going to get the men at the rates which his circular lays down? It will not be a matter of taking on men for a week or two in the wet weather when they are turned off the farm. There is not much of that turning off on the farm in wet weather, but if there were much of it, the Government would not be able to take up men here for two or three weeks' work to do a job of that kind in wet weather; they would have to keep men on for three, six or twelve months at a time. If they limit themselves by the circular and, by defeating the Amendment, restrict it to the agricultural wage, they will not get the men. Therefore, I hope that the Amendment will be accepted.
  11.28 p.m.
  Mr. Kelly: I did not expect to find a new method adopted by the Government to break through the Fair Wages Clause. This is the endeavour revealed both by the circular and by the statement made from the Front Bench opposite; they are determined to try to help to break through the conditions which have been established for this work. During this week a contractor in the country who heard of the discussion of last Monday night said that, if the circular applied to one of his contracts for drainage in the rural districts, he would be placed in a

  1423
  happy position as far as the conditions laid down for wages were concerned, though he did not think that he would be in a happy position with regard to the men who were in his service, because he had not one man who would take from him, or to whom he would offer, such low wages as those which would operate. One would imagine from the way it has been put by the Minister in charge that this is agricultural work. This is a piece of civil engineering, and speaking as one who has for many years been a member of the Civil Engineering Conciliation Board, which has set down, in an agreement with the employers, the rates to be paid not only in the large industrial centres referred to, but also in the rural districts throughout the country, this is evidently the time chosen by the Government to smash these rates if they possibly can by the method envisaged in the circular.
  At this late hour I am not going to elaborate upon that matter, but I suggest to the Minister that it needs to be said on behalf of the trade unions, who have for years been working to establish these rates, they have set them down and received them in all parts of Great Britain, and now we have a Government who say to employers and employed: "We are issuing a circular and intend to use the power of the Government to force the rates down, by saying that no more shall be paid than the low rates that operate for agricultural workers!" The rates that we shall demand if Contractors do the work are much higher than the rates paid by the drainage boards. This work is done by navvies; it is navvies' work. If you expect these people to work for such rates as those in the mind of the Government, there will be trouble, if the work is engaged upon at all. If the Amendment is accepted it will be something on the way, but where men are organised you will not get the work done even at that rate.
  11.31 p.m.
  Mr. Leach: Some of us believed that when the Minister of Agriculture assumed his present office, a well deserved promotion, at least he would never be guilty of a mean act. On the present occasion he is in serious danger of doing a thoroughly mean thing. When he said the other day that he would consider the
  1424
  circumstances involved in the circular, we felt that he would really deal with the matter we are now considering, but re-consideration has left him adamant, and he has put up the Minister of Pensions to buttress an exceedingly bad case. I gathered from the Minister of Pensions that he had been examining the circulars of previous Governments, and he gave us some extracts from those circulars. I put a question to him which remained unanswered, and I should like to repeat it. I asked whether in any of those circulars he had discovered any words which would restrict to any given level the wage to be paid. He quoted extracts to show that the wage must not go below a certain standard, but it could go, apparently, as much above as the Board thought fit to pay. That is a very different state of things from that disclosed in the circular. Most boards pay more than the agricultural rates of wages. It would not be right to bring down the rates paid for this important and skilled drainage work—which the hon. Member for Rochdale (Mr. Kelly) described rightly as civil engineering work—to the level of agriculture, which pays the lowest wages of any industry. Moreover, agricultural labourers are not always able to do this class of work. The engineers concerned with drainage work gather round them a body of men who for the most part are not agricultural workers and who travel with the engineers from district to district. They are, technically, skilled workers engaged in engineering practice. If the circular is to be persisted in you are heading straight for strikes. There will be chaos in this important work. A great many stoppages of work which ought to be performed will follow the operation of the circular.
  The circular lays down a rate of wages beyond which the Board must not go. What are the facts?
  The agricultural labourer's miserable wage is eked out frequently by a cheap house, a little plot of land and the fact that he has no travelling expenses to meet. None of these advantages will be possessed by this small colony of workers who will follow the engineers on these jobs, and whose work is essential to the performance of these drainage works. They will not be free from travelling expenses, they will not have a cottage at a cheap rent,

  1425
  or a small plot of land. They will therefore be in receipt of wages considerably below the agricultural minimum standard. The circular makes the stipulation that where the work is not in a rural area the rate of wages paid must be in consonance with the wages paid for similar work in the urban area. Most of this work is in rural areas, hardly any of it is in urban areas, and therefore the circular means that nine-tenths of the men employed will be reduced to this miserable pittance. I am sure that the Minister of Agriculture does not wish to do this mean thing. He is better than his circular. I was glad to hear him say that he had no part whatever in the issue of the circular and was in ignorance of its existence. When he promised on Monday last that he would consider the whole matter afresh I felt that in the hands of a gentleman of good will, as I know him to be, the issue would be safe and the right thing would be done. Even at this late hour I make an appeal to him to do something which is at least decent in this matter.
  11.39 p.m.
  Mr. E. Smith: The case for the Amendment has been made by those hon. Members who have spoken but there is one serious aspect of the matter which has not been dealt with, upon which I want to ask the Minister to reconsider his attitude. The Amendment says that an Exchequer grant shall be made only on condition that the customary wages paid by the local authority for similar work are paid. That will determine their right to unemployment benefit. Those who represent an urban and rural area have already had one or two examples of the way in which this is operating. The Minister has quoted for the 1924 circular. There was one fundamental difference between the position then and the position now. Since 1924 the Agricultural Insurance Act has been passed which fixes benefits at a certain standard. People engaged in mining and engineering and the building industry may be called upon when unemployed to do work which they would not do otherwise, and they may be called upon to do drainage work. I want to support the hon. Member for Rochdale (Mr. Kelly) when he lays down the principle that this is, and up to now has been looked upon as, civil engineering. Those
  1426
  of us who are associated with work-people who are organised in unions catering for civil engineers know that up to the present the wages that have been paid have been the wages paid by drainage authorities throughout the country.
  Therefore, I ask the Minister to give further consideration to this Amendment, and also to give an undertaking that there will be no reclassification of the applicants for benefit in future if they are called upon to undertake work of this description. In certain areas miners are doing this work, and until recently they have been paid the scale of wages referred to by the hon. Member for Rochdale, and the result is that they have not been reclassified, but owing to this circular being brought to the attention of certain authorities, these unemployed men are now being reclassified when they undertake this sort of work. This raises a very serious issue as far as unemployment insurance is concerned, and I ask the Minister to give an undertaking to the House that, before any Exchequer grants are made, no reclassification of applicants for unemployment benefit shall take place.
  11.42 p.m.
  Mr. W. S. Morrison: I will deal first of all with the point raised by the hon. Member for Stoke (Mr. E. Smith) and the hon. Member for Don Valley (Mr. T. Williams). I quite understand that in mixed areas, where industrial workers may be employed on these schemes, it is a matter of interest to them that their position should be secured and that they should suffer no loss of status as far as unemployment insurance is concerned. I have made inquiries into this, and with regard to the question of unemployment insurance, employment on drainage schemes near industrial centres in which urban unemployed are likely to find work would not be regarded, for the purposes of unemployment insurance, as work in agriculture—
  Mr. Shinwell: What about the wages?
  Mr. Morrison:—and unemployed persons insurable under the general unemployment insurance scheme would not lose their status by being employed in drainage schemes. The hon. Member for Seaham (Mr. Shinwell) asked whether urban workers would have the agricultural wage.
  Mr. Shinwell: If you do not place them in the category of agricultural workers for insurance purposes, why do you place them in the agricultural category for wages?
  Mr. Morrison: The answer is that we do not. The circular says that in the vicinity of big towns or industrial areas where higher wage rates are general, they are exempted from the agricultural wages. In such cases the rate of wages will be that commonly recognised in the district for the type of work involved. That is the answer to the hon. Member for Sea-ham.
  Mr. Shinwell: There are two categories. There are drainage workers working in the vicinity of urban areas, and there are drainage workers working in the vicinity of rural areas. Will the right hon. Gentleman deal with the two classes?
  Mr. Morrison: This circular is founded upon the very excellent practice which has been followed by every successive Government, namely, to pay the rate which is regarded as fair in the district.
  Mr. Leach: As a minimum.
  Mr. Morrison: Agricultural wages in agricultural districts, and urban wages in industrial areas, where these workers are employed.
  Mr. Leach: As a minimum.
  Mr. Morrison: No.
  Mr. Mathers: One might as well say that a railway clerk in a country district should be paid agricultural wages.
  Mr. Morrison: Not at all. The other point is this, that in different sorts of work in drainage, the rate appropriate to the character of the work will be paid. Some hon. Members have spoken of aspects of drainage work which approach civil engineering. If skilled work of that character is required, then the rates for skilled work will have to be paid. Otherwise I do not suppose that any drainage authority would find it possible to get the necessary skilled work to enable its duties to be performed.
  Mr. S. O. Davies: Why not put it in the Bill?
  Mr. Morrison: Let me explain why, and I think it will be found that there is very
  1428
  little between us in this matter as regards intention. I am going to deal with the reason why I cannot accept the Amendment. The reason is that this is a matter of administration and a certain amount of elasticity is required in dealing with these matters.
  Mr. Leach: Where is the elasticity in this circular? And where do the words "restricted to" occur in any previous circular on this matter:
  Mr. Morrison: The hon. Member wants to delve into the past. I prefer to look to the future and to a fair adjustment for all concerned. But the hon. Member challenges us on the matter and asks whether a restriction of this kind has appeared in past circulars. I dare say it is an ungrateful task to go into these matters, but in answer to the hon. Member, and also to the hon. Member for Rochdale (Mr. Kelly) who referred to navvy work and piece work, I must recall the circular issued on 25th June, 1924. First, it says:
  "weekly earnings of unskilled workmen must not be less than the weekly earnings of unskilled agricultural labourers, as fixed by the conciliation committees"—
  The House will recollect that those committees were the predecessors of the present committees, and had not statutory authority—
  "or if no rate has been so fixed, the rate generally paid for unskilled work in the locality. This rate should be inserted in the application form and thereafter the rate as shown in that form and as approved by the Ministry must not be increased without the express sanction of the Ministry. In no case can payments of navvy fates or piece-work rates be entertained, but where it is found necessary to employ skilled craftsmen such as carpenters, foremen and gangers, such men, if properly qualified, may be paid at the ordinary rates applicable to their particular class."
  Is that any different?
  Hon. Members: Yes.
  Mr. Broad: This circular says that they must not be paid more than the agricultural rate.
  Mr. Morrison: Let us deal with one point at a time. When this circular of 1924 was issued there was no statutory wage. There were, in some districts, conciliation committees at work, and the circular very properly said that these men should be paid the wage agreed to

  1429
  by the conciliation committees the modern equivalent of which is the wage fixed by the county agricultural committees. So it is exactly the same thing.
  Mr. Kelly: I must correct that.
  Mr. Morrison: Perhaps the hon. Member will allow me to complete my argument.
  Mr. Kelly: A conciliation board on civil engineering.
  Mr. Morrison: I assure the hon. Member that he is misinformed. There were conciliation committees for agricultural wages in a number of districts.
  Mr. Kelly: For drainage?
  Mr. Morrison: The point I wish the House to understand is that it is a misapprehension to think that what we have referred to in the circular is necessarily the minimum agricultural wage. Many denunciations of the circular have proceeded upon that basis, but what we have referred to in the circular is the local agricultural rate and not the minimum wage. What the circular says is that the authority is to pay the local rate for the district whether the district be agricultural or industrial.
  Mr. MacLaren: But does not the Minister appreciate the unfortunate use of the words "restricted to"?
  Mr. Morrison: No one is going to quarrel over a word. [Hon. MEMBERS: "Oh!"] Successive Governments have found it necessary, in handling public money, to make proper stipulations with regard to the wages paid. For that reason I venture to suggest that we are doing nothing different from what has always been done. If hon. Members care to shelter behind a word they can, but I do not think that there is anything in it. The hon. Member for Don Valley seemed to think that we were proceeding on a basis which was not a true one when we talked about rural areas and industrial areas both being concerned. There are some of these internal drainage board areas which do include an industrial as well as an agricultural population and where the wage paid is 44s. a week. If we accepted this Amendment there would be placed on us an undue degree of restriction in varying easily and quickly the wage rates in the area to the fair rate for
  1430
  the district. This matter has been adequately discussed, and, for my part, I think that we are doing the right thing for the future in asking that the House will let the Clause remain as it stands.
  11.51 p.m.
  Mr. MacLaren: The Minister said that he did not wish to be restricted, but wanted a certain measure of elasticity. One can appreciate that, but a contrast immediately jumps to one's mind. The Minister wants elasticity and no restriction, but I submit to him that in his circular he wants restriction on the wages to be paid for this drainage work. I have been wondering, Mr. Speaker, if a point should not be addressed to you here, because it must be difficult for you to decide when we are out of order and when we are in order. We are discussing a circular. One wonders where we are going with these so-called circulars which grant a Minister full elasticity and do not hedge him about with the written law. This is evidence to-night that there is a dangerous practice arising here, because at one moment we are discussing the contents of a Clause and at the next a circular which cannot be enforced at law.
  I am an engineer and the best time to do drainage work and engineering work in the open is the summer-time; and one cannot help noticing the way in which this circular has been drawn. The very worst time to undertake engineering work in the open is the winter-time, and this circular stipulates that this work shall be carried on in the winter-time. If there were no complaint about wages, there is a definite complaint here. The other day when we were discussing the circular it was hinted that, owing to the fact that the agricultural worker will not be working in the winter, his labour will be exploited in the bitter cold fields on this drainage work. I hear someone laughing. Has he ever tried it? Perhaps that is why his mental apparatus has not yet thawed out. I complain about the restrictions contained in this circular and about the general practice of issuing these circulars. I am sure that when it was first hinted at, the Minister was innocent of this circular, and when he asked the House to advance to him a certain amount of time until he could find out what were the contents of this circular, the House freely accepted that, and hoped that when he had acquainted

  1431
  himself with this mysterious circular he would have same humane views about it.
  I am astonished to find that even the Minister of Agriculture seems to be afraid of the iron hand of the bureaucrat in the office. It seems as if an inviolable fiat had gone forth in this circular and that nothing which this House can say is going to alter it. Politics apart, the right of this House should be considered. Are we to sit here solemnly discussing Bills and formulating Amendments and making Acts of Parliament only to find that what we have passed can be overridden by some private circular from a Department? Another thing I want to say as an engineer. You may get the rough navvy work on these schemes done in this way, but it will be impossible to get proper concrete and machine constructions done merely by some handymen and labourers. I do not know how the genius who drew up this circular came to think that an ordinary labourer's wage should be determined by geographical situation. That is a heritage of the old idea that the men who work in the countryside should receive less than anybody else.
  Last but not least there is this fact. The hon. Member for Stone (Sir J. Lamb) not one or twice in this House has hinted that the encouragement of these new development schemes in the countryside is dangerous, because they tend to divert men from the lower paid agricultural work to higher-paid work. I wonder whether this is not a new "Statute of Labourers." Everybody feels that there is going to be a dearth of labour and therefore a circular is issued to restrict labourers' pay to the agricultural wages prevalent at the time. I regret having to speak on this matter as I am speaking, but there is more involved in this than this Bill. There is the right of the House to know what it is enacting and how far its enactments are governed by circulars issued from departments. Our enactments and those circulars seem to have the same force and the same importance judging from what we have heard in this Debate. This is not the full-blooded Amendment I would like to see. I think it ought to be more drastic in its terms, but, as it is, I thought it would have commended itself to the Minister and I shall vote for it.
  11.59 p.m.
  Mr. Shinwell: On a point of Order. I would like your guidance. Mr. Deputy-Speaker, on a point arising out of the first part of Clause 14 which lays down that certain moneys are to be provided by Parliament towards the expenditure incurred by drainage authorities. It appears to me that this provision is conditioned by words in the circular, the contents of which are not before the House. Should not the conditions which relate to the payment of wages by drainage authorities be placed in the Schedule inasmuch as the wages are closely associated with the provision of money by Parliament?
  Mr. Deputy-Speaker (Sir Dennis Herbert): The hon. Member said he was putting something to me as a point of Order, but I do not think that any point of Order arises. I am not really quite clear what his question to me is. I thought at first that he was raising the question whether, as another hon. Member put it, this Bill after it becomes an Act could be governed by some circular issued by a Government Department. The answer is clear—no Government Department can over-ride an Act of Parliament.
  Mr. Shinwell: In the course of the discussion the question has arisen about the contents of a particular circular, and it now appears that a definite instruction has been issued to drainage authorities, who are to receive money provided by Parliament, that wages are not to exceed a certain amount. The point I am putting is whether the conditions applicable to the wages to be paid ought not to be embodied in the Schedule.
  Mr. Deputy-Speaker: There is certainly no way that I can think of by which the Chair can rule that anything of the kind should be contained in the Bill.
  Mr. Silverman: Further to that point of Order. If, in fact. the circular is not before the House, and if, nevertheless, the Minister has defended the policy of the circular, and has, indeed, stated that it has been the policy of various Governments for the past 16 years, and has inferred that when the Bill becomes an Act it will be interpreted in accordance with the circular, then surely the proper way of dealing with the matter is by stating in the Schedule the conditions on which the subsidy is to be paid?
  Mr. Deputy-Speaker: The hon. Member has raised a subject which is not a point of Order. He may have his own opinion how a Bill should be drawn, and I may have mine and the Government theirs, but that does not mean that we can always expect Bills to be drawn in the way in which we should like.
  12.5 a.m.
  Mr. Palinǵ: The Minister of Agriculture, in opposing this Amendment, made use of the fact that there was a circular in 1924 in which the conditions for the payment of agricultural labourers were laid down if they did drainage work. He is suggesting that what was good enough in 1924 is good enough to-day. That is an inappropriate argument for the Minister to use. The salary of the Minister in 1924 was much less than what it will be in a short time. The Minister is arguing that what was good enough in 1924 for agricultural workers is good enough now. I wonder whether, when he is offered his £5,000, he will put up to the Prime Minister the same argument—that a salary which was good enough for the Minister of Agriculture in 1924 should be good enough now? If it is good enough for the agricultural worker it ought to be good enough for the Minister of Agriculture. This House has agreed that in the case of Ministers there ought not to be disparities in salaries, that for the same work there ought to be the same salary, and all we ask in this Amendment is that an agricultural worker who is asked to do drainage work shall be paid the rate of wages of the district for drainage work. Is that asking too much? Apparently the Minister thinks so. Though he will accept the prescribed rate for Cabinet Ministers, not a penny less, he is not prepared to apply that principle to others. That is particularly mean, seeing that the whole purpose of this Bill is to help the farming community.
  Members who represent the farming community say that they are poverty stricken, and they are asking for help from the public purse and getting it. I have heard some of them say, to their credit, when asking for help for themselves that the agricultural labourer is equally badly off, and that they would like him to get more. Now that they are getting this subsidy from the public purse, they ought to have the decency to see
  1434
  that the agricultural labourer, who does the work, has his share of it, but instead they argue that if he is asked to do drainage work, which ordinarily is paid for at a higher rate than agricultural work, he must still be content to take the lower rate of pay of agricultural workers. In other words, the agricultural worker is not to get a penny of benefit. I am surprised that farmers and landlords, after taking millions out of the public purse, should be so despicably mean as to go into the Lobby against this Amendment.
  12.7 a.m.
  Mr. Buchanan: Apart from what has been said so far I should like to put this point to the Minister. Briefly his case is that skilled workers—carpenters, engineers and the rest—shall all be paid the skilled workers' rate of wages, and we are agreed about that, and therefore the only question at issue is the pay of the unskilled workers, in the agricultural areas, because in urban areas the point may not arise. The skilled worker, the highly paid man, is to be paid the urban rate but the lower paid man is to be paid the agricultural workers' rate. Therefore, on the same job there will be men working under these conditions: the higher paid men will have their high wages maintained, while the pay of the unskilled workers is to be governed by agricultural rates of wages. Can anybody defend that? As well suggest that on some building work in an agricultural district in connection with the Government's defence programme the skilled bricklayer should get the rate of pay of bricklayers in the towns and the labourer who assists him should get the agricultural workers' rate of pay. A man who happens to be classified as unskilled—not that he is necessarily unskilled—is to be dubbed an agricultural worker and paid as such but the man who is in what is classified as a skilled trade is not to be governed by agricultural wages. There is neither sense nor reason in that.
  The Minister's defence defence is that this is what was done in 1924. I thought that method of argument was played out—searching for something done in 1924 to justify what is to be done in 1937. To justify it he had to go 13 years back. Why should not the agricultural labourer be paid the proper drainage workers' rate? Would any hon. Member not do

  1435
  this in his business or his ordinary industrial relations? In an engineering works situated in an agricultural area as many of them are, the labourers are treated as engineering labourers and not as agricultural labourers. In this case, the unskilled labourers ought to be paid as labourers to the skilled men engaged on the work. The Minister said that public funds had to be safeguarded, but that is already done in the Fair Wages Clause. As has already been said, this is a device, because the Government are afraid that, if they paid higher wages on the drainage work, farmers might have to pay some kind of additional wage. That is not the reason given by the Minister, but if he would get up at that Box and say: "We have to pay a sweated wage on drainage work because a sweated wage is paid on agricultural work, that would be a proper defence, and we should see that it was known to the people of the country. It would have some kind of reason in it, but the defence given by the Minister to-night does credit neither to his intelligence nor to his reason. The present position is in-defensible. If this were an assembly where we did things by reason and on the facts as we find them, as we do in business, instead of voting under Government Whips and being told how to vote, the overwhelming number of the House would vote for the Amendment, which has been purposely made moderate in order to appeal to the other side. This Amendment should be carried, because it has fairness and logic behind it.
  12.14 a.m.
  Mr. Silverman: I invite the attention of the House to the way in which the importance of the discussion has shifted from the particular thing sought to be enacted to the way in which the legislation now being prepared is offered to the House. The Lord Chief justice wrote a book called "The New Despotism." It looks as if the Minister of Agriculture is writing an appendix to that book. One would like to know on whose authority this circular was published which apparently is to govern the interpretation of whatever the House enacts in the present Measure. It was impossible to press this point with any force the other night, because the Minister told the House that he had no knowledge that this circular, which apparently had gone out in his name and
  1436
  with his authority, existed at all; and yet it is the very basis on which he invites the House to reject this Amendment. He says that this is the same policy that has been pursued by previous Governments, but I suggest that that is not so in the least. The circulars of 1924 which he quoted were, if I understand them correctly, circulars designed to guarantee to the man employed that his wages should not fall below a certain rate, whereas the circular we are now discussing is designed for the very opposite purpose, namely, that the wages shall not rise above that limit. When the two things are so divergent as that, it is idle for the Minister to say that the policy of the present circular is justified by the policy of the circular of 1924.
  The main point, however, is that the House is being invited to legislate in general terms knowing that whatever it enacts will be subject to whittling down and interpretation and restriction by some departmental authority which issues circulars in the name of the Minister of Agriculture when the Minister does not know that any such circular exists. It seems to me that that is a matter on which the House would be entitled to ask that the whole Debate should be adjourned so that the matter might be reconsidered. Orders-in-Council are well enough, and in many people's opinion are valuable. At any rate they are published and are laid on the Table of the House; we know about them, they can be discussed, and we know who takes responsibility for them. But when it comes to a circular or some kind of leaflet, issued by the Department without the knowledge of the Minister but nevertheless having a greater force of law than the enactments of the House itself, we are reaching a state of affairs of which the House ought to take note, and which Members of the House, whatever they may think about the merits of the particular enactment, ought to regard as a very serious infringement of the democratic rights of the House in times when democracy is in sufficient danger already.
  12.19 a.m.
  Mr. Broad: The position here is that a circular is issued from a Government Department, without being disclosed to Members of this House, to one side of those concerned, namely, the employers. In case there should be some opposition from their point of view, they are told that it is quite all right, that the circular

  1437
  will be used to bring wages down; and the representatives of the trade unions are in total ignorance of it. The point on which I challenged the Minister, and which he evaded, not doing justice either to himself or to the understanding and intelligence of the House, was this: He pretended that the circulars issued by the Department after the Acts of 1924 and 1929 were similar in their purpose and intent to the circular which has been issued on his behalf. It is quite the contrary. Those circulars stated that wages must not be below a certain level. The circular issued by the bureaucrats says the wages must not be more than a certain amount. They can be anything less, but they must not be more. The wage is not one recognised by employers and workmen's organisations for that class of work either in urban or rural districts. We have passed many Bills to improve the standard of life of the workers, and even this Government has done something in that direction, but the right hon. Gentleman is the first Minister who has put into a Bill that, instead of improving the standard of any grade of workers certain classes are to be degraded to the lowest standard of wages paid in the country.
  I know that in the countryside the farmers are very concerned if a man employed on the roads gets a shilling or two more than those who work on the farms. They are jealous about it. The man who works in a water-logged area, cleaning out ditches, rotting his clothes and boots, with nothing extra for injury to health, racked with rheumatism in a short time, working up to his knees in water, unless the Clause is amended, is to be paid not a penny more than the ordinary agricultural worker for that arduous, dangerous and unpleasant work. I hope the Minister will realise that the Department has issued something of which he would be ashamed, if it were on his own initiative. He may think he is being loyal to his Department. I say he has been betrayed by his Department by issuing this circular in his name without drawing his attention to it, if it is true that they have done it unknown to him. If it had not been for the casual circumstance that one of our Members got hold of that circular we should never have known, and in all probability the Minister would never have known. He may not be the
  Minister for long. There are such kaleidoscopic changes in the members of
  1438
  the Government that you never know where to find them. They are here to-day and gone to-morrow. They are Foreign Ministers, Ministers of Agriculture, Secretaries at the Home Office and everything else in turn. The Department have taken advantage of this position. I do not like—and it is the last thing in this House that we ought to have to do—to find fault with the Civil Service. We ought to tackle the Minister, but the Minister has betrayed them into our hands by his confession that he knew nothing about the circular. When his attention was drawn to it, he would not believe that such a circular had been issued. He did not believe it. He doubted the truth of my hon. Friend and thought that it was a cock-and-bull story until the identical words were quoted, and then, after about half-an-hour, he was able to extract it from his Department. If they had been loyal to him they would have produced it right away. The Minister's good nature showed that he would not believe that such a circular was issued, and that he thought it was a garbled version when it was said that something had gone forth. He could not comprehend it.
  I ask him now to return to his first better nature and accept this Amendment, which carries out the principle which has been applied to all Governments for 40 years, that where Government money, Government contracts and that sort of thing are concerned—and even now Acts of Parliament do provide for the Fair Wages Clause—where the community is finding money for contracts or grants-in-aid for any particular kind of work, the Government should insist, as the first consideration, that it should be an obligation upon those who are to get the benefit of the money—in this case the farmers—to see that the wages to be paid are the just and fair wages fixed by representative bodies of workers and employers, or, if no such wages have been fixed, that they shall be the wages usually paid for the particular class of work in the district. If he would accept that we would know that the wage to be paid for drainage work in the countryside and in rural areas would not be the agricultural wage. The workers should be paid more for work of this nature than the agricultural wage. And yet the Minister has held himself to be bound down to the Regulation that the wage in

  1439
  no case shall be more in the rural areas than the lowest Statute wage of the agricultural worker. The people who seek to place everything upon the workers will defeat their own object. What will become of our agriculture if those who cannot help themselves are left in the countryside to do the work themselves? Pay a decent wage on which a man can maintain his physical strength and do a full day's work with a stout heart, and eventually you will make agriculture pay, because he and the rest of the workers will be prepared to do all that is necessary to see that well-conducted agriculture is not run at a loss in this country. It will have this effect. In the villages and small towns I find this position. Around me I see a number of men who lack spirit and who are thin and drawn because the wages paid by the farmers in the countryside do not allow them to obtain sufficient sustenance to keep them fit for work.
  12.30 a.m.
  Mr. Pritt: I want to say a word or two about the extraordinary idea of legislation by circular. Departmental legislation by Orders in Council, properly considered and having legal validity may be either a necessary evil or a necessary good; at any rate, they are obviously necessary and cannot be avoided. But when the
  Minister issues circulars directing this or that, it cannot be too widely known that they have not the faintest legal validity unless the Statute gives the Minister the right to do it by circular. If the Statute does not give him any such right, the circular is clearly nothing better than waste paper, and any agricultural worker who has £400 or £500 to spare can get that fact easily demonstrated in the courts. With a circular of this kind regarding drainage work, he cannot even do that because there intervenes between him and his moral rights the fortune or misfortune that his actual right to wages rests on a contract of service, and if the Minister has wrongly, or rightly, said to whoever the employing body is "Do not pay this man more than a sweated wage or I shall get my skull broken by a meeting of indignant farmers," he has no redress even if he has £400 or £500 with which to go to the courts. When we find at an earlier stage of the Debate on this matter the Minister defending this on the ground that it has been the practice in the past to issue such circulars, we are really getting to a monstrous system of introducing a fair wages prevention Clause.
  Question put, "That these words be there inserted in the Bill."
  The House divided: Ayes, 89; Noes, 191.

  Division No. 291.]

  AYES.

  [12.32 a.m.

  Acland, Rt. Hon. Sir F. Dyke

  Griffiths, J. (Llanelly)

  Oliver, G. H.

  Acland, R. T. D. (Barnstaple)

  Hall, J. H. (Whitechapel)

  Parkinson, J. A.

  Adamson, W. M.

  Harris, Sir P. A.

  Pritt, D. N.

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

  Harvey, T.E. (Eng. Univ's.)

  Ritson, J.

  Ammon, C. G.

  Hayday, A.

  Robinson, W. A. (St. Helens)

  Anderson, F. (Whitehaven)

  Henderson, J. (Ardwick)

  Rowson, G.

  Barr, J.

  Henderson, T. (Tradeston)

  Seely, Sir H. M.

  Batey, J.

  Hills, A. (Pontefract)

  Shinwell, E.

  Broad, F. A.

  Holdsworth, H.

  Silkin, L.

  Bromfield, W.

  Johnston, Rt. Hon. T.

  Silverman, S. S.

  Brown, C. (Mansfield)

  Jones, A. C. (Shipley)

  Simpson, F. B.

  Buchanan, G.

  Jones, Morgan (Caerphilly)

  Smith, Ben (Rotherhithe)

  Burke, W. A.

  Kelly, W. T.

  Smith, E. (Stoke)

  Cape, T.

  Kirby, B. V.

  Smith, T. (Normanton)

  Cocks, F. S.

  Kirkwood, D.

  Sorensen, R. W.

  Dalton, H.

  Lawson, J. J.

  Stephen, C.

  Davidson, J. J. (Maryhill)

  Leach, W.

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

  Davies, S. O. (Merthyr)

  Leonard, W.

  Taylor, R. J. (Morpeth)

  Dobbie, W.

  Logan, D. G.

  Tinker, J. J.

  Dunn, E. (Rother Valley)

  Lunn, W.

  Watkins, F. C.

  Ede, J. C.

  McEntee, V. La T.

  Watson, W. McL.

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

  McGhee, H. G.

  Westwood, J.

  Foot, D. M.

  MacLaren, A.

  White, H. Graham

  Frankel, D.

  MacMillan, M. (Western Isles)

  Wilkinson, Ellen

  Gardner, B. W.

  Mainwaring, W. H.

  Williams, T. (Don Valley)

  Garro Jones, G. M.

  Marshall, F.

  Windsor, W. (Hull, C.)

  Gibson, R. (Greenock)

  Maxton, J.

  Woods, G. S. (Finsbury)

  Green, W. H. (Deptford)

  Milner, Major J.

  Greenwood, Rt. Hon. A.

  Muff, G.

  TELLERS FOR THE AYES.—

  Grenfell, D. R.

  Nathan, Colonel H. L.

  Mr. Paling and Mr. Mathers.

  Griffiths, G. A. (Hemsworth)

  Noel-Baker, P. J.

  NOES.

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

  Fleming, E. L.

  Muirhead, Lt.-Col. A. J.

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

  Fox, Sir G. W. G.

  Munro, P.

  Agnew, Lieut.-Comdr. P. G.

  Fremantle, Sir F. E.

  Nall, Sir J.

  Albery, Sir Irving

  Furness, S. N.

  Neven-Spence, Major B. H. H.

  Aske, Sir R. W.

  Fyfe, D. P. M.

  Nicolson, Hon. H. G.

  Assheton, R.

  Ganzoni, Sir J.

  O'Neill, Rt. Hon. Sir Hugh

  Astor, Viscountess (Plymouth, Sutton)

  Gibson, Sir C. G. (Pudsey and Otley)

  Orr-Ewing, I. L.

  Astor, Hon. W. W. (Fulham, E.)

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

  Patrick, C. M.

  Atholl, Duchess of

  Gluckstein, L. H.

  Peake, O.

  Baillie, Sir A. W. M.

  Goldie, N. B.

  Peat, C. U.

  Baldwin-Webb, Col. J.

  Grant-Ferris, R.

  Perkins, W. R. D.

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

  Greene, W. P. C. (Worcester)

  Petherick, M.

  Beauchamp, Sir B. C.

  Gridley, Sir A. B.

  Plugge, Capt. L. F.

  Beaumont, M. W. (Aylesbury)

  Grigg, Sir E. W. M.

  Procter, Major H. A.

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

  Grimston, R. V.

  Raikes, H. V. A. M.

  Beechman, N. A.

  Gritten, W. G. Howard

  Ramsbotham, H.

  Boothby, R. J. G.

  Guest, Hon. I. (Brecon and Radnor)

  Rankin, Sir R.

  Boulton, W. W.

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

  Rathbone, J. R. (Bodmin)

  Boyce, H. Leslie

  Guinness, T. L. E. B.

  Rayner, Major R. H.

  Briscoe, Capt. R. G.

  Gunston, Capt. D. W.

  Reed, A. C. (Exeter)

  Brown, Col. D. C. (Hexham)

  Guy, J. C. M.

  Reid, Captain A. Cunningham

  Bull, B. B.

  Hannah, I. C.

  Reid, J. S. C. (Hillhead)

  Burghley, Lord

  Hannon, Sir P. J. H.

  Reid, W. Allan (Derby)

  Butcher, H. W.

  Harbord, A.

  Rickards, G. W. (Skipton)

  Campbell, Sir E. T.

  Haslam, Henry (Horncastle)

  Robinson, J. R. (Blackpool)

  Cartland, J. R. H.

  Heilgers, Captain F. F. A.

  Ropner, Colonel L.

  Carver, Major W. H.

  Heneage, Lieut.-Colonel A. P.

  Ross, Major Sir R. D. (Londonderry)

  Cary, R. A.

  Hepworth, J.

  Rowlands, G.

  Castlereagh, Viscount

  Herbert, Major J. A. (Monmouth)

  Royds, Admiral P. M. R.

  Cayzer, Sir G. W. (City of Chester)

  Higgs, W. F.

  Russell, Sir Alexander

  Cayzer, Sir H. R. (Portsmouth, S.)

  Holmes, J. S.

  Salt, E. W.

  Cazalet, Thelma (Islington, E.)

  Hope, Captain Hon. A. O. J.

  Sanderson, Sir F. B.

  Cazalet, Capt. V. A. (Chippenham)

  Horsbrugh, Florence

  Savory, Sir Servington

  Clarry, Sir Reginald

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

  Scott, Lord William

  Cobb, Captain E. C. (Preston)

  Hulbert, N. J.

  Selley, H. R.

  Colville, Lt.-Col. Rt. Hon. D. J.

  Hunter, T.

  Shaw, Major P. S. (Wavertree)

  Conant, Captain R. J. E.

  Kerr, H. W. (Oldham)

  Smith, L. W. (Hallam)

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

  Kerr, J. Graham (Scottish Univs.)

  Somervell, Sir D. B. (Crewe)

  Cox, H. B. T.

  Keyes, Admiral of the Fleet Sir R.

  Soutby, Commander Sir A. R. J.

  Crooke, J. S.

  Kimball, L.

  Spears, Brigadier-General E. L.

  Crookshank, Capt. H. F. C.

  Latham, Sir P.

  Spens, W. P.

  Croom-Johnson, R. P.

  Law, Sir A. J. (High Peak)

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

  Cross, R. H.

  Leighton, Major B. E. P.

  Strauss, H. G. (Norwich)

  Crossley, A. C.

  Lennox-Boyd, A. T. L.

  Stuart, Hon. J. (Moray and Nairn)

  Crowder, J. F. E.

  Levy, T.

  Sueter, Rear-Admiral Sir M. F.

  Cruddas, Col. B.

  Liddall, W. S.

  Sutcliffe, H.

  Davies, Major Sir G. F. (Yeovil)

  Llewellin, Lieut.-Col. J. J.

  Taylor, C. S. (Eastbourne)

  Dawson, Sir P.

  Loftus, P. C.

  Thomas, J. P. L.

  De Chair, S. S.

  Lyons, A. M.

  Titchfield, Marquess of

  Doland, G. F.

  Mabane, W. (Huddersfield)

  Turton, R. H.

  Dorman-Smith, Major Sir R. H.

  McCorquodale, M. S.

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

  Drewe, C.

  McKie, J. H.

  Ward, Irene M. B. (Wallsend)

  Duckworth, Arthur (Shrewsbury)

  Magnay, T.

  Wardlaw-Milne, Sir J. S.

  Duncan, J. A. L.

  Maitland, A.

  Warrender, Sir V.

  Eastwood, J. F.

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

  Wells, S. R.

  Eckersley, P. T.

  Markham, S. F.

  Whiteley, Major J. P. (Buckingham)

  Edge, Sir W.

  Marsden, Commander A.

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

  Ellis, Sir G.

  Mayhew, Lt.-Col. J.

  Wise, A. R.

  Elmley, Viscount

  Meller, Sir R. J. (Mitcham)

  Womersley, Sir W. J.

  Emery, J. F.

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

  Wood, Hon. C. I. C.

  Emrys-Evans, P. V.

  Mills, Major J. D. (New Forest)

  Young, A. S. L. (Partick)

  Errington E.

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

  Everard, W. L.

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

  TELLERS FOR THE NOES.—

  Fildes, Sir H.

  Morgan, R. H.

  Lieut.-Colonel Kerr and Captain

  Findlay, Sir E.

  Morrison, Rt. Hon. W. S. (Cirencester)

  Waterhouse.

  Resolution agreed to.

  CLAUSE 18.—(Veterinary inspectors.)
  12.41 a.m.
  Mr. Foot: I beg to move, in page 12, line 29, after "may," to insert "by order."
  This Amendment should be read in conjunction with the next Amendment on the Order Paper: In page 12, line 34, at the end, insert:
  "(5) Every order made by the Minister under this section prescribing fees to be
  1442
  charged by the Minister shall be laid before Parliament as soon as may be after it is made, and if either House of Parliament within the next twenty-eight days on which that House has sat after any such order is laid before it resolves that the order be annulled, it shall forthwith be void, but without prejudice to anything previously done thereunder."
  I can put this matter very shortly. By Sub-section (4) the Minister is empowered to charge fees to local authorities. I propose that that should be done by order,

  1443
  and that the order should be laid before Parliament and subject to annulment by either House in the usual space of 28 days. In this Clause the effect, I think, will be that veterinary inspectors who are now in the service of local authorities are going to be transferred to the Ministry of Agriculture. The local authorities, of course, will still be required to discharge their various functions in relation to public health, and they will still need the services of veterinary inspectors for these purposes. I do not say that they will be compelled to borrow the services of the inspectors supplied by the Ministry or compelled to fall in with the arrangements that may be made under Subsection (3) by the Minister, but in fact it will be very difficult for them not to use the services of those inspectors when they are offered. In that position, finding that they must use these inspectors, the Minister is then empowered by Subsection (4) to charge such fees as he may choose subject to the approval of the Treasury. The only point I want to make is that really this matter should not be left to the sole discretion of the Minister subject to the Treasury approval, but that when in effect we give to a Department power to impose a form of charge, at any rate that ought to be laid before this House, and this House should have the opportunity of disapproving the scale of fees that are offered as being too high or too low.
  Sir Hugh Seely: I beg to second the Amendment.
  12.44 a.m.
  Mr. Ramsbotham: The hon. Member for Dundee (Mr. Foot) is not quite correct in talking of imposing a charge. These fees would become payable only if the local authority wished to engage the services from time to time, on comparatively few occasions, of the veterinary inspectors. He is quite right in saying that the formal functions of the local authorities are confined to public health, but it may occasionally happen that a local authority wishes to call in the services of a veterinary inspector, for instance in connection with the inspection of meat. That is purely in the option of the local authority, and I think it is reasonable that fees should be charged for veterinary services placed at their disposal should occasion arise to utilise
  1444
  those services. When they do so it is quite reasonable to charge a small fee. I would suggest that it would be very undesirable, if you are charging a local authority, say, 2s. 6d. or 10s. for the services of an inspector, that an order should have to be laid before Parliament. It is purely a matter for the local authorities and their convenience, and I hope the hon. Gentleman will not press his Amendment.
  Amendment negatived.
  CLAUSE 21.—(Extension of Powers of Minister as to slaughter.)
  12.46 a.m.
  Mr. W. S. Morrison: I beg to move, in page 14, line 25, to leave out "laid down," and to insert "done."
  This is purely a drafting Amendment.
  Amendment agreed to.
  CLAUSE 22.—(Eradication areas and attested areas.)
  Mr. W. S. Morrison: I beg to move, in page 14, line 33, to leave out "the."
  This Amendment and the three succeeding Amendments are purely verbal and drafting.
  Amendment agreed to.
  CLAUSE 25.—(Superannuation rights of veterinary inspectors.)
  Amendments made:
  In page 16, line 36, after "the" insert "inspector's."
  Leave out "of such inspector."—[Mr. W. S. Morrison.]
  CLAUSE 31.—(Interpretation.)
  Amendment made: In page 21, line 20, leave out "and," and insert "or."—[Mr. W. S. Morrison.]
  12.47 a.m.
  Mr. Alexander: I beg to move, in page 21, line 30, after the second "supplier" to insert "or wholesaler."
  I understand from the Minister that he is cognisant of what I want to raise on this point, and there is no need to state the point at length. The position we are anxious about is in connection with farmers' organisations, which have for very long years been used to arranging the supplies of their members in practically wholesale fashion, and what is required is that they should not, by the

  1445
  wording of this interpretation, be excepted from continuing this type of business, or from federating for that purpose. I should be glad if the Minister might give us that necessary assurance.
  12.48 a.m.
  Mr. W. S. Morrison: The word "supplier" as used in the Bill is the widest term we can find, and it includes producers and distributors of all kinds, so that any organisation which distributes lime or slag either wholesale or retail will be a supplier for the purposes of the Bill, and I can assure the right hon. Gentleman that it is the intention to provide for the inclusion of merchants of the kind he has in view. These perform very useful services, particularly in supplying the small traders in some cases who operate on a retail basis. They will, of course, like other suppliers, be required to observe the conditions, but, subject to that, they will be on exactly the same footing as all other suppliers. The Amendment is not desirable, because to mention wholesaler would detract from the generality of "supplier," and you would have to mention distributor, manufacturer, and so on.
  Amendment, by leave, withdrawn.
  12.49 a.m.
  Mr. Croom-Johnson: I beg to move, in page 21, line 32, to leave out from "Scheme" to the end of line 33.
  This Amendment is really consequential on the one I moved earlier. It is purely a definition Clause. The words I proposed to leave out have been caught up and put in Clause 3 (1, a).
  Mr. H. G. Williams: I beg to second the Amendment.
  Mr. Morrison: This Amendment is consequential on one which I accepted at an earlier stage of our proceedings to-night and I beg to accept it.
  Amendment agreed to.
  Bill to be read the Third time Tomorrow, and to be printed. [Bill 200.]

  COAL (REGISTRATION OF OWNERSHIP) [MONEY].
  Resolution reported:
  "That, for the purposes of any Act of the present Session to make provision for the ascertainment and registration of particulars as to proprietary interests in un-worked coal and mines of coal, and in certain associated minerals, property, and rights in land, and for purposes connected therewith, it is expedient to authorise the payment out of moneys provided by Parliament of any expenses incurred by the Board of Trade under the said Act."
  The remaining Orders were read, and postponed.
  It being after Half-past Eleven of the Clock upon Wednesday evening, Mr. SPEAKER adjourned the House, without Question put, pursuant to the Standing Order.
  Adjourned at Nine Minutes before One o'Clock.