HC Deb 10 June 1937 vol 324 cc1997-2014

Motion made, and Question proposed, "That the Clause stand part of the Bill."

4.49 P.m.

Sir J. Simon

This is the first of the Clauses, which are 13 or 14 in number, in Part 111 of the Bill headed "National Defence Contribution." As the Committee knows, an announcement was made by the Prime Minister before the Second Reading of the Finance Bill was carried that the Government did not propose to persist in the scheme contained in this Part of the Bill, but that we should put forward an alternative proposal, conveniently described by the hon. Member for Bishop Auckland (Mr. Dalton) as a simpler tax with a larger yield. Therefore, I do not invite the Committee to accept Clause 15 and the following Clauses, and we must take whatever is the proper process for removing them from the Bill.

I announced at Question Time to-day —and the same thing was said by the Prime Minister earlier in the week—that I hope to be in a position to table the Resolution for discussion in Committee of Ways and Means in the course of next week. That will give hon. Members and the public outside an opportunity to consider its terms, which, of course, will be general, and as soon as we have got the approval of the Committee and the authority which is necessary for introducing new Clauses into the Bill, the proposals will be put down in the form of new Clauses. That, I think, is the better procedure. If I were to adopt the other procedure, and ask for the Committee to be set up on the day following in order that I might verbally explain the proposals and only produce the text of the Resolution at the end of my speech, there would certainly be some advantages in that. course in that the explanation would go with the text; but still, I think that it would be better for hon. Members to have time to consider the Resolution, and therefore I think we shall save time and get on better if I put the terms of the Financial Resolution on the Paper first. That I am prepared to do.

Perhaps I may be allowed to add one observation. As the Committee knows, and as my right hon. Friend opposite who was Financial Secretary to the Treasury knows, the terms of any Financial Resolution are always rather more general than the ultimate effect of the Clauses proposed. There are cases, I think, in which the Committee desires that that should be so. I have no desire to put down the terms of the Resolution in such tight language as unduly to cripple discussion—I think myself the better way is to make the Resolution rather wider and looser—but if I do that it follows that I cannot in the Resolution state the necessary exceptions and qualifications which we should have to discuss when we come to introduce the Clauses.

Therefore, I hope that that will be borne in mind, because I think it would not be reasonable, fair or in the public interests that anybody should regard the terms of the Financial Resolution as though those terms in themselves contained the whole explanation with any necessary qualifications that will have to be made. The substituted tax will be as simple as possible, and although, of course, there must be some qualifications and exceptions, I hope what I have said now will prevent there being any misapprehension of what may be called the preliminary discussion which will take place on the day when we take the Financial Resolution in Committee of Ways and Means. It is not for me to move to omit the Clause, but when the question is put, "That the Clause stand part of the Bill," I shall vote "No," and I trust there may be other hon. Members who will do the same.

4.53 P.m.

Mr. Pethick-Lawrence

I understand from the right hon. Gentleman that some time fairly early next week he will put on the Order Paper a Financial Resolution, that we shall then have some time before the question is actually discussed next week or the following week, and that when that time comes, the right hon. Gentleman in Committee will move the Financial Resolution. I take it that then he will be able to give us a detailed explanation of what the Money Resolution is intended to cover. I say that because the right hon. Gentleman said that he would not be able on the Committee stage of the Finance Bill to go into details; but I take it that when he comes to explain the Money Resolution, we shall know the scope of the new tax which he proposes. Of course, the alternative method would be to issue a White Paper, at the same time as the Money Resolution, explaining what the tax will do. If that were done, we should not be in the position of having to deal at once with the proposal of which we shall have had only a rough outline in the first instance. Perhaps the right hon. Gentleman will consider that alternative method. He will remember that in the case of the Budget, the usual practice at the present time is to allow approximately 24 hours to elapse after the details of the Chancellor's proposals have been explained before the House is called upon to debate them. If the right hon. Gentleman intends to follow a similar practice on this occasion—

Sir J. Simon indicated dissent.

Mr. Pethick-Lawrence

I gather that the right hon. Gentleman does not intend to follow that practice, and therefore I suggest that as we have heard to-day that the Financial Resolution is to be in rather wide and general terms, it would be an advantage to hon. Members to have rather more details as to the precise proposals of the Government in sufficient time for them to be prepared to debate the proposals when they are brought forward in the first instance.

4.56 p.m.

Colonel Gretton

Would it not be the ordinary course, when the Financial Resolution is passed, to put the new Clauses on the Paper and leave them there for several days before they are moved in order that they might be examined in detail by hon. Members interested in them? Hon. Members would then have an opportunity of considering the structure of the Clauses and analysing them in their own way. Provisions relating to taxation are always highly technical, and although it is far from my desire to suggest that the right hon. Gentleman the Chancellor of the Exchequer would in any way mislead the House in his explanations, there are details in these matters which require careful examination by experts. Therefore, I suggest that the convenient course would be that the Clauses should be placed on the Order Paper as soon as the Financial Resolution is passed, and that hon. Members should have some days in which carefully to examine them.

4.57 p.m.

Mr. Boothby

I wish to support the plea made by the right hon. Gentleman the Member for East Edinburgh (Mr. Pethick-Lawrence) and to ask the right hon. Gentleman the Chancellor of the Exchequer seriously to consider whether it would not be possible to issue a White Paper at the same time as he tables the Money Resolution. The right hon. Gentleman told the Committee that he intended the Money Resolution to be as wide as possible—and hon. Members on both sides of the Committee thoroughly approve of that course—so that the discussions subsequently can be made as wide as possible. At the same time, a wide Resolution unaccompanied by any explanation might once again lead people to form false ideas about the intentions of the Government. I am sure that the Chancellor of the Exchequer desires as much as we all do to avoid uncertainty, and to avoid more of the scares and panics that have been going on recently. I think there is a real danger, if there is a wide Financial Resolution, that it would convey to certain mentalities in the City, who are only too prepared to receive any alarming news at the present moment with gusto, that the Government's intentions are worse than they will subsequently turn out to be. Therefore, I appeal to the right hon. Gentleman to consider issuing a White Paper giving at least a general explanation of the proposals of the Government at the same time as the Financial Resolution is tabled.

4.58 p.m.

Sir Stafford Cripps

The Committee seems at the moment to be more concerned with the birth of the next child than with the death of the last, and it seems that in a case of this kind, where one is witnessing compulsory infanticide, some rather more elaborate funeral oration should be staged. This is a case which illustrates very well two matters with regard to Budget procedure. Firstly, it shows that a suggestion which is made without any preliminary discussion or inquiry, owing to the high degree of secrecy which is now necessary apparently concerning Budget propositions, is very liable to lead astray the people at the Treasury and the Chancellor of the Exchequer himself. It is a very extraordinary incident that the main feature of the Budget of this year, which was put forward by the Chancellor of the Exchequer in his Budget speech as the great invention which he and the Treasury had made with a view to solving the extremely difficult problem of collecting sufficient money to pay for their rearmament programme, should have turned out to be the one which met with almost universal opprobrium throughout the country.

There were those, of course, in the City of London who did not like it, because it would have made them "cough up" their profits. There were others who thought the general appearance of the child so ugly that it was incapable of taking its place in a civilised system of taxation at all—that indeed it suffered for many of the most serious disabilities which had marked previous forms of taxation. But perhaps the most significant fact of all is that the Chancellor of the Exchequer has been forced, by his own proper master, to withdraw this tax upon which he or rather his predecessor placed such great reliance. It seems to illustrate—and it is worth while drawing attention to the illustration—the enormous power of finance and the City of London as regards the legislation of this country. Supposing this had been a tax which was attacked, on the same basis, from this side of the Committee, because it brought an incidence of hardship and unfair taxation upon the poorer people of the country. I do not think there would have been the slightest chance of securing its withdrawal by the Chancellor of the Exchequer. The reason why he has withdrawn this tax is because those with great financial and industrial interests have been able to influence the back-benchers on his side of the House to revolt against this type of taxation and the revolt is based upon the fear that in a time of very high profits, those concerned may not be able to retain such a large proportion of those profits as they would like to retain.

As far as we on this side of the Committee are concerned, we should be only too delighted to see any tax which took away that large increment of profits from those who are making them, particularly as a result of artificial conditions stimulated by the increase of armaments building, which has extended beyond the armament industries into many other industries in the country to-day. We agree that this tax was so unfortunately arranged as to its incidence, its machinery and its administration that it would probably be too clumsy a weapon to achieve that which we desire, but we do not support the deletion of this Clause on the basis that we do not desire to see any such taxation imposed.

Mr. Boothby

How can the hon, and learned Gentleman advance the argument of profits when he knows and everybody knows that in the new proposals the Chancellor is going to take away more profits from industry in this country than he proposed to take under the original proposal?

Sir S. Cripps

Personally, I shall wait until I see that done. It is not at all certain that the Chancellor of the Exchequer will not be forced to withdraw the new proposal also. I took the liberty when I spoke on the Budget, of telling the Chancellor of the Exchequer that this proposal would never get into the final draft of the Finance Bill. I said it would go and it has gone or is going at the moment. The new Clauses may suffer the same fate when they are put forward, although I imagine that on this occasion the appropriate midwife has been brought in for the birth of the new child, namely, the City of London. Perhaps, having been brought in at the birth of this child, she will not do as she did on the last occasion and when the child is born insist upon the parent killing it.

5.5 p.m.

Major Hills

The hon. and learned Member for East Bristol (Sir S. Cripps) cannot be aware of what occurred in the House of Commons. This tax was disapproved of by all parties. It had only two friends, one being the hon. and learned Gentleman himself and the other the hon. Member for East Fife (Mr. Gallacher). No one attacked it more fiercely than the hon. Member for Bishop Auckland (Mr. Dalton) and it is foolish, therefore, to say that it was opposed only by wealthy people who feared that their dividends were going to be affected.

Sir S. Cripps

I did not say that it was opposed only by such people. What I said was that if it had not been opposed by such people, it would not have been withdrawn.

Major Hills

I think the hon. and learned Gentleman suggested that it was mainly if not wholly opposed by such people. But in fact is was opposed by all sections of opinion in the House of Commons and it would have been opposed, whatever the City of London or the so-called wealthy shareholders had done in the matter. I think the hon. and learned Gentleman is disappointed about this tax. I think he welcomed it as a Socialistic scheme of taxation and approved of it for that reason, and it is for that reason that I am very glad that it has now been withdrawn. I would add, as my hon. Friend the Member for East Aberdeen (Mr. Boothby) has already reminded the Committee, that more money is to be taken from these shareholders under the new proposals. The new taxation is to produce £25,000,000 instead of round about £11,000,000 and thus it will be twice as hard on those people whom the hon. and learned Gentleman is so anxious to get at. I hope, therefore, that the new tax proposals will be supported by him.

May I say a few words to the Chancellor of the Exchequer on the subject of procedure? I should like to see the new Clauses as it were spring fully-grown from the Chancellor's head, but I suppose that is impossible. But I do fear lest uncertainty may arise between the appearance of the Financial Resolution and the publication of the Clauses which are to carry that Resolution into effect. I suppose it would not be possible to arrange that we should have both the Resolution and the actual Clauses. It would be preferable and would give rise to less disturbance if something of that kind could be done. A large part of the trouble in connection with the National Defence Contribution was due to the uncertainty which existed between the date of the Financial Resolution and the time when the actual Clauses were produced. I am very anxious that that state of uncertainty should not be repeated on this occasion.

5.9 P.m.

Sir J. Simon

I wish to make plain to the Committee the procedure which I propose to follow. I begin by replying to my right hon. and gallant Friend the Member for Burton (Colonel Gretton). Of course, the new Clauses will go down on the Paper as new Clauses for the Committee stage of the Finance Bill, and there must be proper time after those Clauses have been put down to enable the text of the Clauses to be considered before the Committee resume for the purpose of discussing them, and, as I hope, adding them to the Bill. But my right hon. and gallant Friend may be assured that all these new Clauses will be put down in time to allow of their consideration by hon. Members. It will be recognised, of course, as I think my right hon. and gallant Friend the Member for Ripon (Major Hills) recognised, that the new Clauses cannot go down on the Paper until after the Financial Resolution. I should not think that it would be in accordance with practice, and I doubt whether it would be constitutional to publish the Clauses until after authority had been obtained from the Committee, for introducing Clauses dealing with this subject-matter into the Finance Bill.

That was what I meant and all I meant when I said that the Financial Resolution must be rather wider than the actual set of Clauses. I did not say, as somebody inaccurately repeated, that the Resolution should be made as wide as possible. That indeed, would be a useless form of resolution. The Resolution will be addressed to the proposals which I am going to make but naturally it will be in more general terms than the Clauses themselves in which the details will be worked out and I have just reminded the Committee that those Clauses will be put down on the Paper so that hon. Members may consider them before being called upon to deal with them in Committee. I do not think, at present, that the publication of a White Paper which I have already very carefully considered would necessarily be the best course to follow. I will consider the suggestion again as it has been put forward by the right hon. Gentleman the Member for East Edinburgh (Mr. PethickLawrence), but I think the Committee will agree that it is in accordance with a good tradition that any explanation of the intentions of the Chancellor of the Exchequer in reference to a tax should be given by the Chancellor of the Exchequer himself. If we once started the practice of bringing out White Papers it might lead to difficulties. Such a paper would have to be textually accurate in every detail, or it would lead to misunderstanding and thus, in effect, you would be printing new Clauses before you had received authority to introduce any new Clauses at all. I am sure that with the good sense which is always exercised about these matters we can avoid any misunderstanding in regard to these proposals.

The procedure, therefore, will be this: I hope early next week to be able to put down on the Paper the Financial Resolution. I do not suggest that we shall be able to discuss it the moment it appears on the Paper. I think it will be found that we shall want a little time in which to consider its terms, but I think we should have a rather general Debate upon it as soon as possible. As I have explained, and as hon. Members realise, the new Clauses will work out in detail what is more generally expressed in the Financial Resolution. When I have explained, during the Debate on the Financial Resolution in some detail—in fact in great detail—exactly what is the scheme which I propose, then if the Committee give me the authority, as I trust they will, I shall without delay put the actual Clauses on the Paper. I think that is the proper course and will meet what I believe to be the general wish of the Committee.

As regards the Clauses which are now being omitted from the Bill, the hon. and learned Gentleman the Member for East Bristol (Sir S. Cripps) has, not unnaturally and acting quite within his rights, taken the opportunity of making some observations about the proposal which is being withdrawn. For my own part, I have come here not to praise Caesar, but to bury him, and to show why the Committee should not add these Clauses to the Bill. I do not think any advantage is to be gained at this stage by arguing as to the exact degree of merit of the scheme which is being withdrawn and I should deprecate discussing in advance the supposed merits—though I hope those merits will, in due course, be generally recognised—of the new scheme which I am about to propose. But the hon. and learned Gentleman was pleased to talk about the Government having listened to its proper master, meaning by that, certain financial interests. May I suggest to him that that sort of talk is better reserved for audiences other than the House of Commons? As a matter of fact the Leader of the Opposition used very different language when the Prime Minister announced that, in view of the opinion expressed in different parts of the House, the Government did not propose to proceed further with these proposals. The Leader of the Opposition then declared: We are here in a democratic assembly, and it is just as well that we should record that we have a Government which is responsive to the will of the House."—[OFFICIAL REPORT, 1st June, 1937; col. 926, Vol. 324.] I forget whether the hon. and learned Gentleman, in the speech which he made on the subject of the National Defence Contribution, liked it or criticised it. I have a recollection that he raised some objections to it, but apparently, now that it is dead, he is devoted to it. I am afraid we are not able to oblige him by resurrecting that particular proposal, and I trust very much that when he sees the new proposal he will consider it with his usual candour and give it his unusual blessing.

5.17 p.m.

Mr. Ede

I share with the right hon. Gentleman a failure to understand the attitude of the hon. and learned Member for East Bristol (Sir S. Cripps) to-day, because I desire to welcome the withdrawal of this tax and the renewal of the ancient alliance between the City of London and the democratic forces in this House. Historians differ greatly as to whether our powers to control taxation and generally to ensure the liberties of the subject are more due to the steady support given to this House during the seventeenth century by the City of London than to the prowess of the soldiers of Oliver Cromwell. I think it is generally believed that, but for the fact that during those troublous years, the very closest alliance did exist between the City of London and this House, our liberties would not have been achieved. Who was it who received Pym, Hampden, Holles, Haselrig, and Strode on the day when Charles I came down to arrest them? The City of London. Whose trainbands were they which marched to the relief of Gloucester, as recorded on the panel on the wall leading to another place? The City of London's. Who was it who recently said that the National Defence Contribution, or N.D.C., had another meaning: No D—, I may not say the word in your presence, Sir Dennis, Contributions to the Tory party funds if they persisted in this tax? Could the analogy be more complete?

I should have thought that my hon. and learned Friend would have recognised that we have now re-established between this side of the Committee and the City of London those relationships which ought never to have been broken, and we can only hope that in future there will be no repetition of 1931. I thank the hon. Member for East Aberdeen (Mr. Boothby) for speaking this afternoon about scares that are received there "with gusto." I am quite sure he will use his moderating influence in future to ensure that the alliance between the City of London and this House shall be on the democratic side of the House and that the slanders that have sometimes been uttered against the City during the recent past will not be repeated, because he will be responsible for the good behaviour of the City of London.

But there is another and still more important phase of recent politics which has been caused by this tax, a tax which has been spoken of to-day as if its parent were the present Prime Minister, but there are many hon. Members who will recall a speech by the hon. Member for Huddersfield (Mr. Mabane), in which he claimed that he advocated this tax last year and that a year before its birth he gave it its appropriate name. I saw him in the House just now and drew his attention to the fact that his poor child was to be hit on the head this afternoon and removed from mortal view, and I understand that he cannot undertake the anguish of attending the Committee to see such treatment accorded to it. But still more serious has been the effect when we realise how he had managed 12 months before to predict the line that the Chancellor of the Exchequer would take this year. We all anticipated, when the Government was reformed with the then Chancellor of the Exchequer at its head, that the hon. Member for Huddersfield would find his place in the Government. In fact, I understand that it was only as recently as Tuesday night of this week that at a meeting of his friends in this House he was reconciled to the fact that for a few more months, until the next General Election, he will have to reside below the Gangway. He should have realised that it is not by constructive proposals that hon. Members opposite get promoted to the Treasury Bench, but rather that if he had indulged in the sort of general abuse which has been showered by the hon. Member for North Bristol (Mr. Bernays) upon all our proposals, he might now be occupying the position which the hon. Member for North Bristol at present—I have no doubt, in the mind of the hon. Member for Huddersfield, somewhat inadequately—fills.

We have been promised that there shall be a new child born, this time without doubtful paternity. My hon, and learned Friend the Member for East Bristol wanted a midwife. I do not know how she would perform the operation that was suggested by the right hon. and gallant Member for Ripon (Major Hills). This apparently is to be some form of miraculous birth, with no period of gestation, but produced by the thought of the right hon. Gentleman the present Chancellor of the Exchequer. I can only say that probably, if it was produced from his thought, it might be a very different child from the one that the right hon. and gallant Member for Ripon anticipates. But however that may be, I am sure of this, after the speech of the right hon. and gallant Member for Burton (Colonel Gretton), that this new child is likely to have as hostile a reception, unless it meets with the very particular favour of certain very interested quarters, as was accorded to the late child. Finally, I am bound to say that it seems to me that the epitaph that should be written over this tax is the one that was written over a day-old child who was buried in a rural cemetery: If I was so soon to be done for, I wonder what I was begun for.

5.23 p.m.

Mr. Gallacher

I maintain, despite anything that may have been said from any side of the Committee, with the hon. and learned Member for East Bristol (Sir S. Cripps), that the withdrawal of this tax was the result of the propaganda of, and the threats that were made by, the City of London, by the big financiers. Do not let us forget that the one-time Member for Hillhead, who has now been rewarded for his labours, speaking from the same place as the right hon. and gallant Member for Ripon (Major Hills), who spoke a few moments ago, uttered very definite threats in this House, and everyone knew, when the City of London was on the rampage, when Member after Member on the Tory side got up to speak for the City of London and attacked the then Chancellor of the Exchequer, that if he was not prepared to withdraw the tax, there was not the slightest possibility of his entering No. 10, Downing Street. We knew that at the time, and I drew his attention to the fact that if he stood firm, that was one of the prices he would possibly have to pay, but I urged that he should face them up and fight them. Then to come here and talk—no matter who says it—about the Government bowing to the democratic will of this House!

It is not the only time that the democratic will of this House has been expressed. We have had discussions here on the family means test, and not one voice was raised in support of the means test as it now operates, but have the Government bowed to the democratic will of the House? There is not a Member, except the most hard-faced and flinty-hearted, who would dare to get up in this House or in the country and oppose an increase in the old age pensions. What is all this nonsense about bowing to the democratic will of the country? There is not a constituency in the country where you could gather intelligent men and women, especially of the working classes and smaller professional people, which would not give support to this tax. The great masses of the people would support the tax, and the Chancellor of the Exchequer knows it, and there is no question of any democratic will of the House or of the country in the withdrawal of this tax.

The right hon. Gentleman the Chancellor of the Exchequer has come to bury, not to praise, the National Defence Contribution, but if it had not been for the voice of the City of London, he would have been standing at that Box, not burying, but praising. The previous Chancellor of the Exchequer, who is now the Prime Minister, started off by praising it. The present Chancellor, who is now burying it, put up such a nice case for it a fortnight ago, before the full fury of the torrent was let loose, but as soon as he sat down the barrage got going, and now he comes to carry through the burial. But in burying this tax the Government and the Tory party are preparing the way for a bigger burial, a greater burial. They are preparing the way for the burial of their National Government and of the gang that is behind the National Government. [An HON. MEMBER: "And of the Communist party."] Who threw that brick? It was the authentic voice of the City, the voice that will support the withdrawal of the tax against the wealthy classes of this country, but will always be raised to impose taxes or hardships or worse on the masses of the people. That is that voice. You can tell the sound of it.

I want to protest against the withdrawal of this tax. I want to declare, before this Committee and before the country, that it is not the democratic will of the people of this country that is being responded to, and it is not the democratic will of this House that is being responded to. It is fear of the big financiers; and I warn my hon. Friends on this side not to give any countenance to this idea of the democratic pressure of this House having been accepted by the Government. I warn them that the same City of London, the same bankers who came down to Downing Street and laid down the law in 1931, have now come and laid down the law in 1937 to the National Government, and they have not got to take an easy view of what that means, because before very long those benches are going to be swept clean, and then they will be filled—

Mr. Boothby

What with?

Mr. Gallacher

—by men and women representing the great masses of the people of this country, not the men and women who misrepresent them. From them there comes no feeling of indignation or of humanity for the mass of suffering that goes on in the constituencies. Now and then we have a platonic reference to poor people in the constituencies. We never get indignation expressed like the indignation which was aroused over this tax. Everyone jumped up to speak against it. How often do they jump up in indignation when it is a question of old age pensions or working conditions?

Sir William Wayland

Will the hon. Member explain why his side objected to the tax?

Mr. Gallacher

I am not prepared to explain why certain Members on the Front Bench opposed the tax, but I know many Members on this side who are opposed to its withdrawal. I want to warn Members on this side that when they occupy those benches an attempt will be made to exploit the democratic will as meaning the will of the City of London and to get them to stand for the City of London. If the City can make such a rage about a small tax like this, what will they do when we put real taxes on them, as one day we will? I want Members on this side to understand that there is no question of the democratic will but of the big financiers determined to control the Government and prevent the Government doing anything that can in any way interfere with their power or their privileges. I want them to prepare themselves against the day when they will have to make serious inroads into the power and privileges of the financiers as a preliminary to putting them out of business altogether.

5.33 P.m.

Sir W. Davison

There can be no better testimony to the democratic patience of this House than the way the Committee have quietly and with self-restraint listened to the Communist gentleman who has just spoken. [Interruption.] I welcome it. I am not complaining about it, but I say it is a great testimony to the democracy and the fairness of this House that the Committee listened to that speech with such patience and silence. The hon. Gentleman knows nothing of the democracy of the Members of this House, none of whom would be here but for the votes of the working people behind them. I desire to protest not only against the hon. Gentleman's speech, but against the innuendo of the hon. and learned Member for East Bristol (Sir S. Cripps) that this tax with withdrawn at the instance of the City of London.

I welcome the testimony which has been given by members of the Socialist party as to the democratic character of the City of London. The City has always stood up for democracy and what is best in the interests of democracy. It has not stood up for its own pocket, as has been suggested, but has from the beginning of these discussions said that it was not only prepared to find the money required, but was prepared to find a larger sum. That is the position to-day, and I understand that the Chancellor of the Exchequer is taking the City at its word and that it will be asked to find a larger sum than was originally proposed. What the City of London objected to, for the reason that it is a democratic body and has the interests of the country at heart more than the interests of any particular class or individual, was that this tax would work unfairly, would be unequal in its incidence, and would not hit alike all classes and sections of the community. It is absurd to say that the opposition to it was a ramp of financiers. I do not suppose that hon. Members on the Front Bench opposite can be said to support City financiers, but on the day when the Budget was introduced they themselves suggested that this tax was inequitable and unsuitable.

The real moral to be drawn, and it is useful moral in these days when we have so much dictatorial powers in governments, is that this old House of Commons has still great power over the most powerful Government of the day. It was because, without any consultation with any-section of the community, the House of Commons generally felt that this tax was inequitable, that the House said that it should not go through. Although we have one of the most powerful Governments that have ever existed in this country, although we have just appointed one of the most popular Prime Ministers, the House of Commons, representing the people, having said that it did not think this tax was equitable, the Government rightly—and added to their stature in doing so—bowed to the will of the House and withdrew the tax. Not only have the Government added lustre to themselves by the withdrawal of the tax, but the moral to be drawn and remembered is the power, influence and might of the House of Commons when it makes up its mind in any particular direction.

5.37 p.m.

Mr. Dingle Foot

I am sure that the speech to which we have just listened will give the greatest pleasure to the working classes of South Kensington. I rise to protest against the idea, which has been stated so often from the other side, that in this business in some way, to use the words of the hon. Member for South Kensington (Sir W. Davison), the Government have added lustre to their reputation. The House of Commons finds itself to-day in a situation which, I imagine, must be without precedent in our Parliamentary history. We all of us, with one or two exceptions, rejoiced over at the withdrawal of this tax, but this ought to be said. What can we think of the efficiency of a Government which brings forward a tax which cannot stand up to criticism for even a few days? We want to realise before we allow these Clauses to be withdrawn that they are the principal feature of this year's Budget, and that the greatest credit was claimed for their invention when the Finance Bill was first introduced. I would remind the Committee of what was said in a most glowing peroration by the Chancellor of the Exchequer on 31st May, when he referred to the stupendous effort that we as a nation were making and said: In this stupendous effort we have the admiration and sympathy of the world. I present this Finance Bill to the House as the instrument by the help of which we may discharge this task and fulfil our destiny."—[OFFICIAL REPORT, 31st May; Vol. 324, col. 712.] Practically the whole of the instrument is gone, and I would only like to express the hope that when next the Chancellor of the Exchequer publishes for the edification of his followers a collected volume of his speeches he will include the speech that he made on the Second Reading of the Finance Bill.

5.39 p.m.

Lieut.-Colonel Colville

The hon. Member for Dundee (Mr. Foot) scarcely put this matter into its proper proportions. He is no doubt aware that the total amount of money to be raised this year by the Finance Bill is over £860,000,000, and the amount that was to be raised by this tax is approximately one-fiftieth of that total. When the hon. Member, in order to suit the purposes of his speech, says that the greater part of the Finance Bill has gone because of the change to be made in this tax, I ask him to bear these figures in mind.

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

Clauses 16 to 28 ordered to be left out of the Bill.