§ (1) to increase to eight hundred million pounds the limit on the aggregate amount of the sums which may be issued out of the Consolidated Fund under Sub-section (r) of Section one; and
§ (2) to include in the expression 'defence services' the following civil services, namely, air-raid precautionary services and grants-in-aid of the Essential Commodities Reserves Fund."
Motion made, and Question proposed,
That this House doth agree with the Committee in the said Resolution.
§ 10.51 p.m.
§ Mr. Attlee
I beg to move, "That the Debate be now adjourned."
We are asked to embark on the Report stage of this very important Resolution at Ten Minutes to Eleven. It is one of the biggest financial Resolutions that have ever come before the House. It is true that we had two days' discussion, but we had no reply whatever to the Debate. The Chancellor of the Duchy of 719 Lancaster answered none of the questions that were put. He made an interesting little speech but on very important questions put by my right hon. Friend the Member for Hillsborough(Mr. Alexander) and others with regard to the expenditure of this money, and particularly with regard to profiteering, we were put off with the suggestion that those matters might be raised on the Defence Estimates. We are getting an increasing habit, first of all, of thinking that the Report stage of a Financial Resolution does not matter. Because it is exempted business it is thought that it can come on after Eleven o'clock. But it is not exempted business because it is unimportant. The tendency now is to regard that stage as of no importance and to put it on late.
The second growing tendency is that points of all kinds are put from this and the other side and no attempt is made by Ministers to answer them. There is a growing habit, instead of answering a Debate, for Ministers to give us a short speech which is apparently an anticipation of the kind of speech that they ought to make on introducing their Estimates. That is all that we get. It is no real reply at all. The habit is growing of treating the House with contempt and imagining that, the Government having a majority, they need not answer any questions. There was full warning on this Debate that the Opposition required answers to questions, and questions were put from all sides of the House but no satisfaction was obtained. I consider that we should have an important Debate like this started at a reasonable hour and not at Eleven o'clock. It may be said that the Bill is coming on, but we are likely to be treated in exactly the same way on the Bill as on the Resolution. It will be introduced in a speech, questions will be asked, and in the end the Minister will get up and make no reply whatever. We are getting too much of that.
§ 10.55 p.m.
§ The Chancellor of the Exchequer (Sir John Simon)
I am very sorry that the "Leader of the Opposition feels that there was any ground for complaint with regard to any part of the Debate in Committee on this Resolution. It may be that some of the questions raised were not dealt with, but I think it will be agreed that my right hon. Friend who replied had a great deal of ground to cover. As 720 regards the Resolution itself, I would ask the House to remember that we had two whole days' Debate on the subject during the Committee stage. I think I may be acquitted of not having stated the nature and substance of the proposals clearly and at length to the Committee. I certainly did my best, and I did not know that my statement was thought to be other than a perfectly straightforward one. My right hon. Friend the Prime Minister him self intervened on the second day, and dealt expressly with a number of very important matters which had been raised. The Debate went on over two full sittings——
§ Mr. Attlee
The right hon. Gentleman has said that the Resolution was very fully introduced by his speech, and I agree that it was, on the financial side; but we were discussing, in addition to the finance, the Statement of Defence in the White Paper, and the Prime Minister said practically nothing on the subject of the Defence White Paper, while the right hon. Gentleman who replied did not deal with any of the questions that were raised on the White Paper, either by myself and my colleagues or by Members in other parts of the House.
§ Sir J. Simon
I myself have gone through the Debate, and I really do not think there is any adequate ground of complaint as to the speech of my right hon. Friend at the end. We all know that he had to deal with a series of points one after the other, and, if there are any other points with which it is necessary to deal, he has the opportunity to deal with them here to-night. I regret to say I do not think we can agree to postpone this business now. It is admitted on all hands to be an extremely important provision that we are anxious to make——
§ Sir J. Simon
I hope that the House generally will not take that view. We are not dealing with this matter at an unexpectedly late hour. At Question Time to-day the Prime Minister was asked his reason for suspending the Eleven o'clock Rule and he said that it was for the purpose of business which has already been completed. We are in front of the schedule that we had in mind. The Chief Whip, during the evening, in order to meet the convenience of everyone, withdrew for to-day a whole series of 721 Estimates with which the Financial Secretary came here to deal, and here we are ready to proceed. I hope that the House as a whole will feel that we ought to go on now, and I assure the Opposition that there is no disposition or desire on my part to fail to deal with every relevant question.
§ 10.59 p.m.
§ Mr. Benn
I hope that the House as a whole will realise that this is not a point which concerns the Opposition only; it concerns every quarter of the House. I am speaking of the House as a whole. The control by this House of finance is really a very important thing. The Government have not been spotless in this matter. Twice recently they have been guilty of very severe breaches of the ordinary rule in regard to borrowing or spending public money. No doubt to-night they are correct according to the Rules of Order, but what the House has to consider is whether a certain reasonableness should not be introduced. Of course it is right for the Government, if it proposes, to act on this at 11 o'clock. I do not believe the Chancellor's argument that we have withdrawn some Supplementary Estimates was a good answer, because the Debate on the main Estimates was on points of real substance. The idea that exempted business means business that must not be entered upon until after 11 o'clock is a pernicious House of Commons doctrine. The exemption was given for exactly the opposite reason, but it has become the practice now, when a thing is exempted business, to imagine that that means you cannot take it before II o'clock or that it is a formal stage which can be treated quite perfunctorily.
The Chancellor says that we have had two whole days. The reason that financial operations of this magnitude are set out in so many stages is because the House has always realised that in control of loans and expenditure its power lay and in no other way. Therefore, it is no good saying we have had another stage. So far as the magnitude of the
§ borrowing power is concerned, here is a sum of 800,000,000 which I think is a tenth part of the debt for the Great War, and that is what we are giving the Government power to borrow.
§ Mr. Benn
It is true they have power to take a twentieth, and they have added power to take another twentieth so that they have power to take one tenth of the Great War debt. They propose to take it after 11 o'clock at a time when questions put to right hon. Gentlemen on those benches have not been answered. I think the Chancellor would be well advised if he conceded the request made by the Opposition and put the thing down for a reasonable time some afternoon, when no doubt we shall get answers to the questions and the matter will be disposed of in more peaceful fashion.
§ Mr. Garro Jones
May I supplement that by saying that in the points raised during the two days' Debate one or two of the Ministers referred to the Service Departments concerned. The Service Department Ministers change with such frequency that I cannot at the moment recollect whether any of the hon. or right hon. Gentlemen sitting on that bench belong to a Service Department. But to the best of my recollection I cannot see a Service Department Minister there. I see one there who used to be a Service Department Minister, but I do not recollect that even when he was responsible for the Co-ordination of Defence he was able to answer our questions in great detail. I am perfectly certain that now that he is responsible for the Dominions he will be of even less assistance to us. In those circumstances I suggest that is an additional reason why the Chancellor of the Exchequer should meet our request.
§ Question put, "That the Debate be now adjourned."
§ The House divided: Ayes, 85; Noes, 162.723
|Division No. 45.]||AYES.||[11.5 p.m.|
|Adams, D. (Consett)||Bellengar, F. J.||Davies, R. J. (Westhoughton)|
|Adams, D. M. (Poplar, S.)||Benn, Rt. Hon. W. W.||Dobbie, W.|
|Adamson, Jennie L. (Dartford)||Benson, G.||Dunn, E. (Rother Valley)|
|Adamson, W. M.||Burke, W. A.||Ede, J. C.|
|Alexander, Rt. Hon. A. V. (H'lsbr.)||Charleton, H. C.||Edwards, Sir C. (Bedwellty)|
|Attlse, Rt. Hon. C. R.||Cooks, F. S.||Fletcher, Lt.-Comdr. R. T. H.|
|Banfield. J. W.||Daggar, G.||Foot, D. M.|
|Barr, J.||Davidson, J. J. (Maryhill)||Gardner, B. W.|
|Garro Jones, G. M.||Leslie, J. R.||Silkin, L.|
|Green, W. H. (Deptford)||Lunn, W.||Silverman, S. S.|
|Greenwood, Rt. Hon. A.||Macdonald, G. (Ince)||Simpson, F. B.|
|Griffiths, G. A. (Hemsworth)||McEmce, V. La T.||Smith, Ben (Rotherhithe)|
|Griffiths, J. (Llanelly)||McGhee H. G.||Smith, E. (Stoke)|
|Hall, G. H. (Aberdare)||MacLaren, A.||Smith, T. (Normanton)|
|Harris, Sir P. A.||Mander, G. le M.||Sorensen, R. W.|
|Harvey, T. E. (Eng. Univ's.)||Marshall, F.||Stewart, W. J. (H'ght'n-le-Sp'ng)|
|Hayday, A.||Masser, F.||Taylor, R. J. (Morpeth)|
|Henderson, A. (Kingswinford)||Morgan, J. (York, W.R., Doncaster)||Tinker, J. J.|
|Henderson, J. (Ardwick)||Morrison, Rt. Hon. H. (Haskney, S.)||Tomlinson, G.|
|Hills, A. (Pontefraet)||Nathan, Colonel H. L.||Westwood, J.|
|Jagger, J.||Paling, W.||White, H. Graham|
|Jenkins, A. (Pontypool)||Parkinson, J. A.||Williams, E. J. (Ogmors)|
|Jenkins, Sir W. (Neath)||Pearson, A.||Williams, T. (Don Valley)|
|John, W.||Poole, C. C.||Wilson, C. H. (Attercliffe)|
|Jones, A. C. (Shipley)||Pritt, D. N.||Windsor, W. (Hull, C.)|
|Kennedy, Rt. Hon. T.||Quibell, D. J. K.||Woods, G. S. (Finsbury)|
|Kirby, B. V.||Ritson, J.||Young, Sir R. (Newton)|
|Lathan, G.||Seely, Sir H. M.|
|Lawson, J. J.||Sexton, T. M.||TELLERS FOR THE AYES.—|
|Mr. Whiteley and Mr. Mathers.|
|Adams, S. V. T. (Leeds, W.)||Furness, S. N.||O'Neill, Rt. Hon. Sir Hugh|
|Agnew, Lieut.-Comdr. P. G.||Gledhill, G.||Palmer, G. E. H.|
|Albery, Sir Irving||Gower, Sir R. V.||Perkins, W. R. D.|
|Allan, Col. J. Sandeman (B'knhead)||Graham, Captain A. C. (Wirral)||Petherick, M.|
|Anstruther-Gray, W. J.||Grant-Ferns, R.||Pilkington, R.|
|Aske, Sir R. W.||Gridley, Sir A. B.||Ponsonby, Col. C. E.|
|Astor, Viscountess (Plymouth, Sutton)||Guest, Lieut.-Colonel H. (Drake)||Raikes, H. V. A. M.|
|Astor, Hon. W. W. (Fulham, E.)||Guest, Maj. Hon. O. (C'ma'rw'll, N.W.)||Ramsbotham, H.|
|Barclay-Harvey, Sir C. M.||Hambro, A. V.||Reed, Sir H. S. (Aylesbury)|
|Beamish, Rear-Admiral T. P. H.||Hannah, I. C.||Robinson, J. R. (Blackpool)|
|Beaumont, Hon. R. E. B. (Portsm'h)||Haslam, Sir J. (Bolton)||Ropner, Colonel L.|
|Beachman, N. A.||Heilgers, Captain F. F. A.||Rosbotham, Sir T.|
|Boulton, W. W.||Hely-Hutohinson, M. R.||Ross, Major Sir R. D. (Londonderry)|
|Boyce, H. Leslie||Hepworth, J.||Ross Taylor, W. (Woodbridge)|
|Briscoe, Capt. R. G.||Herbert, A. P. (Oxford U.)||Royds, Admiral Sir P. M. R.|
|Brooke, H. (Lewisham, W.)||Herbert, Major J. A. (Monmouth)||Sanderson, Sir F. B.|
|Bull, B. B.||Higgs, W. F.||Simon, Rt. Hon. Sir J. A.|
|Butcher, H. W.||Higg, Hon. Q. McG.||Smiles, Lieut.-Colonel Sir W. D.|
|Cartland, J. R. H.||Holdsworth, H.||Smith, Sir R. W. (Aberdeen)|
|Cary, R. A.||Holmes, J. S.||Smithers, Sir W.|
|Cazalet, Capt. V. A. (Chippenham)||Horsbrugh, Florence||Snadden, W. McN.|
|Channon, H.||Hudson, Capt. A. U. M. (Hack., N.)||Southby, Commander Sir A. R. J|
|Chapman, A. (Rutherglan)||Hunloke, H. P.||Spens. W. P.|
|Clarke, Colonel R. S. (E. Grinstead)||Hutchinson, G. C.||Stewart, J. Henderson (Fife, E.)|
|Cobb, Captain E. C. (Preston)||Inskip, Rt. Hon. Sir T. W. H.||Stourton, Major Hon. J. J|
|Colman, N. C. D.||Jarvis, Sir J. J.||Strauss, H. G. (Norwich)|
|Colville, Rt. Hon. John||Keeling, E. H.||Stuart, Hon. J. (Moray and Nairn)|
|Conant, Captain R. J. E.||Lamb, Sir J. Q.||Sueter, Rear-Admiral Sir M. F.|
|Critchley, A.||Latham, Sir P.||Tasker, Sir R. I.|
|Croft, Brig.-Gen. Sir H. Page||Law, R. K. (Hull, S.W.)||Taylor, Vice-Adm. E. A. (Padd., S.)|
|Crookshank, Capt. Rt. Hon. H. F. C.||Lennox-Boyd, A. T. L.||Thomas, J. P. L.|
|Cross, R. H.||Lipson, D. L.||Thorneycroft, G. E. P.|
|Crowder, J. F. E.||Llewellin, Colonel J. J.||Tree, A. R. L. F.|
|Cruddas, Col. B.||Lyons, A. M.||Tufnell, Lieut.-Commander R. L.|
|Colverwell, C. T.||Mabane, W. (Huddersfield)||Turton, R. H.|
|Davidson, Viscountess||Mac Andrew, Colonel Sir C. G.||Wakefield, W. W.|
|Davies, C. (Montgomery)||MacDonald, Rt. Hon. M. (Ross)||Walker-Smith, Sir J.|
|Davies, Major Sir G. F. (Yeovil)||Macdonald, Capt. P. (Isle of Wight)||Wallace, Capt. Rt. Hon. Euan|
|De Chair, S. S.||McKie, J. H.||Ward, Lieut.-Col. Sir A. L. (Hull)|
|Dodd, J. S||Manningham-Bullar, Sir M.||Ward, Irene M. B. (Wallsend)|
|Donner, P. W.||Margesson, Capt. Rt. Hon. H. D. R.||Waterhouse, Captain C.|
|Dorman-Smith, Col. Rt. Hon. Sir R. H.||Marsdan, Commander A.||Watt, Major G. S. Harvia|
|Drewe, C.||Maxwell, Hon. S. A.||Wayland, Sir W. A.|
|Duckworth, Arthur (Shrewsbury)||Mayhew, Lt.-Col. J.||Wells, Sir Sydney|
|Dugdale, Captain T. L.||Medlicott, F.||Whiteley, Major J. P. (Buckingham)|
|Duggan, H. J.||Mellor, Sir J. S. P. (Tamworth)||Wickham, Lt.-Col. E. T. R.|
|Duncan, J. A. L.||Mills, Major J. D. (New Farest)||Wilson, Lt.-Col. Sir A. T. (Hitehin)|
|Elliot, Rt. Hon. W. E.||Mitchell, H. (Brentford and Chiswick)||Wise, A. R.|
|Ellis, Sir G.||Moore-Brabazon, Lt.-Col. J. T. C.||Womersley, Sir W. J.|
|Elliston, Capt. G. S.||Morrison, G. A. (Scottish Univ's.)||Wragg, H.|
|Emmott, C. E. G. C.||Marrison, Rt. Han. W. S. (Cirencester)||Wright, Wing-Commander J. A. C.|
|Errington, E.||Muirhead, Lt.-Col. A. J.||Young, A. S. L. (Partick)|
|Fleming, E. L.||Munro, P.|
|Fox, Sir G. W. G.||Nicholson, G. (Farnham)||TELLERS FOR THE NOES.—|
|Fremantle, Sir F. E.||O'Connor, Sir Tarence J.||Colonel Hope and Lieut-Colonel Kerr.|
Question, "That this House doth agree with the Committee in the said Resolution," put, and agreed to.
§ Question again proposed, "That this House doth agree with the Committee in the said Resolution."
§ 11.12 p.m.
I regret that the decision which the House has just taken has made it necessary for us to continue at this late hour the Debate on this very important Money Resolution. The fact is that the Opposition are completely dissatisfied with the attitude which has up to the present been adopted on the Government Front Bench by those Ministers who have essayed to reply to the Debate. I want to assure the Chancellor of the Exchequer that we have not the slightest complaint as to the manner in which he introduced the Resolution to the House. I think he discharged the duty which fell upon him of making a lucid and clear explanation of what it was proposed to do by way of powers from the Treasury. But in regard to the very important and serious issues which are involved in the purposes for which the money is to be devoted, we have been completely dissatisfied with the answers given on the points raised. We are not at all satisfied with the answers given as to the proportions of the expenditure in the next two or three years upon armaments which are to be made either through loans or taxation.
The point, no doubt, will be considered again—I feel sure it will be—by the Chancellor of the Exchequer in the light of what was said from both sides of Committee on a previous day. But I am persuaded that the Prime Minister, who seemed to think that there were large numbers in the House who had not fully grasped the significance of the figures which are included in the Resolution, has not himself really grasped the terrible weight upon the minds of large numbers of Members in this House of all parties as to the terrible burden which has to be faced. The Prime Minister said that the time may come, and that it is not very far distant, when we shall have to face a situation in which the maintenance costs per annum of the fighting Services cannot be met out of tax revenue; but you will have built up this debt. Therefore, the course you are pursuing in the finance of this matter cannot be justified. There is a great deal of misconception in the minds of some Ministers as to what may be accomplished at the present time by other processes of taxation to meet the immediate need.
726 I do not know whether the Chancellor of the Exchequer has the same high view that many people hold of the capacity, training and experience of Lord Stamp. Lord Stamp was a very able senior official of the Department over which the Chancellor of the Exchequer presides, and he has since become very influential in banking circles. I hesitate to say that he is a banker, after my interlude the other night with the hon. Member for the City of London (Sir A. Anderson). Lord Stamp has, however, become influential in banking circles and has had great experience as President of a railway company, and a director of other companies. I am interested in what he said on the question of taxation and borrowing a few days ago at Liverpool. He was reported in the "News Chronicle" on Saturday last as saying:It may be advisable to tax wealthy people heavily to prevent them from saving. The problem of the excess of savings for investment was occupying the minds of economists all over the world. If savings were poured into the banks and other receiving institutions and could not get out again, a large part of the purchasing power of the people remained idle, thus creating unemployment.He went on to say that he thought the way out was two-fold:First, not to allow the wealthy people to save, by taxing them heavily, and then using the money for consumable things, such as unemployment relief. Secondly, to make new purchasing power by Government borrowing.In the circumstances in which that speech was made by Lord Stamp, it might have been well for the Chancellor of the Exchequer to consult with him and similar authorities as to the methods which could be adopted in order to tap those excess savings which are at present troubling the economists, in order to provide an adequate contribution of tax revenue for meeting the very heavy cost that the nation will have to bear in connection with the armaments programme. I have also been interested in reading in the economic newspapers the comments on the Government's proposals when they were first issued for raising this money by loan. Lord Stamp's point of view was supported indirectly by the kind of comment one got in the "Economist." No doubt there was a great deal to be said for the Chancellor financing the armament programme by way of loan, because it clearly will be possible to raise a large part of the loan by Treasury Bills, and the market needed more Treasury Bills 727 at the present time. I dare say it is time that one of the reasons the market needs more Treasury Bills is because the banks and other institutions have so many surplus funds in their hands that they need an outlet for investment and an adequate return.
That is one of the reasons which enable the Government at the present time to issue short-term money bills at such abnormally low rates of interest. It is quite certain that a volume of surplus funds are there and that a great part of it can be tapped now for the armament programme without injuring in any way the general economic position. They are only too eager to lend hundreds of millions at the Treasury bill rate of 10s. or 11s. per cent., and I contend that a great deal more of this burden, which is being put upon posterity, and which it may perhaps have to try and meet at a time when the circumstances are much more serious than they are to-day, can be met by direct taxation. I have my own views, and they may sound a little hard if I give voice to them. I have my own views why the Government as a whole have decided to take this particular method of financing the armament programme. I have always said in the country and in this House that the Tory Government never forgets its friends.
The real fact is that the Government do not wish to upset their friends by raising taxation more than they can possibly help. But there is another reason, I think. Some hon. Members may have read some revelations made in a Sunday newspaper about a fortnight ago, and this may be one of the other reasons. It seems that the party coffers of the Conservative party are in the view of the Prime Minister much too low to encourage them to go to the country in a general election. Great credit is taken for the Munich Agreement, which, apparently, is one of the reasons why this huge increase of armaments is required. The Prime Minister takes great credit for it, but he was careful to let the country know that, of course, on no account would he cash in electorally on his achievements at Munich; he would not dream of having a general election.
The Prime Minister would not cash in by having a General Election. Well, he did not cash in in that way. How did he do it? I have here a letter sent out by the Prime Minister from No. 10, Downing Street, on 15th October, 1938, a few days after the Munich Agreement. It is addressed to the treasurer of the Conservative party. It reads:My dead Marchwood——" [Interruption.]I have heard him called "Penny"——Suggestions have been made recently, financial and otherwise, to acknowledge my efforts"——There is a wonderful growth in the use of the personal pronoun by the present Prime Minister——in the cause of peace. I do not want any such acknowledgment, but what I have set my heart on is the general appeasement of Europe, and the best way of ensuring this is to see that the National Government is strengthened——
By Jove, it needs it!————and is of a lasting duration. Therefore, if any of my friends desire to do me a kindness, they could do nothing which would appeal to me more than to subscribe to the funds of which you are now treasurer, for ensuring the continuity of the National Government.
§ Mr. Speaker
I would remind the right hon. Gentleman that he is getting a long way from the Money Resolution.
I am seeking to show that one of the reasons the Government do not wish to increase direct taxation is that they may keep in with their friends and replenish the party funds. I am quoting the Prime Minister's letter for that reason.
I have already stated that, in my view, one of the reasons the Government do not wish to increase direct taxation at the present moment is that they do not want to offend the specially wealthy friends of the party, with whom they wish to cash in on the results of the Munich Agreement. I have heard it said from more than one quarter in the last few months that since that letter was sent 729 out, representatives of the Conservative party have waited upon those who are engaged in armament production with a gentle hint that if they get orders from the Government, they ought to contribute to the funds.
§ Mr. Speaker
When I called the right hon. Gentleman to Order just now, he was getting a long way from -the Resolution before the House.
I have not been so far able to recognise myself as out of Order. If you tell me that I am out of Order, I shall, of course, accept your Ruling, but I have endeavoured to keep within the Rules of Order as carefully as any Parliamentarian can.
§ Mr. Speaker
I think the right hon. Gentleman had better not dwell too long on the subject with which he was dealing, which is scarcely relevant to the Resolution.
A hint from you, Mr. Speaker, is sufficient to cause me to pass from the subject to which I have been addressing my attention, and I will only add that in my view, with £580,000,000 to be raised for armaments in the coming financial year, and with £350,000,000 of that at present to be raised by loan, there is every reason why there should be more taxation on those who can afford to contribute to the relief of the burden on the country at the present time than is postulated in this Money Resolution.
There are ways and means which the Chancellor could adopt. My hon. Friend the Member for Bishop Auckland (Mr. Dalton) made some suggestions last Monday, and we have had no reference in any of the replies from the Government Benches to those suggestions. We have some idea that direct taxation would be improved in its yield by the adjustment of death duties, though I know there is a great deal of objection to that being done. I saw in the "Sunday Express" the other day a list of Ministers who seemed to have a very fair share of this world's goods, and one particular Minister was quoted as having come into an estate of 730 £5,000,000, but by reason of the formation of a company he was able to escape with a death duty on that estate of only £27,000. There are many other cases of that kind which could be cited and which could be put right by the Chancellor of the Exchequer by an Amendment of the law, and enable him to get a far higher yield of direct taxation for dealing with this armament programme than he is at present proposing to do.
According to that newspaper it was a case of the registration of a company and not a case of personal inheritance.
The hon. Member asks whether I think that newspaper tells the truth, but I leave that to him to say as a supporter of the National Government.
I am sorry the hon. Member for Belper (Mr. Wragg) is so very much annoyed, but perhaps he will take the matter up with the peer who is the proprietor of that paper.
If hon. Members are not to be allowed to quote statements made in the journals which support members opposite, I do not know where we shall get in our Debates. I should have thought it was common knowledge, whatever the actual details of a certain case may be, that the present situation is that you can escape a heavy share of Death Duties by capitalising assets under the registration of a company.
I do not mind interruptions, but in view of the importance of the Resolution I intend to state my case, and if hon. Members want the Debate to go on much longer I do not mind their interruptions.
§ Brigadier-General Sir Henry Croft
Is not the right hon. Gentleman's demand that there should be more direct taxation in direct conflict with the speech of the hon. Member for Bishop Auckland (Mr. Dalton) who said that all taxation must fall on the working classes? That was also the dictum of Lord Snowden, which has always hitherto been accepted?
The hon. and gallant Gentleman must read again the Official Report of my hon. Friend's speech before he puts that forward. If he reads the speech again he will find that my hon. Friend argued strongly that there ought to be more direct taxation and an adjustment of the basis of the Death Duties. I turn from that and come to the point on which the Opposition feel very strongly and in respect of which we have received no satisfaction. That is the question of how the money that we are asked to give authority to loan is being spent and whether the whole of it is really necessary. We say that the money is not being spent efficiently because a great part of it is being wastefully spent, and we say that if it were not wastefully spent we should not require such a large sum. I put this point because we are convinced that since the Government commenced their rearmament programme there has been a growth of widespread profiteering; and that the Government, who are responsible for asking the country for this great sacrifice, have taken no really effective steps to deal with the situation. The first step the Government ought to have taken was to seek powers to ascertain the true facts.
I do not think that a more startling submission has been made to the House on a matter of this kind than that which was quoted by my hon. Friend the Member for South Shields (Mr. Ede) last Monday with regard to the Machine Tool Makers' Association. I would not be any less generous than others, I hope, in paying tribute to bodies of manufacturers like the machine tool manufacturers for what they have accomplished in technical skill and the output of what was required in the last two or three years, but the price that we have had to pay for it is another matter. When we are told in the Blue Book report of the Estimates Committee that that Association, in this time of national need, when we are going to the constituencies asking the rank and file to come into voluntary service, refuses to disclose its 732 true position in regard to contracts undertaken for the Government, then I think it is a grave state of affairs.
It is only two or three weeks since one of my colleagues brought in a Consumers Bill, in which we asked the House to give the Government power to investigate the accounts of firms and, where necessary, fix prices. That Bill was resisted, but here, where it is a case of serving the needs of the country, we have evidence put before the Estimates Committee of the House by responsible and senior Civil Servants that these manufacturers are not only making high profits but refuse the Government the right even to investigate their books and ascertain the facts. I am obliged to my hon. Friend the Member for Stoke (Mr. E. Smith) for reminding me that they have actually refused to accept the methods of the Government's technical advisers as to costings in this matter. Before authority is given for this loan I want to know what steps the Government propose to take to bring such firms as that to book. It is about time that some notice was taken of our questions and we received some answers.
§ The Chancellor of the Duchy of Lancaster (Mr. W. S. Morrison)
Will the right hon. Gentleman excuse me? I was talking for a moment with my right hon. Friend. I should be greatly obliged if he would, for the sake of clarity, and to enable me to comply with his request, repeat what it is that he wishes information upon.
The question I put was, What efforts do the Government propose to take to remedy the situation which I have outlined? My hon. Friend the Member for South Shields quoted the other day the report of the Estimates Committee on the refusal on the part of the Machine Tool Makers' Association to give information or to accept certain Government costings' systems. We are entitled to know that before we report this Resolution. I come next to the kind of case which I quoted on Tuesday. I referred in detail to the published accounts at the period of the interim dividend announcement of the Bristol Aeroplane Company. I made a prophecy last November, and there was an issue, after I had made that prophecy, of 75 per cent, of bonus shares—and that for the sake of, if I may use their own phrase, 733avoiding confusion for the future in the public mind as to the ratio of profits earned by the company in relation to its capital.They issued at par 2,400,000 new shares, 10s. units, at the rate of one share per share held by the shareholders. The price of their shares on the market that day was 58s., and the ultimate discounted price, owing to the duplication of the capital, has never been less than roundabout 23s. In that one year the Bristol Aeroplane Company issues 75 per cent. bonus capital and pays a 7½ per cent. interim dividend on account of what is clearly going to be the same rate of dividend for the full year. They give to each shareholder a clear 130 per cent. at market price on the haggling of the new issue. What steps are the Government going to take to prevent that kind of financial jugglery out of the nation's needs?
That is not by any means the end of the story of profiteering. Let me take the case of the Hawker Siddeley Aircraft Company. I am not at all sure that, in some respects, it is not in a worse position from this point of view of criticism than even the Bristol Aeroplane Company. As I understand its balance sheet—and as there seems to be a mixture of holding and subsidiary companies, it is difficult to sort out exactly how, to use the common expression, the "bunce" is spread—it seems clear that the profits have been going up very well. For the year 1936, it earned upon its capital, 44'4 per cent, and it paid 30 per cent. and a capital bonus of 10 per cent. In 1937, it earned 47'7 per cent. on its ordinary capital and paid 32½ per cent. plus a bonus of 10 per cent., or 42½ per cent. But it will be observed that the42½ per cent. was paid on a capital which had been inflated by the 10 per cent. bonus of the year before. In 1938, the percentage earned upon the increased capital was 46.7 and the distribution, by way of dividend and bonus, was 42½ per cent. What steps do the Government propose to take to protect the taxpayer against exploitation of that kind, in relation to the use of the money which they are asking us to vote to-night? We are entitled to an answer to that question before we vote them the authority to borrow the money.
I come now to the question of that part of the loan which is to be spent upon air raid precautions. I got no satisfaction 734 the other night when I raised the question of the situation with regard to one of the principal commodities that will be required for protection against air raids, namely, cement. I have taken great care in the last two or three years, as a member of the Government's own committee on the prices of building materials, to look in much detail into 1he inquiries which are being conducted about the cement industry. I have to-night information and matter with which, if the draft report to the Minister were not marked "Private and Confidential" I could make great play. I do not wish to make that play with it, and all I can say is that the cement industry is "doing very nicely, thank you." If I keep away from the information which I have in connection with the Government's committee of investigation, I can give two examples which I noticed yesterday. One is that Associated Portland shares are standing at 73s., a very good anticipatory price, showing the view in the share market of what the distribution is likely to be in the cement industry in the coming dangerous position of the country. If we take the case of the Tunnel Cement Company, we find that twice in the last few years it has issued heavy bonuses, one of them of 100 per cent. and it is still paying very heavy dividends upon inflated capital. Again, these heavy dividends are being paid after it, along with other cement companies, has created very large sinking funds for redemption of debenture and other capital. I saw yesterday that the shares of this company were standing at about 42s. or 43s —a very nice anticipation of the higher profit likely to be earned because of the need of the nation in this matter.
I wish I could see evinced upon the Government benches at this time something like the spirit that was in the heart and was expressed by the voice of the late Mr. Bonar Law. When he stood at the Box in the second year of the War and spoke of his own feelings of shame, of what he felt as a shareholder in companies which were benefiting out of the country's need. It moved him, at that time, in the face of the country's need to propose extraordinary measures to this House of a financial character to avoid exploitation of the general public when all the public were being asked to volunteer their service for the good of the State. It is a very serious thing that we 735 should not have had anything like that spirit evinced at any time in these Debates by any of the Ministers who have been addressing the House on these matters.
It is not only with regard to aircraft and cement companies. Whichever way we look into operations in connection with the armaments programme I find the fingers of the capitalist industry being dipped into the public purse and the exploitation of the citizen. If I turn to naval shipbuilding, iron and steel, engineering, the supply of munitions, I find the same rise year after year for the last three years in the profits, in the bonuses, and very often, therefore, in the effect of higher raw material prices in other industries which are not engaged in armaments at all. For these reasons I feel that we have been completely justified in asking the House not to be wanting to wander away to their beds simply because Ministers decree that we have to discuss this important matter after 11 o'clock, but demanding in the interest of honest decent control of the public weal that we should have answers to our questions.
What are the Government going to do to prevent the public being exploited now, and increasingly exploited in the future? It may well be that within a comparatively short period, although we all pray that it may not happen, you will be asking men to give their lives for their country. You have no right to permit this sort of thing to continue at a time when you are asking other men to make the great sacrifice. The policy that we complain about was laid down by the Prime Minister three years ago when I put a question to him about profiteering and he said, "How does the right hon. Gentleman think we are going to get our armaments if there is to be no profit?" There will be lots of service required without profit and there is no reason at all, if you want to serve the nation, why you should not serve it without profit.
§ 11.54 p.m.
§ Sir P. Harris
The right hon. Gentleman has made a very serious indictment on the issue of profiteering, and certainly it is a pity that his charges were not made at an hour when they would secure more publicity. We have a grave responsibility as custodians of the public purse to see that there is security that 736 the taxpayer is getting an adequate return for the call that is being made upon him. The Liberal party have repeatedly demanded proper safeguards in the placing of armament contracts. On our initiative a Royal Commission was appointed, and in due course it made certain recommendations, which were ignored, although the Commission consisted of members nominated by the Government. That makes the responsibility of the Government greater. They said they were satisfied that adequate safeguards existed under the present system. We also pressed on the Government the importance of setting up a Ministry of Supply, not mere to expedite production, but to improve the machinery for placing contracts on a satisfactory basis and at prices satisfactory to the public.
Ordinary industry and trade are going through very bad times; hundreds of persons engaged in the ordinary normal work of the country are suffering from a general trade depression; and the complaint is made that a few privileged industries, concentrated on munitions production, are making exceptional profits. In view of this we are justified in pressing the Government for satisfactory safeguards to protect the public from exploitation in its hour of need, when we have to work against time to bring our armaments up to the standard required. The Prime Minister and the Government have repeatedly taken cover under one or two pregnant sentences in the Report of the Estimates Committee, but that will not satisfy the country The nation is conscious that terrific profits are being made by certain companies, and we have a right to demand from the Government some assurance that the public are not being exploited. During the War there was a Ministry of Munitions and a real attempt to safeguard the public, but even under those conditions terrific profits were made during the last three years of the War. When we are voting this money and entering into large commitments, not only for the present but for the future, a serious responsibility rests on the Government to secure that part of that money shall not be wasted in giving exceptional profits to privileged people.
§ 11.59 P.m.
§ Mr. Ede
The position has changed since the Debate in Committee started on Monday, because yesterday and to-day 737 there appeared on the centre page of the "Times" two articles, running to four columns, by the Financial Editor. They conceal under much economic jargon the theory that it is right that this £350,000,000 should be raised by loan, because the country is in such a bad way that no other course is open to the Government, but that if the country were prosperous it would be proper to charge this sum to revenue. That is very different from what the Chancellor said in introducing his proposals on Monday, and I hope we shall be told to-night whether the Government accept this view of the Financial Editor of the "Times." On Monday I drew attention to the Report of the Estimates Committee with regard to the Machine Tools' Association. The best answer I could get from the Financial Secretary was that their attitude was one which we must all deplore, and when I suggested that he might stiffen "deplore" to "condemn" he asked me not to interrupt him. I think the word "deplore" shows a quite wrong sense of proportion. I should have thought that no condemnation from the Government benches——
§ Captain Wallace
I did not hear at the time the word that it was suggested I should substitute for "deplore." I thought that as it was getting late I would ask leave to go on with my speech.
§ Mr. Ede
I understand that back benchers on the other side of the House are only to make an audience. We are expected to be like the children of 50 years ago—seen but not heard. So far as I am concerned I can assure the right hon. Gentleman that I will not trouble him with my presence when he is addressing the House again. I do not interrupt a speech which is being made by a Minister unless I have a serious suggestion to make. I want to allude to another subject which was brought before the Estimates Committee. We were told by the representatives of the Service Departments that one of the component parts of the gas respirators was being manufactured under conditions which revealed, when the price was investigated, a profit that they could not accept. The reference is found in the evidence for the 20th June, in Question 2771, where I asked:Is there any requirement by which a firm, which is found to be making an excessive profit, can be removed from the contractors' list altogether?738 The answer was:I think we should probably remove him from the list of contractors, but I think he would have to be called upon, first of all, to justify his price. He might, of course, have some justification to plead. It would be a strong measure to take unless he was obviously"——and that is a word carefully chosen by the Civil Servant who is answering the question—endeavouring to cheat us in some way. Of course, we have had cases where we have spotted a price in. the costings on a subcontract that we thought was excessive, and the sub-contractor has been called upon for an explanation of his price. He has given what, to him, is a first-class explanation of his price, but what it means is that he is inefficient, and the thing we do in a case like that is to prevent him being employed again.We went through a series of questions which it is not necessary for me to read now. They bring me to Question 2781. I asked him what happens with regard to an order on which an excessive price has been paid to a sub-contractor who is not a subsidiary firm. If he is a subsidiary firm his costs can be examined; if not, the Government have no right of access to his books. The witness replied:We have had to accept it, because it is a real cost in his account; he has actually paid that price.I asked:If that is the way you look at it, what is there to prevent collusion between the subcontractor and the main contractor for the sub-contractor to charge an excessive price, and after you have paid the main contractor's account, for that excessive price to be shared between the sub contractor and the main contractor?This is the extraordinary answer I received:I do not think: anyone could prevent that. That is what I mean by 'cheating.'Then the Civil servant put me in an awkward position. He began to ask me questions. He said:That is immoral, is it not?I do not know whether he thought I was an authority on immorality. We reached this extraordinary position, that the Civil servants themselves say that unless there is evidence of cheating, by which is meant some collusion between main contractor and the sub-contractor, some excessive price in the accounts will not be followed by the work being taken away. The country will not be satisfied with that. I had the privilege the other night of being on the same platform as the Minister of 739 Labour. He made the statement, when he was appealing fop volunteers for national service, that all the contracts being placed by the Government for munitions were being placed under conditions that prevented undue profits being made. Right hon. Gentlemen have no right to go on platforms and appeal for voluntary service from men and women in quite humble walks of life on the assurance that they have taken steps to prevent undue profits being made in the munition factories if, all the while, evidence such as I read on Monday and to-night remains on the records of the Estimates Committee and they have taken no steps to give the Service Departments statutory powers to deal with these cases.
How was it found out that the machine tool firms were getting an undue profit? One firm inadvertently allowed its books to get into the clutches of the Costings Department, and it was because that firm allowed its books to get into their hands that inquiries were commenced, and at once the Association advised all the rest of its members not to allow their books to be submitted. Clearly that is not the way in which the Government can expect to get any form of national unity in the present state of affairs. The Financial Secretary to the Treasury used some words which to me as an ex-soldier sounded startlingly familiar. He said that we were all so glad at being demobilised that we forgot to do to the profiteers in the late War what we said we would do to them when we were on the other side of the Channel. I was glad to know that he was prepared to approach this subject from the point of view of the ex-service men, with the ex-service men's threats still in his mind. I recollect that that was nothing to what we were going to do to the regimental quarter-master sergeant when we got back on this side. What was to happen to the row of cottages which we knew he had managed to build out of what he had taken from us would hardly bear repeating.
The right hon. and gallant Gentleman knows the extent—it is clear from what he said the other night—to which the proved cases of profiteering in the late War affected the spirit and morale of the troops and the way in which they regarded these things. After all, we understand that we are not going on with this 740 armaments programme for fun. Those armaments may have to be used, and I am sure that the right hon. and gallant Gentleman will agree with me, that the men who lived through the last War will see that their sons are not sacrificed in the circumstances that prevailed when we were on the other side of the Channel. I appeal to the Government to take such steps now while they can do it—and they will have the whole House behind them—to make quite sure that those who aim at doing well out of the next war may be stopped, so that there shall not be the same feelings of misapprehension and of disgust that assailed so many of us during the last War.
§ 12.14 a.m.
§ Sir Stanley Reed
I should like to associate myself entirely with the main arguments of the right hon. Gentleman the Member for Hillsborough (Mr. Alexander) and the hon. Gentleman the Member for South Shields (Mr. Ede) that the Government will give this matter their most serious and earnest attention. I am not in the least insensible to the difficulties of the Government at a time like this. They have to use every effort to get a speedy production of munitions, and they have to look for the full co-operation of those firms which are engaged in that craft. I am aware that the Treasury has taken steps to exercise control over costs. I am concerned—and this House is concerned—not with the steps which have been taken, but with the results, and those results are not in the steps taken by the Treasury but in the balance sheets which are the common property of stock exchanges.
When you get one group of aeroplane factories which admit that they are almost entirely engaged on national work, and when they say that they have taken out of their constituent companies sufficient to pay 42½ per cent. dividend, nothing more need be said in this House as to the extent of the evil which has grown up. Every sensible person agrees that those in the armaments industry must be treated differently from those engaged in ordinary work because of the temporary nature of their work, but nothing can justify, at a time like this, a holding company saying that they have taken sufficient out of their constituent companies to pay a 42½ per cent. dividend. That is not merely a question of profits, it is a supreme moral 741 issue and I want to express the profound uneasiness which is being felt that that sort of thing is poisoning and falsifying a great national effort to which we want to devote our supreme and unrestricted attention.
§ 12.17 a.m.
§ Mr. Garro Jones
I am sure that the House, and particularly hon. Members on this side of the House, will have deeply appreciated the remarks made by the hon. Member for Aylesbury (Sir S. Reed). It is not that he has said anything new about this matter, because we have been endeavouring to bring these charges home to the Government for three years, but the fact that a further contribution has been made from the other side of the House tends to show that this is not a party issue and that there is substance in the statement of the hon. Member that there is widespread feeling in the country that this is a matter which requires immediate and overdue attention. It would appear that there are only a few persons who are not aware of the seriousness of these charges and those persons are on the Government Front Bench. There is not a single Defence Minister who has not replied to criticisms by reading a garbled version from the summarised Estimates and putting that forward as a complete answer to the charges made, when a further perusal would have shown that this profiteering takes place on a large scale throughout every branch of munitions supplies to the Government. For my part I do not regard munitions manufacturers as the principal culprits in the matter. They are indeed to blame, and I believe that the financiers behind them are even more to blame, but the principal responsibility rests on the Government, whose task it is to prevent these operations being carried out.
On Wednesday night I was able to read, not, unfortunately, while the whole House was present, extracts which show sub-contracts which represent 30 per cent. of the supplies of air frames, at any rate to the Air Ministry. They show that there is no effective check whatever on the prices charged, and that was admitted by the Civil servant who was answering these questions before the Select Committee. The reading of this publication took me 14 hours, but it will well repay reading and if the Chancellor of the Duchy of Lancaster would spend a few hours on 742 reading it, we would not be compelled to make repeated speeches week after week on this subject in the House. The financial correspondent of the "Evening Standard" the other day cited the profits which had been made by some of these companies and issued a warning to some investors not to expect too rapid and continued a rise in these shares, because one of these days there will come a disarmament scare—not an armament scare, mind you, but a disarmament scare—and that would result in a tumbling down of these prices. That is the spirit in which a great many financial operators on the Stock Exchange look upon this matter, and it is a conclusive proof that our main reason for anxiety on this matter is that it develops a vested interest in favour of the continuance of the profits of the armaments industry.
I want to read one or two matters which have been quoted in this report by way of correcting the Prime Minister, who boasts that nothing needs to be done. The first question is that of bulk purchases of supplies. It has been rejected in principle by the Treasury and by the Departments concerned on the ground that it diminishes the contractual responsibility of the contractor, and, secondly, that the charges of bulk storage might diminish any savings which might be effected by these bulk purchases. To me this appears to be an astonishing argument because is it to be imagined that the charges for storage are paid for out of private pockets? Every one knows that the charges for storage are added to the cost before they are sold to the Government, with a considerable profit on top. As to the contractual responsibility being diminished, that is an answer which is repudiated by the fact that in many departments of armaments and in food supply the Government have found it necessary to make these purchases. It is one of the most astonishing things that when the Prime Minister announced 2½ years ago that he intended to embark on a rearmament programme costing £200,000,000 in five years that announcement was made without any steps being taken to lay in supplies of raw materials. The natural consequence was that every raw material speculator in the City of London and elsewhere saw that this would lead to a marked appreciation of the prices and we are paying on that score alone 20 to 30 per cent. more than if 743 the Government had taken reasonable precautions beforehand.
A further point to which I desire to draw attention is as to the best way of getting at the true figure of this profiteering. I contend that the Government should discontinue the practice of refusing to publish actual prices paid for various armament commodities. I have questioned the Chancellor of the Exchequer many times and he has told me that it has been the practice for 40 or 50 years or so. I have no doubt that that practice was retained when conditions were very different from to-day, but since that time the whole system of private competition in tendering for armaments has been completely eliminated and everybody knows to-day that if an armaments manufacturer is asked to quote for a certain commodity the first thing he does is to meet his friend and ascertain what his friend is going to quote.
Therefore, the only persons who do not know what is paid are the public, who will have to pay. There is no longer any safeguard in keeping these things secret from the House of Commons. No good purpose is served by doing that. The present Chancellor of the Exchequer has carried that practice even to a stricter degree of operation than it was carried during the Great War, when the Chancellor of the Exchequer of that time allowed it to rest within the discretion of each Service Minister as to whether he published contract prices or not. There is a further reason why that would be extremely valuable. We are now going into the American and Dominion field for armaments. If the Government would dare to publish the prices which they are paying for some very important comparable munitions obtained from the United States with the prices that are paid in this country, despite the lower labour costs and other lower costs in this country, that alone would provide us with material for many a long debate.
I will give one more example of the need for publishing the prices. Frankly, I am not prepared to give the name of the contractors I have in mind, because these contractors are apprehensive. The Prime Minister has set up a Panel. He thought they would take their complaints to it, but they are not prepared to run the risk of making public complaints. This is a case in which an important 744 article of equipment was required. A friend of mine who happens to manufacture this article was asked to send in his tender that very day, as it was extremely urgent, and he sent in a tender for about eighty of these articles at a price of approximately £100—it was not a very large order. The next day, to his astonishment, he received no fewer than fifteen inquiries for precisely the same article, and on looking down the list of those who had written to him, he found that they were all retailers of this commodity. Replying to one of them, he said that he had already tendered for it, and therefore, he would not be able to quote them a price on which they could add their 33⅓ per cent. Whereupon these retailers raised a big row and threatened that unless he withdrew his quotation to the Government, they would withdraw their custom from him, and he was compelled to withdraw his quotation.
But the lesson to be drawn from that is that the person who sent out these requests to tender from this Department sent out to one manufacturer and to about 15 or 20 retailers. He merely went through the book. The man who was supposed to be an expert in finding out who were suppliers of these commodities did not even know enough about the trade to know who were manufacturers and who were retailers. If we could get the precise prices that are paid for shells, airframes, Rolls Royce and other engines, and other engines, and different types of guns, and compare them with the prices paid during the last war, and the prices paid by different manufacturers and in different parts of the world to-day, we should have a valuable guide as to the extent of this profiteering, and no public interest would suffer.
I want now to say a word or two about the McLintock Agreement. There is a further practical proposal by which we could ascertain the effects of the Government's proposals. I am going to give the House some very interesting information about what happened before the Select Committee on Estimates on that subject. On page 250 it is dealt with, and the matter was first raised by the hon. Member for Stockport (Sir A. Gridley), a supporter of the Government. He asked the Chairman of the Select Committee:—Whether you would agree that we might ask the witness if we could have circulated to 745 us a copy of the McLintock Agreement. It is an agreement which deals with procedure with regard to the placing of contracts … and it might be of great service to us in understanding exactly how the Department works.The representative of the Department answered:—I am quite sure it would be treated as a confidential document; we would have no objection whatever to circulating it.Then followed a considerable exchange of questions and answers, after which a further question was asked by the hon. Member for Cardigan (Mr. O. Evans),a member of the Liberal party. He returned to the charge and asked:—Is there any objection to having that Agreement circulated to the Committee?I would like to say here for the information of hon. Members who have not given close attention to this that the agreement gives the prices which shall be paid over a field of vast magnitude in the supply of aircraft, and therefore it is of great importance. The hon. Member for Cardigan having asked this question, the Civil servant said:—May I put it this way, Sir? If any particular Member wished to have a copy, it could lie supplied.The hon. Member for Cardigan went on:It is a most illuminating and important document.The Chairman then took occasion to intervene. I do not see him present here tonight, though I think he might well have been, because this is a subject which affects him closely and we appreciate the work he does on this Select Committee. He said:In the Public Accounts Committee the other day we were raising the same point …. If it would help anything …. perhaps a copy could be supplied"—that was, in confidence. There was a lot more exchange of argument along that direction and finally the Civil servant stated:It is the normal Government contract practice to regard these documents as confidential.But the Members of the Select Committee, including the hon. Member for South Shields (Mr. Ede) pressed very strongly for this document to be supplied and, finally, under the strongest pressure, it was agreed that a copy of the documents should be supplied to the Members of that Committee only.
This was very far from being an attempt to maintain the obsolete practice 746 of keeping contract prices secret; this is an attempt to extend that practice to keep the methods by which these prices are fixed secret—an entirely new departure. I ask to-night explicitly for an assurance from the Chancellor of the Exchequer that that document shall be made available to every hon. Member. I can assure him that no public interest would suffer by agreeing to that course.
The last point which I desire to make is to be found in a. reference to page xxix, where—despite the assurances which the Prime Minister gave us that all was well—the report says:Your Committee are informed, moreover, that a review of the procedure and its results by a small Committee is under consideration.That evidently suggests a doubt. We have heard no more about the proceedings in that small Committee, and I should like to ask whether it has made any report and what has been the result of its deliberations.
In conclusion, I do want to ask this. I have a strong suspicion that the Government do not take a serious view of this expensive procedure in regard to armaments, that is, the Government as a whole. Let me state the reason why I think that. First of all, you have the Prime Minister assuring us there is no need for any concern whatever and quoting a comprehensive and garbled extract. I have heard many people say that the important thing is to get the armaments; it does not matter what we pay for them. That is an extremely dangerous frame of mind to get into. I know at least one armaments manufacturer who publicly states he cannot help making excessive profits; he cannot help it, because of the system in vogue. Unless this thing is tackled there will be a tremendous public outcry, and in my view there is only one major effective way to tackle it. First of all, to publish prices, and, secondly, to take State control and ownership of these industries. That is being done in Germany and Italy. It is asked "How has it happened that Germany and Italy could rearm with such tremendous and quicker effect than we have been able to do?" It is no use saying it is on account of the drawbacks of the democratic system. There has been no facts stated to show why this Government should not have taken control of the armaments industry. Unless we are prepared to take more effective measures in that direction 747 we shall always find ourselves lagging behind those against whom we are making these defence preparations.
§ 12.37 a.m.
I have only two points to put to the Minister, in order that he may at least give us information as to what is taking place in regard to these particular questions. My first question is to ask if he will give us some information with regard to what steps the Government are taking to deal with rings of employers who maintain prices on a non-competitive basis. In reading the report which has been so extensively quoted to-night by various speakers, I was struck by the questions put to one of the civil servants. He was asked:Do you experience many cases where the price of a particular commodity appears to be fixed by a 'ring.' You have told us you do, in some cases?The answer was "Yes." Then he was asked:That is, in building materials. Do you find in other things, besides building materials, to any large extent?The answer was:Yes; we have the 'ring' problem ever with us. Of course, we have already talked about steel; that is a 'ring'; boilers is a 'ring'; and Portland cement. … Salt-glazed ware for drain pipes; Angola shirting; full-dress clothing is, in fact, a 'ring,' because it is in the hands of only four firms.Further on, when the same civil servant was asked more questions with regard to rings on a non-competitive basis, he also told the Committee that field telephone cable and turbo-alternators were within the ring. Then this civil servant was further asked:Do you consider that the powers of Government Departments require to be strengthened in any way?He was asked this by the Chairman who is well known as a prominent supporter of the Government. His reply was:I think you can only test that by what we are able to do and how far we are able to cope in any way with this absence of competition.That is the position of any Government that allows itself to be in the hands of rings of private employers who base their prices on a non-competitive basis. I would suggest, at least, we should receive some indication on this important matter as to what steps the Government are taking to see to it that these methods so 748 far as Government contracts are concerned, are swept away and that rings are not allowed to quote non-competitive prices with regard to nationally-necessary materials.
My second point is to ask if the Government have contemplated with regard to expenditure, particularly with the building industry, a further survey of the firms in the country who can capably and efficiently undertake Government work. I have had some experience acting on behalf of Scottish contractors in trying to have Government contracts placed in Scotland where certain Government schemes were being carried out and certain Government buildings were being built. I find that there is an inclination in Government departments in London to try to keep away from the travelling necessary, or perhaps the extra labour incurred in placing these important contracts with firms further away from Whitehall. I believe there is a tendency for Whitehall officials and Whitehall departments to deal almost exclusively with firms who are much nearer to them and much more accessible than firms placed further away.
I may say that during the past few months there has been a considerable improvement with regard to that particular question, and that other firms have been brought in. But I still believe, it is my opinion, that there are a considerable number of firms in the country who have asked for and do not receive the opportunity of quoting. During the September crisis one of the biggest Government contracts in Scotland—I refer to the Bishopland Ordnance Factory—was issued out to a firm in London and not a single Scottish firm was allowed to tender in quotation. I made my protest in other ways, and made representations to the Department, and I am glad to say that some of these representations have met with some success. I am very anxious on this particular point, and I do ask the Minister to try and arrange for a more careful survey of those firms who may be able to assist the Government. I believe the more firms there are of that description invited to tender, the better will be the price and efficiency guaranteed for Government work. Those are the two points I wished to raise with the Minister, and I would be very grateful for a clear, definite and emphatic reply to them.
§ 12.43 a.m.
§ Mr. W. S. Morrison
At this late hour of the night, perhaps it would be the wish of the House that I should proceed direct to the main topic of the discussions on this stage of the Financial Resolution. It is true that many other matters have been raised apart from this question of costs, but I believe it would be the desire of the House that I should say what I have to say on that matter, and issues directly germane to it that have been put forward. Perhaps I might be permitted to discuss one or two outlying questions that have been mentioned. May I say this to start with? I think the whole House will agree with the point of view expressed by hon. Members from both sides of the House—that it would be a very bad thing if the impression were wrongly created that there is wide-spread profiteering. I am sure it is a thing we should all regret as damaging and harmful to the great national effort the country is making. If there are cases of the sort, let them be speedily ventilated and examined. No one is more anxious than the Government to secure that for this great sum we are spending the public shall receive full value. I believe that this is a question on which there is no difference on any side of the House. It is quite natural that Members of the Opposition should seize every opportunity they can in order to raise this question, but I can assure them and the House that the incentive to the Government, which has to meet the bill, is no less strong in securing that the utmost value is obtained.
Following from that I might be permitted to make this observation: Recognising the discouraging effect which the feeling that there is profiteering would create, hon. Members will, I think, agree with me when I say that while every case should be investigated, it would not be a proper thing to deduce from one or two isolated instances, even before they have been examined, a general state of affairs which is very far from the case. If any hon. Member took that course he would take a very grave responsibility upon himself by trying to deduce from one or two instances a state of affairs which is quite remote from the truth. Over the whole field, as has been repeatedly said, there is control, and strict control, and every effort is made to improve that control from time to time, and to ensure in 750 the light of experience that there are fresh mechanisms, if necessary, for attaining the common purpose of the whole House, which is to stop any suggestion of this sort of practice.
The hon. Member for North Aberdeen (Mr. Garro Jones) drew my attention to the Report of the Select Committee on Estimates. I would point out to the House the general statement on this question of checking excess profits in the Estimates Committee's Report, which is a document of all parties, and, therefore, of no parties, of a Select Committee of this House. Their general statement is:Your Committee are glad to learn that manufacturers and contractors in general have shown themselves ready to co-operate fully with the Government departments in the steps considered necessary. The three Defence departments and the Treasury appear to be fully alive to the importance of keeping a detailed watch upon costs and profits and of improving and strengthening their methods as experience dictates. Your Committee are informed moreover, that a review of the procedure and its results by a small Committee is under consideration.The hon. Member for North Aberdeen asked, had this Committee made any report? At this stage it was stated that the appointment of such a Committee was "under consideration." The Committee has now been appointed and has been busily at work for some time, and it is probable that it may be found desirable to keep it in permanent session in order that any case that does arise may be reviewed by it in order to prevent any abuses of this character.
§ Mr. Garro Jones
This is an additional Committee. Of multiplication of advisers no good counsel results. What sort of Committee is this? We have already an innumerable number of Committees. Has this Committee any special authority? Who sits on it?
§ Mr. Morrison
The Committee is a Committee of officials. Its purpose is directed towards this investigation—Is there any way of improving the check and the control? My first point would be, do not let us lose sight of the whole of the general field over which control is carried out, and over which profits are not excessive. Perhaps I may be excused for feeling a little surprised when I was addressed by the right hon. Gentleman for Hillsborough (Mr. Alexander) upon the question of cement. I do not think 751 that that is to any important extent a Defence question.
§ Mr. Morrison
It can be used for defensive purposes, but I am informed that the consumption of cement for Defence purposes is an insignificant fraction of the total. These profits are not being made in the main, or even to any significant extent, out of purchases by the Government, but from private trade. Because in one aspect of national Defence it is necessary to use some cement, and may be in the future, that does not justify the right hon. Gentleman in asking me to deal with cement to-night. He might as well ask me, because the Army and Navy consume a great deal of food, to be responsible for the movements in food prices.
The Government stated last August that there was not going to be any great demand for cement and sandbags, but within a short time we found that the price had gone up to seven or eight times the amount.
§ Mr. Morrison
The right hon. Gentleman is alleging the case of cement as a case wherein the Government, in its purchases of this material, is not taking proper precautions, and, in order to try to prove that, he instances the profits of the cement companies. I tell him—and it is an indisputable fact—that their profits are made to a negligible extent from Government contracts, and chiefly from ordinary and general trade. I am quite certain that the Committee which is concerned with cement in its general use, namely, as a building material, will investigate this matter very closely and as the right hon. Gentleman opposite is a member of it the matter will soon come to a head.
The Committee has reported. We have been waiting for more than two months for the Report, to see the light of day. You have spent, not thousands, but millions, in the last three years in providing new barracks, new roads, new military roads, new aerodromes, and you have helped to bear a large part of the additional overheads for cement combines for military works. Do not run away from the fact.
§ Mr. Morrison
Surely the House will be with me when I say this: The Com- 752 mittee has not reported to me but to another Minister. Surely the proper method of proceeding in Parliament, if criticism of that kind is indicated, is to make that criticism to him, and not to me. I mentioned cement for a wider purpose.
§ Mr. Ede
May I draw the right hon. Gentleman's attention to the fact that the Civil servants themselves brought Portland cement before the Estimates Committee as one of the cases in which they had had difficulties about prices. You will find the reference on page 234 in answer to my hon. Friend the Member for Coatbridge (Mr. Barr). You will find that in Question 2958 and in the answer to Question 2960:—With regard to portland cement the action we took was to get it considered by an interdepartmental committee known as the Committee on the Prices of Building Materials, and they are now taking it up with the trade.Apparently that was referred to the Committee, on which my right hon. Friend sits, at the instance of the Service Departments because of difficulties they were encountering with regard to prices.
§ Mr. Morrison
I do not see that that differs in any way from the general conclusion I have mentioned. All that the intervention of the hon. Member for South Shields (Mr. Ede) has done is to show that I have stated the case accurately. Why I refer to cement at all is to make one very important point which is frequently lost sight of in the course of these discussions. I have stated that by far the main amount of profits on cement is not created by Government purchases but by private purchases, and that the profits in cement are made in private trade and not in trade from the Government. What is true so overwhelmingly in the case of cement is true of many of the firms whose conduct is often called in question. By merely looking at the balance sheets of the firms you cannot say how much of the profits come from Government orders and how much from their ordinary, legitimate commercial trade. Cement, I consider, is an extreme instance of that, and of how ignoring that can rob this discussion of much of its value. There are other cases where the same point must be borne in mind.
Another matter referred to by many hon. Members was the question of machine tools. The position with regard to that 753 was accurately stated by the Financial Secretary to the Treasury when he spoke on Monday night. The position is that discussions with this trade are in progress. The Government take the line that they ought to remit the costings, and we hope we may achieve some progress in that direction. I need hardly point out that at present we are working in a free country where these compulsory powers, which everyone wants to apply to someone else and not to himself, are not in existence. We have, as the Estimates Committee points out, done a very great deal by methods of co-operation, and we hope to solve this problem in that way. I was glad that the right hon. Gentleman, in introducing this subject, did pay tribute to the way that they came forward and extended their business, much to the benefit of the nation. In the meantime there is this check: with the consent of the machine tool-makers in this country themselves the duty on imported machine tools is removed in cases where they cannot be immediately supplied in this country.
§ Mr. Morrison
The right hon. Gentleman need not get so peppery. The meaning of the statement is this: the truth is that these duties, as the right hon. Gentleman is aware, are dealt with by the Import Duties Advisory Committee. When there is an application for the removal of the duty it is generally the case that the industry whose interests may be adversely affected opposes its removal. In this case the machine-tool makers do not oppose.
Many hon. Members have referred to costing and have thrown doubt upon the value of the costing of a process or an article after it has been manufactured. The point has been made with apparent force many a time that to send an accountant into a factory after a contract has been terminated to go through various processes and arrive at the cost is like locking the stable door after the horse has been stolen. But there are two kinds of costings. This is an important point. The costing already mentioned is not the only sort of costing by which checks can be made. Beside the costing by an accountant after the contract has been completed, there is a form of technical costing 754 which is sometimes done in advance by men who have technical knowledge of processes involved, and they are in a position to say when the contract is being discussed "The process which you propose to adopt for manufacture of this article is too costly. It can be equally well done by a cheaper process." This costing in advance may be made a condition when it is a question of a contract being made. Great economies are achieved by technical costings in advance. But examination of costs after manufacture is not without advantage. After the contract is terminated and goods delivered, a costing investigation is made by an accountant. If that investigation reveals that there have been unduly expensive methods employed or some evidence of waste, which ought to have been excluded from the process, then the chances of that firm getting a contract again are to that extent diminished and the experience gained from that investigation is used to check the tenders subsequently submitted by all sorts of firms. So the costing system, on which a certain amount of scorn has been poured, provides a double check which is efficiently practised over a wide area of production.
May I ask whether this system is based primarily on the cost of the actual process or is a percentage of profit allowed on the estimated costs?
§ Mr. Morrison
I could not answer precisely as to the exact figure. My impression is that it varies with different articles, because there is the question of overheads, affected again by the volume of the work. All such matters are taken into consideration in order to arrive at a price——
§ Mr. Morrison
If the right hon. Gentleman formulates his question precisely I have no doubt he will get a reply.
The other matter to which I would refer is what is, perhaps, the main cause of this special discussion, namely, the case of the Bristol Aeroplane Company. I was asked for a further illustration. The reason I did not eater into it on Tuesday night was this: It is purely a matter for the Air Ministry who made the contract, and the Secretary of State for Air intended to deal with it in his speech on 755 the Air Estimates. I do not want any question to arise about ministerial responsibility in these matters. If the wrong Minister answers questions, you may get confusion in the business of the House. It is far better to address criticisms to the Minister responsible. In this case my noble Friend the Minister for the Co-ordination of Defence did not make this contract and is not responsible for its execution. The Secretary of State for Air is, and the convenient time to criticise the administration of a Department is, by age-long custom of this House, on the Estimates.
May I ask whether we may expect in a Debate on the Defence Loans Bill which follows this Resolution that the Service Minister will be included among those to speak for the Government, so that we may check the real status of spending which we are expected to support in this Bill? How is it he is not here and answering the criticisms?
§ Mr. Morrison
I intend to answer on this matter to-night if the right hon. Gentleman will allow, and I hope that after I have explained the matter there will be no further trouble about it.
§ Mr. Morrison
The reason I deal with it, by consent of my right hon. Friend the Secretary of State for Air, whose responsibility it is, is that I am anxious, if I can, to dispose of matters which have given rise to a good deal of discussion, and because this matter has been used by the right hon. Gentleman the Member for Hillsborough and others as a sort of peg on which to hang a general attack—if you can hang an attack—on armaments profiteering. That is a general matter to which I might devote attention. The fundamental fallacies underlying the remarks and criticisms made by the right hon. Gentleman the Member for Hills-borough in regard to this company is his failure to distinguish between the nominal capital of the company and the real capital that is employed in its operation.
§ Mr. Morrison
If the right hon. Gentleman does know it, he gives remarkably little evidence of his knowledge. The Government's attitude on this question of profiteering in general terms is that 756 what we want to ascertain is whether the capital employed in a business has been rewarded on a scale that is reasonable or unreasonable; in other words, to bring it down to a concrete case, whether those who supply the capital for the work of the company are remunerated at an excessive or a reasonable rate for their service in supplying the capital. That is what we want to get at. Surely if you are asking yourself a question whether a particular investor is remunerated adequately and reasonably, you measure the return which he gets, not against the nominal capital of the company, but against the money which he actually subscribed in hard cash and gave to the company to carry on.
§ Mr. Morrison
I am quite aware that those who, as it is called, get in on the ground floor, frequently get the advantage over the ordinary investor, but that is not the case we are considering here. I hope the hon. and learned Member will accept that. If you buy a nominal £1 share in the market and pay £5 for it, because that is the real market price, and if the company declares a dividend of 50 per cent. on its nominal capital, the capital yield to you is 10 per cent. The argument as to the justice of your reward should proceed on the fact that you have received 10 per cent., not 50 per cent. That is the fundamental error which I conceive to underlie the whole of the argument of the right hon. Member for Hillsborough.
§ Mr. Morrison
Neither £5 nor £1 applies in actual figures. I have only given an example. I will give the actual figures in a moment.
§ Mr. J. Morgan rose——
§ Mr. Deputy-Speaker (Sir Dennis Herbert)
I must ask hon. Members to leave it to the Chair. The hon. Member is a new Member and perhaps that is the reason he does not understand that when the occupant of the Chair rises he must sit down immediately.
§ Mr. Morrison
I am afraid I also did not sit down, Sir Dennis, as I had my back to you, and I tender my apologies.
The £5 was merely taken as an example to deal with the case of a company——
§ Mr. Jagger
Does the Minister agree that if the capital of the company were written down to two shillings per £1, the rate of dividend would be proportionately increased?
§ Mr. Morrison
What matters is that the reward depends on what you are paying in and not upon nominal capital, whatever it may be. The hon. Member may have an opportunity later to elaborate his point.
The right hon. Gentleman mentioned the Bristol Company and he says in the current year they have given a 75 per cent. bonus issue and have given every shareholder an opportunity to make on the market another 130 per cent. I say that analysis is really misleading if the facts are understood. What happened with regard to this company was that when it was floated as a public company the issue of its shares was made at a very considerable premium.
Surely the Minister means not when it was floated as a company but when the capital was increased?
§ Mr. Morrison
Yes, when it became a public company. It was a private company originally and increased its capital later. When that was done the public who subscribed to that company, paid on its extension of capital a sum which approximated to the market value at the time.
§ Mr. Morrison
I think it was 1935 or 1936. That value was about 53s., so what the investor received for his 53s. which he handed over was a piece of paper saying that he had a 10s. share in the company; but he had parted with 53s., and the whole argument is that when you assess what he received for his money you measure that not against the 10s. of the share but against the 53s. he actually subscribed to the company.
May I ask the Minister to look at the figures again? In fact the public issue was made not at 53s. but at 758 £1 for each 10s. share. I have the figures in my hands. The Minister may have a Treasury brief that is not as well-informed as this.
§ Mr. Morrison
I may say on this matter we can never get far forward if we start quarrelling about different figures.
§ Mr. Morrison
I give the figures as they are given to me. I have not first-hand knowledge of this matter but I have given figures. If the right hon. Member wishes to challenge them he may, and he can bring up the matter on a later stage on the estimates.
§ Mr. Garro Jones rose——
§ Mr. Morrison
I really think I have given way on several occasions. It is very difficult to keep up a connected argument if one is constantly interrupted, and we must approach a matter like this with a certain amount of patience and reasonableness on both sides of the House. The first point I want to make clear is that in measuring the reward the investors in this company achieve, it is important to realise that you must measure what they get out of the company not by the nominal value of the share, which is merely 10s., but by the actual hard cash they have taken out of the bank and put into the company. I suggest that the basis for most of what the right hon. Gentleman said has disappeared.
I really must protest. The right hon. gentleman is essaying to answer a factual case. I put it that his answer does not really tell us what we believe to be the truth. We must really be allowed to tell him what is the truth.
§ Mr. Morrison
There are two sides to the question, otherwise, naturally, we should not be debating it now. I have given my side in order to describe as well as I can the various transactions of this company which have led to much misunderstanding and unfounded allegations as to its accounts and profits. Perhaps I might read a very short extract which appeared in the "Financial Times" dated 13th December, 1938, at the time of this transaction of which the right hon. gentleman 759 speaks; namely, when the opportunity of applying for new shares was being given to the shareholders of the company. I will give this quotation because it is the most succinct method of expressing what the exact position of the shareholders is. It says: —Holders of Bristol Aeroplane shares should on no account neglect their opportunity for selling or applying for the proportion of new shares to which they are entitled at 10s. per share".
§ Mr. Morrison
13th December, 1938.
It goes on:—They receive, of course, three new shares for every four shares they now hold, and, in addition, they have the right to apply for one new share at 10s. in respect of every share that they now possess. These new shares stand at 11s. 6d. to 12s. and can be sold, if the allottee so desires it, at 11s. 6d.May I interrupt the quotation here to draw attention to what I conceive to be the consequent fallacy of the right hon. Gentlemen's argument? I have drawn attention to the confusion between the nominal and real capital, and the second point, which is equally important and which equally vitiates the right hon. Gentleman's argument, is the question of bonus shares. The main point of his argument is that these bonus shares have the same value as the original shares, but it must be obvious to anyone who knows the least thing about stocks and shares that, other things being equal, if a company issues bonus shares to every one of its shareholders and there is no change in the commercial prospects of the company, the price of the shares falls to half because there are twice as many shares on the market, if other circumstances have not changed to combat the unalterable laws of supply and demand for these shares. The fact is that the old shares to-day stand at 22s. which is very different from the 53s. at which they were originally bought. The fact that there is an increase of this character in the number of shares, without any corresponding alteration in the prospects of the company, entirely vitiates the right hon. Gentleman's argument.
§ Mr. Morrison
I am telling the right hon. Gentleman where he is wrong. 760 [Interruption] I myself should accept a similar argument without continual interruption.
§ Mr. Morrison
I will tell the hon. Member in general. They were a small concern in years before when there was not very much business of this sort for them. When they got these orders they had to get capital for expansion. They could get it by an issue of debentures or, if their credit was good, they could get it by borrowing, or by issuing shares at a premium to the shareholders or to the public—by saying, "We will give you a 10s. share for 53s. if you will pay it." The obligation of the company was only 10s. but the 53s. was the actual money which was used for expansion and improvements. At this time the operations of this company were expanded on a big bank overdraft, and it used a part of the premium on the shares to pay off this overdraft and the rest for expansion. It was all used by the company as capital.
Now I will resume my interrupted quotation—interrupted by myself, I mean—irom the "Financial Times," which gives the total result of this transaction. I left off where it said that these new shares stand at 11s. 6d. to 12s. and can be sold, if the allottee so desires it, at us. 6d. It goes on:—Having regard to the standing of the Bristol Aeroplane Company, a better plan would seem to be to take up the new shares and pay the 10s., disregarding immediate fluctuations and looking to the future for reward. Assuming that 100 Bristol Aeroplanesthat means shares, not machines——were bought at 53s. when a purchase at that price was recommended here, the holder's position is:—
The quotation goes on to say:—
£ 100 shares at 53s.cost … … 265 75 shares free … … — 100 shares at 10s.cost … … 50 275 shares cost … … 315The present price of Bristol Aeroplane old shares is 22s. ex all, so that, roughly, the previous buyer at 53s. is about £12 10s. down at the moment.A fair dividend estimate is that the new capital will receive 10 per cent. If so, the shares, at 22s. would give a return of £4 11s. per cent. on the money. This yield is 761 certainly modest for investment in an Aircraft share, but the Bristol Aeroplane Company is in the first flight of the Companies connected with its industry, and at 22s. the shares can hardly be regarded as overvalued for permanent investment.To-morrow is the last day for paying the 10s. which is due on the new shares issued for cash.So far from having received a benefit to the extent of some 200 per cent., as quoted by the right hon. Gentleman, some shareholders are out of pocket by the present arrangement, according to the "Financial Times."
If the right hon. Gentleman will give way, let me say that half of the stuff he has quoted from the "Financial Times" has nothing to do with the real facts. The new issue of Bristol Aeroplane shares was not made at 53s. The public who subscribed for them paid £1 for a 10s. share. They paid this £1 because the profit of the private company before that was at the rate of 25 per cent., and they were willing to pay this £1 because that would give 12½ per cent. The whole premium was paid by the company into a reserve fund. I have quoted the balance sheet of last November and, if the right hon. Gentleman will ask his advisers to look up the facts, he will see that when they had got it in the reserve they decided to capitalize £900,000 of the £1,200,000 and issue it In bonus shares. The people who took up shares got three for every four shares held, and, in addition, they were then offered new shares at 10s. each which they have been selling on the market at 23s. I challenge anybody in the Treasury to dispute those facts.
§ Mr. Morrison
The right hon. Gentleman may challenge them, but he seems rather in the position of Ajax defying the lightning. My information is that the issue was not at a pound, but 53s. Of course, I was not there, but let me pass on to other considerations. [Interruption.]
§ Sir H. Croft
An hon. Member accused me of having shares in various companies which I have not got at all. Am I not entitled to protest? He is accusing everybody of corruption on this side. I do not wish to delay the proceedings, but to say I have no shares whatever in armament firms. I hope the hon. Gentleman will withdraw that remark. [HON. MEMBERS: Withdraw!]
§ Mr. Morrison
If we may pass on, I should like to deal with some important aspects of this case which well justifies the care expended upon it by the right hon. Gentleman. There is the effect of expansion on profit earnings. The Air Ministry is in possession of information as to the actual sales by this company over a period of years both in respect of Government and non-Government work. The information is, of course, confidential and cannot be disclosed, but I can indicate that the information establishes conclusively that the percentage of profit has fallen progressively and to a large degree with the increase of turnover. Over the last three years the rate has dropped progressively, and to such an extent that in the last year it was very little more than half the profit which was earned in 1935. The turnover for the current year will be considerably increased, and the Air Ministry is taking special measures to safeguard the profit position in relation to this increased turnover. It would not be fair, in talking about this company, to neglect to mention to the House a fact of which most of us are aware, namely, the high excellence of their products and the marked efficiency of output in progress at their works. I am sure the House would not wish, while checking every conceivable case of undue profits, to say that a reasonable remuneration or reward should not be given for efficiency and speed of deliveries.
§ Mr. Garro Jones
Nobody makes any charge against the efficiency of this company's products. They are well-known throughout the world, but in purporting to present to this House a picture of the profits made by this company is it fair to leave out that enormous transaction under which the company, or holder of the shares, sold to an intermediary firm of stockbrokers at about a pound, and the stockbrokers sold at enormously increased profits, the total profit made by one firm alone running into six figures? Ought not the Treasury, or whoever briefed the right hon. Gentleman to have particulars of that?
§ Mr. Morrison
I do not think so. After all, the stockbroking side of the matter—as to what happened between the company and the public and the stockbrokers on the other hand—is, I think, not relevant to the argument that this company is making excessive profits. What we are discussing is whether or not the Air Ministry in the case of this company is exercising proper control to secure that the money is not squandered on excessively high prices. It seems to me that what I have said goes to show that that is what they are doing. The stockbroking side of the thing does not affect the Air Ministry control over prices. Nothing I have said about this matter is intended to suggest, and I hope the House will not take it to mean for a moment, that profits should be allowed to become excessive for any armament-producing firm whatever, even though they are working at the highest level. It is intended to proceed to a review of these matters, and to secure as far as possible that there is no waste at all of public money.
There is only one other aspect of this case with which I wish to deal fairly fully. I must apologise for the time I have occupied the House, but I would like to make my explanation as full as I reasonably can. There is this tendency to ignore non-Government sales. I referred to that in a general way in dealing with the cement question which is outside my own province, but many firms in the aeroplane world have considerable earning resources outside their Government contracts. Therefore, until you can really relate the profits of a firm to the prices it is charging the Government, you have to know how much of those profits are derived, for example, from selling aeroplanes abroad, and how much from Government 764 work. The only thing I would say, in conclusion, is that I hope I have shown the House—I do not believe the right hon. Gentleman accepts this version of it——
§ Mr. Morrison
I did not use such an adjective about the right hon. Gentleman's representations of the case, although I am sure that my feelings about his case and his feelings about mine are probably, on the whole, identical. I would only end by saying I am quite satisfied that the Air Ministry are watching this business very carefully. They have always borne these considerations very carefully in mind, and the Secretary of State hopes to deal with the matter when he presents his Estimates to the House at a later stage.
§ 1.39 a.m.
§ Mr. Pritt
I would like to deal with a few of the many things the right hon. Gentleman has said. In particular, I would like to deal with the argument that because shareholders have paid for their shares more than a nominal value of the share, first you must wholly ignore the nominal value of the share in any consideration of the matter, and, secondly, that if a man has paid—I think the figure was £5—for a £1 share and can distribute a 50 per cent. dividend you really ought to regard it only as 10 per cent. on that man's money, and, therefore, nobody has done anybody any wrong. I suppose there is not a night school in the country, or a workers' educational association class, or an elementary school in economics, that would not turn out, as utterly incapable of ever learning anything, a gentleman who put forward that piffling argument for two seconds anywhere. Just consider the results of it for a moment. It means that shareholders who bought at par, £1 per share, and got 50 per cent., are gross profiteers. Then individuals who come in later, inherit grandfather's money, and have to buy these in at £10, are really only getting 5 per cent. There ought to be a subsidy for them. Those people who bought at the bottom of the slump for 2S. are profiteers of the worst possible type.
§ Mr. Spens rose——
§ Mr. Pritt
I am not giving way. I am sorry. Further it means this. If you get a Government which every stockbroker 765 and swindler can trust never to stop profiteering, the annual profits of every armament concern will be so immense that people, instead of buying in at £10 for a £1 share, will buy in at £50 for a £1 share, giving for some a true working profit of 1,000 per cent. but only, it is true, to people who have to pay for the privilege for being in on the swindle. I never heard, even from a fiery economist, such utter drivel in all my life. The drivel is made worse by this consideration: No one is charging the individual shareholder with separate profiteering. No one has suggested from this side of the House that what the Government ought to do is to run round looking for shareholders who have bought themselves in at a low price and made too much money out of it. We do not want to get home so near to one individual relative to that. The charge we make is that the Government are paying too much for their aeroplanes and munitions and other things, because they do not control the profits of the companies which supply these things. Consequently what happens to the Bristol or any other aircraft company is most material in so far, and only in so far, as it shows whether the Bristol Aircraft Company is making a very unexpectedly large amount of money on its operations. It is perfectly fair to make some comparison between the total capital in the business, and it is perfectly fair to say that very often the capital embarked in the business will not be of the same value as the nominal value of the shares when originally issued. But when you are considering, as my right hon. Friend was, the amount of money earned and distributed by a company as evidence of whether the company is making too much out of the Government or not, it is nothing to the point to say that it is all right, because the shareholders had to pay such a lot for the chance to get the swag, and, therefore, they are really getting only 10 per cent. That is really too childish.
Then the right hon. Gentleman, dealing with bonus shares, pointed out what is perfectly true, that if you merely issue bonus shares and double your shares, and say, for the sake of simplicity, that they have the same nominal value, that operation will, of course, halve the market value of each share. But the right hon. Gentleman destroyed his argument. He sought to draw from that by adding the words, "if you do that without any 766 corresponding change in the prospects of the company." Companies generally have one or two motives for giving bonus shares. One is that if you create a lot of bonus shares, the simpler-minded, seeing that the profit is only 20 per cent. instead of 50 per cent., think you are only a small swindler instead of a big one. But another reason for issuing bonus shares is to keep your nominal capital within some reasonable distance of the true value of the capital embarked in the business and issue the bonus shares in order to keep pace with the corresponding change in the prospects of the company. One feature of this company, as of others, it that however often you go on multiplying your shares by issuing bonus shares, they will stand in the market at figures substantially above their nominal value.
The right hon. Gentleman seemed for a moment to be indicating that one of the methods of raising additional capital was to issue bonus shares without charging for them. I am sure that he cannot really have meant that. Then the right hon. Gentleman said that the percentage rate of profits of this company had steadily diminished as the turnover had increased.
§ Mr. W. S. Morrison
I am sure that the hon. and learned Member would like to know what is in my mind. I meant the percentage of profit to turnover.
§ Mr. Pritt
That was in my mind. The percentage of profit to turnover has fallen with the increase of turnover until, in 1938, it is only half what it was in 1935. The simplest of us knows that if you get a company doing a business on a moderate range with a moderate turnover and with its presumably moderate overheads to meet, it may win a percentage on gross profits which may sound quite large to the people who think in terms of five per cent age and do not realise the difference between gross and net profits. But as soon as the company's turnover shoots up the overheads remain almost stationary, some absolutely stationary. Any hon. Member of this House with a knowledge of industrial activity would be able to show the House without a moment's hesitation that if the X company in 1935 was doing extremely well on a percentage of profit to turnover which we may call Y, and if in 1938, with a turnover four or five times 767 as large it was getting a percentage rate of turnover one-tenth of what it was before, it would still be making enormous profits. When we are told by the right hon. Gentleman, to show how miserably poor this company is, that on its immense turnover of 1938 it was getting scarcely more than half of what it was in 1935, he is giving the House one concrete reason why this company is making such enormous profits so that some shareholders in the City can turn over in watered capital and still leave the company bright and happy, thank you.
The essence of all this is that the right hon. Gentleman the Chancellor of the Duchy of Lancaster trots out a series of excuses of which the best is bad and the worst infamous. We are told we ought not to worry about this company, that there is really nothing in the matter. It is rather like the figures of the unemployed being so explained away that one almost bursts into tears at the shortage of labour. But the question is, what are the Government going to do to see that the Bristol Aeroplane Company does not continue to make excessive profits? I thought the right hon. Gentleman the Chancellor of the Duchy of Lancaster was going to sit down without telling us what the Government were going to do. He has told us. The Government are going to do everything they can to secure that there shall be no waste of public money. At last, we can go to bed, happy in knowing that one more problem has been added to the things receiving the earnest and undivided attention of His Majesty's Government.
Let us, however, test it in this way. Has there not been continuously through all the time of this great and magnificent expenditure on appeasement, the most anxious consideration on the part of the Government so that there shall be no waste of public money? Mr. Baldwin promised us several years ago that there should be no waste of public money, no profiteering and, incidentally, that there should be no armaments. But the Government are watching and going to secure that there is no waste of public money. Presumably, they have been doing that all the time that these people have been buying and selling and getting bonuses on their shares. The right hon. Gentleman the Chancellor of the Duchy of Lancaster promises that the Government will 768 go on watching. I would like to insult so feeble a promise, but as I have not sufficient invective to meet the case, I will content myself by saying that it is on a par with the argument that the shareholders are not profiteering because some of them did not get in on the ground floor.
§ 1.54 a.m.
§ Mr. Poole
I do not claim to be a specialist on the matters discussed in this Debate to-night. But one hardly needs to be a specialist to appreciate the merits of the case put up from this side of the House and the reply from the Minister. It seems elementary that if the Minister's defence were that, if a man paid 53s. for a £1 share, of necessity he was not making an excessive profit, the reverse must obviously be true that a man who secured his £1 share at 5s. was doing much better than could be reasonably expected. The right hon. Gentleman the Chancellor of the Duchy of Lancaster made me think that all the people engaged in munitions manufacture were philanthropists and doing the work for love rather than from any other motive. It does seem to me as a new Member that, after the case built up from this side of the House, it would have been far better if the Minister had said "There does seem to be a case, and the best thing we can do is to examine all the evidence brought forward and if the case is substantiated I will assure the House that action will be taken." But there is no denying if the accounts of armaments' companies are studied, that excess profits are being made, and being made largely out of Government work.
§ Mr. H. Strauss
Was not the Minister's point that these high prices were paid for the shares, not by persons buying from other shareholders, but by persons buying from the company? If the shares are bought at such a premium from the Company, surely the hon. Member will realise that the Minister's argument has substance. I agree that if the Minister was referring to a man buying from another shareholder then what the hon. Member says would have greater validity.
§ Mr. Poole
That does not alter my view on the matter one iota. But what I want to point out is the great irrelevance of the speeches of two members of the Government on this matter of assessment of profit. We have had the Chancellor of the Duchy of Lancaster 769 stating that the method of assessing profit must be on the capital of a company, but on Monday night the right hon. Gentleman the Financial Secretary to the Treasury said:It will probably be agreed by the Committee that whatever rate of profit is regarded as reasonable must be calculated on the capital emploj'ed."—[OFFICIAL REPORT, 20th February, 1939, col.. 164, Vol. 344.]That is not the line which has been taken by the Minister to-night. The capital employed is the value of the plant, the raw material and the wages employed on the job. The Government cannot have it both ways. You cannot assess profit on Monday by reference to plant, materials and labour and then say on Wednesday that that is not the assessment of whether the profit is excessive or not. The Government cannot come down on both sides of the fence, and I hope that someone will tell us on which side they are coming down to-night.
I have been interested for some years in what has been happening in the cement industry. I know something of the ramifications. The Minister told us to-night that we must not assume that because the cement industry is making colossal profits, it is making them out of the Government and out of Government contracts. I am prepared to concede that to the Minister, but if the cement industry is making 40 or 50 per cent. and the Minister says that the Government are satisfied that it is only making 5 per cent. on Government contracts, then the cement industry is being allowed to soak the public to a tremendous degree in every other field. But the Government refused a few weeks ago to accept a Consumers' Bill which was designed to protect the general public. Apparently the public are now to be thrown overboard and placed at the mercy of the cement combine in order that the Government may have an excuse for saying that there are no excessive profits being made out of armaments work as far as cement is concerned.
Again, the Minister said, of course, profits might have been made but not having been made on government work. The Government cannot be challenged on this issue. Is not the reverse true? Is it not a fact that many firms might reasonably have been making a loss on their ordinary work and re-couped this over and over again on schemes of government 770 work? Let me give an illustration. I quote the figures from memory, but I think they are substantially accurate. Take John Brown's. In 1933 they made a loss of £50,000, and that was when they were working, not on Government work but on their own initiative. If my memory serves me correctly, in 1937 their profit was £500,000. That means that they made £50,000 loss when they were doing their own work, and when they did Government work they made a profit of £500,000. The Minister cannot have it both ways. An argument which cuts one way also cuts another. I think the case is made out, and I wish the Minister could find it possible to say that as there seems to be a case, he will take it and examine it, and if it is proved he will act. I think that would satisfy the House more than the lame excuses which have been made.
§ 2.2 a.m.
§ Mr. Leslie Boyce
I think I can fairly claim to have had considerable experience of the administration of substantial engineering companies in the last ten years, although I have not been executing government contracts. I am opposed to profiteering in any form, but I have had considerable difficulty to-night in following the debate, which seems to have been full of irrelevancies. If you are to determine whether a company has made excessive profits or not you must consider those profits in relation to the capital employed in the company. If a company issues a £1 share at par to "A", all the company gets is that £1 and no more. If "A" sells that £1 share to "B" for £5 or £6 the company still only gets its £1. If a company issues shares at a premium, and therefore gets more money because those shares are issued at a premium, then it has that much more in capital account; but where the shares are subsequently sold at £5 or £6 that has nothing whatever to do with the management or capital funds of the company but has to do with the jobbers in the City of London or on the Provincial stock exchanges.
I hope that these elementary matters will be clear to the mind of the House. When you come to a company like the Bristol Company—I have no shares in any armament firms—which is going to execute very large Government contracts you have first the capital issued by the company. But in order to execute Gov- 771 ernment contracts, vast as we know they have been, in all probability the company will require a large amount of additional capital which may take the form of a large floating loan at the Bank or some other form in order to finance these contracts going through its works. The original capital subscribed, and also any further capital which may have been issued at a premium will probably have gone to a large extent into land, works, plant, etc., leaving a relatively small balance as working capital. When they get these vast orders they have to be financed. There are huge purchases of materials to be made and very large weekly wage bills to be met. I have in mind one case, an aeroplane factory, where the wage account a few months hence is estimated at something like £35,000 a week. Probably it is more than that with the Bristol Company for all I know.
All this money has to be found, in addition to the money subscribed for shares, whether by premium or not. You have to take share money, bank loans and other sources of finance to arrive at the capital employed in that company at any given time. It is on the percentage of profit against that aggregate sum, which may be equal to two or three times the nominal capital, that you have to determine whether the company is making an excessive profit. I must confess that, on this basis, I am not clear whether the Bristol Company is or is not making an excessive profit. But when I hear it said that "A" paid £8, "B" paid £5 and "C" 10s. or something else, that has nothing to do with it. The hon. and learned Member for North Hammersmith (Mr. Pritt) took the Minister to task, rather unjustly I thought. He said the Minister ought to take a correspondence course at a night school.
§ Mr. Boyce
Yes I heard him. The hon. and learned Member, after taking the Minister to task, as I thought wrongly, then proceeded to scoff at the statement made by the Minister to the effect that the Bristol Company had converted some of its reserves to capital and had thereby increased its capital. That is elementary, it is done every day.
§ Mr. Boyce
If the hon. and learned Member will consult the OFFICIAL REPORT, if he does not alter it in the night, as I am sure he would not do, I think he will see that he criticised the Minister for saying that the company had created fresh capital by the free issue of bonus shares. The fact is that the reserves of the company are not a part of the capital. The company reserves at any time are what is left over of the profits from the revenue account and has not been distributed by way of dividend. Such reserves, unless capitalised, can always be brought back to the revenue account for various purposes such as depreciation. I am sorry to have intervened in the debate for so long at this late hour in order to dispel certain fallacies.
§ 2.10 a.m.
§ Mr. Bellenger
I am glad that the hon. and learned Member has exploded what, I think, on reflection the Chancellor of the Duchy will agree is his argument. The purpose of this Debate, or part of the object of my right hon. Friend's speech, was to urge that excessive profits were being made and that the Government were paying too much for the commodities or articles they were ordering. Now the right hon. Gentleman attempts to counter that argument by attempting to show that it all depends on the prices that the shareholder pays for a share in any Company.
§ Mr. W. S. Morrison
The price that the shareholder pays for the shares is quite irrelevant to the discussion, but where a Company, as in this case, issues shares at a premium, what I am saying is that to arrive at a true picture we should take, not the nominal value of the shares, but the possible intake of money which the Company receives. The prices on the stock market have nothing whatever to do 773 with it; they are merely the forecast of the jobbers as to the prospects of the Company.
§ Mr. Bellenger
I am very glad to hear that explanation because I listened very attentively to the right hon. Gentleman's speech and I gathered that in one part of it he was talking about the market price of the shares. He went on to illustrate it by suggesting that it is not the market price you pay for the shares, that these 10s. shares are not the test, but that it should be the actual value of the share capital. He suggested that the only way to judge whether the capital is getting a fair return is to take the actual dividend on the actual capital, that is, the real dividend on the real capital, and then you could find what rate of interest is being paid on that capital.
I maintain that that is not the real lest as to whether or not the Government are paying excessive prices. If the Treasury officials are going to work out whether the cost of the article is fair or not on the relation between the capital and its dividend, I maintain that that is not the real test. The test should be the prime cost of the article, including all overhead expenses and every item that makes up the prime cost, plus profit. Why have we been discussing this evening the question of alleged profiteering, the relation of dividend to capital? It is true my right hon. Friend the Member for Hillsborough (Mr. Alexander) happened to mention the large dividends these companies were paying, but does not that offer prima facie evidence that excess profits are being made on the individual articles by reason of the fact that they can pay such huge profits. It stands to reason that if the amount of profit on the individual article is limited to a very small amount, then naturally the aggregate profits will be limited in the same proportion.
§ Mr. Boyce
Is not the hon. Member confusing two things—the issue of capital in the form of shares and the whole amount of the capital of the company from all sources? When it comes to the profit on orders there might be only a small or a reasonable profit on the whole amount of that capital employed but which, when expressed in terms of dividend on the issued share capital, might appear a very large amount. That is what might have happened in this case.
§ Mr. Bellenger
The hon. Member knows something about the financial structure of companies and he knows there are three forms of capital in a company—debentures, preference shares and ordinary shares—and it all depends on how these three forms of capital are allotted and on the profits which are arrived at on the ordinary shares. It may be that a company has quite a small, ordinary capital but a very large debenture and preference share capital, and on that preference and debenture capital a fixed interest is paid, generally a comparatively small rate of interest, but on the ordinary share capital large profits can be earned. That was what my right hon. Friend was referring to—the new issued capital of this particular company which was ordinary capital.
I want to get back to another point. I particularly ask the Chancellor of the Exchequer to consider this because I believe he is concerned with the allegations made about profiteering and I suggest to all hon. Members opposite that they are making a miscalculation if they think they can neglect this matter. It is something which the general public outside has got alarmed at because, rightly or wrongly, statements are made in the Press that while people are giving their services in various capacities voluntarily, large numbers, or at any rate a select circle, of manufacturers are making excessive profits out of the general taxpayer. I am quite certain it is the last thing in the world that the Chancellor of the Exchequer, with all his political experience, would desire. He would know that if it could be proved in the public mind, it would react on the Government's own political fortunes. I take it the Chancellor of the Exchequer does not want the National Government to come to an end yet?
But to revert to my first argument, what profit is being made on the prime cost of the various articles? The right hon. Gentleman to-night gave us no answer to that question, and when an hon. Friend of mine asked the question whether the McLintock Agreement, which is a slide-rule formula for finding out the prime cost, would be published so that we can know whether excessive profits are being made, he did not answer the question. Will he publish the McLintock Agreement formula. If it is published we shall be able to get a standard to test 775 the actual costs of different commodities and possibly be able to find out whether excessive profits are being made.
I put this point in answer to some of the arguments he advanced. Take the case of Consolidated Stock. The Government have for many years been paying 2½per cent., irrespective of the price of the stock in the market. They pay only 2½per cent.—a reasonable rate of interest. If the Bristol Aeroplane Company, making these goods, or any of these munition companies, pay a reasonable rate of interest on their capital, then we have nothing to complain about, but if 10s. shares stand at five times their nominal value in the market, it is obvious that this is based on the large profits or dividends they can pay and that there is ground for saying that excessive profits are being made.
I would only say in conclusion that on this side of the House we are serious in the statements we have made. I hope hon. Gentlemen opposite are also serious. If there is no profiteering surely it must be quite easy for the Government to give evidence to us and to the country that there is none. But they must admit that it looks very, very suspicious when an important body of manufacturers refuse to disclose their books to the Government. Surely it must be the thought in the minds of hon. Members that they dare not disclose them. It is no good the right hon. Gentleman saying the Government have set up a Committee to deal with that. The only answer is to say to this House, "These manufacturers who are supplying war goods to this country have put their books before us and we have had these books examined by the Treasury accountants and we can find no possible disclosure of profiteering." If the right hon. Gentleman could come and say that to us, without going into all these long arguments, then that is sufficient answer to our allegations, but to-night, with all his involved arguments, I am afraid he has not convinced many of us and some of his hon. Friends on the case we have put before the House.
§ Mr. Davidson rose——776
§ Mr. Garro Jones
I believe that having spoken does not exhaust an hon. Member's right to put a brief question to a Minister. The Chancellor of the Exchequer was asked certain specific questions which only he can answer. The ones I put to him were, will he terminate the practice of refusing to disclose the prices paid where such disclosure would do no harm to the general interest; secondly, would he authorise publication of the McLintock agreement as being of some guide to Members of the House?
May I ask if the Chancellor will reply to the two points I put. One was with regard to the Government's future action about rings of business firms who do not give competitive tenders for Government contracts; and, secondly, the point with regard to a further and more extensive survey of firms capable of undertaking Government contracts.
§ 2.24 a.m.
§ The Chancellor of the Exchequer (Sir John Simon)
Perhaps I may be allowed to answer the points put very briefly. I will gladly do my best, but I do not intend to make a further speech from this side. As regards the questions last put by the hon. Gentleman, it did appear to me, if I may say so, that they were not questions which arose specifically on either the Defence Bill or, indeed, on Government contracts. As for the general question of what may be done to mitigate the injury that may be caused by rings, that is a very well-known question and of great difficulty. I do not think it is specifically connected with the Defence question. As regards the question of whether the wrong invitation was given to Government contractors, the suggestion the hon. Member made was, in fact, new to me. I understand there was a tendency not to go far enough a field, but to prefer to offer work to those who were conveniently near Whitehall. That certainly would be wrong, particularly wrong in the case of Scottish interests. I would be glad if the hon. Member would let me have the sort of instances he has in mind, and I am quite willing to look into them.
As regards the question of changing the practice which does obtain, that there should not be publication of the price when a Government Department provided itself through a contractor with something or other, no doubt the hon. Member 777 knows there are very serious considerations to be weighed. There is this one. If you were to publish the price at which a Government Department has provided itself, through a particular contractor, with an article it is going to order again and again, then the next time it calls for tenders it is pretty certain that nobody would be likely to offer a price below that which had been published. That is a consideration which has long been regarded as important.
§ Mr. Garro Jones
Contractors always know the prices. Everyone knows that throughout the aircraft industry every contractor knows what every other contractor is quoting for the main items.
§ Sir J. Simon
I am not thinking only of aircraft contracts. I do not profess to know whether what the hon. Member says is right, but I am thinking of the general rule. The general rule is a sensible one. If you take the case of a dockyard which has been providing itself with something from a contractor and has had to pay so much, then the next year it calls for sealed tenders, publication would let all the tenderers know what they were content to pay last time. Lastly I was asked a question about the McLintock report. On looking at the evidence before the Committee on Estimates I see that the question was raised whether members of the Committee could see it and, I think, whether the Chairman could see it. The Chairman ruled that it was a confidential document, and then members proceeded to ask whether they might not see it as a confidence. I do not think in the circumstances, and certainly not in this Debate, I could over-rule all that, especially as it is an Air Ministry document with which I am not myself personally acquainted.
§ Captain P. Macdonald
Is it not a fact that on this Estimates Committee there were members of the party opposite, and they accepted that as a unanimous report of that Committee without any objection whatsoever?
§ Bill ordered to be brought in upon the said Resolution by the Chairman of Ways and Means, the Chancellor of the Exchequer, Mr. Hore-Belisha, Sir Kingsley Wood, Mr. W. S. Morrison, Captain Wallace, and Mr. Shakespeare.