HC Deb 12 April 1943 vol 388 cc983-1030

Motion made, and Question proposed, That it is expedient to amend the law relating to the national debt and the public revenue, and to make further provision in connection with finance."—[Sir Kingsley Wood.]

Mr. Arthur Greenwood (Wakefield)

It is customary for someone who stands at this Box to make a few quite perfunctory remarks on the Chancellor's Statement which quite obviously no Member of this House, apart from any financial genius who may be here, can fully grasp. The Chancellor of the Exchequer, with a facility which I envy, juggled with hundreds and thousands of millions of pounds, and that only confirms my view that all these pounds, shillings and pence are meaningless symbols. Indeed, if I may say so, my right hon. Friend's speech, on which I congratulate him—particularly his remarkable analysis of the situation—really emphasised the fact that to-day goods and services matter more than anything else. Clause 7 of Lend-Lease, with which my right hon. Friend and I were concerned at one time, an arrangement between us and the United States since extended to other nations, is perhaps the most important understanding that has been reached between two great nations. The balance-sheet, as my right hon. Friend quite rightly said, cannot be expressed in pounds, shillings and pence, but can only be expressed in services which are inestimable and incalculable. There is no way of measuring the great assistance that we have had from the United States and Canada, and indeed from the U.S.S.R., and the United States would find it difficult to assess in terms of money the assistance that we have given to them. I think we all realise that this reciprocal arrangement for mutual aid, honestly and sincerely carried out to the limit of every participant's capacity, is one of the real strengths of the power of the Allied Nations during the war.

I do not propose to go into any details about the Budget. A million pounds seems to me a meaningless symbol, never having seen and never being likely to be able to see £1,000,000, and therefore I pass over those figures and estimates, which will receive a good deal closer consideration by Members of the Committee than I could possibly give them, not being, I am told, a financial expert. I come, however, to the question of the increase of taxation. Of course, the nation will bear all the increased taxation that is necessary for the winning of the war. There can be no doubt about that, and of course there can be no serious objection taken to the increased taxation on what the right hon. Gentleman calls "optional expenditure." I suppose there are members who are guilty, even in war-time, of committing this crime of spending money that they could avoid spending, whether on tobacco, or exciseable liquors or by surreptitious visits to the cinema or the theatre. I think the whole Committee and the country will be grateful for the concessions the right hon. Gentleman has made with regard to utility clothing and Income Tax. I imagine that there may be criticisms of the fact that there is really no increase in direct taxation. I will say this to the right hon. Gentleman's credit, that the country would not perish from lack of sustenance if the things upon which he has increased taxation were cut out of our lives entirely, although in my view it might have a very bad effect upon the morale of the people. I think a little tobacco and beer and a little cinema or theatre for those who like them are perhaps some counter-balance to the black-out and the horrors of war-time. The right hon. Gentleman has paid a tribute to the small Income Tax payers. In the nature of things indirect taxation falls relatively more heavily upon the poor than upon the well-to-do. That has always been the view of my hon. Friends and of many reputable economists, among whom I do not number myself. It is generally held that taxation of an indirect character, apart from luxury taxation—and many luxuries really become conventional necessities which some of us would find it hard to do without—bears more heavily on the poorer elements in the community than on those who are better off.

I do not myself regard these increases in indirect taxation as crushing. They are not pleasurable, but they are not crushing. There is, however, in my view a disparity between £33,000,000 new taxation in a full year on beer and £9,000,000 on spirits and only £1,000,000 in the case of wine. [Interruption.] Of course there is a shortage. There seems to be a shortage of lots of things. The real point is the capacity of the people to bear luxury taxation, and I should have thought that might have been put on a rather higher level. I do not think the people will complain very much in the mass at having to find another £9,000,000 for their entertainment, whether in the cinema or in the theatre, and I certainly think it rather drastic, but I can see no solid reason why the taxation of pure luxuries should not be at the rate of 100 per cent. ad valorem. I am sure that the people of the country are prepared to face all the taxation that is necessary to win the war, and I agree that it is important that we should do everything we can to discourage spending upon un-necessaries, and thereby to promote savings. I imagine that the Budget will do something in those directions. At the first blush, not yet having studied the White Paper, with that simplicity of mind and spirit which is known to all members of the Committee, I have not been able to grasp all the details of the statistics so ably, so lightly, almost so flippantly thrown about by the Chancellor of the Exchequer, but, on the whole, my first impression, speaking for myself, is that he made an excellent analysis of the whole world financial and economic situation, on which I congratulate him, and although his Budget may bear a little heavily on the least favoured of our fellow citizens, I think on the whole he has tried to do the fair thing by the people of the country and on that also I may congratulate him, subject, of course, to thoughts which may come with a closer scrutiny of the implications of the speech and to the developing criticism that there may be. I cannot consider the Budget as an unhelpful one, and I congratulate the right hon. Gentleman upon it.

Sir Percy Harris (Bethnal Green, South-West)

I quite understand that the Chancellor of the Exchequer after his great ordeal has not been able to remain in the Committee. I would have liked him to hear the congratulations I am going to give him, because I have on more than one occasion been a critic of the right hon. Gentleman. I have felt that in his earlier years in this high post he was a bit overwhelmed by his Chancellor's robes, but I think that the whole Committee felt to-day that he had grown into his robes and that he had risen to the occasion. I am glad that he did not treat the financial position of the country and the provision of the necessary taxes as an isolated problem, but that he dealt with the efforts of the United Nations as one whole and emphasised that the prelude to victory and the high road to success are to pool our resources. The tribute he paid to the United States of America and particularly to the President, and also to his financial advisers, was well deserved, not only for what they have done since they entered the war, but for the imagination shown by the Executive of America before they became one of the United Nations. We cannot let our friends in America know too much that we are pooling our resources. Lend-lease is no longer a one-way traffic; the whole financial resources of all the United Nations, the Dominions as well as this country, the new world as well as the old, are to be thrown into the common pool to bring about victory.

Canada has made a great gesture, and I am glad that the Chancellor made special mention of it. I do not want the impression to get abroad, however, that Australia, New Zealand and South Africa are lagging behind. Australia and New Zealand have their own problems to face. They have the enemy at their gates, and their taxpayers are just as heavily taxed as ours are. They have to deal with their own enemy, which is a serious danger to a small population scattered over large territories. This Budget will be encouraging not only to our Allies who still have their freedom but also to our Allies who see their territories in the possession of the enemy. It will also be a message to our enemies of proof of our determination and of our power in financial and economic resources to see this war through, however long it lasts.

I am glad that the right hon. Gentleman went out of his way to refer to the cost of living. I think that history will say that one of the most remarkable achievements of this war is the way our finances have been handled by the Government so that the costs of essential foodstuffs have been kept down as compared with the last war. Then we saw constant rises and only realised towards the end the necessity of putting on the brake. In this war prices of essential foodstuffs have been kept at a reasonable rate, and this has been a tremendous help to the morale of our people and has increased the efficiency of our workers. I do not often pay compliments, for I am a born critic, but I should like to pay a compliment to the Board of Trade for extending the principle of utility clothing. That is a sensible step and means that the average lowly-paid man can bear the full brunt of the shortage of commodities by being able to get food and clothing at a reasonable price. There is another thing about which we have to be satisfied. Perhaps I am more pleased than most Members because I went through the last three years of the last war as a Member of the House, and I saw the constant rise of interest rates. The idea got abroad that if you wanted loans from Lombard Street, they were entitled to exploit the national need. The ingenuity of the Treasury has saved us from that, and the patriotism of the nation has proved that when a sound financial policy is put over the Government can rely on the good will of the whole nation to subscribe to war loans.

The right hon. Gentleman emphasised the need for even more savings on a larger scale next year. I suggest that there ought to be less humbug about War Savings Weeks in the coming 12 months. We have had these wonderful targets which have led areas to compete one against another, but in many cases a large part of the money has been found by wealthy concerns who have happened to be in the area. I have in mind a poor borough where two wealthy breweries happen to be located, and the greater part of the subscriptions was found by them. That was not new money and was not savings in the ordinary sense of the word. The money was taken out of the companies' reserves and was not the kind of new savings we want. The appeal must be made to the ordinary men and women, who must be made to realise their great responsibility and the great opportunity which is given them to buy these various certificates. They should be made to realise, too, that their savings will not only help the country now but will help them in the post-war years when industry may be depressed and opportunities for employment not so large.

I want to say a word about the last 15 minutes of the Chancellor's speech. He spoke for over two hours, but the most important part of the statement dealing with new taxes came in the last few minutes. His proposals did not show any great originality, but I do not make any complaint about that. They are well-tried methods of raising money. I do not even criticise the Beer and Whisky Duties, though the cost of both those refreshing drinks is now becoming so high that possibly many men will have to forgo their daily drink at their favourite licensed premises, but I think the Chancellor is putting the Tobacco Duty too high. It is true that in the first few weeks after the extra duty was put on tobacco and cigarettes last year there was a falling-off in consumption, but the demand soon recovered, and increased, and the additional revenue was forthcoming, but I have reason to say that the explanation of a great deal of that increase was that the better-paid workers and the better-off classes were able to get full supplies, which they had not been able to obtain the previous year, while a great number of working people, on the poorer scale, were forced to cut down their consumption of tobacco. I am afraid that the result of the new scale of duties will not cause the war worker getting good wages, or middle-class people, to suffer, but the old age pensioners and the less well paid workers will be forced to reduce their consumption of tobacco and cigarettes. I think that is a point it is well worth my mentioning.

As for the tax on cinemas and other entertainments, nothing is more significant than the long queues standing outside cinemas and theatres in almost every important urban centre, and it does not seem unreasonable, for what is after all a luxury in the fullest sense, that those who enjoy it should pay a little contribution towards the cost of running the war.

With that one small criticism about the Tobacco Duty, which I am afraid we cannot alter, because it would throw out the right hon. Gentleman's Budget, I genuinely accept the Budget proposals as reasonable and sound. I was glad that the right hon. Gentleman promised a further investigation into the incidence of taxation on the weekly wage-earner. There has been a real demand from the weekly wage-earners that they should pay as they earn. I recognise the difficulty in devising a watertight scheme and all the difficulties affecting assessment and allowances which stand in the way of a simplified scheme which would meet the needs of the situation, but I am glad the Chancellor is investigating the problem. No weekly wage-earner minds paying when he is earning good money, but he does resent having to pay Income Tax on past earnings when his wages have come down. I have actually heard it said by men, "I am not going to work any more or work longer hours just to pay Kingsley Wood." That may be very wrong, but it is very human, and if my right hon. Friend, even though he has set up a Committee—to set up a Committee or a Commission is one way of running away from the problem—can devise any ingenious method to enable the ordinary man to pay as he earns, then instead of Income Tax being unpopular with wage-earners, it will become a generally accepted method of raising revenue. After all, it is the best method, the most honest method of raising revenue, because the taxation is not concealed. The citizen knows what he is paying. If the Chancellor can devise any method to enable the ordinary man to pay as he earns, then he will really deserve well of his fellow countrymen. I end as I began. The right hon. Gentleman will be surprised to hear now he has returned that I paid him a compliment, because he does not often hear one from me, but it is a genuine one, and I do congratulate him on his very successful Budget.

Sir Robert Tasker (Holborn)

I think the Chancellor will agree, as we would all agree, that it is useless to impose taxation if it cannot be paid. Let me give him an instance which has already been referred to by me, the case of a man enjoying the enormous income of £150,000 a year from property. With the Income Tax and Surtax, which remain unaltered, the Chancellor leaves that man with 6d. in the pound, which means leaving him with £3,750 a year. But that is not due until January. In the meantime the Chancellor calls for a War Damage Contribution, and as that man's income of £150,000 is derived from property, he will find that in July he has to pay £12,500 to the Chancellor of the Exchequer, so that by the end of the year he is deprived of every penny of income. It has all gone in taxation, and he owes the Treasury £8,750.

The Deputy-Chairman (Mr. Charles Williams)

The hon. Member cannot go into the method of administration of the War Damage Contribution. He can only submit a simple illustration and cannot raise an argument about the whole war damage question.

Sir R. Tasker

I was only using it as an illustration to show that the man has nothing left to live upon. I will submit another illustration which will, I think, engage the sympathy not only of the Chancellor but of every hon. Member in the Committee, and that is the case of the pensioner. According to our taxation system, the man who has been thrifty and has saved, or has perhaps contributed towards a pension for himself, is told that the income from his investments or his pension has not been earned by him and is therefore subject to the tax of 10s. in the £ As a trustee, I am in the unfortunate position of having to say to two ladies, one aged 69 and the other 73, "You have been left annuities of £60 and £90 a year, but the investments are in trustee stock and 10s. in the £ must be paid, and I cannot pay you the £60 or the £90." Surely the Chancellor, who has shown some sympathy in this direction, could take some step by which repayment of the tax deducted could be accelerated. The amounts which have been deducted, £7 10s. and £11 5s. a quarter, cannot be recovered in less than a quarter of a year, and I appeal to the Chancellor to make some arrangement by which taxation shall not be deducted at the source to meet such cases. That applies to many thousands of people as well as to those who have been in civil, military or naval service. If their pension is £150 a year, it is at once reduced to £75 a year until they are able to recover the relief. We ought not too lightly to pass this scheme of taxation without having some regard to pensioners who have done good service to the country.

Another point to which I would direct the attention of the Chancellor is the Income Tax form. I am called upon to fill up many of them, and I am usually absolutely bewildered. I do not know anyone, save the Chancellor of the Exchequer or a Treasury accountant, who can tell what the Income Tax form means, and I suggest that some simplification should be introduced into it. The people of this country are willing to pay for the war, as has been shown in the clearest manner by their ready payment of Income Tax. Nobody wants to shirk his duty, but many people are bewildered. If the Chancellor of the Exchequer were to introduce some simplification, it would be a real boon to us all. Speaking as a trustee, another point which I find extraordinarily difficult is in regard to Probate Duty in meeting the demands of the Exchequer. If there is insufficient money in the bank how is the Probate Duty to be paid? In one case there was a post-war credit, which could not be turned into money. We are told that we must wait until the end of the war. Cannot the Exchequer accept it in part payment of the Probate Duty? The matter does not affect me personally, as I am not dead yet; it affects me only as an executor. The money must be found. The Treasury, quite rightly, exacts payment of Probate Duty, and I suggest that some arrangement should be made to meet the difficulty. It is the same as with money in the Post Office Savings Bank. The Government have the money, but the Post Office cannot release it to pay the Probate Duty. Why not? Cannot a concession be made which will help executors to get and pay the money quickly, which is what the Chancellor of the Exchequer and we all want? I know how hard put too the Treasury must be to collect this money. There was an instance of a bicycle connected with a Post Office worker. An allowance of 3s. was made in respect of this bicycle, but the Income Tax authority claimed some of it. Perhaps the Committee will allow me to read two short letters.

The Deputy-Chairman

The hon. Member's remarks are getting very near to the subject of the Post Office. If the letters have been addressed to the Postmaster-General or have anything to do with the Post Office, the hon. Member had better not read them. If they are a Treasury matter, I will allow him to read them.

Sir R. Tasker

Yes, these are a Treasury matter. I would not attempt to introduce Post Office matters. The first letter is from the Chief Inspector of Taxes, Departmental Claims Branch, the Hydro, Llandudno. Here is the Chief Inspector saying that 1s is not to be calculated, but the Finance Branch, in a letter dated 25th April, say that the question has been raised as to whether the allowance should be included in the return of official emoluments furnished to the Assessor of Income Tax.

Mr. Muff (Kingston-upon-Hull, East)

What was the date of the letter?

Sir R. Tasker

25th April, 1942. The assessor of the G.P.O. then ruled that a portion of the money would cover cleaning, namely, that 1s. should be included in the return of income.

The Deputy-Chairman

That is as far as I can allow the hon. Member to go. He must not pursue that subject any further.

Sir R. Tasker

It is dealing with a return for Income Tax purposes.

The Deputy-Chairman

It is associated with the G.P.O.

Sir R. Tasker

It is from the Finance Branch, and they connect up one with the other. I readily obey your Ruling, having got out the point which I wanted to bring to the notice of the Chancellor of the Exchequer. I am willing to hand all these documents over to the Chancellor of the Exchequer. I find that when one puts all the cards on the table one is treated quite reasonably by the Treasury officials. I have no complaint to make against the Income Tax assessors and have always found them very fair. I never had a confession from them that they do not understand what we do here, but they certainly do not. [Interruption.] I agree with the Chancellor's observation that very few people do. I almost dare to suggest that the Chancellor himself does not always know. One of the most curious things during our Budget day discussions is that we cannot suggest proposals for new taxes, except very quickly, before the Chairman has detected us and rules us out of Order. Are there not many ways of raising money? [HON. MEMBERS: "Yes."] We all know that there are. Why does it take 12 months for these things to be thought out? I wonder whether the Chancellor of the Exchequer will allow me to send him a few suggestions? He can acknowledge them on the usual post card.

Sir K. Wood indicated assent.

Sir R. Tasker

Another thing we are not allowed to discuss is how to economise, although I do not believe there is a Member of this House who could not suggest economies to save taxation. We are not allowed to do it. I am willing to write to the Chancellor also suggesting how economies can be effected, and that——

Major Vyvyan Adams (Leeds, West)

On a point of Order. Would not the hon. Member be in Order in discussing fresh means of economy?

The Deputy-Chairman

Not at this stage.

Mr. Muff

Not even shorter shirts?

Mr. Gallacher (Fife, West)

I listened with very great interest to the speech of the Chancellor of the Exchequer, hoping that in view of the situation that has developed in this country and throughout the world he would show some of the resolution, and some of the courage, that are demanded of the lads in the Eighth Army and the other Armies in North Africa; that he would make a real frontal assault on the vested interests of this country, and take the preparatory steps for putting them out of business altogether. The Chancellor had very much to say and very much to praise in connection with the stabilisation of prices. That was a very necessary, very desirable and very valuable action on the part of the Chancellor and the Government. The Chancellor will recognise—at any rate I hope he will in view of what he had to say about stabilisation—that if private enterprise and vested interests had been left to their own resources, we would have been in a state of ruin and collapse by this time. The Chancellor would not deny it. He could not possibly deny it. Yet the Chancellor, throughout his speech, informed us that he was preparing to let this gang of bloodsuckers loose on us as soon as the war is over. It is almost unbelievable. There is not a Member who does not recognise that their activities had to be curbed if this country was to be saved. The only thing they can think of now is how they can get the shackles off as soon as the war is over and lead us into disaster once again. I hope that the Chancellor will think over, the matter. I will say this for the Chancellor. He is rapacious in one direction——

The Deputy-Chairman

I did not ask the hon. Member to keep off the Chancellor on one line, because I took what he said to be an illustration, but I do not think he ought to go into possibilities about all the various political parties to which the Chancellor might belong. Perhaps the hon. Member will not pursue that further—[An HON. MEMBER: "He said 'rapacious' not 'Fascist' "]—I beg the hon. Member's pardon. I thought he said "Fascist."

Mr. Gallacher

No, I only want to give an indication of how far-reaching the clutching hand of the Chancellor is. He is the first Chancellor of the Exchequer who has got a penny of Income Tax out of me and out of the hon. Member for Dumbarton Burghs (Mr. Kirkwood). But I would rather he had turned his attention in other directions than on to tobacco and beer. I do not drink beer myself, but I certainly consume a considerable amount of the noxious weed, and I have recollections of the happy days of long ago, happy days that I fear will never return, when you could get an ounce of black twist and a pipe for threepence. But the Chancellor used an argument to-day that was in actual opposition to the taxation he is imposing. Of course, I have just about given up hope of expecting anything like logic or reason from the other side—[Interruption]—the hon. Member is one of the young Conservatives who stands out from the mass of deadheads—[An HON. MEMBER: "We are not buffoons"]. But the Chancellor said that there were two features in connection with taxation, one to cut down consumption and the other to raise revenue, but that the essential thing was to cut down consumption. Every Member heard the Chancellor use that argument—that the essential thing was to cut down consumption. Then he told us that as a result of increasing the tax on beer and tobacco the consumption had gone up—[An HON. MEMBER: "And in spite of increased water, too"]. Whether water was put in or not, consumption has gone up following the increased tax.

Sir K. Wood

In spite of it.

Mr. Gallacher

The taxation did not reduce the consumption but sent it up.

Major Adams

"Post hoc, propter hoc"!

Mr. Gallacher

But the Chancellor will try to show how in other directions, the taxation has resulted in reduced compensation. Did the hon. and gallant Member say "Don't talk nonsense"?

Major Adams

No. I did not make the interruption which the hon. Member attributes to me. I said something quite different. As a matter of fact it was Latin—"post hoc, propter hoc."

Mr. Gallacher

I would expect the hon. and gallant Member to show a presumptuous and ignorant attitude towards other Members and to try to hide an interjection or interruption behind a dead language, because he is practically dead himself. But the important thing is that whether it is responsible for the increase or not, the taxation has not reduced consumption. Therefore it is futile to put on further tax in that particular direction if the essential thing is to reduce consumption and the secondary thing to raise revenue. What happens when the increased price goes on to beer? The increase in the consumption of beer is not because of the increase in wages. It is because of the intensity of labour and the lack of opportunities which those who are labouring day in and day out have for getting relaxation or travel of any kind.

I wonder whether Members on the other side have tried to think for a moment what kind of life these lads in the factories and foundries live. I would like any Members on the other side, particularly young Members like the hon. Member for Oxford (Mr. Hogg) to do about six months in an iron foundry, day work and overtime. [An HON. MEMBER: "He would be a Communist."] He would, not half be a Communist. In times like these when it is so difficult to get relaxation, when there is very little opportunity for travelling to the country or anything of that kind, the only thing for many people is to turn to the public house and drink beer and whisky. If the Chancellor puts on a heavy tax and increases the price it is not stopping the drinking but it is reducing very considerably the amount of money that is left for maintaining the household and the other members of the household. Everyone on this side knows that. They see the working class homes; they live among them, and the heavy taxation that is going on beer and whisky is coming out of the stomachs of the women and the children in the homes. Does the Chancellor not know that? I will take the Chancellor for a tour round many working-class areas, ask him into the homes, show him what is put on to the tables, and the conditions under which the people have to live. There is no question of buying utility clothing, even without the Purchase Tax. I understand the necessity for getting money. The Chancellor says that taxation should be on the basis of capacity to pay. I have always said that—and meant it, unlike the Chancellor. I have said, over and over again, that until every penny has been taken from those who can pay it and still have sufficient left to live on, the Chancellor has no right to levy taxes, direct or indirect, on the poorer people. Does anybody say that the rich are taxed up to their capacity to pay? Certainly not. The Chancellor says, "I shall have to ask the House of Commons for permission to raise loans." The House should not give such permission. It should say, "Do not let us raise loans; take it from them." Why is it that in such a situation there is all this talk of piling up enormous debts and paying huge sums in interest?

A mother stopped me the other day in the street and told me about her only boy, who had gone out to Singapore, and had now been missing for 15 months. She asked me to get the Departments responsible to make inquiries to find out whether he was still alive. That boy was 19 when he was taken away from her. Her poor heart is wrenched and broken. Do the Minister of Labour, the Secretary of State for War and others say to women such as that, "I will borrow your boy, and return him with interest"? Hon. Members on the other side all support Ministers in taking away these lads. Who can tell which of them is going to pay the full penalty? There is no borrowing in that case. There should be no borrowing so far as the finances of the country are concerned. Take over the banks and the whole of the finance of the country, and use them to the fullest interest of the country, to ensure not only that our armies are supported, but that the masses of our people are effectively supported and their health maintained.

At the railway station last night the hon. Member for Dumbarton Burghs and I were approached by one of the station officials, who said to us, "What are you going to do to us to-morrow?" I said, "We are going to strip the trousers off you." He said, "I will not mind a bit so long as they keep up the good work that is going on in North Africa." You will find that spirit throughout the whole of the working class. But what about the other fellows? Why do you not make them manifest the same spirit? Take away their finances, take away their industries, take everything over. We are told that sacrifices are being made by all sides. There is not a word of truth in it. When the war is over, the privileged section in this country will own the land, they will own the industries, they will be able to carry on exploitation for profit, just as if there never had been any war. There is not a principle affecting private property and private enterprise, so called, that has been affected by any of the Regulations which we have introduced. The people who were destroying the country before the war, giving us neglected and derelict areas——

The Deputy-Chairman

It would not be fair to the rest of the Committee if I allowed the hon. Gentleman to go into a long dissertation on private enterprise. Other hon. Members would then be entitled to follow him. We had better keep strictly to the Budget Resolutions.

Mr. Gallacher

I must thank you, Mr. Williams, for your guidance on the general character of the speech I am making, but I considered that, at this early stage, generalisations of the character I have been making might be more useful than getting down to a detailed discussion of the Budget such as will be carried on in the next few days by those who consider themselves experts. I will finish by urging the Chancellor and the Government and those who are behind the Government to understand the feeling which exists in this country, the feeling which was expressed by that porter at the railway station, the feeling manifest by workers in industry and by the people throughout the Services, that they want all the resources of the country brought together, pooled and utilised, to ensure the early and victorious end of the war and the safeguarding of the health and wellbeing of the people of this country.

Mr. Holmes (Harwich)

I would like to add my sincere congratulations to the Chancellor, because in four Budgets he has pursued a definite policy. There is no person more annoying, either industrially, domestically, politically or financially, than the man who is always changing his mind. The Chancellor has not changed his mind since he started four Budgets ago. He has based himself on three or four principles. One was that he was going to borrow half the required amount and tax us for the other half. In the second place, notwithstanding what the hon. Member for West Fife (Mr. Gallacher) has just said, he adopted the policy of taxing the broadest back. In the next place, he made up his mind that the articles which should be particularly taxed were those of an optional character. The necessities of life were maintained at a price which rose slowly above pre-war level. The effect of that policy has been that we have had very little inflation, and we have been able to borrow money at almost half the rate of interest which we had to pay between 1914 and 1918. In fact, the comparison between what happened in the last war and what has happened in this, so far as finances are concerned, is most remarkable, and the Chancellor deserves every credit from the Committee for what he has done.

It was interesting to hear the Chancellor refer to the help we had had from America, and especially from Canada. While acknowledgment is made of that, attention ought to be drawn to the fact that the United Kingdom and Canada are the two most heavily taxed countries in the world at the present time. I cannot help feeling that the financial responsibilities which Britain has been taking for the war effort, and which in many cases she is bearing alone, are not sufficiently widely known and are certainly not generally appreciated, and it would be well if we advertised our qualities a little more.

My right hon. Friend the Member for East Edinburgh (Mr. Pethick-Lawrence) will doubtless be speaking on the next Sitting Day. He has recently published an autobiography, which is most interesting and enjoyable reading. One of the things that pleased me was his boyish delight when he was first elected to this House and I am sure many of us share with him that feeling and are still proud of the fact that we are Members of the House of Commons. The second thing that he told us, which was news to me, was that he was the author of the suggestion of a capital levy in 1918. I always thought that it was Mr. Sydney Arnold, now Lord Arnold, who had introduced the idea first to this House, but the right hon. Gentleman says it was he who suggested it. The Chancellor of the Exchequer by his policy has made a capital levy, with all its repercussions, quite unnecessary. In many previous Budget discussions the right hon. Gentleman the Member for East Edinburgh has always referred to that particular subject, and he says that his party desire a capital levy. But I am sure he has not referred to it in the last three years and I shall be interested to find out whether he makes any reference to it when he speaks on this Budget.

This is what has happened. The Chancellor of the Exchequer, by putting on an Excess Profits Tax of 100 per cent., an Income Tax of 10s. in the £ and then a Surtax of 9s. 6d. in the £ has reduced the profits which can be taken out of industry to comparatively little and has transferred the balance of those profits to the Exchequer. The effect of that is that many men to-day who are carrying on big businesses are spending 19/20ths of their time in working for the State and sometimes a little more. They carry on the business, look after it and then see 19/20ths, or even more, of the result of their work going to the Chancellor of the Exchequer. That is surely a great sacrifice which many men have made as their contribution to the war. It has been said by many people that Excess Profits Tax causes people to slacken and that it causes men who are running businesses to be extravagant. I do not believe either of those statements.

Mr. Muff

Did it in the last war?

Mr. Holmes

It did in the last war, I agree, but I do not believe that occurs to-day. The spirit of the men who are running businesses is such that they are proud that their businesses are contributing so much to the National Exchequer for the business of carrying on the war. There is just as much pride among people in big business, in doing their bit towards the war effort, as there is among the workers of the foundry to which the hon. Member for West Fife referred.

There is one point to which I want to refer with regard to the theory put forward lately by the hon. baronet the Member for Barnstaple (Sir R. Acland) and his new party, and that is, the desirability of getting rid of profit. That is a very big subject and I am only going to touch on the point of whether the absence of profit would affect the Chancellor of the Exchequer and the Budget which he has introduced to us to-day. At the present time he showed us in the Financial Statement that he is receiving £1,450,000,000 out of Excess Profits Tax, Income Tax and Surtax. Some £200,000,000 of the Income Tax comes from wage earners and possibly £200,000,000 more comes from sources other than industry, so it leaves at least £1,000,000,000 a year which comes from the profits of industry into the Exchequer. If you abolish all profit in industry his loss is £1,000,000,000 a year.

Mr. Foster (Wigan)

Where does the profit come from?

Mr. Holmes

What that would mean would be a reduction in prices. Let us look to the post-war years. I am not one who believes that we shall be able to reduce taxation very soon after the war. We shall have to give up borrowing. It would not be right to continue to borrow after the war is over, and in order to carry out all the things we want to do, to maintain adequate forces in the Army, the Navy and the Air Force, to do all the social work we want to do, all the restoration and re-equipping of the country and generally to get the men discharged from the Army back into civil life, we shall have to raise as much money as we are raising to-day from taxation. But if we gave up the profit in industry, the Chancellor of the Exchequer would be losing £1,000,000,000 a year. How is that to be made up? It can only be made up by the other Income Tax payers of the country, and the Chancellor of the Exchequer would have to say to them, "Now as the result of there being no profit in industry, you are able to buy everything much more cheaply, and so money goes much further. Therefore, you must be taxed to replace the income that I previously received from the profit on industry." The effect of that would be that the wage-earner who was earning a decent wage would find himself called upon to pay 14s., 15s., or 16s. in the £ and I wonder how that would commend itself to the miner, to the railway worker, or to the engineer or to other people?

Mr. Collindridge (Barnsley)

Where does the present profit come from?

Mr. Holmes

The conversations that have been going on between trades unions and the workers, and between workers' and employers' organisations and the Government with regard to conditions in industry, wages boards and everything else should be continued, and we should endeavour, more and more, as far as industry is concerned, to pull together and share equally the responsibility and the proceeds.

The last thing I want to say is with regard to voluntary savings, which have been a conspicuous success. Some Members of this House have criticised the Savings Movement and the Noble Lord who presides over it, but the results speak for themselves. A wonderful effort has been crowned with success. I wonder whether Members realise that while we have at the present time two important Reports—one by a Noble Lord with regard to post-war currency and the other the famous Report on social security by Sir William Beveridge—both these persons have previously given us reports which have been rejected by the people of this country. Sir William Beveridge produced a scheme for the compulsory rationing of fuel, and the Noble Lord introduced a scheme of compulsory saving. But neither of these compulsory schemes has been implemented, because the people of the country preferred to do the job themselves. I am sure that in every house in the country there was pride last winter at the fact that the number of pence and shillings per week put into meters for electricity and gas was less than the previous year. Householders did their bit. In the same way the National Savings Movement was a wonderfully successful effort. It was said that compulsory fuel rationing would require 60,000 civil servants to administer it, and it would have taken 60,000 more for the compulsory savings scheme——

Mr. George Griffiths (Hemsworth)

It is interesting and instructive to hear all this. Could the hon. Member tell us who gave him his figures, because they are all bunkum?

Mr. Holmes

I have not looked them up, but that is what we were told at the time.

Mr. Griffiths

The Government did not make any such statement.

The Deputy-Chairman

I do not see that the figures have anything to do with this Budget at present.

Mr. Holmes

I am sorry; I was only trying to point out how the people of this country had saved a great deal of man-power which the Ministry of Labour could use in other directions. The last point I want to put to the Chancellor is this: Can he tell us whether we have reached a maximum of expenditure? We must have reached the maximum of our man and woman-power and our capacity to fill factories and so on, and it would be interesting to know whether the sum of £15,000,000 which he mentioned to-day as being the daily cost of the war is regarded as the maximum or, if not, whether he can give a forecast of what the maximum will be. Once again, I would like to congratulate the Chancellor on his Budget. I feel it will have a good reception from this country and a good Press.

Mr. Sexton (Barnard Castle)

To-day the Chancellor has once again opened his Budget, but I do not think he opened it to see what was in it but rather to see what he could put in. Before the Chancellor can come to any decisions at all he must have knowledge of the amount required to provide for the national needs, and he gets that from the various Departments who have had their Estimates before the House, so that to a large extent this House is responsible for the amount of money required by the year's Budget. He also requires knowledge of where the money is, and I think the Chancellor has good informants on that point in the Commissioners of Inland Revenue and other sources. Thirdly, he has the hardest task of all. Knowing what he wants and knowing where it is, the Chancellor has to place the burden equitably on the shoulders of those who are best able to bear it—not a very enviable task. The Chancellor, to do that as it ought to be done, must possess sound judgment, plenty of tact and, above all, honesty of purpose to see that fair play all round is given to the taxpayers of the country.

I was sorry I was not able to hear the whole of the Chancellor's speech, but as a feat of endurance it was marvellous. The Chancellor is quite definitely going into ways and means of facing this tremendous problem. War-time taxation is an extra function; peace-time taxation is to provide the revenue to carry on the services of the country. In war-time any additions to those taxes are to prevent over-spending. I am not quite sure whether the people of this country have yet realised the danger of over-spending. I am not talking about old age pensioners, people who are on compensation or who have national health insurance as their only source of income. I am talking about people in other ranks who are working and who, in many cases, are getting good wages. There is great danger in over-spending, and some of the taxes the Chancellor has put on in previous Budgets have been with the aim of preventing this over-spending. The Purchase Tax was placed on principally for that reason, and it has proved to be the Chancellor's insecticide to slay the squander bug. But when we come to Budget Day we are all inclined to look at the gloomy side, at what we shall have to pay. We scan the list of taxes the Chancellor puts on and grumble if any of our own cherished luxuries have been hit hard. We forget to look at the other side. I was interested in what the Chancellor said about a national balance-sheet which he is considering preparing, so that we can set alongside our liabilities some of the marvellous assets of this country.

For a short time I would like to look at the assets side. These assets have accrued to us through the Budgeting of years gone by. Had it not been for the great war we are now engaged in, these assets would have been of infinitely more value. We cannot lay large assets on one side during a conflict which is so expensive. Many of the assets are intangible. They cannot be weighed, and we cannot measure them, but yet they are there solid and substantial and stand us in good stead in the eyes of the country and of the world.

The major portion of the present Budget deals with war services. I remember speaking on one Budget when I had taken the trouble to calculate the weight of silver it would take to pay the taxes and how many trucks would be needed to hold the silver. This time I have worked out these fantastic figures, these astronomical figures, these incomprehensible figures to the ordinary man, in a different way. What we lend to the Government, somewhere about £2,000,000,000, if it were paid in pound notes and those pound notes were made into girdles, would provide six girdles that would go right round the world. Some may say, "What a picture!" Yet it is not so fantastic. If we look East, West, North and South over the five continents, over the seven seas, to the heavens above and the earth beneath and the waters under the earth, we shall find the products accruing from that penditure I have just mentioned. The are there in the weapons that our boys are using in all quarters of the globe. So it is not so fantastic if I refer to that expenditure in the terms of girdles round the earth. When we realise what we are fighting for, we shall know that it is to provide a better girdle. In the long run we are fighting for liberty, and the price of liberty is not only eternal vigilance. In this instance it is the price of victory. We intend to have it, and we intend to stabilise it. We are paying heavily now in Income Tax, but the vast majority of the people are prepared to go on tightening their belts, paying more, lending more, so that a saner world will ensue. Like the country mouse in the old story, the people of the country are saying, Give me again my hollow tree, A crust of bread and liberty. That is what we are aiming at, and the vast majority of us are prepared to go on paying in order to win this great conflict, so that in the end we may have a more respectable world.

Among other things, we are fighting against ignorance. Look at our schools. By and large, they are not as good as they should be, but we hope that as the result of the Education Bill that is to be introduced they will be vastly better, that there will be more of them and that when the great debt of war has gone——

The Chairman

I am sorry to interrupt the hon. Member, but he is dealing with expenditure now.

Mr. Sexton

I am looking at this as part of the Budget. Part of the money will be spent on education. In times gone by some people said we did not get value for the money spent on education, but if you look at Dunkirk and look at Libya and see what has been done by the lads, and by the lasses too, who have come from our elementary schools, I think we have got value for the money we have spent on education. Another asset we have is deliverance from the squalor of the slums and deliverance from the ravages of disease resulting from our health services. We hope that in time we shall have better facilities for treating disease and removing slums. Another benefit we get from the Budget is in what we pay for old age pensions.

The Chairman

The hon. Member must obey my Ruling. He is not entitled to deal with expenditure. He must content himself with dealing with the Chancellor's proposals for taxation.

Mr. Sexton

I am sorry if I have infringed the Chairman's Ruling. I thought I was entitled to speak of assets alongside liabilities in the Budget. We have assets as well as liabilities, and I thought I was entitled to remark on them, but I will not pursue the point. I will finish by saying that the time has now come to impress on our people the importance of not over-spending. We have in the past paid our taxes on the whole gladly, cheerfully and magnificently, and we are ready as far as this great war is concerned to go on paying until we reach final triumph and this country and the other nations will dictate—not like the dictators of the Axis—the terms of an honourable peace.

Major Vyvyan Adams (Leeds, West)

I am glad to be able to speak now, because I should like to prove to the hon. Member for West Fife (Mr. Gallacher) who is no longer in his place, that I am neither dead nor moribund. I imagine that to-day we are planning not only for the immediate present but for a remoter future as well. That is why we refer to a Committee of Ways and Means. I want to do what the hon. Member for Barnard Castle (Mr. Sexton) did just now and look at the more cheerful side by specifying our vast resources. But before I go further I wish to comment with great respect upon to-day's achievement by my right hon. Friend the Chancellor of the Exchequer. I want to congratulate him on a great feat of physical endurance. He sustained his task with skill and fortitude. I shall not in the least object if he now sustains himself with a little whisky at the old price. The earlier part of his speech was characterised by something unusual, original and illuminating. He succeeded in dissipating the less happy impression that he caused during a certain famous Debate when he shook the moneybags somewhat loudly over the problem of social reform. On that occasion he produced a widespread mood of frustration and disappointment.

I am not going to deal in detail with the Beveridge Report, but I think the Government ought to devote a great deal of their attention to the problem of social security and give it, if not the first, the second priority. It cannot of course come above Defence in the present of the immediate future. It is the Treasury which will in this matter have the last word, and therefore we should have a greater chance of enlarging the measure of social security if we had a distinct Minister to whom it might be said "Here is your staff, and there is a sum of money—say £86,000,000—earmarked for your purpose." I am not asserting that the resources of the Exchequer or of the nation at large are unlimited, but before very long the moment will come when what the right hon. Gentleman referred to as the inflow and outflow of supplies will no longer be ceaseless as it is to-day. It will no longer be necessary for us to sing with devout prodigality, "Praise the Lord and pass the ammunition."

Looking at this figure of £2,900,000,000, which I wrote down at his dictation to-day on this Blue Paper, I should like the Committee to consider the height to which we have raised revenue to meet expenditure on destruction during the present century, that is, during the lifetime of most of us. The South African War, if one looks at old Hansards of the early twentieth century, was regarded as the cause of unemployment and as an excuse for certain financial stringencies. A dozen years later, in 1914, an infinitely more destructive conflict began and lasted for four years. We then spent our treasure at the rate of £5,000,000 to £7,500,000 a day—upon destruction. Unemployment during that period was liquidated, and poverty was forgotten. After that first German war we were told far more clamantly than before that unemployment was the inevitable consequence, and the State was so impoverished that all manner of desirable expansions and beneficent reforms were "too expensive." So we grubbed along with a miserable rate of old age pension, wide unemployment, a low rate of unemployment benefit and—the means test. Yet now we have reached a new level of expenditure representing double the former amount.

In 1939 the State again fell into peril. To-day, by an unprecedented adjustment of burdens, we find ourselves able to sustain, as my right hon. Friend the Chancellor remarked, burdens twice or thrice as large as they were during the first German war. At the same time, there is to-day no unemployment, no hunger, little poverty and no destitution. Instead there are vast total savings and a huge unsatisfied demand which, unless we maintain our controls very carefully after the war, will produce a most disastrous rise in prices and temporary boom. After the last war the boom, which, as it were, blocked the gap which had been blown by the explosions in France, lasted little more than a year, if as long. After this war the demand can be extended for at least a period of 10 years, provided the supply is properly regulated. With this recent history to guide us, I want to make this point, and I am sure that it is relevant to this or any other Budget. I hope that the public will steadfastly shut their ears to any shibboleths that we cannot afford on social security a fraction of what we have expended on warlike destruction over the last 40 years. I believe that the people, in order to face this wider distribution of the national wealth, will accept a higher level of taxation. My hon. Friends on this side of the Committee must also, as I am sure they will, steadfastly and honestly face taxation which touches a generally lower level of incomes and wages.

I hope that you, Major Milner, will not rule me out of Order, because you have a close and neighbourly interest in what I am going to say. I have for nearly 12 years represented a populous district, with which you are familiar, and in parts of which the spectre of poverty is never far distant from some homes. My experience is shared by many hon. Members who entered this House, some of them somewhat unexpectedly, for the first time in 1931. With the greatest respect, I would say to hon. Members who represent suburban and county constituencies that they cannot begin to understand our problem. It is the problem of the redistribution of the national wealth, the redistribution of national resources, the bringing to those who have not, initially the right a full chance and a wider measure of opportunity. We do, it is true, now see children entering the world with chances of survival, health and success far greater than they were 20, 40 or 50 years ago; and yet—I wish to make this point, particularly when we consider that we are not always going to spend a great proportion of £5,000,000,000 a year on destructive purposes—the chances which some children enjoy are a great deal less promising than the corporate efforts of this House and the nation might make them. I am weary of spending much of my time in my constituency in trying to explain what is inexplicable; and in exhausting the patience of my self and my hearers in explaining the inevitability of distress and poverty. After these two wars I am not going to believe that such conditions are inevitable, and I want to be able to invite the attention of my electors to other matters than the "need for poverty."

A broader opportunity is something we shall owe to the men and women of the next generation. The present generation, through a higher level of taxation and greater expenditure on social services, have proved to be not unworthy to succeed the men who fought with Wellington and sailed with Nelson. I believe the children of the heroes of Alamein, the Atlantic and the Mareth Line deserve still higher levels of security and opportunity. I entreat the Government to be ready, in their preparation for converting warlike expenditure to a peace-time economy, to be ready for a sudden end of this war. Nobody will confidently predict the exact date, but however pressing the problems of strategy may be, we must not procrastinate at this stage of the war over the problems of public welfare. We may not garner our victory in Europe for many months to come. But I think we can depend upon it that, when the German collapse once begins, its surge and its speed will outstrip the avalanche. If we say we have no time now for consideration of the social problems which will follow the war—no time to consider how to allot the vast, almost inconceivable, national resources represented in the figures on this Blue Paper—if we turn aside from that problem, we shall be already smothering the chances of peace at birth.

To-day, with a Coalition Government, is, I am sure, the right moment to do the work. Later on our energy, and indeed our money, the commodity that it costs so much to raise, may well be wasted by political auctioneering on both sides. I should like to see this Government set up a Ministry charged exclusively with devising the method of setting in motion the recommendations of the various Reports which were mentioned just now. This is not a moment to balance the refinements of argument. To quote my right hon. Friend the Chancellor of the Exchequer in another context, "precise reckoning is beside the mark." To-day, in perhaps the penultimate stages of the European phase of this war, when I think that anyhow we are certainly well advanced in the second half of the war, it seems to me we have the challenge and the opportunity for which we have hoped and fought. We should be prepared to grasp the moment before the opportunity passes out of our hands for ever.

Mr. Tinker (Leigh)

I think that if the hon. Member for West Fife (Mr. Gal-lacher) were here, he would agree with me that the speech of the hon. and gallant Member for West Leeds (Major Adams) is one with which most of us could agree. I think the hon. Member for West Fife misunderstood him when he made an interjection. His speech was on very sound lines. I wish to compliment the Chancellor of the Exchequer upon the very lucid way in which he presented his Budget to-day. I remarked to a friend that the way his voice carried all through the speech was wonderful. I do not think there is another Member who could have done it as well.

There are one or two points which I wish to put forward in the hope of getting an explanation. The new Income Tax forms have just been issued; mine came on Friday last, a prelude to the Budget statement. There are instructions on how to fill up the form and a reference to "full earnings, including bonus, overtime, commission, casual fees, etc." There has been in the coal industry in Lancashire a curtailment of directors and management. Some of them have ceased to be employed for various reasons. A man in that position is given certain emoluments, say £5,000, on ceasing to be employed, and what is troubling us is how that sum is taxed. If it had been paid to him in wages, we know it would have been taxed, but as it is being paid as a sort of gratuity at the end of the man's employment, one wonders what is the position as regards tax, whether it is a way of evading the tax. I did expect the Chancellor of the Exchequer to deal with that point. Before the end of this Debate I want the Chancellor or the Financial Secretary to explain the position to us. Do these people evade taxation? How is taxation levied upon them?

The next point is a general one which is troubling most of us, with regard to disparity of wealth. The Chancellor of the Exchequer said that taxation ought to be paid by the people best able to do so, yet we find strange things going on. We protest about it, times without number, without having any influence upon the Chancellor. I follow the newspapers from time to time to find out what is happening to the wealth of the country. On 8th April this year I cut from "The Times" and "Evening News," of London, two lists of fortunes. We are being told about the need of equality in meeting the burdens of taxation; how is it that people can leave fortunes like this at the time of their death—£51,000, £88,000, £54,000, £25,000, £22,000, £66,000, £25,000, £22,000, £40,000 and £24,000? In the "Evening News" they use a nice term in describing these fortunes, "Other people's money." I always wonder whether that means that the money belonged to other people or really to the people concerned. The fortunes in this case were: £116,000, £65,000, £30,000, £19,000, £18,000 and £14,000. When a person of that kind dies, the State gets his money. Would it not be far better to have equality during life, so that the common burden would be shared by everyone?

A question was asked of the Chancellor of the Exchequer some time ago about the estates possessed by different proportions of the population. The reply showed that, according to the latest figures in 1941, there were 63,000 people with estates up to £500, 45,000 people with estates up to £1,000, 44,000 up to £5,000, 9,000 up to £10,000, 5,000 up to £20,000, 3,000 up to £50,000, 838 up to £100,000, 360 up to £250,000 and 99 people with over £250,000. One wonders when this kind of thing will close. An hon. Member who spoke for the Independent Liberal Party——

Mr. Muff

No, the Simonites.

Mr. Tinker

I just forget his constituency, but he deplored that the taking of this money provided so much less in the Chancellor's pocket and that, consequently, the burden fell more heavily upon the individual taxpayer. But surely he would recognise that before that time comes those people would be getting the benefit by the lessened cost in production and all that kind of thing, and be much better able to pay, whereas now we find that these people are able to make enough to pay the Chancellor and leave these huge fortunes. I think it is about time this question was tackled more decisively by the House of Commons. Let me make a comparison—this is my main point. I was expecting to hear from the Chancellor of the Exchequer about something being done in connection with what was said in the King's Speech, in which it was stated: Renewed consideration will be given to the position of Old Age and Widowed Pensioners, and farther measures will be laid before you. I did expect that if there was any meaning in this phrase the Chancellor to-day would have been able to tell us what was being put aside for this purpose. There has been no mention of it. One has to ask what is behind all this kind of thing. Are we to be told that fortunes can be made, as they are being made, and yet at the same time a vast number of our people, millions of them, are to suffer on the verge of poverty? Yet there has been no mention at all in the speech of the Chancellor to-day as to what will be done for them. I was expecting some attempt to meet that position, because we on this side put certain propositions before the Chancellor and the Government in the hope that something would be done. I have made my protest on that. I do not intend to pursue it further, but it is one which should be made, because it is causing great feeling in the country, and unless something is done, this burden will be causing much more unrest than is the case at the present time.

With regard to the taxation imposed today, one may say to oneself, "Yes, well, those who enjoy luxuries like beer ought to pay a little more, and those who enjoy tobacco should pay a little more." But I question whether it is wise to do it as it has been done to-day. Take the question of beer. We represent the miners, and it is one of the things they look forward to when they finish the day's work—a pint of beer, or maybe two pints. We are calling on the miners to give all they can, to give increased output. Yet the little joy they get from their pint of beer is to be taxed a little more. What will the miner say? He will say, "We are putting in all the labour we can, and this little luxury helps us in our work. Is that any response to what we have been doing for the country?" I say it will have a very ill effect on the minds of the community and of those who work very hard and do enjoy a glass of beer.

On the question of tobacco. I do not smoke at all. It is no virtue in my case, because I do not enjoy smoking tobacco. But there are those around me who do, and it seems to me to be putting something on their shoulders with which I cannot exactly agree. Then I would refer to another section of the community, the old age pensioners. It is one of the solaces of life to them. I know what happened the last time taxation was increased—the protest that went forth. Now, further taxation is being imposed. Is it wise at this juncture, when we can prove that there are these reservoirs of wealth that can be taken care of by the Chancellor rather than going to those sections of the community about whom I have been speaking? With regard to cinemas, I rather agree with the Chancellor. I think a little more can be paid. I am not protesting against that at all.

On the borrowing question, the Chancellor of the, Exchequer made great play to-day about the rates of interest. I wonder whether it is sound financial policy to pay even the present rates of interest. I feel sure the country would respond to a proposal that people should give up their money without any interest, if it was done equally all round. The payment of interest will mean a further burden on us all when the war is over. It will also mean paying back money in much greater volume to those who have most. When we are prepared to put everything we have into the common pool, there should be no question of paying interest upon it. I go to these demonstrations and appeal to the people to give what money they can. I know that if they have anything at all, they will give it. My chief purpose in going to these demonstrations is to see that the people are keeping up their spirits. If we did not get a penny from them, no gun would fire a shot less. The only real object of these War Savings demonstrations is to see that the spirit of the people is still with us. It is; the people are whole-hearted in the prosecution of the war, and we can get all the money we want without paying any interest. If the Chancellor feels that he must pay some interest, I think that the rate should be reduced and that it should not be more than 1 per cent., or 2 per cent. at the very most. I hope that the Chancellor will examine the position in regard to the taxes on tobacco and beer. If he had kept them out of his Budget Statement, I think it would have been well received by all sections. Later on, when we come to discuss the Finance Bill, some protest should be made against these two forms of taxation, though whether we should vote or not on the question I do not yet know.

Dr. Russell Thomas (Southampton)

I have listened to the speech of the hon. Member for Leigh (Mr. Tinker) with con- siderable interest, especially when he talked about the vast fortunes that are being left to-day. I do not think he quite grasps the position. If I left a fortune—which I am not likely to do—of £100,000 to-morrow, it would make no difference at all to the war effort. First, I should have had to pay 10s. in the £ on the income I received from that fortune during my lifetime, and, of course, surtax, and the £100,000 must have been invested either in war industry or bonds or put into a bank. The whole of the £100,000 would be working for the war effort. I think my hon. Friend, perhaps, objects to my having £100,000 for some other reason, an ethical or political reason, which I shall not go into now, but whether I own the £100,000 or the State owns it does not matter at present.

Mr. Tinker

I was trying to show that at a time like this it is very hard upon people, when they are making great sacrifices, to see huge fortunes being left.

Dr. Thomas

That is what I thought. The hon. Member does not object to the £100,000 being left in my possession because of any effect on the war effort, but he protests against the principle.

Mr. Mathers (Linlithgow)

Is it not a question of liquid assets which could not be harnessed to the war effort in the way suggested?

Dr. Thomas

I do not agree with my hon. Friend. Even at my death I have to pay heavy Death Duties, and such as is left must of necessity be invested again. If it remains in the bank, it could hardly do better.

Mr. Mathers

I think there is a misunderstanding. I am saying that it is not necessarily a question of cash assets. It may not be possible with such as land to harness it to the war effort to any considerable extent at all.

Dr. Thomas

If it is land, it can be harnessed to the war effort and be used to the full capacity. The matter of who is the owner and who is not is a moot point, and I do not think it necessary to pursue the matter any further now. My hon. Friend also talked about the interest that is payable. He advocated that there should be no such thing as war loan and the people should lend their money interest free. We must remember that the interest payable on war loan will all be redistributed in the country. People are taxed in order to pay the loans at the end of the war, and it goes into the pockets of others. It might, of course, mean that some people might sit back and enjoy the labours of others at the end of the war. I remember two years ago when I made a dissertation in this House—in fact, it was the first time I had ever spoken in this House—on the problems that the Chancellor of the Exchequer would have to face in his Budget, saying that he was faced with balancing his Budget either by inflation, borrowing or taxation. Hon. Members might not remember that I favoured on the whole taxation. I proceeded to point out that the Chancellor's main object was to remove as much of our purchasing power as possible—and he has taken it away, bit by bit, to his everlasting credit—but that he should leave us with, perhaps tea and tobacco, in order that we could maintain our morale. But my hopes are sinking to-day.

I will now quote, if I may, some of the figures in the Budget in order to make a point or two that I have in my mind. The total national expenditure was £5,637,000,000, and that included £225,000,000, the Canadian contribution which we are now spending in Canada in a sort of Lend-Lease arrangement. The total revenue was £2,820,000,000 and the total borrowing £2,817,500,000. The borrowing and revenue were almost equal. The main use of these figures, in our budgetary condition, in the present state of our country, and the present state of the war, is to compare them with figures of other war Budgets. I do not think that they would convey very much, unless one looked at them in this way. The right hon. Gentleman the Member for Wakefield (Mr. Greenwood) was a little over-stating the case, I think, when he talked about figures being merely symbols. If we do what I suggest, one or two interesting points come out. The first is that if we compare war revenue with expenditure, we find that, in the first full year of the war, in 1940–41, revenue to expenditure was 37 per cent. In 1941–42 revenue to expenditure rose to 43½ per cent. and in 1942–43, that is to say, the year that has just closed, it has risen to 50 per cent., or, taking out the Canadian contribution, to 48 per cent. It is very remarkable that we can raise such an enormous sum from the revenue before resorting to borrowing. We must, of course, take into account Lend-Lease figures. This would make the revenue percentage very much more unfavourable, although, of course, as the Chancellor has so well stated, reverse Lend-Lease should be taken into account.

Another point I would like to bring out in comparison is this. We see a steady increase of war expenditure, and it is well brought out in this way. If we regard the 1940–41 expenditure as 100, then in 1941–42 expenditure rose to 123 and from 1942–43 it rose to 145, or, taking out the Canadian payment, to 140. There you see a steady rise of war expenditure as the war has progressed, and I would like to say a word or two on this later. Other points of interest that come out in the Budget are that revenue has exceeded expenditure by £192,000,000, but that expenditure was less than the revised estimate by £500,000,000 and that Income Tax reached £1,000,000,000 for the first time in history. The National Debt on 31st March, 1942, was £13,000,000,000, which included the Debt of this war, the Debt which was standing over from the last war and, in fact, all our debts except external debts. But it is not so much the amount of the Debt that matters as the interest we have to pay on it. That is the thing that is so important. By the time the Chancellor opened his Budget to-day the National Debt had risen to £15,600,000,000. Last year's interest on the Debt was £310,000,000 per annum. Although the Debt is very much higher than it was at the end of the last war, the interest payable is very much less. Indeed, it was considerably less than it was in the two or three years following the last war. Actually the interest payable was less and is less at the present time. The average rate of interest at the beginning of this war on the National Debt was about 3½ per cent. or higher; at the present time the rate of interest is only just over 2 per cent., which is a very different thing.

Suppose we look at things from an adverse point of view for the sake of argument, and say that the war will last another three years, in order to see how much more money we should then have to borrow. Supposing the Chancellor borrowed another £10,000,000,000, that would make the total National Debt £25,000,000,000, and the interest payable on that at present rates would be £500,000,000 per annum. That is equal to about 5s. in the £ Income Tax. Even that colossal sum still compares favourably with the amount of interest we paid at the end of the last war, because interest rates then, as I have said, were very much heavier. We must remember, however, that interest rates have been kept low for several reasons. There are £2,000,000,000 invested in Savings Certificates and Defence Bonds, which can be cashed at short notice. Another £4,000,000,000 are invested in Treasury Bills, Treasury deposit receipts—and the floating debt—with interest of only one per cent., or sometimes a little less. Then another £5,000,000,000 are invested in National War Bonds, redeemable within seven or eight years. Interest is low because borrowing is short. The point I want to make clear is that if interest rates go up, as they may well do at the end of the war through circumstances over which we have no control, by only one half per cent., that would mean, roughly speaking, another 2s. 6d. on the Income Tax. Let us bear these things in mind with other matters.

Mr. G. Griffiths

May I ask the hon. Member whether he suggests that the people of this country would be so disloyal as to desire another half per cent.?

Dr. Thomas

I am afraid the hon. Member has not followed my argument. I admit it may seem rather abstruse, although actually it is quite simple. If interest rates went up by half per cent., although I hope they will not, the effect would be very considerable. Such a rise might occur from events outside in the world over which this country would have no control whatever.

Now I would like to turn to Customs and Excise. The Chancellor showed that Customs brought in £21,000,000 more than the estimate and Excise Duties about £59,000,000 more than the estimate. That suggests several things. It suggests, first of all, that the country is consuming more dutiable goods than was anticipated or is desired. Secondly, there is the incontrovertible fact that there has been a shift in the distribution of the national income from the higher to the lower grades. That is as clear as daylight. Wealthy people are gradually being taxed to the limit, and others of moderate wealth and income, because they have not had the advantage of increased income, find it very difficult to meet their liabilities. It is also clear that those whose earnings have risen are carrying surplus money which they are spending but which they ought to invest. This proposition that I have put forward is confirmed by the increase in the note circulation. It has increased during the last year from £754,000,000 to £927,000,000, and there is every prospect of its increasing to £1,000,000,000 during the Easter holidays, when the note expansion generally increases still further.

Mr. Murray (Spennymoor)

The hon. Member must know that if you increase your factories and employ more people, you must inevitably increase the circulation of money.

Dr. Thomas

The note circulation at the beginning of the war was £500,000,000. It is now nearly £1,000,000,000, and although the cost of living has not increased much during the last year and there was no unemployment, during that last year, owing to wage increases, the note circulation has increased by about £127,000,000. I am trying to point out the tremendous danger of that rapid rise in the note circulation, which must eventually lead inevitably, if it continues, to inflationary conditions. It is clear that sufficient earnings are not returning to the Treasury. Savings campaigns are swallowed up constantly in increased wages. I am not against high wages. Nevertheless, there comes a time when you must say to yourself, "We must not ask for more." The railway increases under the 1941 Agreement fall on the Exchequer and not on the railway companies. Take the increase of the amalgamated engineers.

The Deputy-Chairman (Mr. Charles Williams)

I do not think we can go into the Railway Agreement or trade agreements. They are administrative and have nothing to do with the Budget.

Dr. Thomas

I only mention them in so far as they affect the increased note circulation. The increases that occur at present must of necessity fall upon the Exchequer, and therefore make the danger of inflation still worse. My hon. Friend the Member for Harwich (Mr. Holmes) asked when the maximum expenditure was going to be reached. I do not think it is possible to expend a great deal more. We are utilising all our materials at present. There is no unemployment. Everything is being used for the war effort, more or less. We cannot increase expenditure any further unless there are further demands for wages. That is the only way the Chancellor can be forced to put on further taxes. The whole of the people of England are occupied, and the rest of the stuff we are getting from America and Canada. There cannot be any increase of expenditure, if people are reasonable in their demands.

I should like to turn now to a completely different point. We have heard appeals for consideration for this and that section of the community. I am going to appeal for a certain section of the community who have had a particularly raw deal. I did so last year, but I do not see that any relief has been given to them in the Budget proposals. I refer to the small rentier, the person who is living on his or her investments. She has perhaps £200 a year; she is getting on in years, and is faced with a rising cost of living. The personal allowance has been reduced from £100 to £80, and that is a serious thing. I hope the Chancellor will be able to do something for such people, because they are a class whose sons and husbands have frequently done much for the ruling of this great Empire. They have suffered in the hot and arid plains of India and in the jungles of Africa, and carried British law and justice to the far corners of the earth. Separated from their homes and their families, they have not had the advantage of gaining the fortunes and prizes which sometimes come to those at home, and it is not good to think that they might now have to eat the bread of charity. The Budget is a method devised for sharing the burdens among ourselves as equitably as possible, so that we can march shoulder to shoulder towards victory, but I would ask the Chancellor to remember this section of the community who have done so much for their country and who have no organisation to represent them or plead for them in this House.

Mr. Collindridge (Barnsley)

I am sure the hon. Gentleman will forgive me if I do not follow him in all his points. Some of them I did not really understand, but that may be due to the fact that I have been engaged in the industry of mining, where low finance rather than high finance is the lot of the workers. The hon. Gentleman, I thought, was a little unhappy in his defence of his colleague the hon. Member for Harwich (Mr. Holmes).

Dr. Thomas

I did not defend him. I merely took up the question that he asked, when we should reach the maximum expenditure. I pointed out that we were using all our resources, and provided wages were stabilised, we should have reached the maximum expenditure now.

Mr. Collindridge

I apologise. I ought not to have drawn the hon. Member into another statement. If I understood him aright, he was defending the suggestion of the hon. Member for Harwich that the Chancellor should be more considerate to the people who pay Excess Profits Tax and Surtax.

Dr. Thomas

I must make it clear; I said nothing of the kind.

Mr. Collindridge

I do not feel inclined to give way again. I understood the point of the hon. Member for Harwich to be that we should have greater consideration for the payers of Excess Profits Tax and Surtax. During the speech of the hon. Member, I tried to get in a point as to where profits come from and to ask whether, if we eliminated profits, the nation would be disadvantaged. We might be precluded from having sources of revenue for Excess Profits Tax. They are, however, two sources of profit. One is where the producer of an article leaves more in the industry than he receives in wages, and the other is when the commodity is sold to the public and the public pays more for it than the economic cost. In war-time we call upon people to give their very lives in the service of the nation, and in the case of a single soldier who dies, if there are no real dependants no compensation goes to the next-of-kin. Surely it is not too much to ask of the people who hitherto have been advantaged in this island home of ours that they should, at least, have merely the status quo in the shape of profit while the war is running. Because of that, I thought that perhaps the two saddest speeches to-day were those emanating from my hon. Friends who sit on the Liberal-National Benches.

I want to congratulate the Chancellor of the Exchequer upon the very able statement he gave to the Committee. To listen to him was advantageous to us, and the fact that the right hon. Gentleman also sat for hours afterwards listening to the various points which my hon. Friends raised spoke volumes, I thought, for his interest. We may not agree with all that was in his speech, but I think that it will be well received in the country as a whole. He has faced up to the situation in which the nation is placed. I would also give a word of congratulation and encouragement to my hon. Friend the Member for Leigh (Mr. Tinker). When I came to Parliament a few years ago, it used to be the custom, the courtesy custom, to adjourn immediately after the Chancellor had made his statement. My hon. Friends on the Treasury Bench appear to approve of that custom, but I am sure they will bear with me. I think it was a good thing that the hon. Member for Leigh blazed the trail for back benchers to make better use of the short time they have to put their points of view before the "big guns" give their considered statements on succeeding days. Some people may say that our speeches are ill-considered, but to speak immediately after the Budget, if not from the head at least from the heart, can be an advantage to ourselves and the people we are privileged to represent.

I want to put in a word for the people who are to be more heavily taxed to-day. I have never smoked in my life—some people may say "Shame," or "More's the pity" and I drink very little, but we ought to understand why some people drink as much as they do. I come from the mining industry and when working in the pit with my colleagues I was accustomed to drink some four pints of water during a shift. In that way it was possible to create a thirst tendency and a drinking capacity much greater than that of people in some other occupations. When my right hon. Friend spoke about one-fifth more drink being consumed, I wondered whether he has taken into consideration the fact of the gravity of beer being lower, and of people having to drink more before they get to "a certain stage" as one explanation of his increased revenue from beer. While I would say, "Hands off taxing the people's bread"—and the other commodities which they require in order to live—and prefer that we should rather have taxation on luxury or non-necessitous articles, say beer against bread, we must have regard to the fact that there are industries in which the drinking of a humble pint or so of beer is an encouraging factor, not merely physically but also psychologically.

I wonder whether people who, like myself, drink very little and smoke nothing at all, ought not to reflect whether we are not laying on other people a burden of taxation which is rather difficult for them. Let us face the fact that we allow the consumption of tobacco and beer. If we feel that they should not be consumed, if, as my right hon. Friend inferred, taxation was imposed not merely to raise revenue but to prevent the consumption of the materials, surely we ought to take the straightforward and manly course of precluding people from consuming these commodities and not tax them. As has already been said, there may be a large amount of discontent about this matter in our industrial centres.

I wish to pay tribute to the right hon. Gentleman for removing one difficulty which we have voiced a number of times. We have tried to get the Treasury to see the wisdom of continuing Income Tax rebates to those humble folk who have the misfortune to have members of their families physically or mentally afflicted and unable to work. I congratulate the Treasury on extending a friendly hand to those people who have suffered for so long. I wish also to put in a plea for a class of people about whom I am very concerned—our women war workers—in regard to their travelling expenses. About a year ago, the right hon. Gentleman permitted war workers who had had to leave their ordinary work and place of residence to do war work elsewhere, the sum of £10 as rebate for travelling costs, but I have been alarmed to discover that women war workers are not allowed this advantage, on the ground that they were not formerly in industry. I assure the right hon. Gentleman that the full blast of this realisation will cause great indignation and discouragement to our wonderful women, about whom Her Majesty the Queen spoke so nobly yesterday, and I ask him and his Department to look into this aspect of the matter. The right hon. Gentleman spoke of collecting Income Tax at the time of the receipt of the income, and that is all to the good. I have had quite a number of complaints in my Division from workers whose wages have changed, but who have been called upon at a low wage period to pay Income Tax upon the higher wages they formerly received. We are mindful, of course, of the old statement that "eaten bread is soon forgot," and I ask the right hon. Gentleman to see whether something can be done in this matter.

With regard to widows who receive lump sums of compensation in respect of fatal injuries to their men folk, and who often have tax inflicted on the weekly or monthly amounts they receive by way of such compensation, I would suggest that, inasmuch as those sums of money paid for fatal accidents are exhaustive and not continuing, we might remit taxation, at least, on those lump sum payments. I heartily approve of the right hon. Gentleman's statement that direct taxation is on the increase as against indirect taxation. It may be argued against me that the fact that workers paying direct Income Tax and doing so with some distaste is against the view I put forward, but I believe that when we have settled to this idea that we must find the national revenue, it is infinitely preferable that we should do it viâ the salaries and incomes we receive, rather than by way of an indirect form, which often hits the individual who is bringing children into the world in support of the State.

I would add a word of praise to the Department for continuing this exemption of the Forces from the increased tax on tobacco. I think that was all to the good. Those gallant men of ours at home and abroad are well entitled to receive this advantage and I would even suggest that we should extend our good feeling to our Forces to the extent of making their pay tax-free as well. I would conclude with this point: My hon. Friend on the Liberal benches suggested more generous consideration of the people paying Excess Profits Tax. Could I request him to consider this aspect of things? In industry to-day there is a feeling that, despite what our hon. Friends have said from those benches, about new and sympathetic consideration, the fact is that although these large amounts have been paid in Excess Profits Tax, there is still a very high standard of living among those people. Indeed I would like to suggest to my right hon. Friend's consideration a closer examination of the costs that some firms are now putting in, other than materials and wages, and for an examination of costs of entertainment, etc., and various things that are subsidiary to directors' fees, etc. Thereby I think we shall have advantages accruing to the Exchequer.

All things considered, I think the right hon. Gentleman has made a good statement and that it is something which the country will approve. I do think that some justice has been shown to-day to some of the poorest sections of our community and that I am sure will be of great advantage to them. I hope that some of the other points which my hon. Friends and I have raised, will have the Department's consideration.

Mr. Muff (Kingston-upon-Hull, East)

We have made one or two innovations in recent years. One is that the lesser breeds, the minnows of finance, have a chance on the first day of the Budget Debates to take part, leaving the remaining two or three days to the financial pundits. Our time to-day has not been wasted. We have had several interesting speeches. The junior Member for Southampton (Dr. Thomas) characterised his own speech as abstruse. It certainly was. He attacked my hon. Friend the Member for Leigh (Mr. Tinker) for decrying, as I understood, the possession by individuals of huge sums of money; and then he proceeded to criticise my hon. Friend the Member for Wakefield (Mr. Greenwood) for talking of symbols. Yet to-day's finance, with its mighty astronomical figures, makes one think in terms of symbols. Before the hon. Member for Southampton came into the House, when the war broke out, a prophecy was made that by the time the war was finished we should owe £20,000,000,000. France was then at our side, but I do not think the prophecy will be proved wrong.

The hon. Member, in truly Liberal National style, congratulated himself that the rate was only 3 per cent., when the rate was previously 5½ Per cent., and sometimes, when a municipal authority wanted to borrow, 6 per cent. Some of them are still paying 6 per cent. on money which they borrowed in the last war. I would remind the hon. Member that it was Members on these benches who demanded that the maximum should be 3 per cent. It was my hon. Friend the Member for Leigh himself who introduced an Amendment limiting the rate of interest on short-term loans, and the House agreed with him that the interest should not exceed 2 per cent. I believe the Treasury is now borrowing at 1.7/8ths per cent., or something like that. We are borrowing at lower rates, thanks—I am going to be self-righteous—to the watch-dogs on this side of the House. The right hon. Member for South-West Bethnal Green (Sir P. Harris) spoke of the attitude of Lombard Street when this House wanted money. Even to-day the Chancellor could not announce the changes in taxation until after a certain hour for fear that the patriots of Lombard Street would exploit the situation.

The hon. Member for Southampton mentioned the danger of inflation. It is a great danger, and we have to guard against it. We have to remind our constituents that the prices of some of our main commodities are kept stable because of the money that we are spending to avoid inflation. This is a service that the House is rendering to the nation, and I do not think the nation sufficiently realises what we have done to keep the cost of living at its present figure. It might be very much higher if it were not for our agreeing to what we disliked before the war, namely, subsidies. I will confide in you, Mr. Williams, that I have lost the price of a cigar in a wager. I made a wager that no Chancellor of the Exchequer would dare to put up the price of tobacco another 4½d. He has done so. The price of a bottle of decent beer now, I believe, will be 1s. 1d., or something like it. I am not going to repine. I shall have to cut smoking down, but there is no doubt that the Chancellor of the Exchequer is exploiting the weaknesses of the nation, especially with regard to smoking, and he knows that he will get his revenue. He is going to get increased revenue from tobacco, our drinking habits and our love of pleasure.

People will die, and Death Duties will have to be paid, but I like to think of the "good old days" when the Chancellor of the Exchequer would have gone to that Box and boasted that he had a surplus of a few million pounds. If I am not mistaken, the figures now are something approaching £192,000,000. It has gone into the financial kitty. The increased revenue coming in is all going to be swallowed up in the financial kitty, whereas—and this is where I do criticise the Chancellor of the Exchequer—every other Chancellor, especially in peace-time—I agree it is more difficult in war-time—would have suggested that besides giving the reliefs, which we welcome, to housekeepers, dependants, disabled and so on, he was prepared to discuss the raising of the basic rate of pensions to the aged poor. Throughout the speech I did not hear one syllable about that from the Chancellor of the Exchequer.

The Deputy-Chairman

I must remind the hon. Gentleman——

Mr. Muff

I have left it.

The Deputy-Chairman

—that the Chancellor of the Exchequer would have been out of Order.

Mr. Muff

Would he? I am surprised to hear that, though I do not contest your Ruling, Mr. Williams.

Mr. Tinker

Are we to assume that, if the Chancellor of the Exchequer had made provision to increase old age pensions, he would have been out of Order?

The Deputy-Chairman

He could have conveyed an illustration of it, but I do not think he could have gone into it at any great length. I remember that last year there was some controversy on this subject, and it was ruled out of Order.

Mr. Muff

The lesser lights on finance have been holding forth at not too great length. There was a right hon. Gentleman—the late Joseph Chamberlain—who, when the Government of the day were proposing something, said, "We are not going to take this lying down." I want to say in all seriousness—and this is where I leave it—that we expect something more from the increment of taxation under this Budget and that a dividend should be paid to those who are suffering from that low basic rate to which I have previously referred. I agree with regard to everything else. We have been handing out bouquets to the Chancellor, but I would also hand out a bouquet to the "pick-and-shovel" man. I always call the Financial Secretary to the Treasury the "pick-and-shovel" man. I believe he has also been likened to the devil. But the hon. Gentleman has put in a considerable amount of work, and we thank him for it, and we thank the Chancellor of the Exchequer, but these benches, which are not overcrowded at the present time——

Mr. Kirkwood (Dumbarton Burghs)

But they are better than those benches over there, where they are Government supporters.

Mr. Muff

These benches, when they are full, will be full of Oliver Twists, and asking for more.

Mr. David Adams (Consett)

I, too, desire to tender my cordial congratulations to the Chancellor for the astounding Budget he has submitted to us to-day. It is the most phenomenal Budget we have yet seen, providing, as it does, for an expenditure of £15,000,000 a day. I think we must justly affirm that the deductions the Chancellor has drawn from the operation of his previous Budgets have been strictly impartial and that, however much we may dissent from the taxes which have been added or remitted, we can, nevertheless, all assert that there is nothing in the Budget which favours one section of the community more than another. I sympathise fully with, and declare myself an adherent of, the view expressed by my hon. Friend the Member for Leigh (Mr. Tinker), that if it is desirable to conscript life, it may be equally desirable to conscript wealth. That seems to be an incontrovertible proposition, but I recognise that we are living in a capitalist country and that we have a capitalist Chancellor of the Exchequer. If the Chancellor recognises, as he undoubtedly does, that if we are to strip industry for the taxation of the wealth of the country, it will mean to a certain extent stripping industry of its resources through which it must operate in the interest of the country, then, indeed, he may be dubious of the results in the post-war period, when we must increase our export trade and have no mass unemployment.

The Chancellor has undoubtedly pursued a safe and equitable course in regard to his stabilisation policy. One felt that he might have dabbled a little in the ceasing of expenditure of very large sums that are being paid daily, weekly and annually in order to stabilise the currency of the country and to maintain the cost-of-living index at its present level. We learn that the sum of money required to do so is no less than £180,000,000. With regard to remissions of taxation, we must rejoice that at last—although, in my judgment, too late—utility clothing and its products, and housekeepers' and dependent relatives' allowances have been dealt with. These remissions ought to have been done long ago. For the section of the community that was suffering as a result of the Purchase Tax the remission is extremely welcome, especially in those quarters where relative impoverishment still prevails.

I am glad the Chancellor stated that he has hopes of evolving a scheme by which weekly deductions for Income Tax will be made during the period in which the money is earned. There have been many bitter complaints on the part of men who are suffering and have suffered—who have brought the suffering upon themselves indeed—because of demands for Income Tax upon earnings at a previous period when their fortunes were on a much better level than they were when the tax had to be paid. If a scheme of that character can be evolved, and it does not seem to me to be a difficult matter, there will be removed what has been in industrial circles, to my positive knowledge, a source of great grievance. Men have felt, unreasonably in my judgment, a grievance, and they have unreasonably asserted that grievance by declining to work on night shifts or at week-ends.

With regard to new taxation I dissent entirely from the increased taxes upon entertainments, upon tobacco and upon beer. These will strike at things which have become not mere entertainment and pleasure, but, owing to the pressure upon labour, a necessary solace. The workers have been deprived of normal opportunities of recreation, and they regard their entertainments, their beer and their tobacco as necessities. I think it is a great mistake to add to that taxation. I was glad that the Chancellor mentioned that there were to be certain remissions in Excess Profits Tax. I take it they apply to taxes already paid and not to new taxation. Certain things, such as repairs and renewals, allowances for obsolete machinery, the fall in value of stock, and other wasting assets seem to me to call for certain remissions of taxation as a common-sense anticipation of needs which will require examination after the war.

It occurred to me to wonder whether the Chancellor was not thinking that this might be the last war Budget. I do not believe it can be, but the day is dawning when we shall see the last war Budget, and the Government ought to be more alert in anticipating post-war problems. The Atlantic Charter promises full employment for all, and the Prime Minister has told us that we must strive to secure our fair share of an augmented world trade. If we are to have greater freedom of trade and greater planning in industry, it is time that we anticipated the urgent needs that will present themselves as far as the export and import trade of this country is concerned. The time has come, in my judgment, when the Treasury ought to be able to anticipate the amount of expenditure, so that public investment may co-operate if we are to secure the full employment that we seek. If we have entered, as I believe we have, into this new era of universal planning, we must apply this to trade and finance so that the nation may maintain an adequate level of capital outlay for industry and trade. The Treasury ought to provide statistical tables to enable the nation to forecast the position as far as trade, industry, employment and cognate matters are concerned for at least 6 to 12 months to come. That is not an impossibility. It is achievable in Russia, and it ought to be achievable here. I believe the Chancellor, broadly speaking, has gone upon very safe, sound and just lines, and we hope that in the Finance Bill he may see his way to eliminate altogether, or at all events to modify substantially, the new taxation upon the sections of the community that I have enumerated.

Motion made, and Question, "That the Chairman do report Progress, and ask leave to sit again" [Mr. Boulton], put, and agreed to.

Resolutions to be reported upon the next Sitting Day. Committee also report Progress; to sit again upon the next Sitting day.

The remaining Orders were read, and postponed.

It being after the hour appointed for the Adjournment of the House, Mr. DEPUTY-SPEAKER adjourned the House, without Question put, pursuant to the Standing Order.