Commons Sitting of 4 December 1946

Preamble
The House met at Half past Two o'Clock
PRAYERS
[Mr. SPEAKER in the Chair]
ORAL ANSWERS TO QUESTIONS
  CIVIL AVIATION

    Resignations
    Mr. Douglas Marshallasked the Parliamentary Secretary to the Ministry of Civil Aviation how many employees have resigned from B.O.A.C. and B.S.A.A. in the last three months.
    The Parliamentary Secretary to the Ministry of Civil Aviation (Mr. Lindgren): Six hundred and fifty-two employees resigned from British Overseas Airways Corporation during the period in question; of these, 190 and 363 were clerical and manual workers, respectively. The corresponding figures for British South American Airways Corporation were 32, four and five.
    Mr. Marshall: Can the hon. Gentleman account for this rather large number of resignations?
    Mr. Lindgren: When one takes into account the vast change-over in personnel in most large organisations, one finds that much of this is due to the reaction from war conditions, the resignation of women who have since married and resigned, the releases from the Essential Work Order, and a number of factors of that kind.
    Mr. Lennox-Boyd: How many women who have married are in fact represented in these figures?
    Mr. Lindgren: Of the 652 in B.O.A.C.—I have not separate figures for the B.S.A.A.—250 were women.
    Mr. Lennox-Boyd: Does that mean that more than 400 people have resigned for quite different reasons? Is there any precedent in civil aviation for such widespread resignations at a moment of increasing development?
    Mr. Lindgren: No, Sir, because there is no similar organisation. A number of these appointments were of men who had retired, and who came into civil aviation during the war. A number of men have gone back to their previous employment. It is entirely due to the change-over from war to peace conditions.

    West Country
    Mr. D. Marshallasked the Parliamentary Secretary to the Ministry of Civil Aviation if he is aware that in 1939, under private enterprise, the West Country was served by an air service; that, in spite of assurances that this service would be reinstated last September, no service is yet in operation; and when are Cornwall and the West Country to have an air service.
    Mr. Lindgren: I am aware that in 1939 there was a once daily service between Bristol and the Scilly Isles; but I am not aware that any assurances have been given on the part of His Majesty's Government that the service would be reinstated last September. The establishment of a new service for this part of the country, including the extension of services to Cornwall from other parts of the United Kingdom is being planned. The date of introduction must depend on such factors as the availability of aircraft and provision of the necessary buildings, ground aids and equipment.
    Mr. Beechman: Can the hon. Gentleman say whether aerodromes have been selected yet? Will he see that fog dispersal plant is made use of, as there are occasional fogs in the land of Cornish sunshine?
    Mr. Lindgren: The aerodromes have been approved for the route. In regard to the latter part of the hon. Member's supplementary question, I will have to ask him to wait until equipment is agreed upon.

    Vikings
    Mr. Rankinasked the Parliamentary Secretary to the Ministry of Civil Aviation how many new Vikings will be completed by February of next year; and what number he proposes to allot to British Internal Air Services.
    Mr. Lindgren: It is anticipated that 44 Vikings will have been delivered to British European Airways Corporation by the end of February, 1947. The corporation route plans for 1947 are now being framed, and it is not possible at this stage to indicate the precise allocation of Vikings between continental and internal routes. This is, of course, primarily a matter for the corporation.
    Mr. Rankin: Will my hon. Friend keep in mind the fact that a very decided attempt is being made to attract tourists to this country, and that we should allocate a fair number of these new planes to air services in order to give visitors a good impression of the condition of our internal air services?
    Mr. Lindgren: Yes, Sir. These new planes will be divided as between internal and Continental services.
    Mr. Henry Usborne: Arising out of the first reply, does this mean that 44 Vikings will actually be in operational use by February? My hon. Friend used the term "delivery"; will they actually be ready for use or not?
    Mr. Lindgren: They will be in use, it they are delivered. The promise is that delivery of the 44 will be completed by the end of February, 1947. Their delivery will mean that they will immediately be put into service.

    Pilots (Training)
    Mr. Rankinasked the Parliamentary Secretary to the Ministry of Civil Aviation what steps he is taking, or proposes to take, to secure an adequate supply of trained pilots to meet the developing needs of civil aviation; and, in particular, what is being done to prevent the outflow of experienced pilots to European countries.
    Mr. Lindgren: My noble Friend has under close examination the future arrangements for the supply and training of pilots and aircrew to meet the developing needs of civil aviation. The subject is, of course, dependent on a number of factors, including, for example, the schemes of service and training in the Royal Air Force. It is a compliment to the quality of our pilots that they should be offered appointments with airlines of other countries, and my noble Friend has no power to prevent a pilot accepting an
    310
    appointment outside the United Kingdom. In so far as employment within the United Kingdom is affected by salaries and conditions of employment my noble Friend is satisfied that adequate machinery exists to facilitate negotiation and agreement.
    Mr. Rankin: While it may be true that it is a compliment to our pilots that they should be offered service with European air companies, can we take it that it is not also a reflection on our own services that these men should go there?
    Mr. Lindgren: No, Sir. If it were a reflection, then no member of the British nation would ever have accepted an appointment in any other country, and this country's standing in the world and in its commerce would not have been what it is today.
    Mr. John E. Haire: Is it not a fact that the salaries in the European companies are much higher?
    Mr. Lindgren: I think it is true that in certain instances the salaries are higher, and higher salary in this line, as in any other, tends to attract people to it.
    Mr. Lennox-Boyd: Is not one of the hon. Gentleman's difficulties going to be to see that salaries in Government corporations are raised to those in private services?
    Mr. Lindgren: There is machinery for negotiation, and, as far as pilots transferring to foreign air lines are concerned, the information in the Department is that those who have transferred, to K.L.M. in particular, have come from chartered companies.

    London—Manchester
    Mr. William Shepherdasked the Parliamentary Secretary to the Ministry of Civil Aviation if he will state the average number of passengers carried per journey on the Manchester—London air service since its inception.
    Mr. Lindgren: There is at present no service operating exclusively between London and Manchester. The passengers carried per journey between Manchester and London on the London—Manchester—Belfast Service since its inception on 29th July last up to 23rd November represented an average of approximately one and a half.
    Mr. Shepherd: Does the Minister believe that this average would be accepted by a commercial concern, and will he give the reasons why it is so low, and how much loss is being borne by the taxpayer?
    Mr. Lindgren: So far as the latter part of the question is concerned, I have no information to give. This, in fact, arises from a through service. The passengers are being carried on part of a journey on a through service. The times of the services are naturally not such as would encourage traffic on that part of the journey, because they are outside those that would normally be expected by those who want a direct London-Manchester service. That is the reason for the rather low payload in regard to that somewhat short journey. The through traffic is quite satisfactory.
    Sir Ronald Ross: Are not all aircraft running to Belfast inferior aircraft and is there not such a shortage that they have to be used on that route?
    Mr. Lindgren: No, Sir.

    Croydon
    Mr. W. Shepherdasked the Parliamentary Secretary to the Ministry of Civil Aviation what plans exist for the eventual closing of Croydon as a civil airport.
    Mr. Lindgren: No plans have been made for the closing of Croydon Airport.
    Mr. Shepherd: Is the Parliamentary Secretary satisfied that Croydon conforms to the standards to which an airport should measure, in view of the amount of traffic which it has to bear at the present time?
    Mr. Lindgren: In so far as it is used for Continental services, these are being transferred, as quickly as possible, to London Airport and Northolt. The future, so far as Croydon is concerned, will be for charter and civil flying.

    Prestwick (Blind Approach)
    Colonel J. R. H. Hutchisonasked the Parliamentary Secretary to the Ministry of Civil Aviation how the systems of blind approach at Prestwick compare with those at other British civil airfields.
    Mr. Lindgren: The blind approach systems in operation at Prestwick Airport are as follow: (a) Standard beam approach on two runways; (b) blind approach beacon system on two runways; (c) ground controlled approach which is
    312
    operated by the Royal Air Force; (d) S.C.S.51, an American blind approach equipment on one runway. These installations constitute a comprehensive system which, equally with that being installed at London Airport, is consonant with the needs of an international airport. As such, it compares favourably with the standards obtaining elsewhere.
    Colonel Hutchison: In view of the statement by the Minister in another place that London Airport was the most extensively equipped airport in the world, will the Parliamentary Secretary say why the three systems known as B.A.B.S., G.C.A. and S.C.S.51, which are installed at Prestwick, were not included in Instruction No 181 of 5th November to airmen? If they had been so included, would not that have shown that Prestwick, in fact, is the best equipped airport in the world?
    Mr. Lindgren: I can understand the hon. and gallant Gentleman's local patriotism, but my noble Friend's statement in another place was a correct one.
    Sir R. Ross: Are not these arrangements for blind landing better than those at Rineanna, and if so, why did the Minister not use Prestwick instead of Rineanna for transatlantic aircraft?
    Mr. Lindgren: That is an entirely diffrent question.
    Mr. Gallacher: Can the Parliamentary Secretary say when a blind approach or any other approach will be made at Prestwick by a Scottish built airplane?
    Mr. Lindgren: That is a matter for the distant future.
    Lieut.-Commander Gurney Braithwaite: Is not a blind approach to all problems becoming the order of the day for His Majesty's Government?
    Mr. Lindgren: And, no doubt, for the hon. and gallant Gentleman.

    Orkney and Shetland
    Sir Basil Neven-Spenceasked the Parliamentary Secretary to the Ministry of Civil Aviation why aircraft flying between Renfrew and Orkney and Shetland are allowed to land at Aberdeen for refuelling but may not set down or take up passengers.
    Mr. Lindgren: The aircraft referred to are operated by Scottish Airways under agreement with the British European Airways Corporation to provide for through traffic to and from the Orkneys and Shetlands, via Inverness. Landings are only made at Aberdeen at the discretion of the pilot for reasons of weather or other factors calling for refuelling there. The service from Aberdeen to Orkney and Shetlands is being operated by Allied Airways (Gandar Dower) Limited, as agents for British European Airways Corporation. It would be uneconomic to the finance of the latter service to allow the two services to overlap by providing for scheduled operations of the former through Aberdeen. These arrangements are, however, only temporary pending the taking over of these services by British European Airways Corporation, when arrangements will, according to present plans, be made for the combined service to operate via Aberdeen with passenger stops in both directions.
    Sir B. Neven-Spenceasked the Parliamentary Secretary to the Ministry of Civil Aviation if it is proposed to establish a regular air service between Kirkwall and the north Isles of Orkney.
    Mr. Lindgren: It is the British European Airways Corporation's intention to establish a regular inter-island service in the Orkneys when suitable landing grounds are available. The corporation will use larger aircraft than were used in the Orkneys before the war. An investigation into the state of the existing landing grounds was started last October with a view to making them adequate for the larger aircraft.
    Sir B. Neven-Spence: Will it not be possible to use the aircraft which were in use before the war, when we had a very good inter-island service there? The people are anxious to have it re-established as quickly as possible.
    Mr. Lindgren: It is the desire of my noble Friend to re-establish the service at the earliest possible moment.

    Dakotas (Scotland)
    Sir B. Neven-Spenceasked the Parliamentary Secretary to the Ministry of Civil Aviation why Dakotas are not being used on the main air routes in Scotland, in view of the fact that there is no immediate prospect of aircraft of British manufacture being available.
    Mr. Lindgren: Dakota aircraft are already in use on the route Aberdeen— Renfrew—Prestwick—London. It is the desire of my noble Friend to introduce improved British aircraft on to the air routes in Scotland at the earliest possible date wherever the traffic warrants. This will depend on the prior demands of the Viking aircraft as they are delivered into service. To the extent that Viking aircraft are not available, further Dakota aircraft will be introduced on other Scottish air routes in the early part of 1947. These aircraft will become available by transfer from other routes on replacement by Vikings. The allocation of aircraft will be regulated in strict accordance with the priorities of the traffic demands.

    Empty Seats
    Mr. Keelingasked the Parliamentary Secretary to the Ministry of Civil Aviation in how many cases during the last six months the notice of cancellation of seats booked by Government Departments in outgoing aircraft has been insufficient to enable the seats to be filled; and why Departments are not required, in order to encourage longer notice and so promote the allocation of empty seats to waiting applicants, to pay a fine, like private passengers, when the notice is insufficient.
    Mr. Lindgren: As to the first part of the Question I refer the hon. Member to the reply I gave to him on 27th November last. With regard to the second part of the Question, passages sponsored by Government Departments are paid for by the persons concerned in the ordinary commercial way. If such passages are cancelled, the person concerned has to pay either the whole or part of the passage money, according to how long notice he gives. Where a Government Department obtains a priority passage for a member of its own staff, it very rarely happens that it is cancelled too late to be resold. The question of imposing a "fine" on a Government Department in such circumstances does not appear to have arisen.
    Mr. Keeling: Why not impose a fine if there are any cases at all? Does the Minister appreciate that the number of empty seats booked by the Government on outgoing aircraft is one test of the efficiency of Government control?
    Mr. Lindgren: The latter part of that question is not in accordance with the facts.
    Mr. Scollan: Is it not the case that many Members who have shown such great concern for the new airlines, themselves never use them and thus instil confidence in the public to use them?
    Mr. Lennox-Boyd: Is it not the view of all the travel agencies that if the Government abolished priorities and sponsored applications, there would be a strange decrease in the number of important Departmental missions?
    Mr. Lindgren: That is an entirely different question. So far as priorities and sponsored passengers are concerned, 98 per cent. of them are for business men, about 1 per cent. for Government Departments and 1 per cent. for the embassies of foreign countries.
    Mr. Usborne: In the case of the apparently rare occasions when a member of a Government Department fails to cancel his passage in time, will the Minister tell us what is the reason for the Government Department not being asked to pay for that seat?
    Mr. Lindgren: That is a matter which I think ought to be addressed to the Treasury, because any Government Department which was asked to pay would, in fact, refer the request to pay to the Treasury.
    Mr. Usborne: Will the Parliamentary Secretary ask his noble Friend whether that can be done?

    Switzerland
    Mr. Lennox-Boydasked the Parliamentary Secretary to the Ministry of Civil Aviation whether, in view of the failure of the Government-sponsored corporation to provide any air services to Switzerland for the forthcoming Swiss holiday season, he will, for the time being, allow private British charter companies to run regular advertised services between the United Kingdom and Switzerland.
    Mr. Lindgren: Under the Civil Aviation Act, 1946, the provision of systematic services is, of course, a matter for the three corporations. As regards the premise of the hon. Member's Question, the governing facts at present are the temporarily limited resources of the
    316
    British European Airways Corporation and the prority demands for air communications to other countries. It is hoped that the regular service will be started early in 1947. Meanwhile, the British European Airways Corporation is providing for scheduled air tours to Switzerland for the forthcoming Swiss holiday season by suitable charter arrangements.

    F.I.D.O. (London)
    Mr. Lennox-Boydasked the Parliamentary Secretary to the Ministry of Civil Aviation when F.I.D.O. or some form of fog-clearing equipment will be established at London Airport.
    Mr. Lindgren: I indicated in reply to-questions on this subject on 20th November that my noble Friend is giving urgent consideration to this question. The examination must necessarily take some time in relation to the possibility of installation at the London Airport, but action is proceeding urgently with a view to bringing the F.I.D.O. apparatus at Blackbushe into working order. The equipment has, however, not been used for some little while and renovation, together with recruitment and training of staff must involve a delay of some three months before the installation is in full working order. Meanwhile Manston, which is a diversionary airport, is equipped with this apparatus in working order.

    Lympne (Night Landing)
    Mr. Lennox-Boydasked the Parliamentary Secretary to the Ministry of Civil Aviation when it is proposed to equip' Lympne airport for night landings.
    Mr. Lindgren: The prewar facilities at Lympne were destroyed during the war, It will not be possible to provide new night lighting facilities until the aerodromes to be used in the United Kingdom by regular air services are fully equipped with these facilities. In the meantime the possibility of providing obstruction lighting and a mobile floodlight at Lympne is under consideration.
    Mr. Lennox-Boyd: Will the Minister say for how much longer the accidents that happen here are to be allowed to continue and whether, if night landing apparatus cannot be installed, at least lights could be put on the obstructions if the obstructions, which are now holding up night landings, cannot be removed?
    Mr. Lindgren: So far as the number of accidents is concerned, the hon. Gentleman must have information which is not at my disposal.
    Hon. Members: It was in the Press.

  GERMANY

    Volkswagen (Price)
    Mr. W. Shepherdasked the Chancellor of the Duchy of Lancaster what was the original price announced for the sale of the Volkswagen to British personnel in Germany; and what have been the subsequent increases in the price.
    The Chancellor of the Duchy of Lancaster (Mr. John Hynd): Only one price has been officially announced—£160.
    Mr. Shepherd: Can the Minister say whether British personnel who buy these cars in Germany may import them into this country for their own use?
    Mr. Hynd: No, Sir. They cannot.

    Food and Fuel Shortage (Deaths)
    Mr. D. Marshallasked the Chancellor of the Duchy of Lancaster how many deaths caused by lack of food and fuel there have been in the British zone of Germany during October, 1946.
    Mr. J. Hynd: No deaths were reported in October as having resulted from lack of fuel. Eighty-five deaths were reported with oedema complications attributed by German doctors to lack of food. Organic disease was present in many of these cases.

    Reparation Plants
    Mr. Stokesasked the Chancellor of the Duchy of Lancaster at what date the earmarking of factories for reparations is to cease, in view of the fact that it was agreed at Potsdam that such scheduling should be completed not later than 2nd February, 1946.
    Mr. J. Hynd: As I stated in the last Debate on Germany, 2nd February, 1946, was the date on which the level of industry, which would determine the total amount of surplus plant available for reparations, was to be decided and not the particular plants to be earmarked The selection of the most suitable plants within the limits agreed under the level of industry plan of last March is a process
    318
    requiring careful consideration in the interest of Germany economy itself, and I regret it is not possible to declare a final date for completion of the process at this stage.
    Mr. Stokes: Will the Minister be in a position at an early date to make a statement, if only to stop contradictory rumours? Is he aware that only yesterday the British News Service in Cologne announced the impending closure of four further factories at the same time that the British United Press at British Headquarters was giving it out as a distinct probability that all reparations of capital goods would cease? Can he not stop these contradictions?
    Mr. Boothbyasked the Chancellor of the Duchy of Lancaster what steps he is taking to prevent the continued destruction of industrial plant in the British zone of Germany, under the reparation clauses of the Potsdam Agreement.
    Mr. J. Hynd: We must recognise our obligations under Potsdam but the level of industry and reparations may well be discussed by the Council of Foreign Ministers, and I cannot anticipate such discussions. As I stated in the last Debate on Germany, the level of industry plan was agreed on certain understandings, primarily the recognition of German economic unity, and other considerations which have now to be reviewed.
    Mr. Boothby: Is it not a fact that the Russians are proceeding with their own plans in their zone quite apart from any understandings that may have been arrived at at Potsdam, and is there any reason, in the circumstances, why we should not do the same?
    Mr. Hynd: If the question refers to reparations policy in the Russian zone, they are permitted to do so under the Potsdam Agreement: if it refers to wider questions, that, of course, is one of the reasons why we may have to review the level of industry.
    Sir Frank Sanderson: Does the Minister not consider that it would be more economic to take the product of the machinery, rather than the machinery itself, for the payment of reparations?
    Mr. Nigel Birchasked the Chancellor of the Duchy of Lancaster why the factory of Messrs. Imhausen, Witten, is to be dismantled.
    Mr. J. Hynd: I would refer the hon. Member to the reply which I gave to my hon. Friend the Member for Burslem (Mr. Edward Davies) on 27th November.
    Mr. Birch: Will the hon. Gentleman give an undertaking that this factory has not been only temporarily reactivated, and does he not think that the raw material difficulties in industry have been very much accentuated by forbidding the production of synthetic petrol in Germany?
    Mr. Hynd: It the hon. Gentleman refers to the reply to which I have drawn his attention, I think he will find that the factory has been reactivated for the very reason he has mentioned.
    Mr. Gammansasked the Chancellor of the Duchy of Lancaster why the agreement reached at Potsdam with regard to the allocation of German surplus factories has been contravened, in that of seven factories which have been dismantled five have been allocated to Russia and Poland and only two to the Western Powers.
    Mr. J. Hynd: The Potsdam Agreement provided that Russia should receive only 25 per cent. of surplus plant from Western zones, the remaining 75 per cent. to be divided amongst the Western Allies. The first division is, therefore, made as between Russia and the Western Allies, and dismantling of plants allocated to Russia can be commenced immediately after this first allocation. In the case of the Western Allies, their share has to be subjected to a second allocation as between the various claimant countries—a somewhat lengthy procedure—before dismantling can begin. It is for this reason that Russia is ahead of the Western Allies in actual process of dismantling her smaller proportion of plant, and there is no breach of the Potsdam Agreement.
    Mr. Gammans: In view of the fact that it is unlikely that further large-scale dismantling will take place, does it not mean that because the Russians were quicker off the mark they have got away with the "swag"?
    Mr. Skeffington-Lodgeasked the Chancellor of the Duchy of Lancaster the names of the factories in the British zone which may be allocated for reparations which have been, or are being, valued for the purpose of reparations, and upon which demolition has actually started.
    Mr. J. Hynd: I will, with permission, circulate in the OFFICIAL REPORT the names of the plants in the British zone already allocated for reparations, including those which are now in course of dismantling. It would not be in the public interest to disclose the names of further plants which have been provisionally declared surplus under the present level of industry plan at this stage.
    Following is the List:
    Plant and Location

    Schiess A.G.—Oberbilk, Dusseldorf.

    Schiess A.G.—Heerdt, Dusseldorf.

    Schiess A.G.—Reisholz, Dusseldorf.

    Krupp—Borbeck.

    Badeisenwalzwerk—Dinslaken.

    Haniel & Lueg—Dusseldorf.

    Kurbelwellenwerke—Glinde, Hamburg.

    Metallwerke—Neuengamme, Hamburg.

    Hanseatische Kettenwerke—Hamburg.

    Waldrich—Siegen.

    Wagner—Dortmund.

    Kriegsmarine Werft—Wilhelmshafen.

    I.G. Farben Uerdingen—Uerdingen.

    Mathes & Weber—Duisberg.

    Blohm & Voss—Hamburg.

    Norddeutsche Dornierwerke No. 2—Lubeck, Kiel.

    Norddeutsche Dornierwerke No. 4—Roth-beck.

    Norddeutsche Dornierwerke No. 7—Sier-kerade.

    Rinker—Minden.

    Metallwerke Wolfenbouttel—Wolfenbuttel.

    Wolf & Co. Factory A—Bomblitz.

    Wolf & Co. Factory B—Doenverden.

    Wolf & Co. Factory C—Liebenau.

    Dynamit A.G.—Duneburg, Hamburg.

    Dynamit A.G.—Krummel, Hamburg.

    Dynamit A.G.—Clausthal, Zellerfeld.

    Warren Commissions A.G.—Dannenberg, Elbe.

    Heeres-Munitions-Anstalt—Ahrbergen, Hanover.

    Heeres-Munitions-Anstalt—Grasleben, Helmstadt.

    Heeres-Munitions-Anstalt—Lehre, Hanover.

    Heeres-Munitions-Anstalt — Lockstedten —Lager, Hanover.

    Heeres-Munitions-Anstalt—Bodenteich, Hanover.

    Heeres-Munitions-Anstalt — Godenau uber Alfeld.

    Heeres-Munitions-Anstalt—Scheuen.

    Lufthaupt-Munitions-Anstalt—Hambuhren.

    Lufthaupt - Munitions - Anstalt — Nienberg, Weser, Hanover.

    Hans Moog—Wuppertal, Ronsdorf.

    Heeres-Munitions-Anstalt (Salzwerk Riedel) —Burgdorf.

    Sperrwaffenarsenal—Soltau, Hanover.

    Fulbanlage—Clauen, Hanover.

    Stahrohrfabrik von Rudolf Sierverts—Hamburg.

    Chemische Werk Harze-Weser—Langelsheim, Hanover.

    VDM Halbzegwerke Altona—Schwartzenstein, Altona.

    Lenglern Explosives Store—Gottingen, Hanover.

    Blohm & Voss, Steinward—Hamburg.

    Blohm & Voss, Stadtwerk—Stadtwerke.

    321

    Blohm & Voss, Veddel—Hamburg.

    Blohm & Voss, Flugzeug, Altona—Hamburg.

    Gebruder Rentrop—Stadthagen.

    Viking Werkstaetten—Flensburg, Kiel.

    Heinkel A.G. Werkstaetten—Bad Gandersheim.

    Bahre & Gretan—Springe, Hanover.

    Ludwig IIansen—Muenster.

    Brinker Eisenwerk, Max Mueller—Langen-hagen, Hanover.

    Oskar Schneider & Co.—Leichlingen, North Rhine.

    Engelhardt & Foerster—Ober-Verden, Hanover.

    "Wimab" W. Hener Maschinenbau—Witten, Ruhr.

    Fred Mayer & Soehne—Lutzenburg, Holstein.

    Werk Langendreer, Bochomer Verein—Langendreer, Munster.

    Karl Ritscher—Spreetze, Hanover.

    *NOTE—The first 9 on the list are in process of being dismantled.
    Major Bruceasked the Chancellor of the Duchy of Lancaster whether it has been proposed to complete the blowing up or dismantling of Bloehm and Voss; and whether it is proposed to dismantle the turbine repair shop, or the saw mill, or the remaining cranes.
    Mr. J. Hynd: The Allied authorities in Germany have agreed that the whole of this plant should be available as reparations to the Western Allies. It is therefore due to be dismantled and removed after allocation by the Inter-Allied Reparations Agency.
    Major Bruce: Is my hon. Friend aware that there is a considerable amount of plant which could be used for peacetime production and which could, in fact, aid in the recovery of Germany?
    Major Bruceasked the Chancellor of the Duchy of Lancaster which factories in Germany have been ordered to be dismantled.
    Mr. J. Hynd: I have no official information on the dismantling of factories in eastern Germany. There are 17 factories being dismantled in the Western Zones, and I will, with permission, circulate the list of these plants in the OFFICIAL REPORT.
    Following is the list:
    British Zone.

    Schiess A.G. Oberbilk, Dusseldorf.

    Schiess, A.G. Heerdt, Dusseldorf.

    Krupp, Borbeck.

    Bandeisenwalzwerke, Dinslaken.

    Schiess A.G. Reisholz.

    Haniel & Lueg, Dusseldorf.

    322

    Kurbelwellenwerke, Glinde.

    Hanseatische Kettenwerke, Langenhorn.

    Metallwerke, Neuengamme.

    American Zone.

    Kugelfischer, Schweinfurt.

    Deschimag-Weser—Bremen.

    Gendorf, Munich.

    Daimler Benz, Obrigheim.

    Deschimag-Valintin, Bremen.

    Fritz Mueller, Oberesslingen.

    Bohner & Kornle, Esslingen.

    French Zone.

    Degussa, Rheinfelden.

    Newspapers and Periodicals
    Mr. Edelmanasked the Chancellor of the Duchy of Lancaster whether there has been any change in the arrangement whereby newspapers and periodicals can be sent to the British zone of Germany only through a publisher, newsagent or bookseller.
    Mr. J. Hynd: Yes, Sir, private individuals in this country may now send newspapers and periodicals direct to individuals in the British zone of Germany and the British sector of Berlin. Details of the revised scheme are being published by the Postmaster-General. Similar arrangements, in respect of English language newspapers and periodicals, have been made in all Empire countries, India and the United States of America.
    Mr. Wilson Harris: Could the hon. Gentleman say whether that applies to books also, or only to periodicals?
    Mr. Hynd: Books, at the present time, can be sent to Germany through the Save Europe Now Scheme, and there is no immediate extension of the facilities contemplated at the moment.

    Transferred Workers (U.S.S.R.)
    Mr. Gammansasked the Chancellor of the Duchy of Lancaster if he is yet in a position to make a statement regarding the removal to the U.S.S.R. of German civilians in Berlin and other parts of the Soviet zone.
    Mr. J. Hynd: This matter was discussed, on British initiative, at the Control Council in Berlin. It proved impossible to agree the terms of a statement on the policy of employing German labour abroad or to ascertain the conditions under which workers had been transferred to U.S.S.R. The Russian representative stated, however, that it was not proposed to make any further removals of skilled

    323
    workers to Russia. Allegations have appeared in the German Press that the British authorities have deported large numbers of scientists from Germany and forced them to work for us against their will. This is not so and I must state formally that it is not, and never has been, our policy to bring scientists or workers to this country except of their own free will.
    Mr. Gammans: Does this mean that those Germans who were taken away forcibly, as opposed to those who went away voluntarily, to Russia, have not been returned and are still there?
    Mr. Hynd: We have not been able to substantiate the fact that any number of workers were removed forcibly to the U.S.S.R. As stated in the answer, we were unable to obtain a clear indication of what had happened.
    Lieut.-Colonel Sir Thomas Moore: Will the Minister say what form of persuasion or inducement is used by the Soviet authorities?
    Mr. Gallacher: The same as the Americans—the almighty dollar.
    Mr. Stokes: Is the Minister aware that though he has not got the information, there are plenty of people at present in this country who can give him precise details?

    British Personnel (Marriage)
    Mr. Kenneth Lindsayasked the Chancellor of the Duchy of Lancaster why permission is refused civilian officers in the Control Commission for Germany to marry German girls; and whether it is his intention to change the present policy.
    Mr. J. Hynd: Civilian employees may now be permitted to enter into marriages with Germans on conditions generally similar to those applying to military personnel.

    Hamburg Project
    Mr. John Patonasked the Chancellor of the Duchy of Lancaster what was the daily average of the number of workers of all kinds employed on the Hamburg Project and on the building and repair of houses in Hamburg for German civilians, for the period 20th October to 19th November, 1946, giving the averages in each category, separately.
    Mr. J. Hynd: There were on the average some 9,000 Germans and 180 British employed during this period on the Hamburg Project and 1,400 Germans employed on emergency civilian repairs. The figure of 9,000 includes however some 2,500 engaged on rehousing for Germans and some 1,400 employed in providing alternative office accommodation for Germans. Some 5,100 Germans are therefore engaged on the Hamburg Project proper and 5,300 on accommodation for German civilians.
    Mr. Paton: How is it possible to justify this enormous disproportion? In view of the dire need that exists in Hamburg for effective protection for the German population against the hard German winter, should not this whole project be reviewed?
    Mr. Hynd: As I have pointed out quite often, the project, as it is called, involves at present the building of housing accommodation, which is planned, in collaboration with the German authorities as part of the reconstruction of Hamburg. It is anticipated that as and when the Control Commission headquarters for the zone are concentrated in Hamburg, some of that accommodation will be available, whether or not the motive is the building of houses eventually for the German population.

    Minister's Visits
    Mr. Boothbyasked the Chancellor of the Duchy of Lancaster on how many occasions he has visited the British zone during the past 12 months and how many days he has spent in Germany.
    Mr. J. Hynd: During the past 12 months I have visited the British zone seven times and have spent 28 days in Germany.
    Mr. Boothby: Does the hon. Gentleman think that is adequate for the discharge of his duties?
    Mr. Hynd: No, Sir. I am afraid a 24-hour day is not adequate for the discharge of my duties, but I hope that the relief which has been given to me by the introduction of weekly answers to Questions instead of daily, may assist.

    De-Nazification
    Mr. Boothbyasked the Chancellor of the Duchy of Lancaster what steps he is taking to expedite the process of de-Nazification in Germany; and when he anticipates it will be concluded.
    Mr. J. Hynd: I dealt fully in the Adjournment Debate last Wednesday with the steps which are being taken to speed up de-Nazification. All concerned appreciate the need for expedition, and it is hoped to complete de-Nazification in the British zone under the present scheme by the summer of next year.

    Co-operative Movement
    Mrs. Ridealghasked the Chancellor of the Duchy of Lancaster to what extent the Co-operative movement has been revived in the British zone in Germany; what is being done to help it take an active part in the rehabilitation of the German people; whether the international Cooperative alliance is being consulted; and whether the British Co-operative movement is being allowed to assist.
    Mr. J. Hynd: Since the German Cooperative movement was revived in February of this year 62 societies have been approved and the formation of another 26 is under consideration. To help the movement, Nazi discriminatory measures have been revoked, the Germans have been invited to set up an advisory body to assist in the foundation of new societies, and an expert adviser on cooperate matters has been appointed to the staff of the Control Commission. A cooperative institute for applied economics and co-operative training centres have been opened and a co-operative newspaper has been licensed. Representatives of both the International Co-operative Alliance and the British Co-operative Union have visited the zone and given useful advice.

    Blind Welfare
    Sir Ian Fraserasked the Chancellor of the Duchy of Lancaster if he will encourage suitable blind and blinded Germans to reorganise and rehabilitate facilities for the provision of education, training and work for blind people in the British zone.
    Mr. J. Hynd: Yes, Sir, investigations are already in hand to ascertain how best the Control Commission can assist and encourage the Germans to reorganise their blind welfare services.
    Sir I. Fraser: Is the hon. Gentleman aware that any help given in this matter will bear fruit because many blind people, especially young blinded ex-Servicemen, can do valuable economic work?
    Mr. Hynd: We are fully aware of these factors, and that is why the question is receiving the attention at present being given to it.

    Kiel (Demolitions)
    Mr. Stokesasked the Chancellor of of the Duchy of Lancaster whether instructions have now been given to stop the destruction of the deep-water wharves and piers at Kiel so that ocean-going vessels can put in for ordinary legitimate peacetime trading purposes.
    Mr. J. Hynd: I would refer my hon. Friend to the reply which I gave to his earlier Question on 14th October. Full consideration has been, and is being, given to the preservation of facilities required for peaceful trade at Kiel.
    Mr. Stokes: Am I to understand from my hon. Friend's reply that the Government have now changed their policy, and that it is not intended to limit the ships to small vessels of 1,250 tons capacity?
    Mr. Hynd: The reply which I gave in answer to my hon. Friend's earlier Question indicated that we were proceeding to deal with the naval installations and the naval quays at Kiel, but that the deep water and other facilities which can be useful for peacetime purposes are being considered for such purposes.

    Polish PWX
    Major Tufton Beamishasked the Chancellor of the Duchy of Lancaster what suggestions have been received from Polish Army authorities in London regarding the future status of Polish PWX in the British zone in Germany; whether all these suggestions are acceptable to His Majesty's Government; how many Poles in the British zone in Germany were prisoners in German hands during the war and are classed as PWX; what distinguishes the status of these Poles from the status of D.Ps.; and what is to be their future status.
    Mr. J. Hynd: The suggestion was that these Polish PWX should be recruited into the Polish Resettlement Corps in this country or, if they must remain in Germany as displaced persons, that they should keep their military status until given suitable employment under the British authorities, when their civilian identity cards should be endorsed to show

    327
    that they had been Allied combatants. His Majesty's Government have agreed that those who served under British command, may be recruited into the Polish Resettlement Corps; the remainder are to be given civilian status in the British zone where those who do not accept repatriation will, with other Allied ex-prisoners of war, receive priority in employment by the British authorities; their cards will be stamped to show that they were ex-prisoners of war. There are about 30,600 Polish PWX's in the British zone.
    Mr. Francis Noel-Baker: Can my hon. Friend say what is the status of the Polish Army authorities in London, under whose command they now are, and when they are to be liquidated?
    Mr. Stokes: In view of the unsatisfactory nature of the reply, I beg to give notice that I propose to raise the matter on the Adjournment.

    Dr. Schumacher
    Mr. Vaneasked the Chancellor of the Duchy of Lancaster what is the purpose of the visit to this country by the German delegation led by Dr. Schumacher; who are the other members of his party; and what is the programme of their tour.
    Mr. J. Hynd: Dr. Schumacher is visiting this country at the invitation and as the guest of the Labour Party. He is accompanied by Dr. Victor Agartz, Herr Franz Neumann, Herr Fritz Heine, and Herr Wilhelm Knothe. The party arrived on 29th November and is remaining for about 12 days. The programme for the visit, as in all such cases, is in the hands of the inviting organisation.
    Mr. Vane: Will the hon. Gentleman say whether the visit of this delegation has created a precedent and that other private parties from Germany will now be allowed to visit this country, or is that a privilege reserved only for the Socialists' own friends?
    Mr. Hynd: No, Sir. The precedent was set many months ago and has been followed on several occasions by many other parties invited to this country by responsible organisations, religious and other, on this side. I think that the Opposition would agree that it would be diffi-
    328
    cult even for me to refuse the same facilities to representatives invited by the British Labour Party.
    Mr. Mikardo: Is the Minister aware that, irrespective of party, all fair-minded people in this country welcome the visit of this great democrat who suffered so much more than anybody in this House for his opposition to Nazism?

    "British Zone Review"
    Mr. Vaneasked the Chancellor of the Duchy of Lancaster what is the cost of publishing the "British Zone Review"; and what is its circulation.
    Mr. J. Hynd: The cost of each issue of the "British Zone Review" is about £100 sterling plus 1,700 Reichmarks. The circulation is 17,750 copies.
    Mr. Vane: Does not the hon. Gentleman consider that it is a lot of money for a paper of rather low standard, and would he not consider discontinuing it, especially as all factual information is summarised in the Control Commission's Monthly Report?
    Mr. Hynd: I agree that it would be a lot of money if it were a paper of low standard. I think that the "Review" is an excellent publication and is full of useful information.
    Mr. Wilson Harris: Is the hon. Gentleman aware that this paper contains many articles of great interest to anyone in this country who wants to understand conditions in the British zone?
    Mr. Hynd: The primary purpose of the paper is to retain the interest of our own staff in Germany in the various activities that are going on.

    Skimmed Milk Ration
    Major Bruceasked the Chancellor of the Duchy of Lancaster what proportion of the skimmed milk ration for normal consumers was met in the North Rhine region in the first three weeks of the 28-day period beginning 14th October.
    Mr. J. Hynd: In the towns, normal consumers received on the average about 70 per cent. of the ration; in rural districts it was met in full.
    Major Bruce: Could my hon. Friend say whether the proportion is likely to increase in the future?
    Mr. Hynd: I hope that the proportion of the ration will increase in the future. The total amount of the ration is another question because, owing to the seasonal shortage in the production of milk, it may be necessary that the ration of this particular food should be reduced owing to the quantities available.

    Official Transport (Use)
    Mr. Skeffington-Lodgeasked the Chancellor of the Duchy of Lancaster whether he is aware that drivers and transport employed by the Control Commission in the British zone of Germany are being used for illegal purposes by B.A.O.R. wives; and if he will arrange that they are forthwith used as originally intended.
    Mr. J. Hynd: No, Sir, I am not aware of any instances to justify the allegation in the Question concerning illegal use of these facilities by B.A.O.R. wives.
    Mr. Skeffington-Lodge: May I just explain myself? May I ask the hon. Gentleman if he is aware of the fact that a good many British drivers are very resentful because they are being used to take B.A.O.R. wives to bridge parties and cocktail parties, and because they are also being used to take children to and from school, which is quite irregular?
    Mr. Hynd: I am not aware of the first part of the question. It is quite possible that a few drivers may be taking wives to bridge parties. It is certainly proper that they should assist in transporting children to school where necessary, because of the complete absence of transport facilities in Germany, and the non-existence of transport facilities by which British children could be expected to travel to school.

  AUSTRIA (HARVEST)
  Mr. Randallasked the Chancellor of the Duchy of Lancaster the results of the conference to investigate the slow progress with the harvest in the British zone of Austria, its causes, suggested remedies and what action is contemplated.
  Mr. J. Hynd: I do not know to which conference my hon. Friend refers as this matter has been under constant examination. The main difficulty has been transport, owing to the shortage of vehicles, tyres, spare parts and petrol. Largely as
  330
  a result of British help in supplying the Austrian Government with surplus Army vehicles, tyres and spares, most of these shortages have now been substantially overcome, but shortage of petrol is still a serious handicap. Negotiations are in progress to secure more petrol, and the Austrian Government are to introduce new legislation giving them more control over the agricultural programme and the collection of food from the farms.
  Sir Peter Macdonald: Is it not a fact that the petrol in Austria is in the Russian zone, and could not some pressure be put on the Russians to release some of this petrol—of which there is an adequate supply for Austrian needs—for other zones?
  Mr. Hynd: I do not think that the hon. Gentleman's information is correct. The type of oil produced from the Austrian wells and refineries is not the type of petrol useful for this kind of purpose. It is true that if some of that oil were released, it might be more easy for the Austrians to exchange it for petrol from other sources.

  JAPANESE WAR (CONCLUSION)
  Mr. Horabinasked the Prime Minister if he will state the date on which overtures for peace were first received from Japan; the date on which the decision was reached to drop the first atomic bomb on Japan; and the date on which the bomb was dropped.
  The Prime Minister (Mr. Attlee): The decision in principle to use atomic weapons against Japan was taken at the beginning of July, 1945, and the first bomb was dropped on 6th August. The offer of peace made to Japan by the Potsdam Declaration on 26th July was not accepted until 10th August.

  HOUSING EXPENDITURE (RECOMMENDATIONS)
  Mr. Sparksasked the Prime Minister what action he proposes to take, arising from the recommendations of the Select Committee on Estimates, in reference to housing expenditure.
  The Prime Minister: This report is under consideration by the Departments concerned.
  Mr. Sparks: Will the report be made available to hon. Members?
  The Prime Minister: I should like notice of that.

  ATOM BOMB (PROHIBITION)
  Mr. Piratinasked the Prime Minister whether it is the Government's intention to seek to prohibit the use of the atom bomb.
  The Prime Minister: Yes, Sir.
  Mr. Piratin: Do I understand from that gratifying answer that our representative in the United States at this time is informed of the Prime Minister's opinion, and is acting on that?
  The Prime Minister: Yes, Sir.
  Mr. Piratin: Thank you.

  ARMED FORCES

    Sentences (Review)
    Mr. Hector Hughesasked the Minister without Portfolio if he is aware of the widespread demand in this country for legislation authorising the suspension of sentences of penal servitude and imprisonment passed on soldiers during the recent war; that such legislation was passed by the British Parliament during the 1914–18 war; and if he will introduce such legislation on lines similar to the Army (Suspension of Sentences) Act, 1915.
    The Secretary of State for Air (Mr. Philip Noel-Baker): As the House is aware, my right hon. Friend is heavily engaged today in important discussions elsewhere and I have therefore been asked to reply. I am glad to assure my hon. and learned Friend that the provisions of the Army (Suspension of Sentences) Acts of 1915–16 were embodied in the Army Act of 1920, and that their scope was then extended. They are now contained in Section 57A of the Army and Air Force Act, and similar provisions are embodied in Section 74A in the Naval Discipline Act. The reforms introduced in 1915 and 1916 are a permanent part of Service law.
    Mr. Hughes: Is the Minister aware that the number of His Majesty's Forces who are now in prison, combined with those
    332
    who are absentees and missing from their units, total nearly 17,000; and will he, by putting into operation either the Act to which I have referred or some other Statute, make a generous suggestion which will enable them to take their places in the Forces or in industry where they may be needed?
    Mr. Noel-Baker: As my right hon. Friend the Secretary of State for War said a fortnight ago, the questions which my hon. and learned Friend has just raised are under continual review.

    Demobilisation (Rate of Release)
    Mr. Heathcoat Amoryasked the Minister without Portfolio whether, in order to even up the relative rates of release between the Services, he will consider a temporary transfer of certain commitments from the Service with the slowest rate of release to that in which the rate is fastest.
    Mr. P. Noel-Baker: The proposal to transfer commitments from one Service to another, in order to even up the rate of release, has been exhaustively examined in recent months. It was found that the help which could be given by the Royal Navy and the Royal Air Force would be so small that transfers would, in practice, be uneconomical, and that they would involve the waste of the technically trained manpower of these two Services. Moreover, the size of the age and service groups now being released from the Royal Navy and the R.A.F. is shrinking fast; for this reason, delay in the release of these groups would have little effect on the rate of releases from the Army.
    Mr. Amory: Will the right hon. Gentleman bear in mind that mariners are, by tradition, handymen, who can take on any useful job in their stride, and carry it out efficiently?
    Mr. Chetwynd: Would my right hon. Friend consider restricting entry into the Royal Navy until the present disparity of release has been evened up?
    Mr. Noel-Baker: I will ask my right hon. Friend to consider that.

    Service Vehicles (Number Plates)
    Captain John Crowderasked the Minister without Portfolio if he will arrange for all Service vehicles to carry

    333
    number plates with not more than four figures, similar to those carried by private cars, so that the vehicles may be more easily identified in the event of an accident.
    Mr. P. Noel-Baker: The Service Departments are still in process of reducing their large wartime holdings of vehicles, and it would, at present, be impracticable to carry out the hon. and gallant Member's suggestion, but my right hon. Friend will certainly consider its adoption when conditions revert to normal.

    Deserters
    Lieut.-Colonel Liptonasked the Minister without Portfolio whether, in order to reduce the number of deserters from the Services, he will devise some form of conditional amnesty for those deserters who voluntarily come forward to complete their term of service.
    Mr. P. Noel-Baker: I would refer the hon. and gallant Member to the reply given by the Secretary of State for War to the hon. Member for Abingdon (Sir R. Glyn) on 28th November, of which I am sending him a copy. I am not at present in a position to add to that reply.
    Lieut.-Colonel Lipton: While I thank my right hon. Friend for offering to send me a reply, of which I already have a copy in my possession, is he aware that, although this problem is said to be under continual but seemingly ineffectual review, the number of deserters has remained about 20,000 for nearly 12 months, and that public opinion generally deplores this uneconomic and demoralising state of affairs?
    Mr. Speaker: I do not think supplementary questions ought to be miniature speeches; they should be short and snappy.

  FOOD SUPPLIES

    Biscuits
    Mr. Gerald Williamsasked the Minister of Food if he will provide more and better raw materials for the manufacture of biscuits in this country, instead of damaging the goodwill of British biscuit manufacturers by importing biscuits that are packed better, and are of better quality than is possible in this country.
    The Parliamentary Secretary to the Ministry of Food (Dr. Edith Summerskill): Immediately supplies permit, biscuit manufacturers will be allowed increased allocations of raw materials of the best available quality. I have no reason to believe that, in general, the quality of foreign biscuits, or the type of packing employed, will adversely affect the goodwill of British manufacturers.
    Mr. Williams: Is the Minister aware that the quality is affecting the goodwill of the biscuit manufacturers in this country very disastrously?
    Dr. Summerskill: I would remind the hon. Member that so far we have not imported any biscuits.

    Tomatoes
    Lieut.-Commander Joynson-Hicksasked the Minister of Food (1) whether he is aware that, on 9th and 10th October the prices per 12-lb. box of sound tomatoes received by growers from the T.P.D.A. was 3d. per box, and on 25th October was 2d. per box; and what steps he is taking to ensure a reasonable price to the growers of home-grown tomatoes for next season;
    (2) why, on 1st October, prices for 12-lb. boxes of tomatoes paid to growers by the T.P.D.A. were 1s. 9d. for best, but 2s. 8d. for others; and what steps he is taking to ensure that a similar penalty is not imposed upon quality for next season's crop.
    Dr. Summerskill: I am aware that in certain instances, largely owing to unfavourable weather, prices as low as those mentioned by the hon. and gallant Member were paid. Such information as I have been able to obtain shows, however, that average prices paid by the T.P.D.A. to growers on the dates mentioned, even for second grade tomatoes, were substantially higher than those quoted. As soon as the information necessary to identify the individual transactions has been obtained, I will look into them further and will write to the hon. and gallant Member.
    Lieut. - Commander Joynson - Hicks: While appreciating the latter part of the hon. Lady's reply, may I ask if she will not agree that the prices referred to, if substantiated, are really impossible for any

    335
    producer; and will she take steps to try to ensure that such things do not occur next year?
    Dr. Summerskill: I would inform the hon. and gallant Member that the maximum prices in that area on those days were 7s. for 12 lb. chips, and two days later they were raised to 10s. The hon. Member will recall that the weather was very unfavourable, and some of those tomatoes were almost unsaleable.

    Egyptian Eggs
    Mr. Spenceasked the Minister of Food what quantity of shell eggs has been imported from Egypt during 1946.
    Dr. Summerskill: None, Sir. The Egyptian Government has imposed a ban on the export of eggs.
    Mr. Spence: Will the hon. Lady make representations to see if we can get some eggs in exchange for the Suez Canal?
    Dr. Summerskill: I would remind the hon. Member, who must have this information, that the egg packers are continually making representations for the removal of the ban.

    Butchers (Profit Margin)
    Mr. Derek Walker-Smithasked the Minister of Food what representations he has had that the margin of gross profit at present allowed to retail butchers is insufficient to cover the increased cost of serving the meat to the public; and what action he proposes to take.
    Dr. Summerskill: The National Federation of Meat Traders Associations have made representations to the effect that the profit margin for general butchers is too low. These were based on figures of butchers' returns, which are difficult to reconcile with figures obtained by the Ministry. The federation has, therefore, been asked to agree to their accountants consulting with the Ministry's accountants. It is hoped that the result of this consultation will enable us to reach a decision which will be fair and reasonable both to the trade and the community.
    Major Legge-Bourke: In view of the unsatisfactory quality of some of the meat coming from the Argentine, will the hon. Lady consider an increase in the cutting out allowance?
    Dr. Summerskill: That is another question.
    Mr. Walkden: Is my hon. Friend aware that there is another point of view on this issue; and does she recognise that the butchers of Britain have, in the main, never made so much money as they have in the last five years in selling so little in so short a time, and that many butchers do not want control removed for a very long time?

    Wedding Cake (Despatch Abroad)
    Mr. Keelingasked the Minister of Food whether his attention has been drawn to the confiscation of tiny pieces of wedding cake despatched by newly-married couples to their friends overseas who had sent them the ingredients; whether he is aware that this causes resentment at home and abroad; and whether he will give permission for small presents of wedding cake to pass unhindered.
    Dr. Summerskill: There is no obstacle to the despatch abroad by letter of small packets of wedding cake. In a recent case a packet was held up because it did not comply with the postal regulations, not of this country but of the country of destination.
    Mr. Keeling: Would the Minister be a little more specific?
    Dr. Summerskill: I would remind the hon. Gentleman that that is a matter for my right hon. Friend the Postmaster-General.

    Milk (Elderly People)
    Mr. Keelingasked the Minister of Food whether, before milk supplies improve, he will reconsider the allocation, after such improvement, of a larger ration to persons over 70 years of age than to younger persons.
    Dr. Summerskill: My medical advisers have given careful consideration to this question, but have been unable to recommend that the claim of old people for extra milk should be allowed while a low non-priority allowance is necessary. Certain reports following last night's Adjournment Debate were, therefore,' more optimistic than was warranted by anything I said, but I am prepared to consider again whether anything can be done to make things easier for elderly people.
    Mr. Keeling: Will the hon. Lady give an assurance that that consideration will have some result, negative or positive, before the supplies increase?
    Dr. Summerskill: I should not like to make any promises.

    Ceylon Tea
    Commander Maitlandasked the Minister of Food whether he will now make a statement in regard to his recent conversations with Sir Oliver Goonetilleke; whether a request was made by the Ceylon Government to his Department for an increase in the price of tea if this continued to be sold in bulk; at what date notification was received of the intention of the Government of Ceylon to establish a free market; and to what extent negotiations over the price were linked up with a demand for an increase in the price of rubber.
    Dr. Summerskill: No, Sir. Negotiations for dealing with the Ceylon tea production for 1947 are still proceeding, and I am, therefore, unable to make a full statement. In answer to the second part of the hon. Gentleman's Question, Sir Oliver Goonetilleke, Financial Secretary to the Ceylon Government, has recently been in conversations with my Department, and certain proposals were made to him for a contract for tea covering the four years 1947 to 1950, inclusive. However, it was announced on 5th November that the Ceylon Board of Ministers had decided to abandon the present system of the bulk sale of tea when the present contract with the Ministry of Food expired on 31st December, 1946, and to resume sales by auction in Colombo. In regard to the last part of the Question, Sir Oliver's suggestions concerning tea were linked with the general economic position of Ceylon, which is, of course, very closely bound up with the price of rubber.

  KOREA
  Brigadier Fitzroy Macleanasked the Secretary of State for Foreign Affairs whether he is aware that provisions of the Moscow decision of December, 1945, in regard to Korea are not being carried out; and what action he has taken in the matter.
  The Minister of State (Mr. McNeil): Yes, Sir. At the Moscow Conference it was agreed that a United States-Soviet Joint Commission should be set up to prepare the way for the establishment of a Korean provisional democratic Government, and to make proposals for implementing the decision to establish a four-Power trusteeship for a period of up to five years. This commission sat between March and May, but broke up owing to a difference of opinion as to which Korean parties and organisations should be consulted. On 30th August and again on 1st October Mr. Acheson, the United States Acting Secretary of State, emphasised the willingness of the United States Government to resume the negotiations at any time the Soviet Government wished. His Majesty's Government welcome Mr. Acheson's statement, and it is their hope that the deliberations of the Joint Commission may be resumed as early as possible.
  Brigadier Macleanasked the Secretary of State for Foreign Affairs whether he is aware of the difficulties at present being experienced by the British liaison officer in Korea owing to lack of funds, staff and proper means of communication; and what steps he is taking to remedy matters.
  Mr. McNeil: I am aware of the difficulties with which the British liaison officer in Korea is now confronted. As regards staff, an assistant has been selected, and it is hoped he will proceed soon to Korea. Communications will be speedily improved. The delay here has been due to indifferent security arrangements which are about to be remedied. Normal channels for the transmission of funds still do not exist, but the British liaison officer is receiving adequate local currency through the good offices of the United States authorities.

  POLES (REPATRIATION)
  Mr. Stokesasked the Secretary of State for Foreign Affairs how many of the 20,000 Poles in this country on 20th November, 1946, who have volunteered to return to Poland, are still awaiting repatriation; and whether he has yet received any communication from the authorities of the Polish Provisional Government with regard to the speeding-up of their acceptance.
  Mr. McNeil: The total of those awaiting repatriation is now about 21,000. Since the 20th November one ship has sailed, carrying 2,000 repatriates to Poland, and another will sail shortly. Negotiations are taking place with the Polish authorities to speed up the rate of repatriation to Poland.
  Mr. Stokes: Is the hon. Gentleman aware that the figure he has now given is 1,000 in excess of what it was in his last reply? Does he not think it contradictory that the Polish Government should ask us to encourage people to go back, and then put every obstacle in the way?
  Mr. McNeil: I cannot do the mental arithmetic I am asked to do. We have been disappointed with the response. We are hopeful that the Polish Government will cooperate more vigorously.
  Mr. Galacher: Is it not the case that these Poles, when they return, are having every opportunity to assist in the rebuilding of their country and are not deported, as the hon Member and his friends have said?
  Mr. McNeil: That is beyond the Question. The Question is about the facilities for their return, and I hope these will be afforded more generously.

  ANGLO-CHINESE RELATIONS
  Mr. Patonasked the Secretary of State for Foreign Affairs if conversations are taking place, or are intended to take place, between His Majesty's Government and the Chinese Government with a view to developing friendly relations between the two peoples through the extension of mutual cultural and trade interests.
  Mr. Rees-Williamsasked the Secretary of State for Foreign Affairs what negotiations are now taking place between His Majesty's Government and the Chinese Government for a commercial treaty between their two countries.
  Mr. McNeil: No conversations on the inter-Governmental level are in progress or prospect about mutual cultural interests. Such interests are being furthered by the British Council, through its representatives in China, who are in constant touch with the appropriate Chinese authorities. As regards trade
  340
  interests, the Chinese Government were presented with our proposals for a commercial treaty earlier this year, and they have stated that they hope to be ready to begin negotiations in the near future.
  Mr. Paton: Is the right hon. Gentleman not aware that, in spite of the efforts being made—by the Consular Service, I think he said—our influence in China is really non-existent? Is it not time, in view of the great desirability of continuing a friendly association with the Chinese people, that special steps should be taken to further it?
  Mr. McNeil: I am willing to consider any special steps. I do agree with the substance of the argument, but we are extending our influence as best we can through the British Council.
  Mr. Eden: Do I understand that His Majesty's Government desire the closest and fullest commercial relations with China, in accordance with the suggestion the hon. Gentleman has just made?
  Mr. McNeil: Most certainly. To that end we have produced a treaty.
  Mr. Rees-Williamsasked the Secretary of State for Foreign Affairs whether in view of the satisfaction such a visit would give to the Chinese and British peoples, he will arrange for a Parliamentary good-will mission to visit China in the Summer Recess of 1947.
  Mr. McNeil: His Majesty's Government are always glad to consider ways and means of strengthening the existing good relations between China and Great Britain, and to this end welcome in principle the suggestion to send a Parliamentary good-will mission to China, provided it were acceptable to the Chinese Government. The latter's views will be sought on this subject, as well as on the timing of the proposed visit.
  Mr. Rees-Williams: May I thank the hon. Gentleman for that reply and ask him whether he is aware that this proposal will probably receive gratifying response from the Chinese Government?

  POLAND (BRITISH PRESS REPRESENTATIVES)
  Mr. John McKayasked the Secretary of State for Foreign Affairs how many British Press representatives there are in

  341
  Poland; if the number will be increased to report on the election campaign and is the Polish Government prepared to encourage more Press representation during the campaign period.
  Major Beamishasked the Secretary of State for Foreign Affairs if he will give the names and nationalities of the representatives of British newspapers and periodicals now in Poland, showing in each case the publication which he, or she, represents.
  Mr. McNeil: As it is long, I will circulate the answer in the OFFICIAL REPORT.
  Mr. McKay: Would it not be better if some of the reliable papers in this country, such as the "Manchester Guardian" and "The Times", would employ British subjects instead of a Pole, and would it not be better if "Reynolds' News" employed a British subject to report instead of a Hindu?
  Mr. Speaker: This is becoming another speech.
  Following is the answer:
  There are now no staff correspondents of any British newspaper or agency in Poland. I understand that correspondents who regularly send despatches to British newspapers and agencies are Mr. Joel Cang (Polish citizen), for "The Times", "Manchester Guardian", and "Jewish Chronicle"; Miss Ruth Lloyd (United States citizen) for the British United Press; Mrs. Flora Grusen (United States citizen by birth, married to a Canadian) for the "Daily Express" and the "Observer". In addition Mrs. Rhoda Miller (United States citizen) and Mr. John de Silva (British Indian subject), who are working for Telepress, are understood to write occasionally for the "Economist" and "Reynolds' News" respectively. News agencies are represented by Mr. Larry Allen (United States citizen), who is a staff correspondent of the Associated Press.
  His Majesty's Government are anxious to see an increased number of British journalists in Poland before and during the elections. It is understood that most of the principal British newspapers will be sending correspondents out for this occasion.
  As regards the question whether the Polish Provisional Government is prepared to encourage more Press representation during the period of the election campaign, spokesmen of that Government have frequently stated that foreign correspondents have encountered and will en-counter no obstruction in the carrying out of their duties. Except in the case of Mr. Derek Selby, the renewal of whose permission to remain in Poland was refused, no correspondent has been forced to leave Poland. Nor is any case known of a correspondent finally failing to receive a Polish entry visa. I hope, therefore, that no difficulties will arise, and that reliable British correspondents will be enabled to report on the conduct of the elections.

  BRITISH BOYS (BELGIAN AWARDS)
  Mr. Medlandasked the Secretary of State for Foreign Affairs if he is aware that the parents of Anthony Nicholls, 16 years of age and Eric Claude Mudge, 15 years of age who ran away to sea in July, 1942, were signed on in s.s. "Belgian Soldier" at Liverpool as galley boy and cabin boy, respectively, and lost their lives by enemy action, have been informed by the Belgian Embassy that the British Government declined acceptance of decorations for the above-mentioned young men; and if he will reconsider this decision, in view of the desire of the parents to hold some visible recognition of the sacrifice of their sons.
  Mr. McNeil: I regret that no record of the receipt of any such offer can be traced.
  Mr. Medland: In view of the fact that the Belgian Embassy have written to the parents to say that their good offices were used in an endeavour to obtain acceptance of these decorations, will he again look into the matter?
  Mr. McNeil: I am quite certain that there is no record, but if my hon. Friend will give me details I will have the matter investigated.
  Mr. Medland: I shall be very pleased to do so.

  NEW MEMBER SWORN
  The Right Honourable Walter Elliot Elliot, M.C., M.B., Ch.B., D.Sc, LL.D, F.R.S., F.R.C.P., for the University of Saint Andrews, the University of Glasgow, the University of Aberdeen and the University of Edinburgh.
  TRANSPORT BILL (PRINTING ERROR)
  Mr. Speaker: I should like to tell the House that there is a printing error on page 22 of the Transport Bill. The first two lines of Subsection (4), Clause 22, should have been printed in italics, as the subject will of course be covered by the words of the Money Resolution. Owing to the length of the Bill I do not consider it necessary to have it reprinted, but I thought I would mention it in case anybody raised a question on it later.
BILL PRESENTED
  STATISTICS OF TRADE BILL
  "to enable certain Government Departments to obtain more readily the information necessary for the appreciation of economic trends and for the discharge of their functions; to consolidate and amend the law relating to the census of production; to provide for a census of distribution and other services; and for purposes connected with the matters aforesaid," presented by Sir Stafford Cripps; supported by the Chancellor of the Exchequer, Mr. Westwood, Mr. Isaacs, Mr. Wilmot, Mr. Tomlinson and Mr. Belcher; to be read a Second time upon Monday next, and to be printed. [Bill 19.]
ORDERS OF THE DAY

  EXCHANGE CONTROL [MONEY]
  Resolution reported:
  "That, for the purposes of any Act of the present Session to confer powers, and impose duties and restrictions, in relation to gold, currency, payments securities, debts and the import, export, transfer and settlement of property, and for purposes connected with the matters aforesaid, it is expedient to authorise—

  (a)the payment out of moneys provided by Parliament of any expenses incurred under or by virtue of the said Act by any Government department; and

  (b) the payment into the Exchequer—

  (i) of any sums received under or by virtue of the said Act by any Government department; and

  (ii) of such part as may be specified in the said Act of fines imposed on the summary conviction of offenders against the said Act."

  Resolution agreed to.

  EXCHANGE CONTROL BILL
  Considered in Committee.
  [Major MILNER in the Chair]

  EXCHANGE CONTROL BILL

    CLAUSE 1—(Dealings in gold and foreign currency.)
    3.35 p.m.
    Mr. David Eccles: I beg to move, in page 2, line 10, to leave out from "Act," to the end of the Clause.
    This is the first Amendment which my right hon. and hon. Friends have put down to this complicated and important Bill, and I must take the occasion to say that, had we had more time, we should have put down Amendments more carefully drafted and in greater number. The Bill was ordered to be printed on 13th November, hardly three weeks ago, it was read a Second time last Tuesday, and now, a week later, we come to the Committee stage. It has not been possible to consult all those who are interested in this Bill about its effect upon their daily business, and the result of that is twofold. In the first place we have put down a number of Amendments which are exploratory and designed to find out the Government's intentions; in the second place we shall have to ask the right hon. Gentleman more than the usual number of questions before parting with almost all the Clauses,

    345
    in order that we may be in a position to know what action to take during the Report stage.
    This Amendment refers to the territories in which the powers under the Bill are not needed, a blessed area where His Majesty's subjects can still travel and trade with some show of freedom. The conception of the sterling area arose from the administration of exchange control. Wartime finance made it necessary to divide the whole world into two regions, one where our currency moved freely and of which London was the financial centre, and the other where it was necessary to get a permit to make or receive any payments. We have grown to cherish the conception of the sterling area, to which we owe in some degree the persistent strength of our currency. We are therefore very sorry to see this expression dropped from the Bill and to find substituted for it the colourless words, "scheduled territories." It seems that the Chancellor is nervous about owning up to the number of friends whom he has and who have confidence in sterling. He appears to wish to deliver our credit in a plain van, I suppose because he thinks that Washington and New York might misconstrue a phrase which clearly referred to the unity, and the very special ties, which are to be found not only among the territories of the British Commonwealth and Empire, but among some other territories as well. We do not like to see His Majesty's Government drawing a drab veil over an expression of the unity which is precious to all hon. Members of this House.
    The list of the scheduled territories is to be found in the First Schedule to the Bill, and in the Sixth Schedule it is laid down that the Treasury, without an Order being brought before this House, can specify any currency. When the Treasury specifies a currency it puts the territory in which that currency circulates outside the scheduled territories. Therefore, unless the words which we are moving to leave out are in fact left out of Clause 1, the Treasury from now onwards will have the power, without coming to this House to truncate the sterling area. Whether or not we ask the Committee to vote for this Amendment must depend upon the answers which the Chancellor gives to some questions about these scheduled territories, and how he is dealing with them. This Bill contemplates a very
    346
    drastic system of exchange control, more drastic than has ever been put on by a democracy before. It will not work unless the scheduled territories agree also to operate this system. How do we know that they will agree to this? We thought we should see in the White Paper some comforting remarks about the success of negotiations between His Majesty's Government in the United Kingdom and the Governments of the scheduled territories for putting this system into operation throughout the old sterling area. The Committee will have noticed an extraordinarily weak passage in the last paragraph of the White Paper. It says:
    "Other governments are expected to do the same"
    New Zealand is quoted as having already set up an exchange control, and then—I suppose because there is no satisfactory news to be given of any other parts of the British Empire—Canada and Czechoslovakia are named, neither of which is in fact in the scheduled territories. What is going on between the Treasury and these other territories? Is it likely that we are to have these agreements made and signed before the sterling balances have been dealt with? What is the position, for instance, with regard to India, Egypt and South Africa? Are those territories to operate this drastic system in their countries? What we want to know from the Chancellor of the Exchequer is how these negotiations are getting on.
    The Chairman: The question here is whether the Treasury shall or shall not have power to amend the Schedule from time to time, and I do not think we can go into the question of agreements which may or may not exist.
    Mr. Eccles: I am sorry if you, Mr. Chairman, take that view, with which I shall comply. I must make the point that the reason why we wish to have an Order brought before the House if the number of scheduled territories is to be reduced, is precisely because we think that the powers in this Bill are so drastic that it is unlikely that there can be successful negotiation with the Dominion Governments once they have been made permanent on the Statute Book. If this were not a permanent Bill, I could understand that it would be more easy to get the Dominion Governments to agree, but for the reasons which we heard on Second reading, the Chancellor desires this Bill to

    347
    be permanent. It is our contention that that is the very worst start for negotiations with the Dominions. That is why we have put down the Amendment; we wish to elicit from the Chancellor a full and frank statement about negotiations with the Dominions at the present time, because it is a matter which affects Imperial relations very closely. The Committee ought not to part with this Clause before hearing exactly what is going on between the Treasury and the other Governments in the scheduled territories.
    3.45 p.m.
    Lieut.-Commander Gurney Braithwaite: I rise to express the hope that the Government will be able to meet the request put forward by my hon. Friend the Member for Chippenham (Mr. Eccles). I endorse what he said about the regret felt on these benches at the insertion of this new definition, "scheduled territories," in place of the better understood and now time-honoured phrase "sterling areas." Can it be that the right hon. Gentleman is now reticent about referring to the convoy which steams around the British currency, with the shadow of the rapidly diminishing American loan hanging over him? This Amendment, as my hon. Friend explained, seeks some explanation from the Treasury Bench of what exactly they mean, and the action they propose to take under this Subsection. My hon. Friend mentioned that it was possible under this procedure to truncate the list of scheduled territories. It is also possible to elongate that list. The powers are to add to or subtract from the list of scheduled territories. Whatever it means, whether we add to or delete from the list contained in the Schedule, there is one point which hon. Members on both sides of the Committee should safeguard. It is of the highest importance that the House of Commons should have opportunity for discussion. As we understand the Subsection, subtractions or additions can be made at any time by Order.
    We think it is giving far too great a power to allow this to be done by Order in Council. It is surely of the highest importance to the House and the country if some nation is added to, or removed from, this list of scheduled territories. We hope that whoever replies on this Amendment will tell us that the Order will
    348
    be laid, and that we shall have opportunity for discussion. Although we are living in an age when government by legislation has made enormous strides, this is a matter of far too great importance to be left to a procedure which completely by-passes the House of Commons, and leaves hon. Members without any machinery whereby to raise the matter. As has so often been said in the past, governments come and governments go, and the day will come when hon. Members opposite will again occupy these benches. [HON. MEMBERS: "No."] Those who believe in an eternity of power are invariably disappointed. As Lord Snowden said, one day the places which know them now will know them no more. If a Government of a different complexion takes office, and this Bill reaches the Statute Book in its present form, it is possible that there may be a proposal to remove a nation from the list of scheduled territories, to which hon. Members opposite will take the strongest possible exception. They will then wish to debate the matter. I ask them to face the future, and consider whether it is not good House of Commons procedure for the Opposition of the day, whoever they may be, or even back bench supporters of the Government of the day, to have a say in these matters. I hope that the Government will be able to meet us, and that such Orders will be laid, so that it will be possible to debate them.
    The Financial Secretary to the Treasury (Mr. Glenvil Hall): From what the hon. Member for Chippenham (Mr. Eccles) has said, I understand that this Amendment has not been put down in order to carry this matter to a Division, but in order to seek information on two points. I shall have to ask the Committee to reject it, because it is essential that we should continue to have our present powers. Powers exist now, under the Defence Regulations to exclude any country from the sterling area which does not pursue an exchange control policy in line with that of the United Kingdom. The hon. Member for Chippenham seemed to think that there was something sinister in the fact that nowhere in this Bill do the words "sterling area" appear. They have been omitted deliberately, because the phrase "sterling area," or "sterling bloc," has been used in the past extremely loosely. Before the war, it was frequently used to

    349
    describe all the countries which for convenience, or for some advantage, kept a large financial balance in London, and managed their exchange rates so that they generally moved with sterling.
    Most of the Dominions did that, and I think almost half of Europe did it. Japan certainly did. But during the war the number of countries which moved with ourselves in this matter was very much smaller, and the result is that what is now known as the sterling area is a small group of those countries. Those countries, as the hon. Member indicated, are listed in the First Schedule to the Bill. It is our view that we should continue to have the right—without being tied down as the words of the Amendment would tie us down—to have some elasticity in this matter, so that countries can be inserted and deleted as may be required. We do not want to have a hard and fast list, placed in the Bill.
    The mover and supporters of the Amendment are, I think, under some misapprehension. When they talk of specified currencies they are forgetting that so far as scheduled territories are concerned their currencies are not, in the strict sense, foreign currencies. The specification of a currency does not put a territory out of the scheduled territories. That act of exclusion requires an order under Clause 1, which under a later Clause is subject to a negative resolution. That is the reply to the hon. and gallant Member for Holderness (Lieut.-Commander Gurney Braithwaite), who asked if the House would be able to follow these matters and express a view upon them. Under Clause 36, that right is there and can be exercised.
    Mr. Nigel Birch: Surely, the act of specifying a currency automatically excludes it from the sterling bloc?
    Mr. Glenvil Hall: These are technical points but, briefly, the currency of a scheduled territory is not foreign currency. If the hon. Gentleman will look at Clause 1 (3) he will see what I mean. Therefore, it cannot be specified under Clause 2 (1).
    Colonel Crosthwaite-Eyre: I am a little frightened by the answer which the Financial Secretary has just given. Apparently, the value which he places on the retention of these words, is that the Government should
    350
    have absolute power to exclude from the scheduled territories any country which does not happen to see fit to conform to the policy of His Majesty's Government in exchange control. As a poor country, we must depend on give and take, and on the confidence of other countries, and it is absurd for any Government, in our present financial situation, to threaten with a big stick and say that they mean to take powers to make themselves absolute dictators in these matters. We know that if we are to succeed in this period of reconstruction, we must have the good will of other sterling countries with us. We owe far more than we can ever hope to pay within a reasonable time. We have onerous commitments in making fluid a certain part of these balances. We need the good will of all our partners if we are to succeed. Now, the Government come here, brandish a big stick, and say, "If countries do not play our game, according to our notion of the rules, we shall throw them out." That is the last way in which to start our task of reconstruction.
    We are a debtor, and not a creditor, country. We need good will, and must not take dictatorial powers to ourselves. I cannot understand the Financial Secretary's answer to my hon. Friend the Member for Flint (Mr. Birch). If you specify a currency under the Sixth Schedule it automatically becomes a barred currency under the Bill, one to which the First Schedule cannot apply. It seems to me to be an absolute twist of the provisions of this Bill for the Financial Secretary to say that a negative Resolution will be needed under this Amendment, when he can achieve everything he requires under the Sixth Schedule without coming near the House. It may well be that there is a legal safeguard here but it is one which the Government need not apply, because they can achieve their aim without coming here.
    Mr. Glenvil Hall: I am sorry if I did not make myself plain. I meant Clause 36.
    Colonel Crosthwaite-Eyre: The procedure under that Clause is quite unnecessary if the Government use the powers in the Sixth Schedule. To say that they will use Clause 36 is worth nothing, because, as I have said, they can achieve their aim under the Sixth Schedule. I can only hope that my hon.

    351
    Friend will take his Amendment to a Division.
    Mr. Henry Strauss: As regards a specified currency which can be altered under the Sixth Schedule without any reference to the House, I gather that the Financial Secretary said it would not be a currency in a scheduled area; that a currency which might be specified in Clause 2 is not a currency in one of the scheduled territories. That may be his intention, but is there anything in the language of the Bill which shows clearly that a specified currency cannot be the currency of a scheduled territory? If so, perhaps the Solicitor-General will point it out, because, at the moment, I do not see where the Financial Secretary finds this in the Bill.
    Mr. Pickthorn: The Financial Secretary mentioned Clause 2 (1). I think he must have meant Clause 1 (2). He himself reminded us that this was a very technical Bill, and it occurred to me that that might make a difference.
    Mr. Glenvil Hall: It certainly would.
    Mr. Pickthorn: I was not quite sure whether the hon. Gentleman meant Clause 2 (1), or Clause 1 (2).
    The Solicitor-General (Sir Frank Soskice): If Members will look at Clause 1 (3, a) they will see that foreign currency does not include any currency or notes issued by the Government, or under the law of any part of the scheduled territories. Therefore, if one looks at Clause 2, to see what currency can be specified, it will be found that it is only currency which is not the currency of a scheduled territory. The words which the hon. and learned Member for the Combined English Universities (Mr. H. Strauss) is looking for are in Clause 1 (3, a). Perhaps he is now satisfied with that answer.
    Mr. H. Strauss Mr. H. Strauss indicated assent.
    4.0 p.m.
    Mr. Assheton: I am bound to say that we do not feel satisfied with the general tone of the reply given by the Financial Secretary. This question of excluding any territory from the scheduled territories is an extraordinary one, and our view is that it ought riot to be in the power of the Government to do
    352
    anything of the sort, without making an Order which is at least subject to an affirmative Resolution by this House. What will be the effect of such an Order? The effect may be extremely important, from the point of view of Imperial relations and foreign relations. On those grounds alone, I should have thought that it was essential to bring it to the House to get an affirmative Resolution. Apart from that, I ask the Committee to consider the effect which such an Order would have on all citizens who are trading with any country within the scheduled territories. Suddenly, without a moment's notice, this Order will be clamped down, and it will upset trading plans, and negotiations for trading, which are going on in whatever territory is to be excluded from this list. I do not know whether the Chancellor would be prepared to agree to amend this provision so as to require an affirmative Resolution in this case. If he is not willing to do so, I am afraid we, on this side of the Committee who regard this as a very important matter must carry the Amendment to a Division.
    Mr. Benson: I think the right hon. Member for the City of London (Mr. Assheton) quite unwittingly gave a reason why in this case the Order should be subject to a negative, rather than an affirmative, Resolution, namely, that this exclusion could then take place instantaneously and without any warning. The purpose of excluding any area from the list in the Schedule would be that there was a considerable leakage of capital going on throughout that area. The strength of the Bill depends on having a watertight wall around the scheduled areas, and the wall is only watertight in so far as its weakest point is made secure. Let us take country "X."
    Mr. Oliver Stanley: Why not the Faroes?
    Mr. Benson: Let us assume then that throughout the Faroes very heavy leakages of capital are likely to take place. The Government have to come to the House for an affirmative Resolution, which gives warning that the loophole is about to be stopped. The whole experience of the last 25 years of exchange control is that, once there is a breath of a suggestion that the exchange control is to be tightened up, it inevitably leads to an immediate efflux of capital. It is to

    353
    prevent that, I assume, that the Government propose to take powers on a negative Order, which could be clamped on without warning. This would prevent people who are trying to export their capital from having an opportunity to defeat the purposes of the Bill.
    Mr. Stanley: We are obliged for the intervention of the hon. Member for Chesterfield (Mr. Benson). Whether his is the right reason for the adoption of this method, we do not know, but the hon. Member has given a reason which hon. Gentlemen on the Front Bench have, so far, not been able to give. Perhaps they will confirm whether this is the real reason. Although I think there is a great deal of substance in the argument, that some inconvenience to the Treasury might arise, that does not shock me, because in viewing this question, I attach more importance to the exclusion of someone from the scheduled list than to the inclusion of someone new. I am concerned about seeing that the exclusion of someone from this list should receive from this House a less summary form of treatment than that which is proposed. None of us probably mind very much whether the Faroes and Iceland, those countries whose currencies, by a stroke of the magician's wand at the Treasury, are suddenly declared not to be foreign currency—
    Mr. Benson: In this connection how does the right hon. Gentleman spell "Faroes"?
    Mr. Stanley: I stick to the more classical form adopted by the Chancellor in his Bill. We feel that an occasion
    may arise where it is proposed, perhaps for a perfectly good reason, to exclude from this Schedule one of the great Dominions; in other words, to push one of the Dominions outside what has now become the legalised and permanent sterling bloc. The mere fact of interposing between them and us, all the barriers which are erected between us and the ordinary foreign countries by this Bill, must do a great deal to weaken the links between the Dominions and this country. Are we in the House of Commons to do that in exactly the same manner as- we deal with an Order increasing the price of rhubarb by two pence a pound?
    I should be perfectly prepared to accept a fair compromise. If the right hon. Gentleman would give us an affirmative Resolution on the matter of excluding territory from this Schedule, I should be prepared to allow the negative procedure on the question of including new territory; if not, I am afraid that we shall have to take this Amendment to a Division. Further, may I ask could not the right hon. Gentleman think of some less gloomy designation than that of "scheduled areas"? We have in another connotation lived with the words "scheduled castes." In dealing, as we are here, with our close and intimate friends, some more appropriate name should be found for this new economic union.
    Question put, "That the words proposed to be left out stand part of the Clause."
    The Committee divided: Ayes, 255; Noes, 114.

    Division No. 20.

    AYES

    [4.8 p.m.

    Adams, Richard (Balham)

    Boardman, H.

    Coldrick, W

    Adams, W. T. (Hammersmith, South)

    Bowden, Flg.-Offr. H. W.

    Collick, P

    Allen, Scholefield (Crewe)

    Bowles, F. G. (Nuneaton)

    Cooper, Wing-Comdr. C

    Alpass, J. H.

    Bramall, Major E. A.

    Corlett, Dr. J

    Attewell, H. C.

    Brook, D. (Halifax)

    Cove, W. G.

    Attlee, Rt. Hon. C. R

    Brooks, T. J. (Rothwell)

    Crawley, A.

    Austin, H. L.

    Brown, T. J. (Ince)

    Daggar, G.

    Awbery, S. S.

    Brown, W. J. (Rugby)

    Daines, P.

    Ayles, W. H.

    Bruce, Maj D. W. T.

    Dalton, Rt. Hon. H.

    Ayrton Gould, Mrs. B.

    Burden, T. W.

    Davies, Clement (Montgomery)

    Bacon, Miss A.

    Burke, W. A.

    Davies, Edward (Burslem)

    Baird, J.

    Butler, H. W. (Hackney, S.)

    Davies, Ernest (Enfield)

    Balfour, A.

    Byers, Frank

    Davies, Hadyn (St. Pancras, S.W.)

    Barstow, P. G.

    Callaghan, James

    Davies, R. J. (Westhoughton)

    Barton, C.

    Carmichael, James

    Davies, S. O. (Merthyr)

    Bechervaise, A. E.

    Castle, Mrs. B. A.

    Deer, G.

    Belcher, J. W.

    Chamberlain, R. A.

    Diamond, J.

    Benson, G.

    Champion, A. J.

    Dobbie, W.

    Bing, G. H. C.

    Chetwynd, G. R.

    Dodds, N. N.

    Binns, J.

    Cluse, W. S.

    Driberg, T. E. N.

    Blackburn, A. R.

    Cobb, F. A.

    Dumpleton, C. W.

    Blyton, W. R.

    Cocks, F. S

    Durbin, E. F. M.

    Dye, S.

    Lipton, Lt.-Col. M.

    Rogers, G. H. R.

    Edelman, M.

    Logan, D. G.

    Royle, C.

    Edwards, Rt. Hon. Sir C. (Bedwellty)

    Longden, F.

    Scollan, T.

    Edwards, John (Blackburn)

    Lyne, A. W.

    Segal, Dr. S.

    Evans, E. (Lowestoft)

    McAdam, W.

    Shackleton, Wing-Cdr. E. A. A.

    Evans, S. N. (Wednesbury)

    McAllister, G.

    Sharp, Granville

    Ewart, R.

    McEntee, V. La. T.

    Shawcross, C. N. (Widnes)

    Fairhurst, F.

    McGhee, H. G.

    Shurmer, P.

    Farthing, W. J.

    Mack, J. D.

    Silverman, S. S. (Nelson)

    Field, Captain W. J.

    McKay, J. (Wallsend)

    Skeffington-Lodge, T. C.

    Freeman, Peter (Newport)

    Mackay, R. W. G. (Hull, N. W.)

    Skinnard, F. W.

    Gallacher, W.

    McLeavy, F.

    Smith, H. N. (Nottingham, S.)

    Ganley, Mrs. C. S.

    MacMillan, M. K. (Western Isles)

    Smith, S. H. (Hull, S.W.)

    Gibbins, J.

    McNeil, Rt. Hon. H.

    Snow, Capt. J. W.

    Gibson, C. W.

    Macpherson, T. (Romford)

    Solley, L. J.

    Gilzean, A.

    Mainwaring, W. H.

    Sorensen, R. W.

    Glanville, J. E. (Consett)

    Mann, Mrs. J.

    Soskice, Maj. Sir F.

    Gordon-Walker, P. C.

    Manning, C. (Camberwell, N.)

    Sparks, J. A.

    Greenwood, A. W. J. (Heywood)

    Manning, Mrs. L. (Epping)

    Stamford, W.

    Grenfell, D. R.

    Mathers, G.

    Stephen, C.

    Grey, C. F.

    Medland, H. M.

    Stewart, Capt. Michael (Fulham, E.)

    Grierson, E.

    Mellish, R. J.

    Stokes, R. R.

    Griffiths, D. (Rother Valley)

    Messer, F.

    Stubbs, A. E.

    Griffiths, W. D. (Moss Side)

    Middleton, Mrs. L.

    Summerskill, Dr. Edith

    Gruffyd, Prof. W. J.

    Mikardo, Ian

    Swingler, S.

    Gunter, R. J.

    Millington, Wing-Comdr, E. R.

    Taylor, H. B. (Mansfield)

    Guy, W. H.

    Mitchison, Maj. G. R.

    Taylor, R. J. (Morpeth)

    Haire, John E. (Wycombe)

    Monslow, W.

    Taylor, Dr. S. (Barnet)

    Hale, Leslie

    Moody, A. S.

    Thomson, Rt. Hn. G. R. (Ed'b'gh, E.)

    Hall, W. G.

    Morgan, Dr. H. B.

    Thorneycroft, Harry (Clayton)

    Hamilton, Lieut.-Col. R.

    Moyle, A.

    Thurtle, E.

    Hannan, W. (Maryhill)

    Murray, J. D.

    Tiffany, S.

    Hardy, E. A.

    Nally, W.

    Tolley, L.

    Harrison, J.

    Naylor, T. E.

    Tomlinson, Rt. Hon. G.

    Hastings, Dr. Somerville

    Neal, H. (Claycross)

    Turner-Samuels, M.

    Henderson, Joseph (Ardwick)

    Nichol, Mrs. M. E. (Bradford, N.)

    Usborne, Henry

    Herbison, Miss M.

    Nicholls, H. R. (Stratford)

    Vernon, Maj. W. F.

    Hicks, G.

    Noel-Baker, Capt. F. E. (Brentford)

    Viant, S. P.

    Hobson, C. R.

    Noel-Buxton, Lady

    Wadsworth, G.

    Holman, P.

    O'Brien, T.

    Walkden, E.

    Holmes, H. E. (Hemsworth)

    Oldfield, W. H.

    Walker, G. H.

    Horabin, T. L.

    Parkin, B. T.

    Wallace, G. D. (Chislehurst)

    House, G.

    Paton, Mrs. F. (Rushcliffe)

    Wallace, H. W. (Walthamstow, E.)

    Hudson, J. H. (Ealing, W.)

    Paton, J. (Norwich)

    Warbey, W. N.

    Hughes, Hector (Aberdeen, N.)

    Pearson, A.

    Watkins, T. E.

    Hynd, H. (Hackney, C.)

    Peart, Capt. T. F.

    Watson, W. M.

    Hynd, Rt. Hon. J. B. (Attercliffe)

    Perrins, W.

    Webb, M. (Bradford, C.)

    Jay, D. P. T.

    Piratin, P.

    Wells, W. T. (Walsall)

    Jeger, G. (Winchester)

    Poole, Major Cecil (Lichfield)

    West, D. G.

    John, W.

    Popplewell, E.

    Whiteley, Rt. Hon. W.

    Jones, D. T. (Hartlepools)

    Porter, E. (Warrington)

    Wilkins, W. A.

    Jones, J. H. (Bolton)

    Porter, G. (Leeds)

    Willey, F. T. (Sunderland)

    Jones, P. Asterley (Hitchin)

    Proctor, W. T.

    Willey, O. G. (Cleveland)

    Keenan, W.

    Randall, H. E.

    Williams, D. J. (Neath)

    Kenyon, C.

    Ranger, J.

    Williams, J. L. (Kelvingrove)

    King, E. M.

    Rankin, J.

    Williams, W. R. (Heston)

    Kinghorn, Sqn.-Ldr. E.

    Rees-Williams, D. R.

    Willis, E.

    Kinley, J.

    Reeves, J.

    Wills, Mrs. E. A.

    Kirby, B. V.

    Reid, T. (Swindon)

    Wise, Major F. J.

    Kirkwood, D.

    Rhodes, H.

    Young, Sir R. (Newton)

    Lee, F. (Hulme)

    Richards, R.

    Lee, Miss J. (Cannock)

    Ridealgh, Mrs. M.

    TELLERS FOR THE AYES:

    Levy, B. W.

    Roberts, Goronwy (Caernarvonshire)

    Mr. Collindridge and Mr. Simmons.

    Lewis, T (Southampton)

    Roberts, W. (Cumberland, N.)

    Lipson, D. L.

    NOES.

    Agnew, Cmdr. P. G.

    Clifton-Brown, Lt.-Col. G.

    Erroll, F. J.

    Amory, D. Heathcoat

    Corbett, Lieut.-Col. U. (Ludlow)

    Fletcher, W. (Bury)

    Assheton, Rt. Hon. R.

    Crookshank, Capt. Rt. Hon. H. F. C.

    Fraser, Sir I. (Lonsdale)

    Astor, Hon. M.

    Crosthwaite-Eyre, Col. O. E.

    Gammans, L. D.

    Baldwin, A. E.

    Crowder, Capt. John E.

    George, Maj. Rt. Hn. G. Lloyd (P'ke)

    Barlow, Sir J.

    Cuthbert, W. N.

    Glyn, Sir R.

    Baxter, A. B.

    Davidson, Viscountess

    Grant, Lady

    Beamish, Maj. T. V. H.

    Digby, S. W.

    Grimston, R. V.

    Birch, Nigel

    Dodds-Parker, A. D.

    Hannon, Sir P. (Moseley)

    Boothby, R.

    Donner, Sqn.-Ldr. P. W.

    Hare, Hon. J. H. (Woodbridge)

    Bower, N.

    Drayson, G. B.

    Headlam, Lieut.-Col. Rt. Hon. Sir C.

    Boyd-Carpenter, J. A.

    Drewe, C.

    Henderson, John (Cathcart)

    Buchan-Hopburn, P. G. T.

    Dugdale, Maj. Sir T. (Richmond)

    Howard, Hon. A.

    Bullock Capt. M.

    Duncan, Rt. Hon. Sir A. (City of Lond.)

    Hudson, Rt. Hon. R. S. (Southport)

    Butcher, H. W.

    Duthie, W. S.

    Hurd, A.

    Butler, Rt. Hon. R. A. (S'ffr'n W'ld'n)

    Eccles, D. M.

    Hutchison, Col. J. R. (Glasgow, C.)

    Carson, E.

    Eden, Rt. Hon. A.

    Jennings, R.

    Challen, C.

    Elliot, Rt. Hon. W. E.

    Keeling, E. H.

    356

    357

    Kerr, Sir J. Graham

    Neven-Spence, Sir B.

    Stoddart-Scott, Col. M.

    Kingsmill, Lt.-Col. W. H.

    Noble, Comdr. A. H. P.

    Strauss, H. G. (English Universities)

    Lambert, Hon. G.

    Nutting, Anthony.

    Stuart, Rt Hon. J. (Moray)

    Legge-Bourke, Maj. E. A. H.

    Peake, Rt. Hon. O.

    Sutcliffe, H.

    Lindsay, M. (Solihull)

    Pickthorn, K.

    Taylor, Vice-Adm. E. A. (P'dd't'n, S.)

    Lloyd, Maj. Guy (Renfrew, E)

    Poole, O. B. S. (Oswestry)

    Thorneycroft, G. E. P. (Monmouth)

    Lloyd, Selwyn (Wirral)

    Prior-Palmer, Brig, O.

    Touche, G. C.

    Lucas-Tooth, Sir H.

    Raikes, H. V.

    Walker-Smith, D.

    McCallum, Maj. D.

    Rayner, Brig. R.

    Ward, Hon. G. R.

    Macdonald, Sir P. (Is of Wight)

    Reid, Rt. Hon. J. S. C. (Hillhead)

    Watt, Sir G. S. Harvie

    Mackeson, Brig, H. R.

    Ropner, Col. L.

    Webbe, Sir H. (Abbey)

    McKie, J. H. (Galloway)

    Ross, Sir R.

    Wheatley, Colonel M. J.

    Maclean, Brig F. H. R. (Lancaster)

    Sanderson, Sir F.

    White, Sir D. (Fareham)

    Macmillan, Rt. Hon. Harold (Bromley)

    Savory, Prof. D. L

    Williams, C. (Torquay)

    Maitland, Comdr. J. W.

    Scott, Lord W.

    Williams, Gerald (Tonbridge)

    Manningham-Buller, R. E.

    Shephard, S. (Newark)

    Willoughby de Eresby, Lord

    Marshall, D. (Bodmin)

    Shepherd, W. S. (Bucklow)

    York, C.

    Mellor, Sir J.

    Smiles, Lt.-Col. Sir W.

    Young, Sir A. S. L. (Partick)

    Morrison, Maj. J. G. (Salisbury)

    Snadden, W. M.

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

    Spence, H. R.

    TELLERS FOR THE NOES:

    Mott-Radclyffe, Maj. C. E.

    Stanley, Rt. Hon. O.

    Major Conant and Major Ramsay

    The Chairman: In calling the hon. Member for Flint (Mr. Birch) to move his Amendment in page 2, line 13, which refers to the expression "authorised dealer," I would point out that in Clause 42, which deals with interpretation, there is a definition of "authorised dealer." I think it would be convenient to discuss the matter here. We cannot have two discussions on it.
    Mr. Solley: Are we to understand, Major Milner, that if we now discuss the definition of "authorised dealer," it will not be further discussed when we consider Clause 42?
    The Chairman: That is so.
    Mr. Birch: I beg to move, in page 2. line 13, at the end, to add:
    "(4) For the purposes of this Act the expression 'authorised dealer' means any person who is at the date when this Part of the Act comes into force lawfully pursuing the trade or business of buying or selling or borrowing or lending any gold or foreign currency and in addition any such person as may for the time being be authorised by an order of the Treasury to act for the purposes of this Act as an authorised dealer in relation to gold or any foreign currency."
    This is a matter of some importance. The Bill inevitably gives great powers to the Treasury and the Government, and it has been accepted on Second Reading, and therefore, we cannot question the fact that these great powers are given; but I believe it is the duty of the Committee to see that no more powers are given to the Treasury than are absolutely necessary for them to carry out the intentions of the Bill. As the Bill is now drawn, it appears that the Treasury have the power of life and death over a great many individual businesses, because it is laid down in the Bill that dealings in gold and foreign exchange
    358
    must take place only through authorised dealers. If one wishes to see what an authorised dealer is, one has to look at Clause 42 That Clause is very specific. It says:
    "Authorised dealer means, in relation to gold or any foreign currency, a person for the time being authorised by an order of the Treasury …
    Therefore, the Treasury has a complete option as to who should be allowed, and who should be forbidden, to carry on this type of business. Further, if hon. Members look at the Sixth Schedule they will find that Orders specifying who are and who are not to be authorised dealers need not be laid before the House of Commons, and, therefore, are not subject to debate. It is doubtful whether any Government should be given powers of life and death over other people's business, without opportunity being allowed for discussion. We have had many similar cases and the Government answer has been: "Trust us." Probably there are exceptionally virtuous people on the Front Bench opposite, but I look on their financial probity less favourably than I did since the taking over of the London Passenger Transport Board 3 per cent. stock. In any case it is wrong that any legislation should pass this House which is not right in itself. We think it is the duty of the legislature to see that any legislation that is passed, does not give more power than is necessary.
    What this Amendment seeks to do is to give protection and also to define what an "authorised dealer" is It does not say that if somebody acting as an authorised dealer does not behave himself, the Government cannot exclude him from business. The Government have ample power to deal with misconduct.

    359
    They can prevent anyone doing a thing they do not want to be done. This proposal does give protection to those legitimately in the business. It was difficult to draft a provision of this kind without giving the Treasury power to stop new entrants into the business, and that, is in fact, what it does. It says that new entrants may be allowed in, but only with the consent of the Treasury. I hope that the Chancellor of the Exchequer will give this Amendment careful consideration, because I think it is a reasonable one. I also hope that he will give us some assurance that there will be liberality of treatment in the case of new entrants into this business. I have no doubt that this Clause will be very popular in the City. I have not been up there recently so I do not know, but it imposes a compulsory closed shop in the banking world and those inside any business which imposes the closed shop principle, always take a more favourable view of the matter than those outside. I cannot think that a closed shop in the banking world is going to be valuable for this country, however valuable it may be for the bankers. I hope that the right hon. Gentleman the Chancellor of the Exchequer will accept this Amendment.
    Mr. Charles Williams: I may be allowed to ask one or two questions on this Amendment. I notice that we are giving power to the Treasury so that by means of Orders they will be able to limit the number of people engaged in this form of transaction. I should like to know from the Chancellor of the Exchequer whether or not he accepts the provision that those people who are already engaged in this business, provided they behave well —and obviously the Chancellor can get at them under this Bill if they do not— will be able to carry on their own business. I think it only right and reasonable to ask for some assurance in that respect. One of the main purposes of the Amendment is that those already working this business should have every reasonable chance of carrying on. I should like also to ask if it is proposed that there should be anywhere, some sort of list of authorised dealers. It is going to be rather difficult for people to "know who are authorised dealers and where that information can be obtained. I think it is a pity that the Treasury are taking such very drastic powers to get people out of
    360
    employment in this way. I do not think they will, necessarily, be used; but I do say the powers in the Bill as it stands, without this Amendment, leaves too much with the Treasury, and I think that is dangerous. We should guard against that. It ought not to be in the power of the Government to take away a man's living in that way. I do think that the regulations should be carefully considered. In regard to the Orders dealing with individuals, as I understand it, they will not be laid before the House. Am I right in that assumption?
    The Solicitor-General The Solicitor-General indicated assent.
    Mr. Williams: That being so, I suggest it is the strongest point" against this Clause. I think these Orders should be laid before the House. It is part of the duty of the House of Commons when" Orders are passed affecting the lives of individuals to see that such Orders are presented to Parliament. For all these reasons I think a strong case has been made out for this Amendment. I do not think it will weaken the position at all, but it takes a reasonable line acceptable to the country and for that reason I hope it will be added to the Bill.
    Mr. Glenvil Hall: I must ask the Committee to resist this Amendment. In our view it is not necessary and it certainly will not accomplish what is in the minds of hon. Gentlemen opposite. The hon. Member for Flint (Mr. Birch) talked about the phrasing of the Bill conferring a closed shop on certain dealers in the City, and I think he said that it was a closed shop with a vengeance. If this Amendment is accepted it certainly will confer a closed shop on the dealers now operating, because the effect of the words which we are now asked to insert, will be to give all persons who are authorised dealers the right to continue. I am not denying of course that we give it, but the Amendment goes on to lay down that at the date when this Bill comes into operation those in business in this way should be continued in business and there are conferred upon them very extensive powers which we cannot accept. We think that the Committee, when it realises what is meant, will not accept the Amendment. It would obviously mean that if an authorised dealer were guilty—and I do not suggest they would be—of any irregularity, he could not be taken from

    361
    the list because of the power conferred on him. The Bill would be absolute. We cannot accept the Amendment for that reason. What I think hon. Gentlemen opposite are anxious to know is whether all the present authorised dealers will continue to be recognised in that capacity, and I can certainly give the Committee that assurance. The dealers who are now operating in this field are reputable firms, and we have no desire to put any of them out of business. As far as we are concerned the position will continue to be as it is now. The number of authorised dealers is probably well known to many hon. and right hon. Members opposite. They are people of the highest repute and as I say we have no desire whatever to see them put out of business.
    4.30 p.m.
    Mr. Stanley: We are very grateful to the hon. Gentleman for his statement, which appeared to me to be an excellent speech in favour of this Amendment. The effect of the Amendment is, indeed, to carry out the hon. Gentleman's assurance that the authorised dealers will be allowed to continue since they are most reputable people and there is no desire whatever to put them out of business. Our difficulty here is that Ministers come and go, and the time may arrive when the Ministers representing the Treasury may be neither so reasonable nor so courteous as those facing me now. Then, I am afraid, the assurance which the hon. Gentleman has given us will have no validity. Only if it has been incorporated in an Act can he be certain that when he lays down his office the assurance he has given us today will be honoured by his successors. Frankly, it is for this very reason that we wish this Amendment made. We are, I confess, in some difficulty. I do not think it is at all helpful that the Treasury should be assuming, in this and other instances, enormous power of personal patronage. In Clause after Clause they are taking upon themselves powers to make one man's livelihood and destroy that of another, and in this particular case it can be done without any Parliamentary supervision whatever.
    Had it been practicable we should have liked to insist upon some Parliamentary supervision—at any rate of all appointments or deletions—but we realise that to have a reference to the House, even through the process of a negative Resolu-
    362
    tion, in the case of adding one name here or of a firm going out of business there, would be too much. Therefore, we looked about to see if it were not possible to guard against the greatest evil, which is that of the Treasury—by which, of course, is meant the Chancellor of the Exchequer of the day—establishing, say, a monopoly in favour of particular friends of his. We understand that among the many fields, quite unconnected with cooperative trading, into which the Co-operative Society is now launching, banking is assuming considerable importance. It may well be that the Co-operative Society will want to take part in these exchange transactions, and that some future Chancellor of the Exchequer, under pressure from his supporters, might desire to give to the Co-operative banking corporation a monopoly of dealings of this kind. And under this Clause he could do it without the House of Commons having any charge of intervening. We believe that to be wrong, and in this Amendment we do at any rate provide a safeguard against some future assault on the reputable firms who are now carrying on this business.
    With regard to the small point that it would not be possible to get rid of one of these people for some irregularity, the solution is perfectly easy. All that is necessary is to include among any penalties which can be imposed upon a dealer for irregularity, that of being struck off the list. That would entirely meet the hon. Gentleman's point. As far as I am concerned, I feel that we shall be obliged to press this matter to a Division unless the Chancellor can offer us some better alternative which will protect us against the sort of thing I have indicated which I am sure he would not do, but which his successors—possibly from the parties which now sit behind him—might be tempted to do.
    The Chancellor of the Exchequer (Mr. Dalton): In response to the right hon. Gentleman I should like to make one point clear. If this Amendment were accepted in the form in which it has been moved, its effect would be to give all the authorised dealers an unalterable and unqualified right to deal. If this Amendment were passed it would be impossible to disengage any person from his rights to continue to be a dealer if he has those rights now. That means that however

    363
    gross a person's offence, even if he is convicted in a court of law and heavily mulcted, whether in the field of exchange control or outside, we should be unable to remove him from the list. Evidently, we cannot accept that, as I think the right hon. Gentleman recognised in his last observations when he suggested that the Amendment might itself be amended to make a provision for striking off such a person. But would that be any improvement on what we propose? I suggest not, because, as the right hon. Gentleman has recognised very reasonably, Parliament would have no wish to concern itself with Orders from time to time relating to whether Mr. Smith, or the Co-operative bank, or any other single unit, should or should not be allowed to deal in foreign exchange. Therefore, if we were to accept an Amendment in the form suggested, with a provision that persons may be struck off the list from time to time, it could realty get us no further than we already propose to go in the Bill as drafted.
    Mr. Stanley: Would it be possible to make a provision that they should be struck off following conviction?
    Mr. Dalton: That, of course, is not the Amendment before us. I am trying to clarify the issue, and my suggestion is that the Amendment before us is unacceptable because, as I think the right hon. Gentleman himself admitted, as it stands it would mean irremovability. If a further Amendment were submitted—allowing removability that would be a matter for a separate discussion, but I am inclined to think that that would get us no further although, naturally, I should want to see the words before I expressed a final view. I, therefore, suggest that hon. Members opposite should not press the present Amendment to a Division, but should think again and suggest an alternative Amendment, although I am by no means committing myself to accept it and I am very doubtful whether any plant which flowered from this root, would be any better than what we have already.
    Mr. H. Strauss: I really think that the arguments in the Chancellor of the Exchequer's reply are not directed to the point which we wish to raise. It is always possible that those who draft Amendments for the Opposition are less skilled or more
    364
    hurried than those whose services are available to the right hon. Gentleman, but I wish to suggest reasons why this Amendment, even in its present form, is nothing like so bad as the Chancellor has suggested. Far from asking us to produce something better for him to consider, the right hon. Gentleman should, if we can satisfy the Committee that we have a point of substance, think again and bring forward Amendments himself. We should not press this to a Division if there were an undertaking from the Government to meet the point. May I explain what this point of substance is? It is that, if any people are to be put out of business, that fact should be disclosed to the House. The right hon. Gentleman has been good enough to say that it is not his intention to put people out of business and I accept that absolutely.
    Mr. Dalton: Not unless they commit irregularities or do something of a blameworthy character.
    Mr. Strauss: I accept that the Government do not wish to put a man out of business unless he is guilty of an irregularity, but they are taking powers under which they can put out of business anybody they like without any control by this House or anybody else. The Financial Secretary spoke about the creation of a closed shop, but how much more a closed shop it would be if the Government could strike out all but one of the people now dealing. That is possible under this Clause. Presumably it is quite possible to provide in the Bill here that those at present in the business shall continue, and then in later appropriate clauses give the terms on which people can be struck off the lists and prevented from carrying on their occupations, and I trust that will be for offences against the law. Although I am sure the Treasury has every intention of working this properly, I think that irregularities, meaning breaches of regulations, are something which the courts of this country are quite capable of investigating. The suggestion which has been put forward from the Opposition Front bench certainly deserves consideration. On the Second reading the right hon. Gentleman said that the existing powers and existing methods of operation were satisfactory. He cannot therefore say that it is impossible for everybody now operating to continue to operate under the Bill. I should like to say a word about prece-

    365
    dents. I have not looked the point up but I have no doubt that if I did I could find many. Let us take a precedent in a quite different sort of Bill—the hon. Member for East Woolwich (Mr. G. Hicks) will remember—the Architects' Registration Bill, in which we made all sorts of provisions as to future right to use the name "architect", but we had a saving Clause so as not to injure those already lawfully in the business. That has been done again and again in Acts of Parliament.
    I submit in all seriousness that the Government, on the admission of the Chancellor of the Exchequer and the Financial Secretary to the Treasury, arc taking powers which they themselves say they have no intention of using—namely, the power to strike off otherwise than for some irregularity. I want to make it absolutely clear that I am not casting any aspersions on the Government's intentions. I do not think they have the guilty intention of acting in an outrageous manner under this Clause, but they could do so. If they are good democrats and good House of Commons men, they will not want to take improper powers which they have no intention of using. The words in the Amendment, or something like them, are entirely appropriate at this stage of the Bill. At a later stage of the Bill, if the Government think they have not sufficient powers to strike people off for irregularities, let them take those powers, but do not let them take powers which enable them to put anybody they like out of business and which they say they only intend to use against irregularities—not mentioning what the irregularities are or giving any power to the people struck out of business to demand that their cases should be investigated by a court of law. These powers, in the form in which the Government are taking them, are outrageous. I do not believe there is much wrong with the Amendment as it stands, but if the right hon. Gentleman or the Solicitor-General considers there is something wrong with it, I am sure this party would not pursue the matter to a division on getting an appropriate undertaking from the Government. If, however, that undertaking is not forthcoming, in the interests of Parliamentary decency and legal decency and the maintenance of the rule of law, we ought to press this to a division.
    4.45 p.m.
    Mr. Solley: If there is one reason why hon. Members on this side of the Committee ought not to accede to the proposed Amendment, it is the fact that the hon. and learned Member for the Combined English. Universities (Mr. Strauss) talked about Parliamentary and legal decency. In point of fact, the Amendment is both ill-conceived and self-contradictory. It is ill-conceived because if it were passed, it would deal a serious blow at the intentions of the Government as expressed in Clause 1 of this Bill. Clause 1 aims at illegal dealings in gold or foreign currency. I apprehend that if a person were brought before the appropriate legal authorities on the charge that he, not being an authorised dealer, had dealt in gold or foreign currency, then, on the definition in Clause 42 as it stands, the court would have no difficulty in deciding whether the person was or was not an authorised dealer. But if we consider the definition of "authorised dealer" in the terms of the Amendment, we find that there are two classes of so-called "authorised dealers." The first consists of persons who were:
    "lawfully pursuing the trade or business of buying or selling or borrowing or lending any gold or foreign currency …"
    The second class consists of those whose names would appear on an appropriate Order made by the Treasury. If the court is faced with a defendant who says "I am not in class 2, I am class 1," we shall have the ridiculous picture, for instance, of a jeweller who is lawfully entitled to buy gold for the purposes of his trade saying that he is an authorised dealer— authorised by whom we do not know and never shall know—and that therefore he can do everything which the Government thinks it is improper in the public interest for him to do. This would make it doubly difficult for the administration to track down dealings by such so-called unauthorised dealers.
    Much has been said about the fact that there is no remedy on the part of any dealer whose name is not accepted by the Treasury in the proposed Orders. That is complete and utter nonsense. I can imagine what would happen if any reputable dealer found that his name was not in such an Order. He would immediately get in touch with some of his friends on the other side of the House. He would not find many friends on this side of the House—
    Hon. Members: Why?
    Mr. Stanley: Because he is a reputable dealer?
    Mr. Solley: I am assuming that, on the whole, dealers are reputable. Otherwise we should have used much stronger language in the definition in Clause 42. Whether the dealer be reputable or not, questions could be asked in this House in certain circumstances, and the matter could be raised on the Adjournment and in other ways. It is a purely theoretical argument of no value to suggest that because the Treasury does not propose to put the Orders before this House, any person who is aggrieved by the decision of the Treasury will have no remedy whatsoever. There is also no justification for any person being given the status of an authorised dealer when he has not been authorised by anybody but merely because he says, "I used to carry on a certain trade at a certain time and therefore I am authorised." For all these reasons the Committee should refuse to accept the Amendment.
    Mr. Jennings: I did not intend to say anything on this subject until I heard what seemed to me to be an inconsistency. The Financial Secretary said he had nothing against these people; that they comprised a very honourable and fair class of business people but that they could not be included in the list. He also assured the Committee that there was no intention of putting them out of business. I would like to make this point, that reputable people carrying on business in the City resent the idea of being allowed to carry on that business, at the behest of the Government. It is high time that opposition to that sort of Government action was presented in the House of Commons. What is being interfered with here is the liberty and the rights of the people. [Laughter.] Hon. Members may laugh, but if I were a dealer at this moment in the City, I should be wondering whether this Government were going to put me out of business or not. The Chancellor said that the wording of this Amendment did not meet the case, but the right hon. Gentleman knows exactly what is in the minds of the people who have put down this Amendment and he could bring forward an Amendment which would meet this difficulty. It is high time that the Chancellor satisfied people outside
    368
    that it is not the Government's intention to restrict them in every possible way and put them out of business. The Financial Secretary said that was not his intention; if that is so, he should include a proper Clause to cover the point. To give the Chancellor credit, he is quite capable of bringing in a Clause which would meet the difficulty indicated by the Amendment moved so ably by my hon. Friends behind me and, for those reasons, I support the Amendment.
    Mr. Pick thorn: I think we might ask the right hon. Gentlemen on the Front Bench opposite to make some endeavour to educate some of their followers on this kind of point. There is a particularly striking case here. We have had, over and over again, this argument that some extreme extension of coercive policy is really harmless because there are opportunities of raising it either by Parliamentary Questions or on the Adjournment, or otherwise. I think that right hon. and hon. Gentlemen on the Front Bench opposite know by now, that that is really not a fair argument, and that this continual pouring of more and more indispensable work into the Parliamentary vessel has got far beyond tolerable limits. Here we have a particularly striking case because, if I understood the discussion aright on this point—and I think I have—it was wholly agreed between the two Front Benches, that whatever else you want under this Subsection, you do not want Parliament to have to concern itself with whether Mr. Smith should be added to or subtracted from the list, or even whether the Cooperative bank should be added or subtracted from the list. That was ope of the major points, if not the major point in the right hon. Gentleman's argument against this Amendment.
    That being so, it becomes slightly absurd that there should be chivalrous assistants rushing to his rescue from behind, and using this argument once again, that it really does not matter if you give a Government a power which the Government itself admits it would be very wrong for any Government ever to use. Because that is what we are being asked to do, and we are being told that it does not really matter because somebody can put down a Question about it which may turn out to be Question 140 or something of that sort owing to the incapacity of hon. Gentlemen opposite to apply the

    369
    usual self-restraint which gentlemen supporting a government generally exercise upon themselves. So I really beg the Front Bench opposite to try to persuade their followers not to lengthen the discussion unnecessarily by continually repeating this specially false argument to the point of self-parody.
    Mr. Messer: It was really made in answer to a statement that Parliament had no power at all. It was not the main argument.
    Mr. Pickthorn: Since the point has been put to me, may I say—I am within the recollection of the Committee—that the argument was not merely put in answer to a point. The argument was put, as I think I fairly stated just now—and I apologise to you, Major Milner, for repeating it, which I would never do if I had not been asked to do so by hon. Gentlemen opposite—that the Government is asking for a power which it said it would be extremely improper for any Government to use. The Government's action in so asking is defended by its supporters, upon the ground that there might be a Parliamentary Question or a short Debate on the Adjournment. I say that would be reducing Parliamentary procedure beneath the point of contempt and derision and that it is really time that argument was dropped.
    Mr. Messer: It was used in answer to a point that was made.
    Mr. J. S. C. Reid: I think we must ask the right hon. Gentleman to deal with the substance of this Amendment. The point between us is a comparatively narrow one, but it is, we think, of profound importance. Let me try to put it in a couple of sentences. To begin with, we are all agreed that the completely blameless dealer ought not to be interfered with, and the Government say they are not going to do so. Let us, for the purposes of argument, accept the view that that is sufficient protection —though I do not accept it otherwise. Then we are all agreed that the man who has been convicted of an offence ought not to continue. There is no dispute about that. But there are two intermediate classes of case, on which I think we ought to have the Government's view. First, there is the man who is suspected of having broken the law but against whom nothing can be proved. Is it or
    370
    is it not the Government's intention that he shall be taken off the list? That is a perfectly fair question and I think it deserves a straight answer because, if the Government say, "We shall act on suspicion without giving the man a chance to clear himself," that is not a form of procedure which hitherto in this country has received any support from any quarter, and I hope this Government will not support it.
    There is the second kind of case about which there may be controversy—the case of the dealer who is not suspected of having broken the law, but who has indulged in some practice which is perfectly legal but unpopular with the Government. Is it the intention of the Government to act in that kind of case? I will not give examples but there are many cases in which there is room for a perfectly good definition. A man does something which the Government thinks is rather near the law, but which is perfectly legal and which he thinks is perfectly right. What will the Government do about that? I ask for a specific answer to these two questions. Will the Government act on suspicion, or will they act on some form of action which they think undesirable but is not illegal? If they will clear up these two questions, then we are all agreed about the rest of the ground to be covered— the people who are quite blameless and the people who are plainly at fault and who have been convicted—but it is those two intermediate types of case which will give the trouble and on which I think we ought to have a specific answer. Speaking for myself, the absence of a specific answer will leave us in great doubt about the Government's likely action in those events and I shall suspect that they might take action in a way quite contrary to the traditions of this country.
    5.0 p.m.
    Mr. Glenvil Hall: I can answer that question quite briefly. Of course, no Government, and certainly not this Government, would act merely on suspicion. That would be grossly unfair and we should never dream of doing it. It might help the Committee if I indicate who the authorised dealers are. Perhaps I should have indicated it earlier, but I did not want to waste time. The authorised dealers in gold and bullion are the six leading bullion brokers, plus the Bank of England. The authorised

    371
    dealers in currency are, in the main, the British banks, plus the, accepting Houses.
    Mr. J. S. C. Reid: The clearing banks?
    Mr. Glenvil Hall: The clearing banks and the accepting houses. Then there are the United Kingdom offices of the banks of issue and the central banks in the sterling area. There are also the British branches of other banks in foreign countries who are not within the scheduled territories.
    I think the Committee will agree that much of what has been said has been quite beside the point. [HON. MEMBERS: "No."] The fact quite definitely is that the Amendment is far too wide. It would include dealers who can go outside the United Kingdom and do business abroad. In addition to the reasons which my right hon. Friend gave with such clarity to show why it is impossible for us to accept the Amendment, it would freeze dealers who are now in operation. We have no desire to freeze them. It would, supposing any irregularity, prevent the Treasury acting, in order to take them out of the list.
    Mr. Stanley: Until the hon. Gentleman intervened I was in some doubt whether to advise my hon. Friends to press this Amendment to a Division. Since his intervention I am in no doubt. We shall certainly press it to a Division. The very list which the hon. Gentleman has read out, exposes the absurdity of the Government's refusal to accept the Amendment. There can be no conceivable reason in the mind of any reasonable man for striking any of those off the list. All we want to protect ourselves against, as I said before, is the right hon. Gentleman
    being succeeded by, for example, the hon. Member for West Fife (Mr. Gallacher), who would then find himself in possession of these funds. I will make this concession to the right hon. Gentleman. If he is afraid of the Bank of England or of one of the authorised dealers committing some felony which results in their prosecution, and if he fears that he will not be able to strike them off the list, we are prepared to meet him. If he proposes an Amendment at a later stage to enable him to strike off the list any authorised dealer who has been convicted, we shall certainly not oppose him. In view of the statement made by the Financial Secretary to the Treasury, to withdraw our Amendment now would simply be to encourage the Government to proceed in a course which appears to have no limit, and which might leave, in the future, a great opening for malice.
    Mr. C. Williams: The Financial Secretary repeated a statement of the accuracy of which I am not quite sure. He said that the Amendment would not enable him to reverse the position in regard to the people on the list. What in the world is Clause 37 for, except for this? It says:
    "Any permission, consent or authority granted by the Treasury under this Act … may be revoked by the Treasury."
    I want to know what it means. I am not going to discuss the point, but Clause 37 goes to the root of the statement which the Government have made.
    Question put, "That those words be there added."
    The Committee divided: Ayes, 107; Noes, 256.

    Division No. 21.

    AYES.

    [5.5 p.m.

    Agnew, Cmdr. P. G.

    Digby, S. W.

    Jennings, R.

    Amory, D. Heathcoat

    Dodds-Parker, A. D.

    Keeling, E. H.

    Assheton, Rt. Hon. R.

    Donner, Sqn.-Ldr, P. W

    Kerr, Sir J. Graham

    Astor, Hon. M.

    Drayson, G. B.

    Kingsmill, Lt.-Col, W. H

    Baldwin, A. E,

    Drewe, C.

    Lambert, Hon. G.

    Barlow, Sir J.

    Dugdale, Mal, Sir T. (Richmond)

    Legge-Bourke, Maj. E. A. H.

    Baxter, A. B.

    Duthie, W. S.

    Lindsay, M (Solihull)

    Beamish, Maj. T. V. H.

    Eccles, D. M.

    Linstead, H. N.

    Birch Nigel

    Elliot, Rt. Hon. W. E.

    Lloyd, Maj. Guy (Renfrew, E.)

    Bower, N.

    Eroll, F. J.

    Lloyd, Selwyn (Wirral)

    Boyd-Carpenter, J. A.

    Fraser, Sir I. (Lonsdale)

    Lucas-Tooth, Sir H.

    Bromley-Davenport, Lt.-Col. W.

    Gammans, L. D.

    McCallum, Maj. D.

    Buchan-Hepburn, P. G. T.

    Glyn, Sir R.

    Mackeson, Brig. H. R.

    Butcher H. W.

    Grant, Lady

    McKie, J. H. (Galloway)

    Butler, Rt. Hon. R. A. (S'ffr'n W'ld'n)

    Grimston, R. V.

    Maclean, Brig, F. H. R. (Lancaster)

    Carson, E.

    Hannon, Sir P. (Moseley)

    Maitland, Comdr. J. W.

    Clifton-Brown, Lt.-Col. G.

    Hare, Hon. J. H. (Woodbridge)

    Manningham-Buller, R. E.

    Corbett, Lieut.-Col. U. (Ludlow)

    Headlam, Lieut. Col. Rt. Hon. Sir C.

    Marlowe, A. A. H.

    Crosthwaite-Eyre, Col. O. E.

    Holmes, Sir J. Stanley (Harwich)

    Marshall, D. (Bodmin)

    Crowder, Capt. John E.

    Howard, Hon. A.

    Marshall, S. H. (Sutton)

    Cuthbert, W. N.

    Hurd, A.

    Mellor, Sir J.

    Davidson, Viscountess

    Hutchison, Col. J. R. (Glasgow, C.)

    Morrison, Maj. J. G. (Salisbury)

    Mott-Radclyffe, Maj. C. E.

    Sanderson, Sir F.

    Watt, Sir G. S. Harvie

    Noble, Comdr. A. H. P.

    Savory, Prof. D. L.

    Webbe, Sir H. (Abbey)

    Nutting, Anthony

    Scott, Lord W.

    Wheatley, Colonel M. J.

    O'Neill, Rt. Hon. Sir H.

    Shephard, S. (Newark)

    White, Sir D. (Fareham)

    Peto, Brig. C. H. M.

    Shepherd, W. S. (Bucklow)

    Williams, C. (Torquay)

    Pickthorn, K.

    Smiles, Lt.-Col. Sir W.

    Williams, Gerald (Tonbridge)

    Ponsonby, Col. C. E.

    Spence, H. R.

    Willink, Rt. Hon. H. U.

    Poole, O. B. S. (Oswestry)

    Stanley, Rt. Hon. O.

    Willoughby de Eresby, Lord

    Prior-Palmer, Brig. O.

    Stoddart-Scott, Col. M.

    Winterton, Rt. Hon. Earl

    Raikes, H. V.

    Strauss, H. G. (English Universities)

    York, C.

    Rayner, Brig, R.

    Sutcliffe, H.

    Young, Sir A. S. L. (Partick)

    Reid, Rt. Hon. J. S. C. (Hillhead)

    Taylor, Vice-Adm. E. A. (P'dd't'n, S.)

    Renton, D.

    Thornton-Kemsley, C. N.

    TELLERS FOR THE AYES:

    Ropner, Col. L.

    Touche, G. C.

    Major Conant and Major Ramsay.

    Ross, Sir R.

    Walker-Smith, D.

    NOES.

    Adams, Richard (Balham)

    Dodds, N. N.

    Lewis, T. (Southampton)

    Adams, W. T. (Hammersmith, South)

    Driberg, T. E. N.

    Lipson, D. L.

    Allen, Scholefield (Crewe)

    Dumpleton, C. W.

    Lipton, Lt.-Col. M.

    Allighan, Garry

    Durbin, E. F. M.

    Logan, D. G.

    Alpass, J. H.

    Dye, S.

    Longden, F.

    Attewell, H. C.

    Edelman, M.

    Lyne, A. W.

    Austin, H. L.

    Edwards, Rt. Hon. Sir G. (Bedwellty)

    McAdam, W.

    Awbery, S. S.

    Edwards, John (Blackburn)

    McAllister, G.

    Ayles, W. H.

    Evans, E. (Lowestoft)

    McEntee, V. La. T.

    Ayrton Gould, Mrs. B.

    Evans, S. N. (Wednesbury)

    McGhee, H. G.

    Bacon, Miss A.

    Ewart, R.

    Mack, J. D.

    Baird, J.

    Fairhurst, F.

    McKay, J. (Wallsend)

    Balfour, A.

    Farthing, W. J.

    Mackay, R. W. G. (Hull, N. W.)

    Barnes, Rt. Hon. A. J.

    Field, Captain W. J.

    McLeavy, F.

    Barstow, P. G.

    Gallacher, W.

    MacMillan, M. K. (Western Isles)

    Barton, C.

    Ganley, Mrs. C. S.

    Macpherson, T. (Romford)

    Battley, J. R.

    George, Lady M. Lloyd (Anglesey)

    Mainwaring, W. H.

    Bechervaise, A. E.

    Gibbins, J.

    Mallalieu, J. P. W.

    Benson, G.

    Gibson, C. W.

    Mann, Mrs. J.

    Berry, H.

    Gilzean, A.

    Martin, J. H.

    Bing, G. H. C.

    Glanville, J. E. (Consett)

    Mathers, G.

    Binns, J.

    Goodrich, H. E.

    Medland, H. M.

    Blackburn, A. R.

    Gordon-Walker, P. C.

    Mellish, R. J.

    Blyton, W. R.

    Greenwood, A. W. J. (Heywood)

    Messer, F.

    Boardman, H.

    Grenfell, D. R.

    Middleton, Mrs. L.

    Bowden, Flg.-Offr. H. W.

    Grey, C. F.

    Mikardo, Ian

    Bowen, R.

    Grierson, E.

    Millington, Wing-Comdr, E. R.

    Bowles, F. G. (Nuneaton)

    Griffiths, D. (Rother Valley)

    Mitchison, Maj. G. R.

    Braddock, T. (Mitcham)

    Griffiths, W. D. (Moss Side)

    Montague, F.

    Bramall, Major E. A.

    Gruffyd, Prof. W. J.

    Moody, A. S.

    Brook, D. (Halifax)

    Gunter, R. J.

    Morgan, Dr. H. B.

    Brooks, T. J. (Rothwell)

    Guy, W. H.

    Morris, P. (Swansea, W.)

    Brown, T. J. (Ince)

    Hale, Leslie

    Morrison, Rt. Hon. H. (Lewisham, E.)

    Brown, W. J. (Rugby)

    Hall, W. G.

    Moyle, A.

    Bruce, Maj. D. W. T.

    Hamilton, Lieut.-Col. R.

    Murray, J. D.

    Burden, T. W.

    Hannan, W. (Maryhill)

    Nally, W.

    Burke, W. A.

    Hardy, E. A.

    Naylor, T. E.

    Butler, H. W. (Hackney, S.)

    Harrison, J.

    Neal, H. (Claycross)

    Byers, Frank

    Henderson, Joseph (Ardwick)

    Nichol, Mrs. M. E. (Bradford, N.)

    Callaghan, James

    Herbison, Miss M.

    Nicholls, H. R. (Stratford)

    Carmichael, James

    Hicks, G.

    Noel-Baker, Capt. F. E. (Brentford)

    Castle, Mrs. B. A.

    Hobson, C. R.

    Noel-Buxton, Lady

    Chamberlain, R. A.

    Holman, P.

    O'Brien, T.

    Champion, A. J.

    Holmes, H. E. (Hemsworth)

    Oldfield, W. H.

    Chater, D.

    Horabin, T. L.

    Parkin, B. T.

    Chetwynd, G. R.

    House, G.

    Paton, Mrs. F. (Rushcliffe)

    Cluse, W. S.

    Hoy, J.

    Paton, J. (Norwich)

    Cobb, F. A.

    Hughes, Hector (Aberdeen, N.)

    Perrins, W.

    Cocks, F. S.

    Hynd, H. (Hackney, C.)

    Piratin, P.

    Coldrick, W.

    Hynd, Rt. Hon. J. B. (Attercliffe)

    Poole, Major Cecil (Lichfield)

    Colman, Miss G. M.

    Jay, D. P. T.

    Popplewell, E.

    Comyns, Dr. L.

    Jeger, G. (Winchester)

    Porter, E. (Warrington)

    Cooper, Wing-Comdr. G.

    Jeger, Dr. S. W. (St. Pancras, S. E.)

    Porter, G. (Leeds)

    Corlett, Dr. J.

    John, W.

    Pritt, D. N.

    Cove, W. G.

    Jones, D. T. (Hartlepools)

    Proctor, W. T.

    Crawley, A.

    Jones, J. H. (Bolton)

    Randall, H. E.

    Daggar, G.

    Jones, P. Asterley (Hitchin)

    Ranger, J.

    Daines, P.

    Keenan, W.

    Rees-Williams, D. R.

    Dalton, Rt. Hon. H.

    Kenyon, C.

    Reeves, J.

    Davies, Edward (Burslem)

    King, E. M.

    Reid, T. (Swindon)

    Davies, Ernest (Enfield)

    Kinghorn, Sqn.-Ldr. E.

    Rhodes, H.

    Davies, Hadyn (St. Pancras, S.W.)

    Kinley, J.

    Richards, R.

    Davies, R. J. (Westhoughton)

    Kirby, B. V.

    Ridealgh, Mrs. M.

    Davies, S. O. (Merthyr)

    Kirkwood, D.

    Roberts, Goronwy (Caernarvonshire)

    Deer, G.

    Lee, F. (Hulme)

    Rogers, G. H. R.

    Diamond, J.

    Lee, Miss J. (Cannock)

    Royle, C.

    Dobbie, W.

    Levy, B. W.

    Scollan, T.

    374

    375

    Scott-Elliot, W.

    Taylor, R. J. (Morpeth)

    Weitzman, D.

    Shackleton, Wing-Cdr. E A. A.

    Taylor, Dr. S. (Barnet)

    Wells, W. T. (Walsall)

    Sharp, Granville

    Thomas, I. O. (Wrekin)

    West, D, G.

    Shurmer, P.

    Thomson, Rt. Hn. G. R. (Ed'b'gh, E.)

    White, H. (Derbyshire, N.E)

    Silverman, S. S. (Nelson)

    Thorneycroft, Harry (Clayton)

    Whiteley, Rt. Hon. W.

    Simmons, C. J.

    Thurtle, E.

    Wilkins, W. A.

    Skeffington-Lodge, T. C.

    Tiffany, S.

    Willey, F. T. (Sunderland)

    Skinnard, F. W.

    Tolley, L.

    Willey, O. G. (Cleveland)

    Smith, H. N. (Nottingham, S.)

    Turner-Samuels, M.

    Williams, D. J. (Neath)

    Smith, S. H. (Hull, S.W.)

    Usborne, Henry

    Williams, J. L. (Kelvingrove)

    Snow, Capt. J. W.

    Vernon, Maj. W. F.

    Williams, W. R. (Heston)

    Solley, L. J.

    Viant, S. P.

    Williamson, T.

    Sorensen, R. W.

    Wadsworth, G.

    Willis, E.

    Soskice, Maj. Sir F.

    Walkden, E.

    Wills, Mrs. E. A.

    Sparks, J. A.

    Walker, G. H.

    Wise, Major F. J.

    Stamford, W.

    Wallace, G. D. (Chislehurst)

    Young, Sir R. (Newton)

    Stephen, C.

    Wallace, H. W. (Walthamstow, E.)

    Stewart, Capt. Michael (Fulham, E.)

    Warbey, W. N.

    TELLERS FOR THE NOES:

    Stokes, R. R.

    Watkins, T. E.

    Mr. Pearson and Mr. Collindridge

    Stubbs, A. E.

    Watson, W. M.

    Taylor, H. B. (Mansfield)

    Webb, M. (Bradford, C.)

    Question put, and agreed to.

    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    5.15 p.m.
    Mr. Eccles: There are two points I would like to raise before we part with the Clause. The first concerns the system of authorised dealing. The authorised dealer comes into the Bill for the first time in this Clause, so this is an appropriate place to ask the Chancellor of the Exchequer for information about how foreign exchange dealing is actually to be done. At the present time, all the banks act as agents of the Bank of England, and each transaction is settled separately. They get a small commission, and the Bank of England gets a very large profit, because the margin between buying and selling rates is wide. I think the profit is something like £900,000 a year. These people are now to settle inside their offices the buying and selling orders in the same currency that come in during the day, so that at the end of the day, they will only have to settle the balance with the Bank of England. The effect of that is to transfer to the banks some of the profit which has previously been made by the Bank of England. No doubt that is a sweetener for the authorised dealers. We want the Chancellor to go a step further, and to allow authorised dealers to deal between themselves, as well as marrying the transactions in their own books. The effect of that would be that the margin between buying and selling rates would be narrowed.
    The Chairman: This is surely a matter which does not come under Clause 1. The Clause says:
    "no person, other than an authorised dealer, shall, in the United Kingdom, and no person resident in the United Kingdom, other than
    376
    an authorised dealer, shall, outside the United Kingdom, buy or borrow any gold or foreign currency from, or sell or lend."
    I do not see that the Clause deals with how that should be done.
    Mr. Eccles: With great respect, Clause 1 sets up a system of dealing in foreign exchange by authorised dealers.' It is of very great importance to know how that system is going to be worked, because, as we have just seen in the previous discussion, we are giving power to the Treasury to say who is to deal. I am asking how they are going to deal in order that we may have an opportunity of finding out from the Chancellor whether the great exchange market in London is to be re-established. I ask the Chancellor whether he will allow authorised dealers to deal amongst themselves. That is my first point, and my second point is to return to the question of the scheduled territories, and once again to press the Chancellor to make a statement as to how negotiations are going with the Governments of the scheduled territories. We cannot tell whether Clause 1 is a good Clause or not unless we know what part the scheduled territories are going to play. Therefore, we hope the Chancellor will make a full statement on this question, on which a great many people are anxious for more information.
    Mr. McKie: Before we part with the Clause, I would like to say with what grave apprehension I view some of the purposes which it envisages. First, there is the point with which my hon. Friend the Member for Chippenham (Mr. Eccles) concluded his speech, namely, the question of the definition of the scheduled territories under Clause I of this highly controversial and complicated Measure. No one can dispute that it is a very highly

    377
    controversial and technical Measure. Indeed, that is one of the major objections we on this side of the Committee have to a very great deal, almost to the whole, of this Bill. We always have a wider Debate on the Motion, "That the Clause stand part of the Bill," and I hope the Chancellor of the Exchequer, or his quite able lieutenant the Financial Secretary, will see fit to give us some further information as to what conversations they have had.
    The Chairman: I am sorry, but it appears to me, on looking at the First Schedule, that this is not the place to raise, if it be in Order to raise the question at all, the question of what negotiations are proceeding, and whether they include, or exclude, countries in the scheduled territories.
    Mr. McKie: With great respect, I bow to your Ruling, Major Milner, but as the Clause dealt with the definition of the scheduled territories I thought that when we came to the discussion on the Motion, "That the Clause stand part of the Bill," I might, at all events, refer to it somewhat cursorily. I would like to say, as the words "scheduled territories" appear in this Clause, that I do not think that on the first Amendment we had anything like been a satisfactory explanation of what has done or left undone; and I fear much more what has been left undone than has been done in regard to conversations.
    The Chairman: I have already indicated to the hon. Member that the question of conversations does not arise here. The first Amendment was confined to the question of whether the Government have the right to amend the Schedule. The matter of the scheduled territories themselves does not come within the scope of the present discussion.
    Mr. Assheton: On a point of Order. Is it not difficult to know whether this is a Clause which we ought to adopt unless the Chancellor can give us information on the point? I agree that the Debate should not be allowed to range over a wide field.
    Mr. McKie: I was endeavouring to point out to the Chancellor and the Government the grave danger with which they may be faced in the future if they adhere strictly to the words of Clause "1 (3, b), which deals with the scheduled territories. I do not think we have had a satisfactory explanation so far. My hon.
    378
    Friend the Member for Chippenham requested the Chancellor—
    The Chairman: The proper occasion on which to raise the question of the scheduled territories in the form in which the hon. Member desires to do so is when we reach the First Schedule. If the right hon. Gentleman the Member for the City of London (Mr. Assheton) will forgive me for saying so, that equally applies to his intervention.
    Mr. McKie: Of course I leave that, though, if I may say so, with great respect, the Government have, I think, been very fortunate in having you, Major Milner, in the Chair—[HON. MEMBERS: "Withdraw."] I say that with great respect— [HON. MEMBERS: "Withdraw."]—I will withdraw if I am asked to do so by the Chair.
    The Chairman: I do not know whether the hon. Member intended that remark to be a reflection upon the Chair. If so, he must withdraw it.
    Mr. McKie: I certainly do so. I intended no reflection whatever, Major Milner, and I will merely say that I think the Government have been fortunate. I hope that when the right hon. Gentleman comes to reply he will say something more to inform us, or relieve our fears, about the words "authorised dealers" in Clause 1. It seems as though, with regard to other people whose interest may be financially or otherwise interfered with by this Socialist Government, the authorised dealers, as they are defined—
    The Chairman: The hon. Gentleman cannot go into that question again.
    Mr. McKie: Surely, in Committee of the whole House of Commons, and so long as the House of Commons exists, we are entitled, when discussing the Motion, "That the Clause stand part of the Bill," to discuss what is in the Clause?
    The Chairman: The Committee has already decided the question of authorised dealers. The Committee, having already expressed an opinion on the question, we cannot go into that matter again.
    Mr. McKie: It was discussed on a specific Amendment. I always thought that in the Debate on the Motion "That the Clause stand part," a Member was entitled to raise the whole subject. I will con-

    379
    clude my remarks by saying that I hope we shall have, in response to what my hon. Friend the Member for Chippenham said a few minutes ago, a further explanation, if you, Major Milner, allow the Chancellor to give it, as to how the authorised dealers stand under this Clause.
    Mr. Dalton: We have had an instructive discussion, and I hope that some of the assurances given from this bench may have removed some apprehensions from the minds of some hon. Members opposite. With regard to authorised dealers—I am here dealing with the point raised by the hon. Member for Chippenham (Mr. Eccles)—it is the case that we propose that, henceforth, there shall be power for the dealers who are here referred to—the banks and the others—to act as principals and no longer as agents. That, I would judge, would be generally accepted as a reasonable plan. I have not come armed with exact figures as to the profits made by the Bank of England out of this business. Indeed, I am doubtful whether it would be wise for me to reveal those figures, even if I had them. No doubt it will follow that there will be a rather wider dispersion of such profits as are to be made out of this business in future, when the dealers concerned can play their part as principals. I would expect that to be the case. With regard to their being able to operate between themselves, that is a matter now under discussion. So far as the Government are concerned, we have no objection to a reasonable arrangement between them. We would need to define it and work it out in detail.
    Mr. Eccles: That would reduce the profit.
    Mr. Dalton: That would be a good thing, would it not? If a profit is unnecessary, if it can be bypassed by more practical arrangements, I am sure that the hon. Member would be the first to applaud. The answer to his question is that, in principle, we have no objection to a certain amount of dealings between themselves, and we are now in the course of discussions designed to settle how that shall come about.
    I take note, Mr. Beaumont, of the Ruling of your predecessor in the Chair, and I, therefore, do not propose to say anything more on the subject of the scheduled territories than this—I hope to keep in Order and gratify the hon. Mem-
    380
    ber: We have no reason whatever to suppose that any difficulty will arise with any Government in any of the scheduled territories in the operation of this—no reason whatever. This Bill has been published for some time. It is not a question of instituting, with our Dominions, some special ad hoc conversations on this subject. We have been living together through seven or eight years of this regime, and Australians, New Zealanders and South Africans are well accustomed to the working of this arrangement. From the constant intercourse we have with them, we have no reason to think that there will be any difficuly at all. With regard to discussions with other members of the Commonwealth, or other holders of sterling balances, it would be inappropriate, in view of the Ruling of Major Milner, for me to say anything at this stage. That being so, I hope that we may now have the Clause.
    Mr. C. Williams: May I ask one question? Does the definition of "foreign currency" include Canadian dollars?
    Mr. Dalton: The answer is, "Yes," because Canada has never been within the sterling area at any time. So the technical answer is, "Yes."
    Mr. Williams: Surely if that is so, we could put in the Bill some better definition than the word "foreign" for the currency of a fellow member of the Commonwealth?
    Mr. Dalton: We have had no suggestion that that is necessary.
    Mr. Assheton: I would like to tell the Chancellor how extremely glad I was to hear from him that he was in process of making arrangements to enable banks and authorised dealers to deal among themselves in currency. It is a long time since close dealings in foreign exchange have been possible in London. The fact that such large profits have been earned by the Bank of England shows that the action now being taken by the Chancellor is highly desirable. We weclome it, and we hope to hear from him in greater detail before long the exact arrangements which he proposes. With regard to the second point, I am glad to think that the Chancellor anticipates no difficulties in regard to the various countries which are mentioned as scheduled territories. I only hope that the facts will bear out his hopes.
    Mr. Dalton: No difficulties in respect of the operation of exchange control. It is only in that context that I am in Order in speaking. I wish to make it abundantly clear that I said I anticipate no difficulties in respect of the operation of exchange control.
    Mr. Assheton: I am glad of that.
    Mr. Dalton: It would be out of Order to go beyond that.
    Clause ordered to stand part of the Bill.

    CLAUSE 2.—(Surrender of gold and foreign currency.)
    5.30 p.m.
    Colonel Crosthwaite-Eyre: I beg to move, in page 3, line 16, to leave out Subsection (6).
    In two places in this Bill there are, from a practical point of view, identical Subsections which make it a presumption of guilt until the person accused of an offence establishes his innocence. They are in Clause 2 (6) and Clause 4 (6). In the second case, the Chancellor of the Exchequer has already put down an Amendment proposing that this Committee should delete that Subsection. This Amendment, therefore, can be taken as consequential to the one put down by the Chancellor, and I hope we shall have no difficulty in persuading the Government to accept it. After the last Amendment, which was very technical, I think this one is simple. It is a matter which is fundamental to British law as I understand it, not as a lawyer but purely as a civilian. It has been fundamental to British law over a great many centuries that a man is innocent in the face of the law until he is proved guilty.
    Under this Bill the Government wish to take powers to say that a person shall be guilty unless he can prove himself innocent. I think all of us would admit that when the Government try to enforce the terms of Clause 2, when they try to ensure that gold and foreign currency are in fact surrendered to authorised dealers, they will find it a very difficult job. I have no doubt that their first reaction to this was, "Very well, let's put it on to the individual to prove that he has not contravened our regulations. That will be much simpler for us." That is totally opposed to everything in our way of life
    382
    which, irrespective of the side of the House upon which we sit, has been common ground over the centuries. I hope for that reason, if for none other, that the Government will accept this Amendment. I do not think it is any more difficult to try to prove the offence under Clause 4 than it is under Clause 2. If the Chancellor can accept the position in Clause 4, why not accept it in Clause 2?
    Finally, I think hon. Members opposite must come to some understanding of the way in which they propose this legislation. The fact is that if legislation is to succeed it can only succeed if it is accepted by the country as a whole. It is no use hon. Members opposite thinking that this sort of Clause, under which guilt is to be presumed, can be as effective as governing by the public will. Hon. Members opposite should realise that they would get on much faster and there would be a much wider acceptance of these Measures if only they tried to govern by the consent of the country instead of imposing regulations of tills nature which transgress the fundamental principles of British law.
    Mr. Solley: I am sorry to put reasons before the Committee to show that this would be a most undesirable Amendment. The hon. and gallant Member for New Forest and Christchurch (Colonel Crosthwaite-Eyre) spoke about the fundamental principle of the criminal law that in general it was for the prosecution to prove beyond all reasonable doubt the guilt of a defendant. No person who knows anything about the administration of the criminal law would quarrel with that general statement. What the hon. and gallant Member did not say was that there were quite a large number of exceptions to that general rule. They are exceptions which the Legislature has introduced specifically in the interests of the public so that in such cases defendants would not be acquitted when they ought to have been found guilty. For example, under the licensing laws, the Defence Regulations and certain provisions, I believe, of the Public Health Acts, there are a number of offences where the onus is on the defendant to prove that certain things did or did not happen.
    If we apply that test to Subsection (6) we find that the Clause is aimed at creating the offence of failing to surrender gold or foreign currency contrary to certain provisions. It is essential that the

    383
    surrender should be made to an authorised dealer. Only a few moments ago we heard that the authorised dealers are quite numerous. They include the leading banks and bullion dealers, and so on. If this Subsection were left out of Clause 2 it would be for the prosecution to prove, one, for example, that the defendant did not go to the Bank of England; two, that he did not go to Barclay's Bank; three, that he did not go to Lloyd's Bank, and so on. One can imagine the infinite trouble and time which would be involved in proving that negative. In practice it could not possibly be proved. As a corollary to that statement, no person who had deliberately infringed the requirements of this Clause could be brought to justice. Therefore, I submit that if there be a case when the general rule as to the burden of proof ought to be abrogated, this is such a case. The Government would be perfectly justified in refusing to accept this Amendment.
    Mr. C. Williams: My name is on the Order Paper in connection with this Amendment which I believe is of considerable importance. The importance of it lies in the words:
    "… It shall be presumed, until the contrary is shown. …"
    The hon. Member for Thurrock (Mr. Solley) has enlightened the Committee again, as he so often does, as to what the Government ought to do in this matter. He must know, as I think almost every ordinary person knows, that we have a fundamental dislike for assuming that a man is guilty until he is proved guilty. He was kind enough to say that this was different and that it was one of the exceptions in the national interest. He said that there are a number of exceptions, and this is where my objection lies. Here, we are bringing in more objections and more exceptions and making it more common for the ordinary man to be assumed guilty unless he can be proved innocent. That is our fundamental difference with hon. Gentlemen opposite. The second point which he raised in defence of the Government was when he referred to the Defence Regulations. I do not know how the Government will like his defence, though I should think that they may not like it very much. For what did we fight the war except to get rid of the sort of things that happened under the Defence Regula-
    384
    tions? That was his argument and I say quite frankly that nothing makes rue go further in my conviction that this Amendment is right.
    As my hon. and gallant Friend the Member for the New Forest and Christ-church (Colonel Crosthwaite-Eyre) said, it is a curious thing that here is an Amendment which would cut out the presumption of guilt, so far as this particular detail is concerned, and yet, when we come to a later Clause in the Bill, we find an Amendment put down by the Government, who have obviously seen the folly of putting this Subsection in at all, to cut out such presumption of guilt. That being the case, in spite of the rather provocative speeches which we have had from the back benches opposite, I believe that, with good will on the part of the Front Bench opposite and ourselves, the Government will be able to accept this Amendment. I gather from the speech to which we have just listened that, very shortly, we on these benches may be called upon to go into the Lobby and support hon. Members opposite on an Amendment which is almost identical to this one. That being so, and realising that there is practically no difference between the later Amendment and this one, surely the Financial Secretary will be able to say that the Government accept this Amendment as a matter of principle. The principle involved is precisely the same as the principle involved in the later Amendment.
    Mr. Glenvil Hall: The object of this Clause is to lay on the individual the obligation to offer to an authorised dealer gold or foreign currency that is, in certain conditions, in his possession. The Subsection to which this Amendment refers does one simple thing; it lays upon the individual who has in his possession either gold or foreign currency, the obligation to show that he has, in fact, complied with the law and offered such gold or foreign currency to an authorised dealer. Unless this Subsection is retained, it will, as my hon. Friend the Member for Thurrock (Mr. Solley) said, be difficult—some might even say impossible—for the authorities to prove beyond any doubt that a man had, in fact, offered gold or foreign currency to an authorised dealer. There are many banks, and those banks have hundreds of branches. All we are doing here is to insist that, when the point is put to the

    385
    individual concerned; he should indicate when and where he offered the gold or foreign currency in his possession to an authorised dealer.
    There is nothing wrong in that; nor can it be said, because that is laid down in the Bill, that we are actually assuming a particular individual to be guilty before the case against him has been proved. We are not assuming anything; we are merely asking him whether he has complied with the law. It will be perfectly simple for him to say, "Yes I have; I went to a certain branch of Barclays Bank on such and such a day and, because it was not the sort of currency they wanted, they refused to take it." He will then have complied with the law, and the whole matter will be finished. Therefore, we think that what we are putting into this Subsection is very reasonable and necessary in order to help the authorities to discover wrongdoers, and to discover them quickly.
    It is true that on Clause 4, with which I cannot deal now, my right hon. Friend the Chancellor of the Exchequer has put down an Amendment to delete this provision. We will deal with that when we come to it, but, in that case, for reasons which will be given in due time, the position is not the same, and, therefore, we shall not insist on that particular Subsection being retained in the Bill. Meanwhile, however, we are dealing with Clause 2 and, for the reasons which I have given, I hope that the Committee will accept the explanation and not insist on this Amendment.
    545 p.m.
    Mr. Marlowe: I do not think that the explanation given by the Financial Secretary is very convincing. It is perfectly true that there are recognised exceptions to the general principle, but it is also true that there is a general principle. The only ground on which the hon. Gentleman has attempted to justify the retention of this Subsection is the same as that put forward by the hon. Member for Thurrock (Mr. Solley)— the difficulty of establishing guilt in a certain type of case. In my submission, that is not a satisfactory answer. The mere fact that it may be necessary to prove a certain number of negatives is not an objection at all. As the Financial Secretary well knows, it happens in dozens of cases. Take, for instance, cases
    386
    of false pretences, where a man has pretended a number of different things, A, B, and c. The prosecution has to prove a negative; if the man says that a certain state of affairs existed, the prosecution has to prove that it did not. That is a process well known to the law and does not present any great difficulty, particularly in cases such as we are discussing today, where records are kept and where there should be no difficulty whatever of using the ordinary channels of evidence to establish that a man has not complied with the obligation of offering for sale those things which he is required to do under this Clause.
    There is a very firm principle in this matter. The onus of establishing his innocence should not be thrown upon the accused person. Although, in some cases, it is possible to make out a reasonable ground for exception of that principle, the burden of establishing that there is such a case rests upon those who propose it. Unless the hon. Gentleman can make out a good case for this, one is not justified in infringing the general principle. I say that he has not really satisfied the Committee on this point; he has not made out a case. Although, as I say, there are well known exceptions—I cannot, offhand, think of one which relates to property in this way, except in relation to certain assumptions which are made in relation to stolen goods—it seems a little hard that a person who is in possession of gold or foreign currency should, for example, be assumed to be a person in the same category as a receiver of stolen goods. There may be other exceptions in relation to property, but they are certainly very few. I ask the Committee to say that the Financial Secretary has not established his case, and that, if he fails to establish it, we ought not to do away with the general principle in matters of this kind.
    Mr. Pritt: I would like to put a question to the hon. and learned Member for Brighton (Mr. Marlowe). In his time, he must have replied to prosecutions. I wonder how many witnesses he would have the responsibility of telling the Treasury to call in order to prove the case against somebody who was alleged not to have offered to an authorised dealer some currency which he held? If this Amendment were accepted, he would have to tell the prosecution to call a witness from each

    387
    branch of every authorised dealer in the country.
    Mr. John Foster: I wish to support the Amendment on the grounds, as the hon. Member for Thurrock (Mr. Solley) put it, of public interest. It may be in the public interest that guilty men should be punished and, from one point of view, it would be very convenient for everybody accused of a crime to have to go into the box and put up an affirmative case. But in this country, there has always been the overriding principle that people accused of crimes should have the case proved against them and should be assumed to be innocent until proved guilty. This particular course does exist in regard to certain rather unimportant matters, where the accusation really consists of what might be called a civil offence. The reason this kind of subsection is particularly objectionable is that it affects what is known as the onus on the prosecution of proving a guilty mind. The ordinary rule in a prosecution is that the accused must be proved, not only to have done the acts which are complained of, but to have done them with a guilty mind. When the onus is put on the defence, it is not enough for the defendant to say: "I did not intend to do anything wrong."
    Mr. Bowles: Suppose a butcher sells bad meat. He is guilty, is he not, without any question, whether he knows it is bad or not?
    Mr. Foster: That is exactly the point I am trying to make. The hon. Gentleman opposite has made it even better. Imagine a man who is given an envelope, the contents of which he does not know. When the police, or somebody else, find the envelope in his house they open it and find 10,000 dollars in it. That man may have been told by the friend who gave it to him, "This is my will. I want you to keep it, and not to show it to anybody." The friend may be a crook, who says to himself, "Jones is an honest man. I will get him to keep this 10,000 dollars. Nobody will ever suspect, and if there is any risk he will run it." He is like the butcher who has sold bad meat; he has 10,000 dollars in his possession and, according to the hon. Member for Nuneaton (Mr. Bowles), he has committed an offence. That is exactly what I was
    388
    trying to say. Like the butcher who has bad meat, he has 10,000 dollars in his possession and has not delivered them up or offered to sell them to an authorised dealer.
    Mr. Bowles: The hon. Gentleman is a much better lawyer than I am, and I think he will find there is special legislation to deal with a butcher who sells bad meat, but not in the case he has just mentioned.
    Mr. Foster: If there is special legislation I do not see the relevance of the hon. Gentleman's intervention.
    Mr. Bowles: That is what is being done here—special legislation.
    Mr. Foster: As I understand it—and I understand the hon. Member for Nuneaton supports me—the intention of the Government here is to legislate, specially for people who have 10,000 dollars in their possession, however innocently, because they are then presumed not to have offered it to an authorised dealer. The prosecution then come along and say, "This man has had 10,000 dollars in his possession. He is presumed not to have offered it to an authorised dealer." If he goes into the box and tries to say that he did offer it to an authorised dealer, that is a good reason but it is not permissible, because when the presumption is put on the defence it eliminates the defence of mens rea; it makes it impossible for the defendant to say, "It is quite true. I actually did the acts," or "did not do the acts of which there is complaint, but I did not have a guilty mind. I had no idea there was 10,000 dollars in that envelope." It does seem to me that the effect of this Subsection is very reprehensible when it has the effect of depriving a man of a possible defence. He can go into the box or not, as he may choose. The object of the Government ought to be achieved in another way. I think it is impossible to imagine how the Government can really mean that a man who has no guilty mind, and who is quite innocent of any guilty intent, should none the less be convicted because the presumption is put on him when he has no defence to it.
    Amendment negatived.
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    Mr. Ecclcs: I have one question in regard to Subsection (4). Under that Subsection nobody is allowed to sell gold at a premium. I understand that by Clause 35 the Crown is bound by this Bill. I would recall to the Chancellor's memory —which I have no doubt is very vivid— that he and I were in a black market in gold, which was authorised by the Treasury, in the Middle East. Am I not right in thinking that under this scrupulously drawn Clause it will not now be possible for the Treasury to sell gold at a premium in the Middle East? That would be a very unfortunate occurrence. I would like to ask whether my interpretation is correct or not.
    Mr. Glenvil Hall: In so far as one can answer a query of that kind, which is a little unusual—I will not say hypothetical, though it might well be that— I would say, surely the Government would deal through an authorised dealer, namely the Bank of England. Therefore, what they did would be quite lawful.
    Mr. Assheton: There is one small point I would like to ask the Chancellor. It is a very simple one, and not at all technical. Under this Clause the holders of gold coin and bullion have to surrender them. May I ask the Chancellor whether gold coin covers gold coin which is not current; that is to say, those who have gold coins in coin collections? Are they subject to this Clause?
    Mr. Dalton: The question is put without specific notice, of which I do not complain. My impression is that it is old coins which the right hon. Gentleman has in mind, numismatic collections. My quick answer, without consultation, is that they are not affected by the Clause. But I will verify this, and let the right hon. Gentleman know with certainty at a later stage. I am pretty sure they are excluded.
    Mr. Assheton: Suppose that is not, in fact, the case. Will the right hon. Gentleman put it right?
    Mr. Dalton: We do not want to include them.
    Lieut.-Colonel Dower: The Chancellor said he would inform my right hon. Friend. There are other hon. Members who are interested in this matter. Will he in-
    390
    form the other hon. Members of the Committee?
    Mr. Dalton: Perhaps the easiest way to leave it would be this. If I find I am wrong on this I will publicly say so at a convenient moment in the Committee. If, on the other hand, as I think is the case, I find I am right, perhaps hon. Members would not expect me to say anything further on the matter.
    Clause ordered to stand part of the Bill.

    CLAUSE 3.—(Bailees of gold and foreign currency.)
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    Mr. Birch: I have one question in regard to Subsection (2), under which the. Treasury take powers to direct anybody to deposit gold or foreign currency
    "in the custody of such banker as may be specified in the direction."
    I would like to know why that power to direct to a particular bank is taken, and not merely power to direct to an authorised deposit or authorised dealer.
    Mr. C. Williams: Under Subsection (1) do I understand that nobody is able to hold gold coin? Is it illegal to have any gold coin in one's possession? I know the sale of them affects the Chancellor, but is it or is it not illegal for a person to hold a gold sovereign? Where do we stand on that? Supposing a sovereign or an old guinea is given by one person to another, where does he stand? I conclude there is some way of dealing with this, but I cannot find it. For instance, ancient Greek coins, which are gold, have a very great value. What is the position in regard to these matters? This is something which affects a very large number of people I would like some answer to that if I could have one.
    6.0 p.m.
    Mr. Glenvil Hall: I think the answer to-the hon. Member for Flint (Mr. Birch), who put the first question, is that the reason why a direction can name a given bank to which the payments should be made, is purely one of administrative convenience. It is obvious that a destination must be given, and in our view there is nothing wrong or unreasonable in naming; what that destination should be, in order

    391
    to help everybody concerned. So far as the sovereign on one's watch chain is concerned, it might be that, technically, it would be covered by the provisions of the Bill, which, quite frankly, in the ultimate are stringent. Nevertheless, it will be the fact that the Treasury will, by order and regulation, make a good many relaxations, and this, most certainly, will be one. The Treasury would not dream of making the keeping of a few coins by an individual, either as museum pieces or for sentimental reasons, an offence under the Bill.
    Mr. C. Williams: It is not a question of ownership. It is a question of sale. Will an ordinary sale—by Christie's, for instance—be quite legal, or will it not be?
    Mr. Glenvil Hall: Oh, yes. If an in dividual has coins of that kind and wants to sell them—and individuals still have sovereigns rucked away—a jeweller or dealer will sell them, although not an authorised dealer; and by regulation and order it will be quite legal for the ordinary man in the street to deal in that way with his jeweller, or at a shop which caters for that kind of thing.
    Mr. Assheton: My hon. Friend the Member for Flint (Mr. Birch) put a question to the Financial Secretary, to which he gave us an answer. I am bound to say I was not at all satisfied with the answer, although I do not know if my hon. Friend was. The Financial Secretary's answer was, that it is administratively convenient. Why is it administratively convenient? I should have thought it would be as convenient to draft the Clause in such a way as not to direct a person in those circumstances to give that gold or currency to be kept in the custody of some authorised person. The hon. Gentleman gave us no answer on that point. I do not understand myself why he wishes to say here, which specific depositary is to be the recipient. Could he give us a rather fuller answer?
    Mr. Dalton: I would assume that, normally, it would be agreed between the two parties. I think that there is some reason, for administrative convenience, to have an order of a definite character, but I do not think that at all excludes an agreement, as to the form of the order, between the Treasury and the person concerned. I should think that, in practice, no grave difficulty would arise.
    Mr. Assheton: I wonder if the right hon. Gentleman will look into it again before the Report stage?
    Mr. Dalton: Without commitment, of course, we will have a look at it again, to see if relaxation could be greater.
    Mr. J. Foster: I should like to ask whether, at the moment, there is any relaxation?
    Mr. Dalton: I am advised that there is at the present moment. There was the case which was quoted of that old Greek coin. I am advised that it is perfectly proper under present arrangements. Even if it is not we shall see the thing is regularised.
    Mr. C. Williams: I thank the right hon. Gentleman for his reply. I was only trying to help him, and I expect he is as grateful to me for my help as I am to him for his answer.
    Clause ordered to stand part of the Bill.

    CLAUSE 4.—(Travellers' cheques, etc.)
    Mr. Birch: I beg to move, in page 3, line 34, to leave out "enable," and 10 insert "entitle."
    This is a very small point, almost only a drafting point, but I think it is of some importance. What the Amendment seeks to do is to substitute the word "entitle" for the word "enable." As Clause 4 (1) is drafted, it does allow a wide latitude of interpretation, because there are a great many types of documents which enable one to get money and enable one to get foreign currency. A letter saying, "This is my friend Mr. Smith, and I very much hope you will look after him," may, in certain circumstances, be much more valuable than a letter of credit. This is, presumably designed to apply only to travellers' cheques and letters of credit, which do definitely entitle as well as enable; whereas a letter may entitle one to get money, although not enable one to get it. I think it right to have greater precision in the drafting of this Clause.
    Mr. Glenvil Hall: I think we are agreed that this is a small point, and it is certainly a drafting point. Experience alone will show whether the word "enable." is the correct word to use in this connection, but we are advised that "entitle" would certainly not be the right word, because it has a certain legal connotation;

    393
    and it might be assumed, on what, after all, is purely a banking facility, that the individual to whom the travellers' cheque or letter of credit is addressed is under obligation to pay. I hope the hon. Gentleman will not press this point. He can take it that we shall watch this matter. If we do find that the word used is not the right one, and that because we are using the wrong word—we do not think we are, but if we are—some change has to be made, because the word we are using excludes certain documents which should be included, we shall certainly look into it, to see that a change is made.
    Mr. J. S. C. Reid: I do not know what the hon. Gentleman means by waiting to see, because by that time the Bill will be law, and it will not be subject to change. I hope he will look into this again, because there are other words, not only the word "enable," but the words "document of a kind intended to enable." Intended by whom? The writer of the document or by the recipient? I think the hon. Gentleman ought to look at the whole phrase "intended to enable," which, I am sure, is much too wide. We can leave that to the Report stage.
    Mr. Glenvil Hall: "Intended to enable" refers to the parties to the transaction. In all probability it would be a bank of issue here—perhaps the right hon. Gentleman's bank. If he were going to South Africa they would give him a letter of credit or travellers' cheques, addressed, perhaps, to the Standard Bank of South Africa. It means "intended to enable" him to get the amount specified in the letter of credit when reaching South Africa. It means that and no more. In regard to the second question, I would direct his attention to Clause 31. A change of this kind could be carried through under the provisions of that Clause.
    Mr. Pickthorn: I do not know whether I am missing some legal point. If so, perhaps, the lawyers here could put me right. But on the ordinary construction of the words, surely, "intended to enable" must mean that the intention is in the person who issued the document; and it seems to me that the hon. Gentleman who replies for the Treasury is—I am sure unwittingly—misleading the Committee, in telling us it is the intention of the parties. Surely, it must be an intention by the person issuing the document. If
    394
    so, the definition which we have just been given is fundamentally incorrect, and I think we ought to have it amended and supplemented. Secondly, we were told that the word "entitle" is, from the Government's point of view, too narrow. We have been inclined to think that their word is, from our point of view, too wide. Is it not really the duty of the Treasury Bench to give us some instances, or some analytical distinction, showing why it is necessary to have it too wide, as it seems to us, and not merely to say to us, "Your word is narrower than ours"? That was obvious; that was the intention in putting down the Amendment, but that is all that we have been told on that point. Cannot we be told why it is necessary to have a wider word?
    Mr. Henry Strauss: The point seems to-me to be a slight but not unimportant one. I can conceive that the word "entitle" may not, for technical reasons, be entirely appropriate, and therefore I am not inclined to press it at this stage, but it seems to me, although I feel considerable confidence in the gentlemen who advise hon. Gentlemen opposite, that the words "intended to enable" are too wide. The main point I want to put is this. It is quite clear that the point, if it is a good one, is one which must be considered before the final stage of the Bill in this House, and not in its working. If the right hon. Gentleman says that he will consider the point on the lines I have suggested before the Report stage, my hon. Friend and I will ask the leave of the Committee to withdraw the Amendment.
    Mr. Dalton: Certainly.
    Amendment, by leave, withdrawn.
    Mr. Howard (Westminster, St. George's): I beg to move, in page 4, line 1, to leave out Subsection (4).
    The purpose of this Amendment is to-draw attention to the extremely wide terms in which this Clause is drawn. It seems that it will have the effect of making some perfectly normal and ordinary transactions illegal. If it is the desire of the Government to render illegal certain improper transactions, or any particular acts which would lead to an abuse of the exchange control generally, then I for my part would be only too glad to see specific Clauses prohibiting those Acts in this Bill, but when it is drawn so widely that perfectly legitimate transac-

    395
    tions are made illegal, it is surely time to ask for some explanation. If I may put it this way all of us would agree that it is a useful and desirable practice that a policeman should hold up his hand at one particular crossing and stop traffic there to enable other traffic to go through, but it does not follow from that that the best way to increase safety on the roads and to improve traffic is to have every policeman holding his hand up at every crossroad the whole of the time. That seems to be the effect of this Clause. The first words of the Subsection are:
    "Every person in or resident in the United Kingdom."
    Then it refers to "any document," and after the short debate we have just heard on Subsection (1) of this Clause, it is still not quite clear what "any document" might be. It is very wide, but refers mainly to travellers' cheques. Then it goes on:
    "shall encash it or cause it to be encashed …with the person issuing it or with a banker."
    6.15 p.m.
    In the case of a person who is in this country and has come from abroad, presumably the person issuing it will also have been abroad in the country from which the visitor started, and quite clearly it will not be possible for a person in this country to encash it with the person who issued it in the first place. The alternative with which he is presented is to encash it with a bank. On the face of it that would not seem unreasonable, except when one considers the normal form of a traveller's cheque itself. It is surely not a very wrong or wicked thing to use a traveller's cheque to pay one's hotel bill; it is quite normal to pay one over into the hotel, which accepts it. It is a normal and proper convenience, but as the Subsection is drawn at present, that would be illegal.
    Again, a traveller's cheque could quite properly be used for purchasing a ticket, whether by air or rail, to travel. But under this Subsection it must be encashed with a bank. If, as unfortunately, rather frequently happens these days in connection with air travel, one has to go at short notice, it is quite conceivable that it would in fact be impossible for the intending traveller to get his traveller's cheque cashed at a bank. Quite apart from the
    396
    question of convenience, it might actually be impossible, and it would still be illegal for him to get the money in any other way. These difficulties will arise under the Clause unless the Treasury can and will consent to retention or encashment elsewhere than at a bank. But how is the Treasury to indicate its consent when a foreigner may have got the traveller's cheque in a foreign country? Indeed, it need not necessarily be a foreigner; it might be a British subject who happens to have been abroad, perhaps in one of our own territories, and who has obtained a traveller's cheque before coming back here. How, when obtaining that traveller's cheque, is he to obtain the consent of the Treasury in this country to the exact purposes for which he may use it when he comes into this country? I submit with great respect that it is much too wide, and I therefore hope that the Amendment will be accepted.
    Mr. Glenvil Hall: We take the view that this Subsection is not, in fact, too widely drawn. This Clause deals with traveller's cheques and similar documents, which of course must be covered if exchange control is to function in all its parts, because a traveller's cheque is cash once removed, and can be foreign currency once removed. Therefore, we have got to deal with documents of this kind, and this Clause does so. Where Subsection (4) refers to a document, it is dealing with the kind of document defined in Subsection (1) of Clause 4, and that is the kind of document to which I have just referred. What we want to do is to prevent anyone using a letter of credit or a traveller's cheque, whether got from a bank or from a travel agency, and building up a stock of them, because that would be possible and indeed legal if we did not include this Subsection in the Bill. Therefore, we must have it, and after all it is only commonsense, and fair, that if someone applies for a letter of credit or traveller's cheque to go for a holiday, he should use the money for the purposes expressed in his application and for which the money or currency was given him.
    Mr. Howard: Abroad, and not in this country?
    Mr. Glenvil Hall: He should use it for the purposes which he stated in his application. If he does not use it for those purposes, it is only right and fair that

    397
    he should hand back the cheques to the authorised dealer, who is probably his banker. For these reasons, and for others which I, take to be obvious, we must ask the Committee to reject this Amendment.
    Mr. Howard: Is the Financial Secretary really suggesting that travellers who wish to get travellers' cheques in some foreign country to come here, must obtain the consent of the Treasury in regard to the purposes for which the money is to be used in this country?
    Mr. Glenvil Hall: The hon. Member is now talking about a national who is resident in another State. In that case he would have a bank in his own territory from which he would obtain credit and currency to come over here. We are obviously not dealing with him. How he gets the money, and the reasons he gave to his banker are purely his concern and not ours.
    Mr. J. Foster: I think that we ought to have a clearer explanation from the Financial Secretary. This Clause is drawn too widely. A person who comes here from outside the United Kingdom with travellers' cheques has to cash them with a banker. In this connection, I should like to ask whether the Treasury have consulted the organisation which has to encourage tourists. Anyone who has travelled knows that travellers' cheques are used as cash or currency, and it will therefore be a great inconvenience if travellers' cheques cannot be cashed at railway stations, or with the concierge of a hotel. These cheques can now be cashed in a hundred and one different ways, but if these people are to be driven to the banks, it will not help at all. The Financial Secretary as I interpret him says it is not desirable that foreigners should be be able to build up cash in this country, but it seems to me that a man who has travellers' cheques for £100 can go to Lloyds Bank and cash them and build up the nest-egg he wants. The Financial Secretary suggested that it would not be proper, for instance, for an American to come here with £10,000 worth of travellers' cheques, when he had not received permission from the Treasury to cash that amount, but submit that this money could not have been acquired without the sale of dollars. What possible safeguard is it to make a man cash his travellers' cheques in Lloyds Bank on one
    398
    side of the street, and prevent him from cashing them with the concierge at the Savoy Hotel on the other? I understood the Financial Secretary to say that the Government did not want a man to have travellers' cheques in dollars or francs, and use them for purposes which were not intended. I understand that but that has nothing to do with the case. The Clause is much too wide and restricts legitimate tourists. The Treasury have to rely on the ordinary restrictions in other parts of the Bill as to what a non-resident can or cannot do with his cash.
    Mr. W. J. Brown: I have an interest in this matter, because I have some travellers' cheques. I am not sure how I am to be treated under this Clause. If I spend precisely the number of travellers' cheques which I hold, then this practical issue will not arise. But suppose I come back with £20 or £30 of travellers' cheques in my pocket. There are many other Members in this House who go abroad, and I can well imagine that I might meet one in the smoke room, and find that he wanted some travellers' cheques. I might say, "I have some which I do not want. Will you buy them from me?" Do I understand that I am not allowed to carry through what I have hitherto regarded as a perfectly harmless transaction?
    Mr. Bowles: I do not know whether the hon. Member has ever seen a travellers' cheque, but the great thing about these cheques is that you have to sign your name in two different places— at the issuing bank, and at the bank which cashes the cheque.
    Mr. Brown: I am an authority on this subject, because I have just acquired a stock of these cheques. If I do a deal with a fellow Member of Parliament, there will be exactly the same number of travellers' cheques as there were before, and exactly the same amount of currency. But in order to carry out this simple transaction, I shall expose myself to a penalty, although I am not sure what the penalties are. Is it really necessary to have a closed shop on transactions between one Member and another, and one citizen and another?
    Mr. J. S. C. Reid: I hope the Financial Secretary will tell us a little more about this. I am sure that this Clause is extremely confusing to a person who wishes

    399
    to have this type of credit and take travellers' cheques abroad. It is right that the public should know what this Clause means. I have studied this—I am not an expert, although I am not completely ignorant on these matters—but I do not know what it means. Let me first suppose, unlike my hon. Friend the Member for Northwich (Mr. Foster), that we are dealing with travellers' cheques issued in this country.
    6.30 p.m.
    Mr. Glenvil Hall: That is al1 we are dealing with.
    Mr. Reid: My hon. Friend was apparently dealing with travellers' cheques issued in sterling in America, and I do not know whether that is feasible or not. I think it is if such a thing exists, and I see no reason why it should not exist. But let me come to the traveller's cheque drawn in this country. What must I do with it? If it is issued by one of the limited number of people who are authorised dealers, it is covered by Clause 5. But we were told, earlier today, that you can count the Dumber of authorised dealers almost on the fingers of one hand. Accordingly, one of the documents will, quite properly, be issued by persons who are not authorised dealers. I take one that is so issued. Unless the Treasury have given me specific consent— and it takes time and trouble to get it— I must encash it, or cause it to be encashed in the scheduled territories. I must do it immediately, before I have an opportunity of using it, because the Treasury consent is to my retention of it. If I have no consent to retain it, I must be committing an offence unless I get rid of it at once.
    It is true that the third, fourth, and fifth lines of the Subsection do not say that I have to encash it at once and one would think what was meant was a reasonable time, in all the circumstances. But that seems to be contradicted by the next line which appears to indicate that I cannot retain it at all unless I have Treasury consent. The Treasury must consent to my retention of it, not to my retention after its purposes have been served. I am taking the Subsection before we get to the last three lines—the general case, not the exceptional case. Unless I get one of these cheques from an authorised dealer, or obtain specific consent from the
    400
    Treasury, I may commit an offence if I retain it at all. Suppose I get a cheque this week, intending to use it a fortnight hence, and I have no consent to retain it for a fortnight I am committing an offence in retaining it for a fortnight. The only thing I can do is to put it in my pocket on the day I am leaving. I therefore hope that the Government will give us an adequate explanation of this matter.
    Sir Frank Sanderson: I feel very confused as to the meaning and interpretation of Subsection (4), the first line of which says:
    "Every person in, or resident in"—
    If anyone from the Continent, or from the Americas, were visiting this country he would, in fact, be in this country. If that be so, this would refer to travellers' cheques issued in the visitor's country, to be expended here in Britain. On the other hand, it may also refer, and only refer, to a resident in this country who has received travellers' cheques and who desires to cash those cheques abroad. I would like to know whether it refers to the first of the two cases I have enumerated, or to the second, or to both. A travellers' cheque issued by a banker in this country, to be expended abroad, is used for a variety of purposes. It is used for paying for railway tickets, or for air travel, for payment of a hotel bill, or merely for the purpose of securing money to be expended in other ways. I would like the Chancellor to make it clear whether he desires to limit the means by which travellers' cheques can be cashed abroad, whether he is referring to travellers' cheques issued to nationals at home to be spent abroad, or whether he is referring to travellers' cheques issued abroad to foreign nationals to be expended here. It is essential that these points should be made clear. If the Minister considers that the words of the Subsection are clear I assure him that the man in the street does not think so, and would like some clarification of these points.
    Mr. Solley: I submit to the Committee that this matter is not so complicated as might appear from the speeches we have just heard. The apparent complication has arisen from the fact that Members opposite have forgotten that the documents we are discussing are documents which have been created to fulfil a particular purpose. Subsection (1) of Clause 4 says that it applies to:

    401
    "…any document of a kind intended to enable the person to whom the document is issued to obtain foreign currency …"
    in certain circumstances. Putting it shortly, the purpose of the document is to enable an applicant for the document to obtain foreign currency for certain purposes—
    Mr. W. J. Brown: It is not foreign currency for certain purposes. Clause 4 (1) says:
    "This Section applies to any document of a kind intended to enable a person to whom the document is issued to obtain foreign currency …"
    That covers travellers' cheques, and letters of credit.
    Mr. Solley: That is true. It says:
    "… to obtain foreign currency from some other person on the credit of the person issuing it …"
    If we apply that definition to Clause 4, we find that a person, having obtained that document, which was issued for the purpose of getting foreign currency, must encash it in the scheduled territories with the person issuing it, or with a banker. Under Subsection (1) of this Clause the purpose of issuing this document is not to enable a person, having possession of the document, to obtain foreign currency, but to enable the document to be encashed. Members opposite may not agree with this submission, but I think it is the right one.
    This document, therefore, is issued for the purpose of obtaining foreign currency which must, in the ordinary case, be cashed in the scheduled territories. If, however, the applicant changes his mind and does not propose to cash this document in the scheduled territories, or does not propose to use the document for the purpose for which it was required or intended under Subsection (1) of this Clause, then he must apply to the Treasury for consent to retain it, or, in other words, for consent not to use it for the purpose for which it was required and the purpose intended under this Clause.
    Mr. C. Williams: Can the hon. Member explain what happens if no one wants the document?
    Mr. Solley: If no one wants the document, and the hon. Gentleman will give it to me, I can use it for a very good purpose.
    Mr. W. J. Brown: I might be disposed to solve some of my own problems by
    402
    handing all my surplus cheques over to the hon. Member, but I am afraid that I should still be committing a crime.
    Mr. Solley: I am not going to argue that point. The point which I am making is that although Subsection (4) of this Clause could have been worded more clearly, it is, nevertheless, reasonably clear to any person who cares to read it carefully, and, in my submission, it ought to stand as it is.
    Mr. Henry Strauss: I regret to inform the Chancellor of the Exchequer that the elucidation to which we have just listened has not entirely removed my doubts about the Subsection as it stands. I think the simplest way in which I can put my point is to give an example of what may well occur at any time to any of us. If one of us obtains a traveller's cheque for the purpose of foreign travel, the utmost he will get is £75, because that is the most that the Chancellor wishes him to spend abroad. Assume that the person who has taken it wishes to travel by air, but on arriving at the aerodrome finds that the weather is such that he cannot depart, and he has to stay for a night or two waiting for better weather. He runs up an hotel bill, and, finally, when the aeroplane can take him, he starts before any local bank is open. It will now be a criminal offence under this Subsection for him to use a traveller's cheque which he has obtained by the consent of the Chancellor of the Exchequer for his foreign travel, to pay his hotel bill in this country. Does the right hon. Gentleman really desire that fantastic result? I cannot think that he does. I cannot think that those advising him wish to produce this ridiculous result. If this Subsection does not produce that result—I do not wish to be unkind to the hon. Gentleman who has explained the whole thing to the Committee—perhaps the learned Solicitor-General will show me where I am wrong. The case which I am putting is nothing like the rather dangerous transaction in which the hon. Member for Rugby (Mr. Brown) is determined to indulge. It seems a perfectly normal transaction but one which is made illegal by this Subsection
    Let me turn to another matter. It is quite common for a person here to obtain travellers' cheques for use in this country —a Member of Parliament, for example, who has to travel to different places— which he can use to obtain cash in a

    403
    place where he has no banking account. At the moment, it would be possible, no doubt, for bankers to issue sterling travellers' cheques for use only in this country, which would solve that problem, but I do not think that there would be anything necessarily improper if travellers' cheques expressed in sterling, such as we are all accustomed to get for use in travel abroad, were also available for use in this country. Under this Subsection it will not be legal to use them here. My main purpose, however, is to ask that a Minister should meet the perfectly simple point regarding the gentleman who has obtained travellers' cheques, who is held up at an hotel near an aerodrome, and who wants to use one of those cheques to pay his hotel bill.
    6.45 p.m.
    Mr. Glenvil Hall: The short answer to the question put by the hon. and learned Member for the Combined English Universites (Mr. Strauss), is that the traveller who visualises going abroad on a holiday and who is held up by bad weather will have paid his fare, and it will not come out of the £75. The travellers' cheques, if he has been wise, will not be in sterling, but in some foreign currency. In addition, as I think is well known now, all travellers are permitted to take £5 sterling with them for eventualities such as has been suggested on the journey going and coming back, when they are within the jurisdiction.
    The present Bill, I might add, is designed to protect the exchange position of this country. It is true that the provisions laid down in the Bill are, in many respects, very stringent. That may be regrettable, but, nevertheless, they are necessary. At the same time, as I think the Committee know, it has been decided that by exemptions, orders and regulations of one kind and another, many of the provisions of this Bill can be limited or made of no avail. So far as foreign travellers to this country are concerned, we are fully alive to the fact that we want them here, and under exemption orders to be made under Clause 31, conditions governing their stay here will be made as easy as possible, subject to the overriding needs of the country to preserve its foreign exchange.
    Mr. H. Strauss: The hon. Gentleman says that travellers' cheques, which a man obtains for the purpose of foreign travel,
    404
    will not be expressed in sterling. Any Member of this House who has travelled abroad in the last few years will know that that is entirely incorrect. When you go to your bankers to get travellers' cheques for use abroad, you can get them in denominations of £10 if you wish, and you then get cash for them in any foreign currency, according to the place you are visiting. With regard to the £5, if the traveller is held up at an aerodrome for some time with his family, he may need more than £5. If he takes more than he needs in cash and is not held up by bad weather, there is nothing which he can lawfully do with his excessive cash because he is not allowed to take it out of this country.
    Mr. Glenvil Hall: If the hon. and learned Gentleman intended to go abroad, and he came back with more than the requisite amount upon him in sterling, and made a clean breast of it to the Customs and Excise, either they would accept his explanation—if he looks innocent and is obviously a bona fide traveller—or they would take the money from him and credit his account with it or pay it to him personally, or in any way in which he desired to have it. That is how the thing works. I do not want to labour this, but frankly, if the travellers' cheques are expressed in sterling, what on earth is the hon. and learned Member trying to say? If they are cashable in sterling, or in a foreign currency, it seems to me that the person holding such travellers' cheques would be covered against all eventualities.
    Mr. H. Strauss: I am sure that the Financial Secretary wishes to answer the point that I put to him. I put to him the specific case in which a person wishes to pay an hotel bill incurred while he is waiting for the weather to become sufficiently good for his aeroplane to fly. The person has no other money upon him adequate to pay the bill except sterling travellers' cheques, and the aeroplane leaves before the bank is open. He cannot, therefore, cash the travellers' cheque at a bank. Why should he not be allowed to pay his hotel bill? How does the Financial Secretary answer that question?
    Mr. Glenvil Hall: The answer is that he should have upon him enough sterling to cover the bill. If people who travel are too simple or too poor to have a sufficient surplus to meet an eventuality of the sort

    405
    visualised, obviously one cannot legislate for that kind of thing in any Act of Parliament. Whether one had exchange control or not, the situation visualised would face that particular traveller.
    Mr. J. Foster: The hon. Gentleman said there would be exemptions under Clause 31. Will he tell us, either now or when we discuss Clause 31, the main lines of the exemptions which are to be granted?
    Mr. Dalton: It is a much wider question than this.
    Mr. J. Foster: But in this case the Financial Secretary has said, "Do not worry about foreign travellers, because there will be adequate exemptions." Can he tell us, now or on Clause 31, on what lines those exemptions are to be? Will he undertake to do that?
    Mr. Glenvil Hall: An opportunity will occur later, either on Clause 31 or on an earlier Clause, to deal with that point. If the hon. Gentleman will permit me, I will not deal with it now, and indeed, I am not sure whether I would be in Order in dealing with it now. I can assure the hon. Gentleman that the point is covered by the Bill, and it will be permissible for the Treasury, by exemption order, to grant travellers who come to this country every facility to pay hotel bills and to have petty cash in their pockets for 'bus fares, cab fares, or fares on the underground or even to buy meals for their wives. I think it was the hon. Member for Northwich (Mr. John Foster) who talked about an American coming to this country with his pockets full of dollar bills. The hon. Gentleman made my right hon. Friend's mouth water. That is the kind of visitor we want, because dollar exchange is always acceptable to us. If and when he came with foreign exchange in his pocket, he would come under another part of the Bill.
    Mr. J. Foster: I am sure the Financial Secretary does not wish to misrepresent me, but I did not deal with dollar bills. With regard to the other matter which I raised, all I was asking was that the Government should state what exemptions there are to be. It is quite understood that the Treasury can make exemptions. What I want is an assurance from the hon. Gentleman that, when the time comes, he will state the main lines of those exemptions.
    Mr. Glenvil Hall: I thought I had made it clear that, at the appropriate moment, such a statement will be made either by me or by my hon. and learned Friend the Solicitor-General, on behalf of the Chancellor. I think the main point to which attention should be directed is that which was made by the right hon. and learned Member for Hillhead (Mr. J. S. C. Reid). He wanted to know whether, under this Subsection, it would be essential for an individual holding the currency mentioned to get rid of it. The answer is "No," because the Subsection does not name a time, and, therefore, we must use common sense about it. The crux of the whole thing is the purpose for which the travellers' cheques were issued, and if that purpose is fulfilled, whether it is today, tomorrow or next month, obviously the provisions of this Subsection will not have been contravened. I think that is self-evident.
    Mr. J. S. C. Reid: The Subsection is so drafted that in the general case there is no statement of purposes in the application, because the last three lines begin:
    "and where in his application for that consent he has stated that he requires it for a particular purpose …"
    That is a special case, and the main part of the Subsection deals with a general case where no purpose is stated. Take the general case, where no purpose is stated in the application; take the case where the travellers' cheques are not issued by an authorised dealer. As I read the Subsection—and I ask the Solicitor-General if that is the right meaning—the person is not allowed to hold the cheque at all unless he gets the specific consent of the Treasury for its retention. Therefore, it seems to me that, in that case, if you carry out the obvious purpose you have in mind, you are committing a crime. I cannot think that is intended, and, therefore, I say that the Subsection ought to be redrafted.
    The Solicitor-General: To understand the object of Clause 4, one has to bear in mind Clauses 1 and 2. Clause 4 applies only to documents which enable one to obtain foreign currency. Either that is ordinary foreign currency, or it is specified foreign currency. If it is ordinary foreign currency, Clause 1 applies to it, and one treats the travellers' cheque just as if it were foreign currency within Clause 1. If it is specified foreign cur-

    407
    rency, it falls within Clause 2, and one treats that travellers' cheque as if it were specified foreign currency. With that introduction, to return to the question asked by the right hon. and learned Member for Hillhead (Mr. J. S. C. Reid), the position is as follows. If the Treasury have not consented to the retention of the travellers' cheque, it has to be turned in immediately. Obviously, it has to be done at once. It has to be done as soon as the consent to retention expires. Suppose that it is ordinary foreign currency, and not specified foreign currency, the position will be that, under Clause 1, it will have been obtained from an authorised dealer, and it will have been obtained pursuant to an application, and in terms of a particular Treasury consent, namely, a consent to use it for foreign travel on some specific purpose for a specific period. The person who holds the travellers' cheque which comes within the ambit of Clause 4 (4) will, therefore, have to encash it within the scheduled territories only when the time for which the Treasury consent to his retaining it expires. That makes it perfectly workable and easy. In other words, when one is discussing travellers' cheques, one has to visualise them as foreign currency.
    7.0 p.m.
    If they are ordinary foreign currency, only got through authorised dealers and with Treasury permission for a specific purpose, they specify that the foreign currency will have to be turned in under Clause 2. A traveller has to encash it within the scheduled territories as soon as the purpose for which he obtained it from the Treasury or the time he is allowed by the Treasury to retain it expires, not before. Altogether it works simply and easily, but I can see it is not easy to define the reason on the first reading of the Clause. What has to be borne in mind is the simple thesis that one has to draw foreign cheques with foreign currency, and then look back to Clauses 1 and 2 to see what happens to them. It will be found that the result is perfectly simple.
    I have been asked a question with regard to aerodromes. If a traveller goes to an aerodrome and finds that his plane is not leaving and he has to wait two or three nights, can he use a travellers' cheque to pay his hotel bill? The answer to that is that he would not be able anyhow, because the Clause only applies to
    408
    travellers' cheques enabling him to obtain foreign but not English currency.
    Mr. H. Strauss: It does not say that
    The Solicitor-General: With very great respect, it does. If the hon. and learned Gentleman will look at Clause 4 (1),
    "This Section applies to any document of a kind intended to enable the person to whom the document is issued- to obtain foreign currency."
    Mr. H. Strauss: It does not say "foreign currency and not English currency."
    The Solicitor-General: By implication it does not apply to travellers' cheques other than travellers' cheques described in Clause 4 (1). Under this Subsection he could not use one of these to pay an English hotel bill, but he probably could if he read the terms of the permission given by the Treasury. The terms of the permission would allow him to do so because the cheques were given for the purpose of foreign travel which means journeying in and out of England. Therefore it depends upon the terms of the Treasury consent. I repeat that really the thing is not so difficult if one takes the trouble to read Clauses 1, 3 and 4.
    Mr. J. S. C. Reid: The Solicitor-General's explanation has made the position even worse than it was. Let me draw the Solicitor-General's attention to this. Clause 4 (4) deals with a document expressed in terms of sterling. There is nothing whatever on the face of that document to show what its ultimate destination is intended to be. Here is a perfectly good letter of credit addressed to all and sundry all over the world expressed in terms of sterling.
    The Solicitor-General: Will the right hon. and learned Member for Hillhead {Mr. J. S. C. Reid) give effect to the words to which this Clause applies?
    Mr. Reid: I am coming to that. The question of whether that applies to this document under the Solicitor-General's explanation is answered by the fact that it is not dependent on what is written in the document. It depends solely upon the intention of the parties who issued the document. A letter of credit or a travellers' cheque is issued by a certain bank or a travel agency. That is not, on the face of it, cashable only in certain places; it is cashable in any place in the world.
    Mr. Glenvil Hall: Against these provisions.
    Mr. Reid: You have to get behind that, and you have to inquire what happened when the traveller went to the travel agency and asked for the document. That does not appear on the document. All that appears on the document is that it can be cashed in America or in Australia, or inside the sterling area or in some place where there are different rules. Whether or not I commit an offence under Subsection (4) depends not solely on what I do, not on what the document says, but on what was said to the travel agency when they issued the document. Let us assume that I go to one of these agencies and say, "Please give me a document to use in America." I then get a document with a certain understanding. If I say, "Give me a document to be used in Australia," that is quite a different thing and this Clause does not apply. However, if I say, "Please give me a document that I can use either in America or in Australia because I am going to both countries," what happens then? I do beg the hon. and learned Gentleman to believe that he has not explained this Clause at all, and we shall have to divide against it because it is even more unintelligible now than it was before.
    Mr. Turner-Samuels: On what authority does the right hon. and learned Member for Hillhead (Mr. J. C. Reid) say that the cheque depends on what took place between the parties when it was issued and not upon the terms of the document itself? It is perfectly clear, in the terminology of the document, that this Clause applies to any document
    "intended to enable the person to whom the document is issued to obtain foreign currency."
    It is the document not in the construction of what has been previously negotiated between the parties which decides the issue. The right hon. and learned Gentleman should adduce some authority for the proposition he has made, because it does not make legal sense.
    Mr. Reid: I do not like to be accused of not making legal sense. Will the hon. and learned Gentleman agree to this—that the form of document is precisely the same, whether I have asked for a document which can be used in America, or for one that can be used in Australia?
    410
    The document may be for £75 and it is expressly sterling with which we are dealing. If it is a letter of credit intended to be used in Australia, this Clause does not apply to it. If it is a letter of credit intended to be used in America this Clause does apply to it, and the only way of understanding it is by asking the man who wrote it out what he did intend.
    Mr. Turner-Samuels: I do not agree with that at all.
    Mr. W. J. Brown: I have in my hand a document covered by the Clause. It is a traveller's cheque for £5. I want to know how the use of that cheque is going to be affected by this Clause. It will be covered by Clause 4 (1), because that Clause says:
    "This section applies to any document of a kind intended to enable the person to whom the document is issued"—
    that is me—
    "to obtain foreign currency."
    There can be no doubt that the purpose of this document is to enable me to obtain foreign currency. It is true that on the back of the document it is written:
    "Available only in the sterling area,"
    but, in fact, I can get foreign currency within the sterling area. There is no difficulty about that. I can get foreign-currency in any country that comes within the sterling area on the basis of that document. I can use that cheque in various ways. I might use it to pay my mess bill on the boat, or to buy a ticket for a train or plane, or I might use it to pay a hotel bill. In fact, it is a substitute for cash and an effective substitute at that. In the old days, if I had some of these over when I came back, I could sell them to another Member of Parliament, get my money back, give him the cheques he wanted, and thus complete a smooth transaction. [An HON. MEMBER: "No."] Oh yes I could, and I happen to know, because I have done it. For alls practical purposes the cheque served the purpose of cash.
    If I turn to Clause 4 (4), I am confronted with a sharp limitation. All I can do with this instrument, I am told is to
    "… encash it or cause it to be encashed' in the scheduled territories with the person issuing it or with a banker …"
    The "person issuing it" is Barclays. Bank in London, and if I am in Bermuda

    411
    they would obviously not be accessible so that therefore I must cash it with a banker and nobody else in Bermuda. The whole flexibility of this piece of paper as an instrument of travel and accommodation is destroyed, if those words stand as they are now. I can make no other sense out of the English of the Subsection. When the Solicitor-General spoke I must Say that I thought I was beginning to see light on the matter, and that he was envisaging what was to happen after the journey was over and the traveller was back home. The learned Solicitor-General says that when the journey is over and I am back in England I must, if I have not used these cheques, do one of two things. I must either take them back to Barclays Bank or to some other banker. That is all right, and the only effect would be that I would have to make the exchange through a banker, and not through someone else. But there is nothing in these paragraphs to suggest that Clause 4 operates only after the Englishman has been abroad and has come back with some spare cheques in his pocket.
    The Solicitor-General: Read the last three lines.
    Mr. Brown: They are:
    "… where in his application for that con-Bent he has stated that he requires it for a particular purpose"—
    I have said that I require this traveller's cheque for a particular purpose.
    The Solicitor-General: Read on.
    Mr. Brown: I may be taking too much with me and underrating the hospitality I shall enjoy. I may not use all the cheques, and when I come back I understand that I am obliged to do certain things under Clause 4.
    Mr. Glenvil Hall: Now the hon. Gentleman has it.
    Mr. Brown: If that is so, then I wish the Government had inserted words to that eftect, because the Subsection as it stands does not say that this is what one must do with an instrument of exchange for foreign travel when one has come back and has not spent it. At least the thing would then have been clear, whether desirable or not. It certainly is not clear now, and if it bothers hon. Members to
    412
    interpret the wording what effect will it have on people outside? From now on, we shall have to protect ourselves by carrying a copy of the Act wherever we go. At least let us make, it intelligible. I urge the Chancellor of the Exchequer and the Financial Secretary to take the Clause out and, if this is something that has to be done at the end of the journey, I beg them to think not only of the American who comes to England—I have a great affection for him and his dollars— but also of the Englishman who goes from this country to some other country. I ask that the Englishman may be considered—which is almost heresy in these days—and that the Subsection should be redrafted to make it clear that we shall still be able to use these travellers' cheques for foreign travel as before, and that all the Chancellor is concerned with is what we do with them when we return.
    Mr. Dalton: Although I have not yet taken part in the discussion on this Clause, I have listened with great attention to the speeches which have been made from various parts of the Committee. I hope that the difficulties which have been suggested are really nonexistent, and if I can I will certainly endeavour to make the position clearer than it has seemed to be to some hon. Members—and to some hon. and learned Members who are accustomed to construing these documents. Before Report stage I will consider whether we can introduce some further clarification into the Clause, since it is evidently confusing to a number of hon. Members who have different views on it. I cannot agree to withdrawing the Clause at this stage, but I do undertake to look at it with my advisers to see whether we can make clear the intention, which is, of course, merely to protect our exchanges resources from improper raids. That purpose is common, I think, to all hon. Members, and as I say I will undertake to re-examine the wording before Report stage and, if possible, introduce some qualifying Amendment.
    Mr. Pickthorn: May I ask the right hon. Gentleman just one question? Is it part of his intention, as I thought it was of those making most of the speeches from this side of the Committee, that a world letter of credit should be usable for paying, for instance, hotel bills, railway fares and so on—
    Mr. Dalton: In this country?
    Mr. Pickthorn: No, in foreign countries. Or must it always be turned into cash first and the cash then used for the purposes I have indicated?
    Mr. Dalton: I do not think a straight reply to that point would do justice to the question. I undertake to look at the various points which have been raised, and see whether a further clarification can be made. I do not want to go over the ground again, taking up point by point the arguments that have been advanced. I think that that would waste the time of the Committee, and that the undertaking I have given will be more useful to the Committee than a prolongation of the present discussion.
    Mr. Howard: I think there is only one course open to me now, but I should like to say that nothing in the world would have induced me to move this Amendment had I thought that we were going to be led into this discussion of legal details. I moved it as a perfectly straightforward Amendment for practical reasons, and I had hoped to receive a reply. In view of the Chancellor's undertaking, however, I beg to ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.
    Mr. Glenvil Hall: I beg to move, in line 20, to leave out Subsection (6).
    The Committee will notice that this Amendment has the backing not only of my right hon. Friend but of an hon. and gallant Gentleman who sits on the other side of the Committee. We dealt with this point on Clause 2 but, as I indicated then, the arguments in favour of the retention of the same wording under Subsection (6) of Clause 2 do not apply here. The traveller's cheque or letter of credit with which we have just been dealing invariably says on its face, in a most unmistakable way, just who are the parties to it. That being so, it is quite inapplicable that this Subsection should be included in this Clause.
    Mr. Stanley: Certainly nobody on this side of the Committee will quarrel with the decision of the Government to remove this Subsection, but what some of us would like to know is why it was ever put in The hon. Gentleman has just told us that it is wholly inapplicable and that the document concerned shows who
    414
    are the parties to it; in other words, there never could have been any justification whatever for a Subsection of this kind. I think we are entitled to ask why, in these circumstances, the Government should have included a Subsection which certainly seems, to the layman, to 'contravene every legal tenet in which we have been brought up to believe. We ordinary people have always understood that it was part of the law of this country that one was presumed innocent until proved guilty. Here we have the Government putting in a Subsection to say that one is assumed to be guilty until proved innocent, which is a pretty serious thing to do. Then, shortly after publication, they come down and tell the Committee that they have had second thoughts and wish to withdraw the Subsection after all.
    It only shows what many of us have suspected and what anybody who listened to the discussion on the last Subsection must have known, that the drafting of this Bill has not yet received proper consideration. It is all the more important if the Bill has not received proper consideration in the Ministry before its publication that ample time should be given for its proper consideration in the House. We labour already under great difficulties in view of the shortage of time which has elapsed between the Second Reading and the Committee stage. Who knows how many more Subsections there are which the Minister has not already looked at and which when he does look at them he may ask to withdraw? In view of this, I am sure that the right hon. Gentleman will not complain if we are forced to ask for a reasonable explanation for the very complicated Measure which after inadequate preparation we are now being asked to pass.
    Mr. Dalton: I gather that we are all agreed that this should come out, and therefore I doubt whether there is much more to be debated. There may be important matters later on which we are not agreed and on which we shall be better advised to spend time. I may be on the edge of Order—but not more than the right hon. Member for West Bristol (Mr. Stanley) was—when I say that we regard the general arrangements in the Bill as satisfactory. Of course, reasonable time is always due to be given in everything. The only debate is on what may sometimes be called reasonable. The right hon. Gentleman and his friends will realise that I cannot admit there has been any lack of

    415
    thought or labour in the preparation of the Bill. I know only too well that it is to the contrary. This is an essentially difficult subject on which to legislate, but it has been considered at very great length and very great detail and the attention of many learned and able persons has been given to it. However, we are all agreed on this and I do not propose to say any more about it.
    Mr. C Williams: The Chancellor of the Exchequer has put himself in a very difficult position, not only by his previous speech but by his Amendment. Still more has his position been made difficult by the unfortunate remarks earlier by the Financial Secretary. Let us look at what we are doing here. In this Subsection we have a particularly brutal and un-English provision which goes against the highest canons of English law. It is so brutal and so un-English that the Chancellor of the Exchequer has to withdraw it from the Bill. He says that we are agreed about this, but are we agreed? This happens to affect travellers' cheques, and the only difference between this and the other case is that in the previous case great sums of money were affected. Just now, when the right hon. Gentleman was in difficulty, there came to his assistance the hon. and learned Member for North Hammersmith (Mr. Pritt), who pointed out that if that Subsection, which works roughly in the same way as this, was applied, he would then have to ask every bank and every branch of every bank throughout the whole of the United Kingdom for evidence.
    It was on that evidence alone that some hon. Members were in favour of withdrawing that Amendment, or else it would have gone to a Division. Now there is no longer that persuasive tongue below the Gangway, but, on the other hand, the Chancellor of the Exchequer has completely thrown over the whole of the arguments put up on his side and has admitted that in this case the thing is too hot even for him. I always welcome repentant sinners, but it is a pity that he did not go a little further and abolish a good deal more. What in the world happens to the individual who cannot get his travellers' cheque cashed? Surely he is just stuck? We have never had any answer to that question. As the Chancellor has met us here, perhaps he will also consider our former Amendment before the Report
    416
    stage. I hope he will not suffer any inconvenience from any lawyer getting up behind him and cutting away his whole case.
    Amendment agreed to.
    Motion made, and Question proposed, "That the Clause, as amended, stand part of the Bill."
    Mr. Howard: May I ask the Chancellor if he will extend his undertaking to reconsider the wording of Subsection (4) to Subsection (5)? I knew that Subsection (4) was a little difficult, but I had no idea it was as difficult as it is until the Debate took place. Subsection (5) seems even more complicated than Subsection (4) and it has to be interpreted by reference to other Subsections. Will the Chancellor give an explanation now, or better still, extend his undertaking—
    Mr. Dalton: Perhaps I did not make myself clear. My undertaking applies to the whole Clause. The Subsections hang together.
    Mr. H. Strauss: On the Chancellor's undertaking, I only want to put two points to him. The first is that, when he examines the Clause again he will remember that it is not only the obscurity to which we object but what some of us believe to be its absurd and unnecessary provisions. I hope that he will come to the conclusion that the case I have put to him of a man at an aerodrome obtaining sterling in this country to pay his hotel bill is one that he will desire to legalise. The other point is in answer to one put by the Solicitor-General. I hesitate to say that the Solicitor-General is wrong on any point of law, but I think that in this case he must have mistaken the point. Surely the fact that a document is a document within the meaning of Subsection (1) as a document issued to obtain foreign currency does not mean that it is not a document capable also of obtaining sterling. I believe there is nothing whatsoever impossible about such a document coming within that provision.
    Clause, as amended, ordered to stand part of the Bill.

    CLAUSE 5.—(Payments in the United Kingdom.)
    Mr. H. Strauss: I beg to move, in page 4, line 41, at the end, to add:
    "Provided also that nothing in this section shall prohibit or be deemed to prohibit the

    417
    doing of any of the things specified in paragraphs (a) to (c) of this section where the person resident outside the scheduled territories is in the United Kingdom at the time when any such thing is done and the payment or credit is intended for use in the United Kingdom."
    This Amendment is to deal with an absurd result of the Clause as it stands, to which I drew attention on the Second Reading. I will repeat the case I put, that of an American visitor and his wife. Imagine such a visitor at breakfast in his hotel in London and his wife informing him that she intends to spend the morning shopping and will be out for lunch. He wishes to give her some money, which he lawfully has, for that purpose. He gives it to her and instantly commits an offence under Clause 5. I gather from the Chancellor of the Exchequer that he may have had these powers for a long time but that nobody has been sufficiently idiotic to prosecute a person in such circumstances. I am certain that he does not intend to do so. But it is unfortunate that a visitor doing this innocent thing will make himself liable under our criminal law.
    7.30 p.m.
    I am certain that this sort of transaction cannot be dealt with simply by treating it as coming under the maxim de minimis. It may be said, the Government will deal with it by a general exemption. I do not think that is a very satisfactory way because a foreign visitor, and especially an unfriendly critic from a foreign country, will very often not look at the regulations but will look at an Act of Parliament. I do not think such terrors should be held over the foreign tourist even as a possibility. It is to remedy this absurd result that I have attempted, whether successfully or not, to draft the Amendment. I do not know whether my Amendment is the most apt for the purpose I have in mind, but I am perfectly certain that the Chancellor of the Exchequer will wish to do something about this Clause, in order to make it clear that the really absurd results flowing from the Clause as it stands are not intended, and that a foreign visitor can hand over a sum of money to his wife in this country without committing a serious criminal offence.
    Mr. Dalton: I think I can assure the hon. and learned Gentleman that the foreign visitor, with whom he was primarily concerned, coming here on holiday or on business, will not find that
    418
    this Bill, which we are proposing to transform into an Act, will make his life in any way more difficult than it is now, because it is our intention to repeat without substantial change, so far as this class of case is concerned, the exemption order in Clause 31, which will substantially reproduce the corresponding order now operating under the Defence Finance Regulations. I think that anybody who has been following the operation of that will agree that it has quite effectively cleared all this class of case. It is not merely—and I want to emphasise this— that we would not take notice of the American citizen handing money to his wife for her shopping; the position is not that such things are against the law but we turn a blind eye to them; that is not the position. Under the Order, they will no longer be acting against the law, and will not be liable.
    Mr. J. Foster: Could the Chancellor give the reference?
    Mr. Dalton: My hon. and learned Friend will get it for the hon. Gentleman. I have the substance of the order here, but not its actual number. Now with regard to the non-resident, which was the case raised by the hon. and learned Gentleman. I now have the number of the Order, it is No. 1383 of 1946, S.R. and O. We shall provide, as is provided by the order already, that he can spend freely any sterling notes and any cash of which he is lawfully in possession. There will be no limit on him there whether he imported them or cashed a cheque here or exchanged foreign currency or gold with an authorised dealer in order to get sterling. We are, of course, very much seized of the desirability, for obvious reasons, of promoting visits to and travel in this country by people outside, whether from the Empire or from the United States or from other foreign countries. We shall certainly draw this exemption order with that very much in front of our minds, and will do everything in our power to ease the path and the transactions of visitors.
    I was asked by the hon. Member for Northwich (Mr. J. Foster)—and an undertaking was given on my behalf—to make at some stage in the Debate a fairly full statement of the contents of the exemption order. I doubt whether this is the most convenient moment, but I under take to do it. That is why I do not pur-

    419
    sue the point further now, having dealt with the point particularly raised by the hon. and learned Gentleman the Member for the Combined English Universities (Mr. H. Strauss). It may come conveniently on Clause 31. As to that, I will take advice, and at some stage I will make a fuller statement than I have just made of what we shall put into the exemption order, but we shall not make any substantial or striking changes, so far as this order is concerned from that which is operating now. I hope that being so, that this Amendment will not be pressed.
    Mr. Maude: With great respect to the right hon. Gentleman, I submit that that is unsatisfactory, for the simple reason that the words chosen by my hon. and learned Friend seem to be words that would obviously be for all time so far as the Act is concerned. There could not be any reason of flexibility, a reason which the Solicitor-General has given on various occasions. Surely the right hon. Gentleman would agree that these words are suitable and sensible words? I feel strongly on that, for as we have sat here month after month, again and again powers have been taken that are too wide and are not needed, and again and again it has been said, "We will put it all right in an order." What is the right hon. Gentleman doing? He is building up a great mass of legislation which eventually will be handed over to some other Government, and it means endless watching here and there to see whether orders are too wide or not, and so on. I hope very much, therefore, that in this case it will be deemed wise to put in those words and have done with it, and so get better permanent legislation in this Bill, instead of having to scratch about like a hen in one of these wretched orders.
    Mr. Stanley: I would like an opportunity of saying a word on this Amendment because I agree very much with what has just been said by my hon. and learned Friend the Member for Exeter (Mr. Maude). In replying to this Amendment the Chancellor of the Exchequer was most reasonable; he could not have been more reasonable from a practical point of view. He said that there would be an order which in fact would give the whole substance of this Amendment. In those circumstances one asks, why is it not possible to put in the Bill—which,
    420
    after all for centuries has been the normal place in which we legislate in this country —what he now tells us he will put in the order? We recognise that there are some cases where we have pressed for something to be included in the legislation where the quite reasonable answer given is, "Well, this is a thing which may have to be altered from time to time, and because of that it is not convenient that it should be put in a permanent piece of legislation." The Chancellor did not give that reason on this point, and I do not think he could give it, because it is quite clear that no sensible man and no sensible Chancellor would ever have the intention of altering the particular bit of the order about which he is speaking. It is, therefore, a permanent bit of legislation, but instead of a permanent bit of legislation embodied in the Bill, we are told it will be a permanent bit of legislation which subsequently will be done by order.
    It seems to me that this is a quite unnecessary extension of this new practice of legislating by order and not by Bill. A Government which has been so guilty during the last year of the largely unnecessary use of that new method ought to jump at this opportunity of legislating in a more orthodox and correct way, on an occasion when it cannot possibly in any way interfere with the purposes of the Bill. If the Chancellor, or the Solicitor-General who I see straining at the leash, were able to tell us that there were possibilities that the Order might be varied, and that there might be occasions when it might be desirable that my hon. and learned Friend's American, sitting over his not very appetising breakfast, should not hand £2 to his wife to buy something not worth £2; if that could be explained to us, we should consider it. Unless something can be given us to show that what is proposed to be done in the order is something less than permanent, we demand that permanent legislation should be put where it has always been put up till now, and that is in a Statute where everybody can read it and see it, and not in one of the 1,383 and more orders which have been made in this one year.
    Question put, "That those words be there added."
    The Committee divided: Ayes, 102; Noes, 298.

    Division No. 22.]

    AYES.

    [7.42 p.m.

    Amory, D. Heathcoat

    Grant, Lady

    O'Neill, Rt. Hon. Sir H.

    Astor, Hon. M.

    Grimston, R. V.

    Pickthorn, K.

    Birch, Nigel

    Hare, Hon. J. H. (Woodbridge)

    Ponsonby, Col. C. E.

    Boothby, R.

    Headlam, Lieut.-Col. Rt. Hon. Sir C.

    Poole, O. B. S. (Oswestry)

    Bower, N.

    Henderson, John (Cathcart)

    Prior-Palmer, Brig. O.

    Boyd-Carpenter, J. A.

    Howard, Hon. A.

    Ramsay, Maj. S.

    Bracken, Rt. Hon. Brendan

    Hurd, A.

    Rayner, Brig. R.

    Braithwaite, Lt.-Comdr. J. G.

    Hutchison, Col. J. R. (Glasgow, C.)

    Reid, Rt. Hon. J. S. C. (Hillhead)

    Bromley-Davenport, Lt.-Col. W.

    Jennings, R.

    Ropner, Col. L.

    Buchan-Hepburn, P. G. T.

    Joynson-Hicks, Lt.-Cdr. Hon. L. W.

    Ross, Sir R.

    Butler, Rt. Hon. R. A. (S'ffr'n W'ld'n)

    Keeling, E. H.

    Sanderson, Sir F.

    Carson, E.

    Kerr, Sir J. Graham

    Savory, Prof. D. L.

    Churchill, Rt. Hon. W. S.

    Lindsay, M. (Solihull)

    Scott, Lord W.

    Clarke, Col. R. S.

    Linstead, H. N.

    Shephard, S. (Newark)

    Clifton-Brown, Lt.-Col. G.

    Lloyd, Maj. Guy (Renfrew, E.)

    Shepherd, W. S. (Bucklow)

    Crosthwaite-Eyre, Col. O. E.

    Lloyd, Selwyn (Wirral)

    Smiles, Lt.-Col. Sir W.

    Cuthbert, W. N.

    Lucas, Major Sir J.

    Snadden, W. M.

    Davidson, Viscountess

    Lucas-Tooth, Sir H.

    Spence, H. R.

    De la Bère, R.

    McCallum, Maj. D.

    Stanley, Rt. Hon. O.

    Digby, S. W.

    Mackeson, Brig. H. R.

    Strauss, H. G. (English Universities)

    Dodds-Parker, A. D.

    Maclean, Brig F. H. R. (Lancaster)

    Stuart, Rt. Hon. J. (Moray)

    Drayson, G. B.

    Macmillan, Rt. Hon. Harold (Bromley)

    Sutcliffe, H.

    Drewe, C.

    Maitland, Comdr. J. W.

    Thornton-Kemsley, C. N.

    Dugdale, Maj. Sir T. (Richmond)

    Marlowe, A. A. H.

    Touche, G. C.

    Duncan, Rt. Hon. Sir A. (City of Lond.)

    Marples, A. E.

    Walker-Smith, D.

    Duthie, W. S.

    Marshall, D. (Bodmin)

    Wheatley, Colonel M. J.

    Eccles, D. M.

    Marshall, S. H. (Sutton)

    White, Sir D. (Fareham)

    Elliot, Rt. Hon. W. E.

    Maude, J. C.

    Williams, C. (Torquay)

    Fleming, Sqn.-Ldr. E. L.

    Mellor, Sir J.

    Williams, Gerald (Tonbridge)

    Fletcher, W. (Bury)

    Moore, Lt.-Col. Sir T.

    Willoughby de Eresby, Lord

    Foster, J. G. (Northwich)

    Morrison, Maj. J. G. (Salisbury)

    Winterton, Rt. Hon. Earl

    Fyfe, Rt. Hon. Sir D. P. M.

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

    Young, Sir A. S. L. (Partick)

    Gage, C.

    Mott-Radclyffe, Maj. C. E.

    Galbraith, Cmdr. T. D.

    Neven-Spence, Sir B.

    TELLERS FOR THE AYES:

    Gammans, L. D.

    Nicholson, G.

    Commander Agnew and Major Conant.

    NOES.

    Adams, Richard (Balham)

    Cluse, W. S.

    George, Lady M. Lloyd (Anglesey)

    Allen, Scholefield (Crewe)

    Cobb, F. A.

    Gibbins, J.

    Allighan, Garry

    Cooks, F. S.

    Gibson, C. W.

    Alpass, J. H.

    Collins, V. J.

    Gilzean, A.

    Anderson, F. (Whitehaven)

    Colman, Miss G. M.

    Glanville, J. E. (Consett)

    Attewell, H. C.

    Comyns, Dr. L.

    Goodrich, H. E.

    Austin, H. L.

    Cooper, Wing-Comdr. G.

    Gordon-Walker, P. C.

    Awbery, S. S.

    Corlett, Dr. J.

    Greenwood, Rt. Hon. A. (Wakefield)

    Ayles, W. H.

    Crawley, A.

    Greenwood, A. W. J. (Heywood)

    Ayrton Gould, Mrs. B.

    Crossman, R. H. S.

    Grenfell, D. R.

    Bacon, Miss A.

    Daggar, G.

    Grey, C. F.

    Baird, J.

    Dalton, Rt. Hon. H.

    Grierson, E.

    Balfour, A.

    Davies, Edward (Burslem)

    Griffiths, D. (Rother Valley)

    Barnes, Rt. Hon. A. J.

    Davies Ernest (Enfield)

    Griffiths, Rt. Hon. J. (Llanelly)

    Barstow, P. G.

    Davies, Hadyn (St. Pancras, S. W.)

    Gruffyd, Prof. W. J.

    Barton, C.

    Davies, R. J. (Westhoughton)

    Gunter, R. J.

    Bechervaise, A. E.

    Davies, S. O. (Merthyr)

    Guy, W. H.

    Bellenger, Rt. Hon. F. J.

    Deer, G.

    Haire, John E. (Wycombe)

    Benson, G.

    Delargy, Captain H. J.

    Hale, Leslie

    Berry, H.

    Diamond, J.

    Hall, W. G.

    Binns, J.

    Dobbie, W.

    Hamilton, Lieut.-Col. R.

    Blackburn, A. R.

    Driberg, T. E. N.

    Hannan, W. (Maryhill)

    Blenkinsop, A.

    Dugdale, J. (W. Bromwich)

    Hardy, E. A.

    Blyton, W. R.

    Dumpleton, C. W.

    Harrison, J.

    Boardman, H.

    Durbin, E. F. M.

    Hastings, Dr. Somerville

    Bowden, Flg.-Offr, H. W.

    Dye, S.

    Henderson, A. (Kingswinford)

    Bowen, R.

    Edelman, M.

    Henderson, Joseph (Ardwick)

    Bowles, F. G. (Nuneaton)

    Edwards, A. (Middlesbrough, E.)

    Herbison, Miss M.

    Braddock, T. (Mitcham)

    Edwards, Rt. Hon. Sir C. (Bedwellty)

    Hewitson, Capt. M.

    Bramall, Major E. A.

    Edwards, John (Blackburn)

    Hicks, G.

    Brook, D. (Halifax)

    Edwards, N. (Caerphilly)

    Hobson, C. R.

    Brooks, T. J. (Rothwell)

    Edwards, W. J. (Whitechapel)

    Holman, P.

    Brown, T. J. (Ince)

    Evans, E. (Lowestoft)

    Holmes, H. E. (Hemsworth)

    Brown, W. J. (Rugby)

    Evans, S. N. (Wednesbury)

    House, G.

    Bruce, Maj. D. W. T.

    Ewart, R.

    Hoy, J.

    Burke, W. A.

    Fairhurst, F.

    Hudson, J. H. (Ealing, W.)

    Butler, H. W. (Hackney, S.)

    Farthing, W. J.

    Hughes, Hector (Aberdeen, N.)

    Callaghan, James

    Field, Captain W. J.

    Hutchinson, H. L. (Rusholme)

    Carmichael, James

    Follick, M.

    Hynd, H. (Hackney, C.)

    Castle, Mrs. B. A.

    Fraser, T. (Hamilton)

    Hynd, Rt. Hon. J. B. (Attercliffe)

    Champion, A. J.

    Freeman, Peter (Newport)

    Irving, W. J.

    Chater, D.

    Gaitskell, H. T. N.

    Isaacs, Rt. Hon. G. A.

    Chetwynd, G. R.

    Gallacher, W.

    Jay, D. P. T.

    Clitherow, Dr. R.

    Ganlay, Mrs. C. S.

    Jeger, G. (Winchester)

    422

    423

    John, W.

    Neal, H. (Claycross)

    Sparks, J. A.

    Jonas, D. T. (Hartlepools)

    Nichol, Mrs. M. E. (Bradford, N.)

    Stamford, W.

    Jones, J. H. (Bolton)

    Nicholls, H. R. (Stratford)

    Steele, T.

    Jones, P. Asterley (Hitchin)

    Noel-Baker, Capt. F. E. (Brentford)

    Stephen, C.

    Keenan, W.

    Noel-Buxton, Lady

    Stewart, Capt. Michael (Fulham, E)

    Kenyon, C.

    O'Brien, T.

    Strauss, G. R. (Lambeth, N)

    Key, C. W.

    Oldfield, W. H.

    Stubbs, A. E.

    King, E. M.

    Oliver, G. H.

    Taylor, H. B. (Mansfield)

    Kinghorn, Sqn.-Ldr. E.

    Paling, Rt. Hon. Wilfred (Wentworth)

    Taylor, R. J. (Morpeth)

    Kinley, J.

    Palmer, A. M. F.

    Taylor, Dr. S. (Barnet)

    Kirby, B. V.

    Pargiter, G. A.

    Thomas, I. O. (Wrekin)

    Kirkwood, D.

    Parkin, B. T.

    Thomas, John R. (Dover)

    Lawson, Rt. Hon. J. J.

    Paton, Mrs. F. (Rushcliffe)

    Thomson, Rt. Hn. G. R. (Ed'b'gh, E.)

    Lee, F. (Hulme)

    Paton, J. (Norwich)

    Thorneycroft, Harry (Clayton)

    Lee, Miss J. (Cannock)

    Pearson, A.

    Thurtle, E.

    Leslie, J. R.

    Peart, Capt. T. F.

    Tiffany, S

    Levy, B. W.

    Perrins, W.

    Tolley, L.

    Lewis, T. (Southampton)

    Piratin, P.

    Tomlinson, Rt. Hon. G.

    Lindgren, G. S.

    Platts-Mills, J. F. F.

    Turner-Samuels, M.

    Lipson, D. L.

    Popplewell, E.

    Ungoed-Thomas, L.

    Lipton Lt.-Col. M.

    Porter, E. (Warrington)

    Usborne, Henry

    Logan, D.G.

    Porter, G. (Leeds)

    Vernon, Maj. W. F.

    Longden, F.

    Pritt, D.N.

    Viant, S. P.

    Lyne, A. W.

    Proctor, W. T.

    Wadsworth, G.

    McAdam, W.

    Pursey, Cmdr. H.

    Walkden, E.

    McAllister, G.

    Randall, H. E.

    Walker, G. H.

    McGhee, H. G.

    Ranger, J.

    Wallace, G. D. (Chislehurst)

    Mack, J.D.

    Rankin, J.

    Wallace, H. W. (Walthamstow, E.)

    McKay, J. (Wallsend)

    Rees-Williams, D. R.

    Warbey, W. N.

    Mackay, R. W. G. (Hull, N.W.)

    Reeves, J.

    Watkins, T. E.

    McLeavy, F.

    Reid, T. (Swindon)

    Watson, W. M.

    MacMillan, M. K. (Western Isles)

    Rhodes, H.

    Webb, M. (Bradford, C.)

    Macpherson, T. (Romford)

    Richards, R.

    Wells, W. T. (Walsall)

    Mainwaring, W. H.

    Ridealgh, Mrs. M.

    Westwood, Rt. Hon. J.

    Mallalieu, J. P. W.

    Roberts, Goronwy (Caernarvonshire)

    White, H. (Derbyshire, N.E.)

    Mann, Mrs. J.

    Rogers, G. H. R.

    Whiteley, Rt. Hon. W.

    Manning, Mrs. L. (Epping)

    Royle, C.

    Wigg, Col. G. E.

    Marquand, H. A.

    Scollan, T

    Wilcock, Group-Capt. C. A. B.

    Marshall, F. (Brightside)

    Scott-Elliot, W.

    Wilkins, W. A.

    Mathers, G.

    Segal, Dr. S.

    Willey, F. T. (Sunderland)

    Mayhew, C. P.

    Shackleton, Wing-Cdr. E. A. A.

    Willey, O. G. (Cleveland)

    Medland, H. M.

    Sharp, Granville

    Williams, D. J. (Neath)

    Mellish, R. J.

    Shawcross, C. N. (Widnes)

    Williams, J. L. (Kelvingrove)

    Messer, F.

    Shurmer, P.

    Williams, W. R. (Heston)

    Middleton, Mrs. L.

    Silkin, Rt. Hon. L.

    Williamson, T.

    Mikardo, Ian

    Silverman, J. (Erdington)

    Willis, E.

    Millington, Wing-Comdr. E. R.

    Silverman, S. S. (Nelson)

    Wills, Mrs. E. A.

    Mitchison, Maj. G. R.

    Simmons, C. J.

    Wise, Major F. J.

    Monslow, W.

    Skeffington-Lodge, T. C.

    Wyatt, W.

    Montague, F.

    Skinnard, F.W.

    Yates, V. F.

    Moody, A. S.

    Smith, Ellis (Stoke)

    Young, Sir R. (Newton)

    Morgan, Dr. H. B.

    Smith, H.N. (Nottingham, S.)

    Zilliacus, K.

    Morris, P. (Swansea, W.)

    Smith, S. H. (Hull, S.W.)

    Moyle, A.

    Snow, Capt, J.W.

    TELLERS FOR THE NOES:

    Murray, J. D.

    Solley, L. J.

    Mr. Collindridge and

    Nally, W.

    Sorensen, R. W.

    Mr. Coldrick.

    Naylor, T. E.

    Soskice, Maj. Sir F.

    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    Mr. Eccles: Clause 5 raises the whole question of the liberty with which people are allowed to make payments in the United Kingdom. The Clause begins:
    "Except with the permission of the Treasury."
    certain things cannot be done. It is of great interest to us to know whether the Treasury is going to exercise its discretion as heretofore. We are very anxious to know whether there is going to be any tightening up. I would like to direct the Chancellor's attention to the fact that, although on the whole the Bank of England work these things very well—and I am the first to pay my tribute to them—
    424
    there are some cases in which we think a little more latitude would be in the interests of the country. As the Chancellor is going to make a wartime arrangement permanent—which we do not think is a good thing—we want to be sure that there will be reasonable latitude.
    The sort of case I have in mind is this. We are allowed to make payments for films coming into this country. A very large sum of money is represented. But, when we look at the art business—and I take a great interest in the art business—we find that extraordinarily cramping restrictions are imposed. I thought it was the Board of Trade who refused import licences. But I noticed that when the Board of Trade refused an import licence to the

    425
    President of the American Society of Painters, Etchers and Engravers, Mr. John Taylor Arms, to send a few of his etchings here to an exhibition—and he is, so to speak, the senior man in the engraving world in America—they said, "We cannot give you this licence because the Treasury tell us that our balance of payment does not permit it." That is really an insult to an American artist. He is told that he cannot send a few prints which he would sell at eight or ten guineas each. At the same time, he knows that Hollywood films are admitted, and that British artists are welcomed when they exhibit in America. This is a small point, but, because we know he takes an interest in art, we expect from the Chancellor a more generous working of this Clause than we have had hitherto. I want to ask him for an assurance that he will look into these things, and try to see that the Clause is not operated in such a way as to prevent foreign artists from occasionally sending a picture to be exhibited and sold in this country.
    Mr. J. Foster: I would like to ask the Chancellor, having now studied the Exemption Order, 1383, 1946, S.R.O., exactly how it answers the question put by my hon. and learned Friend the junior Member for the Combined English Universities (Mr. H. Strauss). As I read the order, it seems to refer to payment by one person to another. I do not know whether the Chancellor agrees with that, but that was my recollection of it. I am not sure whether it would cover the payment of an American to his wife. I would be very grateful if the right hon. Gentleman would state exactly how the Order covers that payment.
    With regard to Clause 5, paragraph (b), am I right in thinking that that prohibits any person in this country from making any payment to a person who is resident outside the scheduled territories, but present in the United Kingdom? As I understand it, it means that nobody can make any payment of any kind to a foreigner who is a traveller, or tourist, in this country. If the answer is that it is covered by the Exemption Order, 1383, 1946, S.R.O., I will be obliged if the right hon. Gentleman will say so. As I understand the Clause, it prohibits anyone giving any change to a resident outside the United Kingdom, and means that a shopkeeper cannot give 10s.
    426
    change until the tourist has bought an article for 10s., and paid a pound note. It also prohibits a person making any payment to a person resident outside the scheduled territory, but present in the United Kingdom, for any service he may have rendered. He may be engaged in some quite lawful business in this country on which he pays Income Tax, but, because he is a person resident outside the United Kingdom, the person inside the United Kingdom is not allowed to make him any payment at all. I understand that that is the advice given by lawyers to persons who seek to make payments to non-residents who happen to be in this country and that, strictly speaking, all such payments are illegal, but that in practice the Treasury does not go after such payments as I have mentioned. As this Measure is an opportunity which is being taken by the Government for codifying the law, making it a little clearer, if possible, and embodying principles of law, I think it is not sufficient for the Chancellor of the Exchequer to say, as I anticipate he may say, that the exemption will be granted by the Treasury, partly contained in these Orders in Council, and partly contained, as he attempted to show, in the Memorandum which accompanied this Bill. In order that the position of persons in this country and travellers or business men can be ascertained, it should be stated in this Committee quite clearly how the Measure will work, and whether it is possible for the exemption to be inserted in the Act.
    8.0 p.m.
    The specific question I want to ask the Chancellor is, firstly, how Order 1383 of 1946 covers the case put to him by my hon. and learned Friend the Member for the Combined English Universities (Mr. H. Strauss); and secondly, am I right in thinking that Clause 5 (b) prohibits payment by anybody in the United Kingdom to a non-resident, unless specific Treasury permission has been granted? If that is so, will he state how, and in what form specific Treasury permission is granted to (a) a tourist and (b) a business man who comes to this country, and who in the course of his dealings engages in some transaction which may or may not attract tax—that, of course, depends on the Convention between the two countries. Some expression of the policy of the Govern-

    427
    ment, and also some reason for not making it clearer in this Clause, would be of interest to the Committee.
    Mr. Dalton: The points raised by the hon. Member for Chippenham (Mr. Eccles) were, I think, essentially two. He began by asking whether I would assure the Committee that we did not intend, with regard to this particular Clause and the orders made under it, to tighten the existing regulations. I can assure him on that. We do not intend to tighten the existing regulations as at present advised. I do not wish to conceal from the Committee that we are, as has been said repeatedly already, operating by way of a Bill of this type, because we are convinced that in the difficulties which confront this country we must have power to act swiftly from time to time, to deal with situations or devices which we may not at this moment be able clearly to foresee. I have endeavoured to explain that previously; I repeat it now. Subject to that general cautionary observation, I can assure the hon. Member for Chippenham that we have no present intention, in the light of our present knowledge of the technique of evasion, on the one hand, and of the needs of the country on the other, of tightening the present regulations.
    The hon. Member went on to ask not merely that we should not tighten the regulations but that we should positively loosen them in several directions. He cited the case of an American artist who had been unable to get permission from the Board of Trade—he thought that the Board of Trade had been incite I by the Treasury—
    Mr. Eccles: I did not say that.
    Mr. Dalton: I do not know who said it, but it was said. Anyhow, the hon. Member said that the case was that of a United States artist who had not been able to get some of his paintings or etchings into this country. The hon. Member for Chippenham asked whether we could do something to deal with cases of that sort. In fact, he asked whether I would look into this and similar cases. Certainly, I will, but here again there is evidently a limit, and it may be a very close limit, to what we can allow to be brought into this country in so far as it may involve a demand for the expenditure of dollars. It would be easy to travel far afield, and
    428
    compare popular taste in respect of Hollywood films and etchings by good artists. We might together, draw a number of gloomy and sad reflections from such a study, but that would be out of Order on this Clause. I undertake that if there are particular cases, such as this, if there is a distinguished American artist who has had a difficulty of this sort, and if the hon. Member would send me particulars of that case, I will certainly look into it and see whether, within the bounds of prudence, we can ease up. But we must not ease up too much.
    It is the whole case behind the Bill, that we have to be very careful in regard to our foreign exchange resources. We cannot allow them to dribble away, this way or that, to please this person or that. It may often be necessary to say, "No." I know that the whole Committee understands that. Subject to that, I am certainly most anxious that people should not feel affronted, and that, having produced artistic work of high value, they are not able to have it shown in this country; one would regret that. Also, from the point of view of the inhabitants of this country, it is desirable, for our own sakes, that we should have as much as we can afford of works of art, books, or scientific writings or literary productions or anything else from other countries. That is true of a lot of things other than books. Within that general framework, I shall endeavour to meet the hon. Gentleman's case, and in particular, study the examples such as that which he will send me.
    With regard to the points raised by the hon. Member for Northwich (Mr. J. Foster), I think it would be tidier if, as I have already undertaken to do—and I think the Committee accepted it as a reasonable plan—instead of picking up questions as we proceed, I were to make a statement, which I will endeavour to make as full and clear as I can, of the content of the exemption order which we shall issue in replacement of the Order which the hon. Member now has in his hand. He has not had it in his hand for long, because he and I were walking into the House together a little while ago, and he and I had not then recently read it. No doubt we had both already read it some time ago, and had forgotten a good deal of it. It would not be useful for me to give snap answers to questions. Instead, when we reach Clause 31, I will

    429
    make a detailed statement on the content of the Order which will pick up not only' this Clause, but also what we will do with regard to certain other Clauses, which will equally be covered by the Order which we propose to make. If the hon. Member will not think me evasive or discourteous, I suggest that it would be much more convenient to the Committee to pursue that course.
    Mr. J. Foster: The Chancellor of the Exchequer said he did not want to give a snap answer, but he has given one. It was that the instance given to him was covered by the Order. I am asking him, if that snap answer was wrong, to correct it, and if it was right, to say why it was right. What the right hon. Gentleman said is reasonable, and I welcome his statement. The first point I want to ask him is this. How does Order 1383 of 1946 cover a payment by an American husband or an American's wife at a breakfast table in their hotel on a nice sunny morning? Is it the case, as was put to the Chancellor by my hon. and learned Friend the Member for the Combined English Universities that under Clause 5 (a), an American sitting in his hotel, who hands his wife £10 with which to shop, is committing an offence, unless he has the permission of the Treasury? As I understood the snap answer, it was, "No." If the Order means that, I do not at the moment see the point.
    Mr. Dalton: What I said, or what I intended to say, was that it is our intention to provide in the new Order that non-residents shall be able to spend freely in this country any sterling notes and cash. We will secure by the Order that he shall be free to spend in this country any sterling notes and cash, and to cash cheques here, whether it comes through the cashing of cheques or the exchange of gold with an authorised dealer, and so on. It is my information from my advisers that all these exemptions are operating now. I have not a copy of the Order in my hand; the hon. Gentleman has. Before I make the statement which I promised to make on Clause 31, I will check up on whether it is under that particular Order and, if so, under what section of it, or whether it is under some other Order. However, that is the effective Order which covers, if not the whole ground, the major part of it. Practically all we are seeking to continue is in that Order. Other
    430
    Orders have been made from time to time, but I think it will be more convenient that we should tidy the thing up in the way I have suggested. Though I do not think that anything I have said tonight is incorrect, if it is wrong, a correction will be made frankly when we come to the later occasion.
    Mr. Stanley: I think all hon. Members welcome the Chancellor's suggestion that, at some stage, he should make a comprehensive statement.
    Mr. Dalton: I will make it on Clause 31.
    Mr. Stanley: That is the point. Clause 31 is very late in the Bill and the trouble is that between then and now, there will be numerous occasions, when the Chancellor will say, "When we come to Clause 31 I shall be dealing with that." Naturally, we want him to make the statement not only when it is most convenient for him, but when it meets with, the approval of the Chair. If he could take an earlier opportunity of making that statement, I am sure it would make the discussion easier. It would be much easier to discuss this Clause after the statement has been made, and when we know what is in it, otherwise we shall be told that some point we raise is to be covered by the statement later. If the right hon. Gentleman could think of an earlier opportunity of making a statement, it would be useful.
    Mr. Dalton: I shall be glad to think about it but it is largely a question of the logical place at which to make it and the place at which it would be in Order to make it. I thought it was quite clear that it would be in Order on Clause 31. I think that also would be your view, Mr. Beaumont. I shall be very glad to look into the possibility of whether it would be equally in Order to make so wide a statement at any other point. Perhaps, Sir, we might consult you or Major Milner beforehand on the question of where such a statement may be made. If it is convenient to leave it in this way, I will do my best to meet the wishes of the Committee.
    Mr. Jennings: The Chancellor's statement will affect many substantial industries such as iron and steel in Sheffield and shipbuilding, in connection with which people come to this country to spend money. I suggest that he might

    431
    consult the President of the Board of Trade and the Minister of Supply to see the sort of transactions upon which money is spent in this country by people resident outside, to our advantage from a trading point of view. I am anxious that no restrictions here should stop the expansion of trade, and I beg the Chancellor to have a word with his colleagues to see that no restriction and inconvenience, harmful from a trading point of view, will be caused to these people.
    Mr. Dalton: I will look into that.
    Question put, and agreed to.
    Clause ordered to stand part of the Bill.

    CLAUSE 6.—(Payments outside the United Kingdom.)
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    8.15 p.m.
    Mr. Eccles: There is a small point which I wish to make on this Clause, which deals with payments outside the United Kingdom. Here again, only with the permission of the Chancellor can anyone make a payment to, or place any money to the credit of, anyone outside the United Kingdom. At present, I think that the Bank of England, probably under the orders of the Treasury, takes rather too short a view about the value of lending money outside this country. For instance, suppose a firm in Brazil wants to finance a shipment to New York in dollars. Normally, before the war, it would go to an English bank, and the English bank would finance that shipment. That is going on now. I am glad to say—and the Solicitor-General will know to what extent it is true—that the amount of business which is being brought to London by foreign countries, business which does not touch our shores, is very good. But, of course, the bank must give facilities before financing business outside this country. A commission is earned, but it means that some of our available working capital in dollars is being used outside this country to earn money. That applies also to the entrepôt trade. They, too, need to place money to the credit of people outside this country to buy goods subsequently for resale in another country at a profit to themselves.
    At present it is undoubtedly true that severe restrictions are being put on this
    432
    sort of business. For instance, to go back to the art trade—which I know fairly well because I am a collector—an art dealer in London cannot put any money to the credit of his agent in Milan when there is a book sale in Milan. He is not allowed to do that, yet if he cannot do it he cannot buy anything there which he would afterwards sell, perhaps in New York, at a good profit. Many of the banks find also that they cannot get permission to finance trade between two countries outside the United Kingdom, trade on which they would earn a commission. I suppose that the view of the Treasury is that our working capital in foreign exchange is too small to permit it to be used in these ways. I put it to the Government that the actual operation is based on too short-sighted a view.
    The fact of the matter is that the Treasury, by long training, are accustomed to make up their accounts once every 12 months, and they desire that their annual balance sheet should be full of cash. Therefore, they do not like to see British assets engaged for a longer period than 12 months, in trade which probably goes on and on. After a man has finished one transaction, he then wants to use the working capital for another. One of the criticisms of the present exchange control system is that it is being operated by a Department of State which takes too short a view Trade cannot take this annual budget view which the Treasury must take. If the Treasury are to remain the masters of foreign exchange control then they really must learn to take a rather longer view. Were the Chancellor of the Exchequer here, I should have reminded him that he has said that he does not believe in annual balances. He has said that there is nothing sacred in this period of 12 months. I wanted to ask the Chancellor whether he will keep his eye on this and try to get the Treasury to take the same long view in the granting of exchange facilities of this type. In particular, I think it would pay this country to give the entrepôt trade greater facilities for buying abroad for the purpose of re-sale later. As the Chancellor of the Exchequer is not present, perhaps the hon. and learned Solicitor-General could convey this point to him and, perhaps, at some later time, we could have an answer, because it is a matter which affects the business of a great many people.
    The Solicitor-General: I have listened with great interest to the observations made by the hon. Member for Chippenham (Mr. Eccles). He has dealt with matters concerning which I have to speak rather from a brief, than from any intimate experience, as he and hon. Members opposite will understand. But I will certainly convey what he says to my right hon. Friend. So far as I myself feel able to answer what he says, my answer must be that it is impossible, a priori, to define the circumstances in which currency would be made available for the entrepôt business, or the sort of transaction which the hon. Gentleman has in mind. One can only say that each case would be considered on its merits, and assessed in relation to the national interest and the overriding necessity of conserving our resources of foreign currency to the uttermost extent. Of course, the attitude of the Treasury towards transactions of that type would, naturally, differ as time goes on. Circumstances may become more stringent, or they may become less stringent. Our balance of payment position may become better, or it may become worse. Therefore, it is impossible to lay down any general statement of principle with regard to that type of transaction, beyond what I have already done—that is to say, each case must be considered on its merits.
    The hon. Gentleman was speaking on Clause 6 and of the way in which it might be operated But, purely as a Clause —and that is the matter, I submit, with which we are principally concerned at the moment—it is the complement to Clause 5. Clause 5 would be inadequate if it were not supplemented by the further qualifications in Clause 6 which has no other purpose in this Bill, except to make sure that Clause 5 does not leave an easily usable loophole. I submit to the Committee that that really is the scope of this discussion. Clause 6 is inserted in the Bill simply for that purpose. It has, as have all other Clauses, to be used with Treasury permission, subject to such indulgence as the Treasury may grant, and subject to such exemptions as are made under the all important Clause 31 of the Bill. The exemptions necessary to enable transactions such as the hon. Gentleman has in mind to be carried out, in so far as they can be carried out consistently with the national policy in relation to such transactions, must be made under the
    434
    terms of exemption Orders made under Clause 31. They will, of course, modify the stringent provision of Clause 6. I will not attempt to tell the Committee that the Clause is not stringent. It is stringent, as is Clause 5. It would not be frank to say otherwise. As the House was told on Second reading, the whole framework of this Bill is really hinged on Clause 31. Clause 6 contains a number of very stringent provisions and Clause 31 is introduced to modify the operation of those otherwise stringent provisions, and will be used to make possible transactions of the type which the hon. Gentleman has in mind, so far as they can be undertaken consistently with the national interest.
    Lieut.-Colonel Dower: I had not intended to intervene in this Debate on the point raised by my hon. Friend the Member for Chippenham (Mr. Eccles) until I heard the reply of the hon. and learned Solicitor-General. If I may say so, I thought that the hon. and learned Gentleman showed great courtesy in his reply on this occasion as, in fact, he always does. But I do not agree with his answer. If each case is to be dealt with on its merits, I cannot see these permits getting through in time. If hon. Members are honest with themselves, and with the Committee, they will admit that when they have to deal with a Government Department and they leave off the letters "M.P." from their correspondence, nothing happens for weeks and weeks. But if they put "M.P." on their letters, as I do, they receive prompt attention. Therefore, when the hon. and learned Solicitor-General says, with all earnestness, that each of such cases will be dealt with on its merits, I am afraid it does not impress me. I can see such a sale as the hon. Member for Chippenham mentioned, which would do no harm to anybody, being over and done with before the permission came through. For that reason, I ask the hon. and learned Solicitor-General to see, when he tells his right hon. Friend about the points which have been raised, whether some means can be found for expediting the process in the cases of the kind put forward by the hon. Member for Chippenham.
    Mr. J. Foster: I would ask the Solicitor-General to make representations to his right hon. Friend in the case of certain transactions capable of being accomplished by the use of sterling which, in the technical sense, need only be out for

    435
    a very short time. I have been informed, for instance, of two cases in the chemical trade where certain chemical products, which were available in Italy and urgently needed in the Middle East, were refused the necessary sterling payments between Italy and Palestine—it may have been Persia—on the ground that they were not the kind of payments which should be granted the individual permission of the Treasury. If my information is correct, these were cases in which, by putting out sterling for a short time, we could have financed an operation to the advantage of the world in general and our own country in particular, because we should have received the middleman's profit for having arranged this trade. The products involved could not be produced in this country, in the sense that they were in short supply in this country and were not available for export. I hope that, in making representations to the Chancellor of the Exchequer, the hon. and learned Gentleman will bear in mind that such instances do exist. If he thinks that anything could be done about the matter, I should be pleased to send him the details, but I do not wish to waste his time unnecessarily.
    Mr. Benson: I think that everybody agrees with what the hon. Member for Chippenham (Mr. Eccles) and other hon. Members have said about its being highly desirable that we should be able to finance third party trade which does not touch this country, and on which we should earn a reasonable profit. But I suggest to hon. Gentlemen opposite that, while we all agree that that is highly desirable, they should consider the risk which they are asking us to run. As I see it, it is that sterling shall be put out all over the world, by a very large number of people, in order that these profits may be earned. It does not take a very large leakage of capital to wipe out all the profits that may be earned in 12 months, because fantastic profits are not made on these deals. As a rule, financial dealings in third party trade bear a very low rate of interest. The suggestion is that very large sums of sterling should be put out all over the world, where banks and our finance machinery could not keep track of them, in order that a certain amount of profit shall be made. Because we could not keep track of such transactions, the possibility of using this form of trade to
    436
    export sterling is so great that, desirable as the profits might be if we could run the risk, I do not think that we can possibly undertake the risk that any wide extension of this third party trade would involve.
    8.30 p.m.
    Mr. Jennings: I thought the hon. Member for Chesterfield (Mr. Benson) had not quite listened to the learned Solicitor-General. The hon. and learned Gentleman said that all these transactions would be dealt with on their merits.
    Mr. Benson: Exactly, on their merits.
    Mr. Jennings: I must say, the learned Solicitor-General gave us a very courteous and sensible reply on his brief. He said he would report to the Chancellor the matter raised by my hon. Friend the Member for Chippenham (Mr. Eccles) and that each case would be considered on its merits. So far as that goes, I am quite satisfied. But I would also like him to impress upon the Chancellor that when the Treasury are making up their minds on these cases they should do so quickly. Very often have we heard it said, "I have lost that business, because the Treasury have not made up their minds." I do believe that when expedition is almost as important as judging on the facts of each particular case, their minds should be made up quickly, so that the opportunity will not be lost and we shall get the transaction completed. In contradistinction to the hon. Gentleman the Member for Chesterfield, I think the learned Solicitor-General has no intention of conveying to the Chancellor the idea that we want a wide extension of these transactions. We want, as the learned Solicitor-General suggested, every transaction dealt with on its own merits, but, in addition to that, we want them dealt with expeditiously.
    Mr. Birch: We have heard a great deal about the way everything will be put right when we come to Clause 31. I would urge this consideration upon the Solicitor-General and the Financial Secretary. We have here a very complex economy, and if we are to live we must do the things at which we are good. The things we are not good at, are such things as growing wet wheat and feeding it to hens. The things we are good at are, particularly, merchanting and dealing in commodities all over the world. It is very largely

    437
    by those means that we have earned our foreign exchange. What we should wish for our people, is what every mother wishes for her son, that he should do the best-paid work in the world. This type of thing is the best-paid work, and it cannot be done without a certain amount of working capital. That is what is required. It is all very well to say we will deal with each case on its merits. When it is a question of buying something in one country, and selling it in another, by the time the merits have been looked into those merits no longer exist. It is very important that people who are dealing with these things, and who have a reputation for doing so, should have the chance of exercising their art. If we are to cut out all those things in which we have led the world, and go back to peasant crafts and agriculture, we shall be a very poor country. It is vital for us to realise that it is only by doing the things at which we are good, that we shall pay our way.
    Question put, and agreed to.
    Clause ordered to stand part of the Bill.

    CLAUSE 7.—(Compensation deals.)
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    Mr. J. Foster: I would like to know whether or not au pair arrangements are legal under this Clause. As the learned Solicitor-General probably knows, an au pair arrangement is one whereby, let us say, his daughter goes to Switzerland and stays with a Swiss family for a month and in return he has the daughter of the Swiss family to stay with him for a month. A number of such advertisements appeared in "The Times" recently. I would appreciate a statement, "Yes" or "No," whether those au pair arrangements are or are not compensation deals within Clause 7.
    Mr. Glenvil Hall: The answer is that they are allowable. If, technically, it is found that they are not, then steps will be taken under one of the orders issued under Clause 31 to see that they come within the ambit of the exceptions. I say that with the proviso that if it were found later that, under the guise of exchanging residences, in order to learn the language of the other country, the arrangement was abused—I cannot see
    438
    how it could be, but suppose it were—then obviously that exception would have to be withdrawn. But the answer to the question put to me by the hon. Gentleman is that it would be allowable under the terms of the Clause.
    Question put, and agreed to.
    Clause ordered to stand part of the Bill.

    CLAUSE 8.—(Issue of securities.)
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    Lieut.-Commander Braithwaite: This is a highly technical and difficult Clause to follow, made far more so by the extremely involved draftsmanship. Just now the learned Solicitor-General, in dealing with Clause 6, said that was a matter on which he was not competent to reply because it dealt rather with the financial aspect. Here we are on something in which he will be in his element. I invite hon. Members opposite who are following the proceedings, as opposed to those who are here for the purpose of rest and recuperation, to turn, if they would, to Clause 8 (2) and try to appreciate the difficulties which I find as a layman in this sentence—this non-stop sentence of 175 words, of which Subsection (2) consists. I have done my best. Through you, Mr. Deputy-Chairman, may I inform the learned Solicitor-General that I have made my way with painful steps, and slow, as far as the semi-colon to be found in line six on page six. Up to that point I think I have understood the meaning of the Subsection. But proceeding beyond that point I confess I have become lost and involved. One of my hon. and learned Friends who was here just now read it with me, but he has left the Chamber in a state of emotion for the purpose of obtaining refreshment. So we must now lean, as we so often do, upon the learned Law Officer opposite.
    I suggest, in all seriousness, that it would be a good thing if we could have these matters put into Acts of Parliament in rather simpler language. This is an extraordinarily involved sentence. I think perhaps even the hon and learned Gentleman the Member for Gloucester (Mr. Turner-Samuels) might find himself in difficulties in this matter. On the other hand, he may find it simple. I do not. At any rate, now that we have the Law Officer with us I hope he will be able to

    439
    engage in what I might describe as an explanatory memorandum on this Subsection, and explain to us the pains and penalties to which we are laying ourselves open if this is allowed to stand part of the Bill. I confess to being in a state of almost complete—I do not know quite what word to use—
    Mr. Turner-Samuels: Fog.
    Lieut.-Commander Braithwaite: Perhaps "fog" is too simple a word. I was trying to find some legal word.
    Mr. J. Foster: Laski.
    Lieut.-Commander Braithwaite: I think that is a very valuable suggestion. I feel in much the same position as Professor Laski earlier in the week. I would be grateful if the learned Solicitor-General would favour us with his exposition.
    The Solicitor-General: Putting it quite shortly, Subsection (1) of Clause 8 prevents the issue of securities to persons resident outside the scheduled territories. Suppose a person who subscribes to the memorandum of association of a new company is a person who is resident outside the jurisdiction, Subsection (2) says that certain consequences will follow. The first consequence is this. The incorporation of the company itself shall be perfectly valid, notwithstanding that the subscriber is resident outside. That is the first point. The second point is that. in so far as his subscribing would make him a member of the company, the memorandum shall be invalid, and he shall not become a member of the company by so subscribing. The third point is this Section 28 of the Companies Act 1929, says, that if in the case of a public company, there are less than seven members, and if the company trades for six months after its incorporation, anybody who is a member of that company, knowing that it has less than the requisite number of members, shall be responsible for the debts of the company to their full extent. That is to say, he shall not be enabled to rely upon the fact that it is a limited liability company. The third consequence of the subscriber to a memorandum being a person resident outside the scheduled territories is this: that members of the company who subscribe to the company shall be liable to the full extent of the company's debts if it goes on trading for six months with a less
    440
    number of members than that which is the minimum requisite. I hope that is clear.
    May I recapitulate, because, I frankly confess, it is confusing? I hope I can make it clear. There are three consequences of a subscriber to a memorandum being resident out of the scheduled territories. First, the incorporation remains a valid incorporation; second, the memorandum is invalid in so far as it purports to make that subscriber a member of the company; third, the consequence provided for in Section 28 of the Companies Act. 1929, in the event of a company trading for more than six months with less than the minimum requisite number of members, shall ensue, so that the members of the company shall be liable to the full extent for the company's debts. They cannot say that, because it is a limited liability company, they are responsible only to the extent of their investment.
    Lieut.-Commander Braithwaite: The Committee is indeed indebted to the hon. and learned Gentleman. I followed him as far as I could. I am still in a certain darkness. I shall read his speech tomorrow in the OFFICIAL REPORT In the meantime, I make this practical and concrete suggestion, that on the Report stage the Government should delete this Subsection, and substitute the words of the hon. and learned Gentleman, which are far more coherent, obscure as they still are. I wonder if that could be done?
    Lieut.-Colonel Sir Cuthbert Headlam (Newcastle-upon-Tyne, North): I should like to endorse what my hon. and gallant Friend has just said. I do not think I am particularly unintelligent, but I confess that I could not, and still cannot, understand this Clause
    Mr. Gallacher: It is quite simple.
    Sir C. Headlam: Then will the hon. Member kindly explain it? I do suggest to the hon. and learned Gentleman that he should reconsider the wording of this Clause. I am convinced that he could make it much clearer to the average man than it is at the present time. It is a complicated Bill, which it is difficult for the layman to understand and this wording seems to make things even more difficult to understand. I do beg the learned Solicitor-General to look into this Clause, and see if he cannot make it a little clearer for the rest of us.
    8.45 p.m.
    Mr. Eccles: Perhaps I might attempt to help the Committee by saying that the Solicitor-General was telling us in his lucid language that what this Clause does is to put obstacles in the way of Americans trying to invest money in this country. It is the purpose of the Clause that, except with the permission of the Treasury, persons resident outside the scheduled territories— and we are all really thinking about citizens of the United States of America— shall not buy British securities in a new venture. We must question this policy. We must ask the Government why they are so keen to make it difficult for the citizens of the United States and other countries—the French, for instance—to invest their money here. They want to come at the present time. Americans and Canadians want to put money into British factories. They want to do it first because they think the British workman will turn out a good article at an economic price. They also want to do it because they do not believe that we can fulfil our Bretton Woods obligations without a very stringent sytem of import licensing; and, therefore, if they want to have products made with their processes sold in this country they must be made inside the ring fence.
    That is why American business men are coming here with their processes. But they are being put off by the Treasury, or sent to the Board of Trade and sent back to the Treasury. I know a good many of these people. What they are doing is to go to Paris and fix up their factories there, because they are not given decent terms to come here. The reason is that the Bank of England and the Treasury think that every American dollar that is put into this country is "hot" money. They have got "hot" money on the brain. They believe that if any investment is made in this country by United States citizens some panic—something or other—will occur in a few years, or even a few months, and that they will then want to take their money out again. I do not believe that that is the present situation There are many industrialists in the United States who would like to see their processes developed with British labour and in British factories; and, therefore, I ask the Financial Secretary whether the Treasury might not reconsider their whole policy to investments by foreigners in this country. I believe it is a good, civilised thing to do; and I
    442
    do not believe for one moment that satisfactory arrangements could not be made whereby these investors would be content to take out a reasonable profit. Of course, if they have to keep their money here for five years without taking out anything—and they might make a loss— they would require a reasonable dividend. I think the Government should be careful, when they make exemptions under the famous Clause 31, to do it in such a way that the foreign investor, who wants to come in this country, is not frightened off, and does not go to the Continent of Europe and put down his plant there.
    Lieut.-Colonel Dower: Will the Solicitor-General inform us what are the reasons why we should not want to attract foreign capital?
    The Solicitor-General: Permission is readily granted for the investment here of dollars, providing dollars are, in fact, paid and, so far as it is possible to do so, permission is granted with the greatest rapidity in each case. [HON. MEMBERS: "No."] It is all very well for hon. Members to exclaim, but there is a c6nscious endeavour on the part of the responsible authorities to cut out delay. Obviously, delay does interfere with legitimate business, and business often has to be done very rapidly, and the authorities responsible have that very keenly in mind. If hon. Members know of cases of delay, I should be very glad if they would kindly let me or my right hon. Friend have particulars, because in bringing such instances of delay to their notice they would be assisting the responsible authorities. Delay is a thing which is fought against quite deliberately—
    Mr. Pickthom: Deliberately?
    The Solicitor-General: Deliberately, knowing that it is an obstruction which must be avoided. That is my answer to the hon. Gentleman. I do not think that the complaint he made is one which has foundation in fact, but if it has foundation in fact, if he would let us have particulars we should be obliged.
    Mr. Pickthorn: Surely the learned Solicitor-General has not met the main point, which was that the Clause, as he explained it—could I have his attention for a moment? [HON. MEMBERS: "Why?"] Because we are endeavouring to understand this Clause. If hon. Gentlemen had been a little longer in this House

    443
    perhaps they would know that that is customary. The point put was that, from the Solicitor-General's explanation—which I thought was very lucid, and which I at least followed—the purpose of the Clause appears to be to make difficult, in general, investment by American capitalists in this country The Solicitor-General answered that in special cases there is expedition in permitting such investment, in spite of the general rule, but the point of the main argument put to him by my hon. Friend was that the general rule itself needed defending. With every respect to the learned Solicitor-General, I cannot quite think that that is really a Law Officer's point, and I submit to the Committee that it is a point which they ought not to accept without some explanation of the general, principle.
    As the learned Solicitor-General was put up to answer this small Debate, may I ask him to consider one other point which is within his particular competence? It was complained that Subsection (2) was much more obscure than Subsection (1), and I respectfully agree, but I would suggest— diffidently, because I know quite well that amateur draftsmen are almost always worse than professional ones—that it ought to be considered whether the parallel provisos in sub-paragraphs (a) and (b) could not both be put into the same form of expression, so that both would be either negative or positive. I think a real difficulty in reading the Subsection is caused by the change-over from the use of the word "unless" on the one side to the positive condition on the other.
    The main point, to which I would turn finally, is that if it is agreed, as I think the learned Solicitor-General did agree with my hon. Friend below me, that the main general purpose of the Clause is to make difficult, in general and apart from specific licences, the investment of dollars in this country; if that is, as I understand and believe it to be, the purpose of the Clause, surely the Clause ought not to go from the Committee without that purpose being justified? I respectfully suggest that there has been no attempt, so far, to justify that purpose, though I do not for a moment suggest that it might not be an absolutely good and indispensable purpose.
    Mr. Birch: I appeal to the learned Solicitor-General to answer this other
    444
    point, as I think he was about to do a moment ago. It is a matter of some importance. My hon. Friend the Member for Cambridge University (Mr. Pickthorn) suggested that there might be a very good reason for stopping people investing dollars here, but I confess that it escapes me at the moment. I would like to know the real reason why the Government wish to discourage the investment of dollars in this country at the present time, when I should have thought that it would be a very valuable thing to have dollars.
    The Solicitor-General: It is a complete misunderstanding of this Clause to think that it is designed to make it difficult to invest dollars. The whole point is that there must be the means of control, and the whole scheme of this Bill, as I said earlier, is to impose stringent powers of control and then to relax them in accordance with circumstances by action under Clause 31. Dividends can be remitted abroad now, as the position is, and as far as the investment of dollars is concerned, there is no objection to it in principle. But each case must be considered on its merits, in order to see whether it is in accordance with the national interest.
    Mr. Pickthorn: Why, if there is no objection in principle?
    The Solicitor-General: There must be general overall control in particular cases for the sake of the national interest. [HON. MEMBERS: "Why?"] That is the object of control, that it should be possible to put a hand on these transactions if the national interest so requires.
    With regard to the drafting point raised by the hon. Member, I agree it is possible, as a matter of drafting, to make sub-paragraphs (a) and (b) both either positive or negative, but I do not think it would be an improvement, and I submit to the Committee that sub-paragraphs (a) and (b) are models of lucidity in this particular Bill.
    Mr. Stanley: In this particular Bill, yes.
    The Solicitor-General: I said, quite consciously, in this particular Bill. It is a Bill which is complicated and technical, it is no good denying that. But as the two sub-paragraphs read now, I submit that they are perfecty intelligible and satisfactory in their present form.
    Colonel Crosthwaite-Eyre: Does that answer from the Solicitor-General mean that the Government are now frightened of the movement of "hot" money into this country, because that is a thing which the Chancellor has always denied? In fact, the Chancellor, in numerous answers, has suggested that it is the Government's desire to get dollars to come into this country, and that it is the Government's desire to ensure that the maximum investment is made as soon as possible. Does the learned Solicitor-General's answer mean that the Government's policy has now been reversed, and if not why put this barrier in the way? Surely the one thing we want today is to encourage the maximum investment of dollars in the shortest possible time. We want to encourage people to come here and spend dollars, in order to improve the balance of payments between ourselves and the United States. To introduce this control is merely to leave the Treasury as a bottleneck, as yet another channel through which the unfortunate foreign investor must percolate as best he can, in trying to do what we all want to encourage him to do, namely, invest in this country. It seems to me to be quite absurd, illogical and foolish to do such a thing, when we are dependent for the moment on any source from which we can draw that revenue which we so badly need in order to eke out the American Loan. I would suggest to the Government that instead of putting in a Clause like this they should put something in to encourage foreign investors and make it easier for them by letting them know really where they stand. In that way we should get on a lot faster.
    Mr. Stanley: I should like the learned Solicitor-General to answer one question about which I am not quite certain: How is it that all the controls he says he may want to exercise over this sort of thing are not already provided by the Borrowing Act? Are not all issues of securities in this country already subject to the supervision of the Treasury under that Act, and if that is so, what extra powers are needed under this Clause?
    The Solicitor-General: They are not controlled by reference to the territorial position, and they are not controlled by reference to whether the persons to whom the issue is to be made are or are not resident in the scheduled territories.
    Mr. Stanley: That is really not an answer to my question. My point is that before anybody issues securities of any kind, they have to get the permission of the Treasury, through the machinery laid down by the Borrowing Act.
    Mr. Glenvil Hall: The Capital Issues Committee.
    Mr. Stanley: Yes. Any issue of securities under this Clause, or anything done in that way, would have to go to the Capital Issues Committee. Why on earth cannot they, with their powers, take these things into account? They have all the powers under the Borrowing (Control and Guarantees) Act. What is the necessity for this being in the Bill? It is simply cluttering up the Statute Book, causing more difficulties and more misunderstandings. All the powers the Government can possibly need to deal with the issue of securities in this country have already been given by this House, last year, in that Act. Can I have an answer on the point, what extra powers this gives the Government that they have not got already.
    9.0 p.m.
    The Solicitor-General: I have already given the answer, and I cannot go on repeating it. The Capital Issues Committee is guided by the question of whether the investment is socially necessary, and this provides a different species of control by reference to territorial jurisdiction. In this case, the Treasury are given the power to control issues of securities to persons who are resident outside the scheduled territories. That is a different kind of control from that envisaged in the Borrowing (Control and Guarantees) Act. The two things are completely different. They can be worked together, but one is control on one footing, and the other is control by reference to a completely different point. It is incorrect to think that there is any unreasonable stopping of investments here in dollars. As I said earlier, the permission is readily given for investment, provided the investment is paid in terms of dollars or other useful foreign currency. There is no unreasonable or unthinking obstruction placed in the way of such investments.
    Mr. Gallacher: I grow weary of listening to the wails of hon. Members on the

    447
    other side. I cannot speak for the Government, but I can speak for a whole lot of the lads who sent the Government here. They sent the Government here to push out the British capitalists, and there is no sense in pushing out the British
    capitalists and opening the door for American capitalists to come in.
    Question put, "That the Clause stand part of the Bill."
    The Committee divided: Ayes, 300; Noes, 93.

    Division No. 23.]

    AYES

    [9.5 p.m.

    Adams, Richard (Balham)

    Dumpleton, C. W.

    Kirkwood, D.

    Adams, W. T. (Hammersmith, South)

    Durbin, E. F M.

    Lawson, Rt. Hon. J. J.

    Allen, Scholefield (Crewe)

    Dye, S.

    Lee, F. (Hulme)

    Alpass, J. H.

    Edelman, M.

    Lee, Miss J. (Cannock)

    Anderson, F. (Whitehaven)

    Edwards, A. (Middlesbrough, E.)

    Leslie, J. R.

    Attewell, H. C.

    Edwards, Rt. Hon. Sir C. (Bedwellty)

    Levy, B. W.

    Austin, H. L.

    Edwards, John (Blackburn)

    Lewis, T. (Southampton)

    Awbery, S. S.

    Edwards, N. (Caerphilly)

    Lindgren, G. S.

    Ayles, W. H.

    Edwards, W. J. (Whitechapel)

    Lipson, D. L.

    Ayrton Gould, Mrs. B.

    Evans, E. (Lowestoft)

    Lipton, Lt.-Col. M.

    Bacon, Miss A.

    Evans, S. N. (Wednesbury)

    Logan, D. G.

    Baird, J.

    Ewart, R.

    Longden, F.

    Balfour, A.

    Fairhurst, F.

    Lyne, A. W.

    Barstow, P. G.

    Farthing, W. J.

    McAdam, W.

    Barton, C.

    Field, Captain W. J.

    McEntee, V. La T.

    Bechervaise, A. E.

    Follick, M.

    McGhee, H. G.

    Belcher, J. W.

    Fraser, T. (Hamilton)

    Mack, J. D.

    Bellenger, Rt. Hon. F. J.

    Gaitskell, H. T. N.

    McKay, J. (Wallsend)

    Benson, G.

    Gallacher, W.

    Mackay, R. W. G. (Hull, N. W.)

    Berry, H.

    Ganley, Mrs. C. S.

    McLeavy, F.

    Bevan, Rt. Hon. A. (Ebbw Vale)

    George, Lady M. Lloyd (Anglesey)

    MacMillan, M. K. (Western Isles)

    Binns, J.

    Gibbins, J.

    Macpherson, T. (Romford)

    Blackburn, A. R.

    Gibson, C. W.

    Mainwaring, W. H.

    Blenkinsop, A.

    Gilzean, A.

    Mallalieu, J. P. W.

    Blyton, W. R.

    Glanville, J. E. (Consett)

    Mann, Mrs. J.

    Boardman, H.

    Goodrich, H. E.

    Manning, Mrs. L. (Epping)

    Bowden, Flg.-Offr. H. W.

    Gordon-Walker, P. C.

    Marquand, H. A.

    Bowen, R.

    Greenwood, Rt. Hon. A. (Wakefield)

    Marshall, F. (Brightside)

    Bowles, F. G. (Nuneaton)

    Greenwood, A. W. J. (Heywood)

    Mathers, G.

    Braddock, T. (Mitcham)

    Grenfell, D. R.

    Mayhew, C. P.

    Bramall, Major E. A.

    Grey, C. F.

    Medland, H. M.

    Brook, D. (Halifax)

    Grierson, E.

    Mellish, R. J.

    Brooks, T. J. (Rothwell)

    Griffiths, D. (Rother Valley)

    Messer, F.

    Brown, T. J. (Ince)

    Griffiths, Rt. Hon. J. (Llanelly)

    Middleton, Mrs. L.

    Bruce, Maj. D. W. T.

    Gunter, R. J.

    Mikardo, Ian

    Burke, W. A.

    Guy, W. H.

    Millington, Wing-Comdr. E. R.

    Butler, H. W. (Hackney, S.)

    Haire, John E. (Wycombe)

    Mitchison, Maj. G. R.

    Callaghan, James

    Hale, Leslie

    Monslow, W.

    Carmichael, James

    Hall, W. G.

    Montague, F.

    Castle, Mrs. B. A.

    Hamilton, Lieut.-Col. R.

    Moody, A. S.

    Chamberlain, R. A.

    Hannan, W. (Maryhill)

    Morgan, Dr. H. B.

    Champion, A. J.

    Hardy, E. A.

    Morris, P. (Swansea, W.)

    Chater, D.

    Harrison, J.

    Murray, J. D.

    Chetwynd, G. R.

    Hastings, Dr. Somerville

    Nally, W.

    Clitherow, Dr. R.

    Henderson, A. (Kingswinford)

    Naylor, T. E.

    Cluse, W. S.

    Henderson, Joseph (Ardwick)

    Neal, H. (Claycross)

    Cobb, F. A.

    Herbison, Miss M.

    Nichol, Mrs. M. E. (Bradford, N.)

    Cocks, F. S.

    Hewitson, Capt. M.

    Nicholls, H. R. (Stratford)

    Coldrick, W.

    Hicks, G.

    Noel-Baker, Capt. F. E. (Brentford)

    Collick, P.

    Hobson, C. R.

    Noel-Buxton, Lady

    Collindridge, F.

    Holman, P.

    O'Brien, T.

    Collins, V. J.

    Holmes, H. E. (Hemsworth)

    Oldfield, W. H.

    Colman, Miss G. M.

    Horabin, T. L.

    Oliver, G. H.

    Comyns, Dr. L.

    House, G.

    Paling, Rt. Hon. Wilfred (Wentworth)

    Cooper, Wing-Comdr. G.

    Hoy, J.

    Palmer, A. M. F.

    Corbet, Mrs. F. K. (Camb'well, N. W.)

    Hudson, J. H. (Ealing, W.)

    Pargiter, G. A.

    Corlett, Dr. J.

    Hughes, Hector (Aberdeen, N.)

    Parkin, B. T.

    Cove, W. G.

    Hynd, H. (Hackney, C.)

    Paton, Mrs. F. (Rushcliffe)

    Crawley, A.

    Hynd, Rt. Hon. J. B. (Attercliffe)

    Paton, J. (Norwich)

    Crossman, R. H. S.

    Irving, W. J.

    Pearson, A.

    Daggar, G.

    Jay, D. P. T.

    Peart, Capt. T. F.

    Dalton, Rt. Hon. H.

    Jeger, G. (Winchester)

    Perrins, W.

    Davies, Edward (Burslem)

    Jeger, Dr. S. W. (St. Pancras, S. E.)

    Piratin, P.

    Davies Ernest (Enfield)

    John, W.

    Platts-Mills, J. F. F.

    Davies, Hadyn (St. Pancras, S. W.)

    Jones, D. T. (Hartlepools)

    Porter, E. (Warrington)

    Davies, R. J. (Westhoughton)

    Jones, J. H. (Bolton)

    Porter, G. (Leeds)

    Davies, S. O. (Merthyr)

    Jones, P. Asterley (Hitchin)

    Pritt, D. N.

    Deer, G.

    Keenan, W.

    Proctor, W. T.

    Delargy, Captain H. J.

    Kenyon, C.

    Pursey, Cmdr. H.

    Diamond, J.

    King, E. M.

    Randall, H. E.

    Dobbie, W.

    Kinghorn, Sqn.-Ldr. E.

    Ranger, J.

    Driberg, T. E. N.

    Kinley, J.

    Rankin, J.

    Dugdale, J. (W. Bromwich)

    Kirby, B. V.

    Rees-Williams, D. R.

    Reeves, J.

    Sorensen, R. W.

    Warbey, W. N

    Reid, T. (Swindon)

    Soskice, Maj. Sir F.

    Walking, T. E.

    Rhodes, H.

    Sparks, J. A.

    Watson, W. M.

    Richards, R.

    Stamford, W.

    Webb, M. (Bradford, C.)

    Ridealgh, Mrs. M.

    Steele, T.

    Wells, W. T. (Walsall)

    Robens, A.

    Stephen, C.

    West, D. G.

    Roberts, Goronwy (Caernarvonshire)

    Strauss, G. R. (Lambeth, N.)

    While, H. (Derbyshire, N.E.)

    Roberts, W. (Cumberland, N.)

    Stubbs, A. E.

    Whiteley, Rt. Hon. W.

    Rogers, G. H. R.

    Taylor, H. B. (Mansfield)

    Wigg, Col. G. E.

    Royle, C.

    Taylor, R. J. (Morpeth)

    Wilcock, Group-Capt. C. A. B

    Scollan, T.

    Taylor, Dr. S. (Barnet)

    Wilkins, W. A.

    Scott-Elliot, W.

    Thomas, I. O. (Wrekin)

    Willey, F. T. (Sunderland)

    Segal, Dr. S.

    Thomas, John R. (Dover)

    Willey, O. G. (Cleveland)

    Shackleton, Wing-Cdr. E. A. A.

    Thomson, Rt. Hn. G. R. (Ed'b'gh, E.)

    Williams, D. J. (Neath)

    Sharp, Granville

    Thorneycroft, Harry (Clayton)

    Williams, J. L. (Kelvingrove)

    Shawcross, C. N. (Widnes)

    Thurtle, E.

    Williams, W. R. (Heston)

    Shurmer, P.

    Tiffany, S.

    Williamson, T.

    Silkin, Rt. Hon. L.

    Tolley, L.

    Willis, E.

    Silverman, J. (Erdington)

    Tomlinson, Rt. Hon. G.

    Wills, Mrs. E. A.

    Silverman, S. S. (Nelson)

    Turner-Samuels, M.

    Wise, Major F. J.

    Simmons, C. J.

    Ungoed-Thomas, L.

    Woods, G. S.

    Skeffington-Lodge, T. C.

    Usborne, Henry

    Wyatt, W.

    Skinnard, F. W.

    Vernon, Maj. W. F.

    Yates, V. F.

    Smith, Ellis (Stoke)

    Viant, S. P.

    Young, Sir R. (Newton)

    Smith, H. N. (Nottingham, S.)

    Wadsworth, G.

    Zilliacus, K.

    Smith, S. H. (Hull, S.W.)

    Walkden, E.

    Snow, Cast. J. W.

    Wallace, G. D. (Chislehurst)

    TELLERS FOR THE AYES:

    Solley, L. J.

    Wallace, H. W. (Walthamstew, E.)

    Mr. Michael Stewart and Mr. Popplewell.

    NOES.

    Agnew, Cmdr. P. G.

    Headlam, Lieut.-Col. Rt. Hon. Sir C.

    O'Neill, Rt. Hon. Sir H.

    Aitken, Hon. Max

    Henderson, John (Cathcart)

    Pickthorn, K.

    Amory, D. Heathcoat

    Howard, Hon. A.

    Ponsonby, Col. C. E.

    Astor, Hon. M.

    Hulbert Wing-Cdr. N. J.

    Prior-Palmer, Brig. O.

    Birch, Nigel

    Hurd A.

    Ramsay, Maj. S.

    Boothby, R.

    Hutchison, Col. J. R. (Glasgow, C.)

    Rayner, Brig. R.

    Bower, N.

    Jonnings, R.

    Reid, Rt. Hon. J. S. C. (Hillhead)

    Boyd-Carpenter, J. A.

    Joynson-Hicks, Lt.-Cdr. Hon. L. W.

    Ropner, Col. L.

    Braithwaite, Lt.-Comdr. J. G.

    Keeling, E. H.

    Ross, Sir R.

    Bromley-Davenport, Lt.-Col. W.

    Kerr, Sir J. Graham

    Sanderson, Sir F.

    Buchan-Hepburn, P. G. T.

    Lennox-Boyd, A. T.

    Scott, Lord W.

    Carson, E.

    Lindsay, M. (Solihull)

    Shephard, S. (Newark)

    Clarke, Col. R. S.

    Linstead, H. N.

    Smiles, Lt.-Col. Sir W.

    Clifton-Brown, Lt.-Col. G.

    Lloyd, Maj. Guy (Renfrew, E.)

    Snadden, W. M.

    Crosthwaite-Eyre, Col. O. E.

    Lucas, Major Sir J.

    Spence, H. R.

    Davidson, Viscountess

    Lucas-Tooth, Sir H.

    Stanley, Rt. Hon. O.

    De la Bère, R.

    McCallum, Maj. D.

    Strauss, H. G. (English Universities)

    Digby, S. W.

    Mackeson, Brig. H. R.

    Stuart, Rt. Hon. J. (Moray)

    Dodds-Parker, A. D.

    Maclean, Brig. F. H. R. (Lancaster)

    Sutcliffe, H.

    Dower, Lt.-Col. A. V. G. (Penrith)

    Maitland, Comdr. J. W.

    Thornton-Kemsley, C. N.

    Drayson, G. B.

    Marlowe, A. A, H.

    Touche, G. C.

    Dugdale, Maj. Sir T. (Richmond)

    Marples, A. E.

    Walker-Smith, D.

    Duncan, Rt. Hon. Sir A. (City of Lond.)

    Marshall, D. (Bodmin)

    Wheatley, Colonel M. J.

    Duthie, W. S.

    Marshall, S. H. (Sutton)

    White, Sir D. (Fareham)

    Eccles, D. M.

    Maude, J. C.

    Williams, C. (Torquay)

    Fletcher, W (Bury)

    Mellor, Sir J.

    Williams, Gerald (Tonbridge)

    Fyfe, Rt. Hon. Sir D. P. M.

    Moore, Lt.-Col. Sir T.

    Willoughby de Eresby, Lord

    Gage, C.

    Morrison, Maj. J. G. (Salisbury)

    Winterton, Rt. Hon. Earl

    Galbraith, Cmdr. T. D.

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

    Young, Sir A. S. L. (Partick)

    Gammans, L. D.

    Mott-Radclyffe, Maj. C. E.

    Grant, Lady

    Neven-Spenee, Sir B.

    TELLERS FOR THE NOES:

    Grimston, R. V.

    Nicholson, G.

    Mr. Drewe and Major Conant.

    Question put, and agreed to.

    CLAUSE 9.—(Transfer of securities and coupons.)
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    Mr. Eccles: Clause 9 continues the bad work of Clause 8, and further restricts the transfer of securities to foreigners. The White Paper says in paragraph 8:
    "There is no discrimination against foreigners as such."
    I am not sure that that is true after reading Clause 9. The Committee will know that at present an American citizen,
    450
    or a citizen of any country outside the scheduled territories, can have free sterling here, or can remit dollars to this country and have the proceeds credited to his registered account in sterling. If he has the money in his account here, he can buy, at the present time, any security in sterling he wishes or any piece of property. If he desires, at a later date, to resell that security and to take home, let us say, in dollars, the proceeds of the sale, he gets an M form, which is usually given without trouble, and it goes through in that way.

    451
    9.15 p.m.
    I want to ask the Chancellor of the Exchequer whether it is not a fact that, under Clause 9 as now drafted, an American cannot buy any security, whether he wishes at some future date to sell it and remit the proceeds out of the country or not, without a permit from the Treasury. In other words, this is a new restriction upon the investment by foreigners of money in this country. If I was right in arguing on the previous Clause that the Treasury are afraid that American money coming into this country might be "hot" money at some future date, it is surely more likely to be so if it is in the form of cash rather than in the form of property here. If that is a good reason, I think we should not put this new restriction upon foreigners, but should allow them, if they remit money to this country, to buy what they like here. If they wished at some subsequent time to take the money out, I can understand they would have to get the permit, but it appears to me that an extra restriction is imposed here. The second point I wish to make very much affects our business dealings with the Empire. Under Clause 9 (2) it is provided that
    "Except with the permission of the Treasury, a security not registered in the United Kingdom shall not be transferred outside the United Kingdom if either the transferor or the transferee, or the person, if any, for whom the transferor or transferee is or is to be a nominee, is resident in the United Kingdom."
    Take the case of a South African company which has its head office in Johannesburg and the principal register of shares in Johannesburg, but also has a subsidiary register in London, with a London transfer committee which operates upon that London register, records the transfers and issues the new certificates. This Subsection means that no person in this country may become a shareholder in such a South African company, the head office of which is in Johannesburg, unless he gets permission from the Treasury. If there is, no general exemption in regard to that under Clause 31, it will kill the business between this country and South Africa, and other parts of the Empire, where the head offices, the main registers of the companies' shareholders, are in fact in some town in the scheduled territories.
    452
    I go further. The Committee will know that there are some South African companies which do not keep a London register. What will happen when some United Kingdom resident desires to become a shareholder in one of these South African companies? Must he go to the Treasury to get a permit? If so, it will have a serious consequence. In the case of many of the gold mines in South Africa, which bring so much to the currency stability of the sterling area, since we need the gold to defend the pound, many of them begin with a South African company, and it is not until the company is well established—in other words, until the mine is a proved venture —that application for leave to deal is made in London. If the Chancellor desires, as I am sure he does, the further development of South African mines and other businesses in other parts of the Empire, he must give a general exception under Subsection (2), so that a United Kingdom resident can become a shareholder in a company, the head office of which is in the Dominions, without his having to go hat in hand and produce to the registrar prescribed evidence from the Treasury. I should be very grateful if the Chancellor would give us this assurance, as I know that many of the mining companies in this country are particularly anxious about the matter.
    The Solicitor-General: In order to understand the object and the effect of Clause 9 one has to contrast the scheme of control of transfer of securities in this Bill with the system which operated under the Defence Regulations. The system was that securities had to be registered and placed at the disposal of the Treasury in order that they could be realised, but that has been completely abandoned, so that the object now is not to make them available for the purposes of conversion into foreign currency. This is completely different. The object now sought to be achieved is conservation of the security position, and, therefore, what we are endeavouring to do will be done in such a way as to cause the least hindrance possible
    First, Clause 8 imposes a limitation upon the issue. It requires permission for the issue of new securities to residents outside. Then Clause 9 imposes a control on the transfer, unless both transferor and transferee are resident within the United Kingdom or scheduled territories.

    453
    How is the registrar who keeps the register of securities to know how to register the securities unless it is made clear by the appropriate evidence, which shall be prescribed, that the necessary conditions are fulfilled and that the transferor and the transferee are resident within and not without? That system can be operated easily without causing any inconvenience to persons who desire to purchase and sell shares by the means of declarations on the transfers. A declaration of residence made on the transfer by the transferor or the transferee and within their authority will be franked by the authorised agents, who will be the banks and the Share and Loan Department of the Stock Exchange, and will combine the system so as to make transfers easy in these particular circumstances. In other words, the transfer as between residents will take place as a matter of course.
    What we design to ensure is that the transfers do not fall into the category which are not transfers as between residents. They can be supervised and the agency which will supervise the transfer and pass it in cases where there is doubt about it is the banks or the Share and Loan Department of the Stock Exchange, but in cases of doubt they will have to go to the authority reposing power in them, namely, to the Bank of England. So in point of fact, actual transfers will take place as if there were no control as far as the transferor and the transferee are concerned. That is the object of Clauses 8, 9 and 13, and that, of course, includes Subsection (2) of Clause 9.
    The question then arises how it will be operated, and here one is thrown back upon the question of general policy, which does not immediately arise under the terms of this Clause. What the Bill provides is the machinery of control. How that control will be exercised is a matter which is different. It is a question other than the question with which the Committee is immediately concerned, namely, what does the Bill provide for and how does the control operate? Will the control operate in such a way as either to be unworkable or impose unnecessary hindrance, or hindrance which can be done away with in the case of a transfer of shares?
    I hope that the Committee will accept from what I have said that, in the case of permitted transfers, there will be nothing beyond the mere appending of a signature
    454
    to a declaration form by the transferor and the transferee. In cases of doubt— that is to say, where one of the persona is resident outside—then the authorised agent, the bank or other agency, can frank it as being either a permissible transfer or not and, if there is any doubt, a refer back to the Bank of England. It will be seen that the thing will thus work quickly. The question beyond that is simply one as to general financial policy. One can raise an infinity of questions as to whether this or that market transaction will be interfered with, but I submit to the Committee that that does not arise on this Bill. The question the Committee is discussing is whether this control—which is the control we proposed to the House on Second Reading and which, in principle, the House then approved—will work. In order to see how it will work one has to examine the actual Clauses of the Bill itself. When one goes beyond that and asks whether public policy requires that permission should be given under Subsection (2) of Clause 9 in the case of purchases of shares in South Africa—the question raised by the hon. Member for Chippenham (Mr. Eccles)—then I respectfully suggest that we are traversing ground which does not come within the scope of the present discussion.
    Mr. Eccles Mr. Eccles indicated dissent.
    The Solicitor-General: The hon. Gentleman shakes his head but, with great respect, I submit that he is, in point of fact, asking a question which is not germane to this discussion.
    Mr. Eccles: Surely the Solicitor-General would agree that there are not just two or three special cases but hundreds of thousands of shares which are affected by a very simple decision. I will boil the whole thing down into one question. Do the Government intend to consider shares on a London register of a South African company as in all respects as if the company were registered in the United Kingdom? If he would say "Yes" to that, he would relieve a great deal of apprehension
    The Solicitor-General: The argument that enormous numbers of share transactions are concerned demonstrates the Tightness of my point, that we are now being asked a question which is not germane to this discussion. The hon. Gentleman mentions one kind of share transaction, but after all there are count-

    455
    less different kinds, and there are share markets all over the world and different types of business. These come within the domain of general financial policy and do not arise on this Bill, which is intended purely to impose a control. It does impose a control, and the question which the Committee is discussing is the nature of this control and whether it is an efficient one.
    Mr. Stanley: It is with considerable disappointment that I rise to my feet because when I saw the Chancellor of the Exchequer flashing a message to the Solicitor-General a moment ago I thought he was giving him the answer, whereas in fact he just told him to sit down.
    Mr. Kirkwood: The Chancellor would not be so rude.
    Mr. Stanley: Perhaps he asked him to resume his seat. We on this side of the Committee really cannot accept the contention of the Solicitor-General that it is not germane in a discussion of a Bill imposing a control to raise the question of how that control is to be exercised. It seems to me a most important point. Obviously, our whole attitude towards the Bill must be governed by the way in which we are told it is to be used, and indeed—if I might have the Chancellor's attention on this point—the argument seems to cut entirely across the line he himself has been taking in this Committee. He told us that he proposed at some stage, sooner or later—we hope that if possible it will be sooner rather than later—to give us some idea how the controls are to be operated.
    The Chancellor is going to give us a survey of the exemption Order, and let us know what is going to be left outside. That is exactly what we are asking for and what the Solicitor-General said we are not entitled to ask for in discussing a Bill of this character. My hon. Friend the Member for Chippenham (Mr. Eccles) wants to know if there is to be under Clause 31, not, of course, an exemption for one particular transaction, but an exemption exempting from the operation of Clause 9 (2) the whole range of the South African registered shares to which he has referred. That is a question we are entitled to ask, and the sort of question which the Chancellor has already promised to answer. We should feel more
    456
    secure than we do now after the speech of the Solicitor-General if the Chancellor could just confirm that we are not only within our rights in discussing the way these controls are going to be worked, but that he is going to take an early opportunity to give this Committee a general idea of the method he proposes by means of telling us what is going to be in the exemption Order.
    9.30 p.m.
    Mr. Dalton: My hon. and learned Friend was resisting the temptation placed in his power by the hon. Member for Chippenham (Mr. Eccles) to particularise in high degree what would be the attitude taken by the control towards particular South African undertakings. In that my hon. and learned Friend was wise, because I have undertaken, as the right hon. Gentleman said, to give to the best of my ability and in broad terms—and it can only be in broad terms—the intentions we have for the content of this Order for the consideration of the Committee. That broad undertaking stands and we will seek to find suitable time sufficient for Debate upon it.
    We are here considering a narrower question than the wider commitment I have made to the Committee on Clause 9 (2). This particular Clause is drafted in terms of the requirements of the United Kingdom as a safety measure in case the control that we have in a particular scheduled territory may fall short of the minimum that is required for our own protection. That is the approach we must make to it. This is a Bill for the national financial defence of this country in cooperation, as we hope, with the various Governments within the scheduled territories, but if would be very rash and might create quite a false impression of certainty in a situation that cannot be completely certain if I were to answer the hon. Member for Chippenham more specifically with regard to a particular class in any particular territory. However, I hope it will be of some assurance to the Committee if I say that normally —in the great majority of cases, and unless there is some reason to the contrary —the exemption Order, which I will seek to expound to the Committee at a suitable moment, will extend to the scheduled territories at large. That is to say, if there is some undertaking within any of the scheduled territories—the hon. Member

    457
    instanced South Africa but I am making a statement of a more general form— normally it would be our intention that the exemption should extend to the scheduled territories as a whole, subject, of course, to exceptions that might be approved in particular cases in the light of particular considerations. I hope that the right hon. Gentleman will regard that as reasonably reassuring.
    Earl Winterton: Will the right hon. Gentleman particularise on one point? It is clear from what the Solicitor-General said that where a bank of one of the scheduled territories is either the existing agent or about to be the agent of the investor in this country and where a transaction takes place such as the Solicitor-General referred to, the onus of responsibility rests on that bank as agent and not on the person here, and, therefore, it is necessary for the bank to obtain the permit Otherwise, if the bank failed to do so, the person resident in this country might be held to be guilty of an offence.
    Mr. Dalton: I have been present during most of the Debate, but I was absent during the earlier part of the discussion on this Clause. I have endeavoured to give the Committee the general intention of the Government on the matter at issue, but it would be more appropriate that my hon. and learned Friend would answer this particular question, because he has heard the whole discussion.
    The Solicitor-General: The answer appears to be that declarations will be authenticated by the authorised agents, the banks, and the authentication is made, therefore, on the responsibility of the bank.
    Earl Winterton: That counts as the permission of the Treasury?
    The Solicitor-General: Yes. The authorised agent has certain limited authority from the Treasury, communicated to it by the Bank of England. It is limited authority in the sense that it may frank certain transactions as to which there is doubt. In the ordinary case, where the tranferor is resident in the territories, and signs the declaration, and the transferee is resident in the territories and signs the declaration, of course no question arises. But where you have a case which is out of the ordinary, where ensure that no one shall be guilty under
    458
    one or the other is resident outside, then it is the authorised agent, the bank, which takes the responsibility of franking it as being a transaction which can be allowed or which requires permission, or referring it to the Bank of England in case of doubt.
    Mr. Birch: The learned Solicitor-General rightly pointed out that Clause 9 ties in with Clause 13. It seems to me that the effect of these two Clauses goes further than that of the existing Defence Regulations because, under Regulation 3A (3), residents in foreign countries are permitted to exchange British securities between themselves, provided the person to whom they make the exchange is in the same country. I could read out the whole Regulation, but I will refrain from doing so. As I understand it, under these two Clauses, that will no longer be the case. Without Treasury permission, residents outside the scheduled countries cannot exchange securities between themselves, though they are in the same currency area. I wondered why, in fact, the Regulations have been tightened by this Bill, whereas we have been told there was a general relaxation.
    The Solicitor-General: In terms, i quite agree that the Clause, as drafted, tightens the provisions of the Regulations. The question of switching, as between nonresidents will have to be dealt with by exemption under the Regulation. I quite agree that the regulation in its terms, requires consent for such an operation.
    Mr. Birch: But why has it been tightened?
    Clause ordered to stand part of the Bill.
    Clause 10 ordered to stand part of the Bill.

    CLAUSE II.—(Substitution of securities and certificates outside United Kingdom.)
    Mr. Eccles: I beg to move, in page 7, line 23, to leave out "calculated," and to insert "intended by him."
    With your permission, Major Milner, perhaps I may speak on this and the succeeding Amendment, namely, in line 24 to leave out "calculated," and insert "intended by him." This is one of the exploratory Amendments intended to find out what the words mean. We want to

    459
    this Clause of an offence unless he had a guilty intent. It appears that a postman who handled a letter in the Post Office that contained one of these documents, which we ought not to have without permission, would be performing one of a series of acts leading to a crime, and he might be held guilty by doing so. The Amendment is designed to find words which will safeguard the position of the innocent person who performs one of the acts in the chain, but does not know when he is doing so that he is assisting in the performance of a crime. Therefore, I would like to hear from the Government their explanation of the word "calculated."
    The Solicitor-General: The word "calculated" is very frequently used in Finance Acts for purposes of taxation. It is still understood in that context. I see the point, and the apprehension of the hon. Gentleman, and we should like to consider the matter. It is not intended, of course, that a person who is a completely innocent cog in a scheme, should be saddled with liability. There must be some degree of cognisance before he can be saddled with liability. As at present advised, I should be disposed to take the view that "calculated" is the word appropriate to achieve the object that we have in mind; but, having regard to the Amendment and to the apprehension voiced by the hon. Gentleman, we would like to reconsider that matter. I do not say that we shall alter it, but we shall reconsider it in the light of what has been said.
    Mr. Maude: I think the Solicitor-General will agree, upon looking into the matter, that "calculated" simply means "likely." The courts have already taken that view, in the Townley case in the House of Lords. When he comes to examine it I think the Solicitor-General will find that it is not a mere exploratory word, but that it is likely to get someone in, whom the Solicitor-General does not want in.
    Mr. Eccles: In view of the assurance we have received from the Solicitor-General, I beg to ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.
    Clause ordered to stand part of the Bill.
    Clauses 12, 13 and 14 ordered to stand part of the Bill.

    CLAUSE 15.—(Deposit of certificates of title.)
    Mr. Pickthorn: I beg to move, in page 9, line 31, to leave out "(whether directly or indirectly)."
    The Amendment is intended to be merely exploratory. I was not in the least surprised that I had not fully understood these words, and those whose advice I have been able to seek, were not able to enlighten me. Therefore some of my hon. Friends thought that it was proper to put down this Amendment, which has a purely interrogatory purpose. We want to know what the words mean.
    9.45 p.m.
    The Solicitor-General: The object of the word "indirectly" is to bring in the case in which a certificate of title is held to the order of a particular individual but is held in the name of someone else. For example, it may be held under some subterfuge or camouflage, so that he can give directions in regard to it in some concealed way, either through a nominee or in some form or other. The object of including the word "indirectly" is to make sure that that type of case is brought within the ambit of the Subsection. Otherwise, if the Clause read:
    "It shall be the duty of every person by whom or to whose order a certificate of title is held,"
    it might be contended that in cases in which there was an intervention by some third person who held, as a nominee, secretly, for the individual concerned, that that type of circumstance would not be within the ambit of the Clause. To prevent that, we have used the word "indirectly" to make sure there is no loophole through the provisions of the Clause.
    Mr. Howard: I do not want to press this matter unduly, but I would point out that the Subsection says:
    "It shall be the duty of every person."
    This Clause imposes a definite duty. It is, therefore, important that persons on whom the duty is imposed, should know whether they have that duty to perform. How is a person to know that he has an indirect duty?
    Mr. H. Strauss: If the case put forward by the Solicitor-General was the sole case, possibly the words "through an

    461
    agent," instead of "indirectly," might meet the point which we and the Solicitor-General have in mind. Some words of that sort might meet our objections, without conflicting with the object which the Government have in mind.
    The Solicitor-General: The hon. Member for St. George's, Westminster (Mr. Howard) was concerned about an indirect duty. But there is no question of an indirect duty. The question is whether there is an indirect holding. The hon. and learned Member for the Combined English Universities (Mr. H. Strauss) has suggested that we might use another form of wording, namely, the word "agent." I do not know, without studying it, whether that would be better, or worse. But the form we have used, after careful consideration, is one which, in our view, achieves the object we have in mind. It covers the case in which one man holds securities in the name of someone else, in order to camouflage the fact that he is the person who can really give directions in regard to the disposal of those securities. We feel, subject to any arguments which may be advanced by hon. Members opposite, that the word "indirectly" is apposite to include that class of case. Therefore, subject to what hon. Members opposite may still desire to say, we feel that the phrase is satisfactory as it stands.
    Amendment negatived.
    Mr. Birch: I beg to move, in page 10, line 43, at the end, to add:
    "(8) For the purposes of this Part of the Act the expression "authorised depositary means any person who at the date when this Part of this Act comes into force is lawfully holding himself out as accepting on deposit by way of custody any security, certificate of title, coupon or secondary security as defined in section nineteen of this Act and in addition any such person as may for the time being be authorised by an order of the Treasury to act as an authorised depositary for the purposes of this Part of this Act."
    The Chairman: I would point out that the expression "authorised depositary" also arises in the interpretation Clause.
    Mr. Birch: In view of the lateness of the hour, I shall be very brief. This is very much the same point as that which was dealt with on the second Amendment discussed today, because the effect of this Clause again is to put it within the power
    462
    of the Treasury to put anybody out of business who is, in the ordinary way, a banker—[HON. MEMBERS: "Hear, hear."]—I am grateful for the support from the opposite side of the Committee— because securities can only be deposited with an authorised depositary. If one looks at Clause 42, one finds that an authorised depositary is a person authorised, for the time being, by the Treasury. No definition of any sort is given. The object of moving this Amendment is to ensure that no arbitrary action is taken by the Treasury, and that no one is deprived of his livelihood unless he has committed some crime. We had an un-satistactory answer on this point previously, and we had to divide on it. I should have thought that it was easier to allow this definition of "authorised depositary", than it was in the case of an "authorised dealer." I am not entirely without hope that the Government may accept this Amendment, but if they do not I very much hope that I shall have the support of my hon. Friends in dividing against the Government.
    Mr. Eccles: I wish to support the Amendment. The definition of "authorised depositary" is difficult. It is quite clear that those who undertake this duty will be put to a good deal of cost which they have not had to bear before. I wonder whether the Chancellor will not follow the precedent set in France, where, as I understand it, a similar Measure has resulted in the French Government having to set up a national depositary, because of the cost involved. I hope that that will not be the case here. If it is not to be the case here, then the Government will require to have a wide list of depositaries. It is stated in paragraph 16 of the White Paper:
    "Arrangements will be made to meet the reasonable requirements of brokers, solicitors and others who may need temporarily to hold such documents"
    I ask the Chancellor exactly what that sentence means. Does it mean that the time-honoured practice of a solicitor holding some securities for his client, or a stockbroker for his customer, is, after a short period, to end; and that, in fact, the intention of the Treasury is to concentrate on the big banks the duty of being depositing agents? I would like to know what the Chancellor has to say on that point.
    The Solicitor-General: As the hon. Gentleman will have noticed, Clause 15 deals only with bearer certificates and certificates not registered on the United Kingdom register. I suppose that a great majority of persons already keep not only their registered certificates, but also such bearer certificates as they have and certificates on non-British registers, at their bank. In practice, little difference will take place, because the authorised depositary will again be the bank.
    Mr. Stanley: Just the banks?
    The Solicitor-General: Yes. In regard to the question about solicitors, in fact, in a large number of cases they retain custody of certificates on behalf of their clients. In the case of bearer certificates these will have to be deposited with banks, who will be the authorised depositaries. The Clause makes provision that solicitors and brokers can have temporary possession of the bearer and other certificates for various purposes—collecting dividends if required or effecting transfers, or similar normal business transactions. When the certificates have been deposited with the authorised depositary, there is nothing to prevent their being transferred from one owner to another, provided that the transfer is one which is permitted under Clauses 8, 9 and 10 of the Bill. That is to say, it will be permitted if it is a transfer between two resident owners. Therefore, a bearer certificate which is in the possession or custody of an authorised depositary, where it has been deposited by the transferor, can be transferred to another depositary which is the depositary of the transferee. But in practice it will work out, in the long run, that there will be very little difference from the present procedure. Normally, people keep their certificates at their bank, and they will go on keeping them there. The owner of the certificate is given the right to choose the authorised depositary. He can indicate what authorised depositary he wishes to be the custodian of his certificates. Therefore, there will be little change from the present position and the ordinary owner of certificates really will know very little about it. It is simply a device for keeping them in proper custody.
    Mr. Birch: Why not accept the Amendment?
    The Solicitor-General: The Amendment raises a completely different issue. The
    464
    arguments relevant to the previous Amendments on these lines are also relevant in this case. It is not a question of depriving authorised depositaries of their business, or putting them out of business, and ruining them. What will be done is that the Treasury will nominate particular authorised depositaries who, in fact, will be the banks. Therefore, for the reason given before, it will be unsatisfactory if all banks who at present act as depositaries of certificates are automatically and for good authorised depositaries for the purpose of Clauses 15 and 16.
    Lieut.-Commander Braithwaite: We are within three or four minutes of the time for adjourning the Debate. May I say in the very brief period of time at my disposal that I hope the hon. and learned Gentleman the Solicitor-General will look at this again? If he studies this Amendment again, I think he will see that the words we have put down will, in fact, be of value to him in the course which he has in mind. In view of the lateness of the hour, there is no time to press him on one other point, but I was surprised to hear him say that there is to be a kind of closed shop in this matter. He says it is going to be the banks and nobody else.
    The Solicitor-General The Solicitor-General indicated dissent.
    Lieut.-Commander Braithwaite: The hon. and learned Gentleman harped upon banks—the closed shop. There are to be no other authorised depositaries.
    Mr. Piratin: The hon. and gallant Member would not like to see the Big Five as open shops, would he?
    Lieut.-Commander Braithwaite: There is no time to deal with that latest futility from the Communist Party, which has arrived very late in the day. We are attempting to discuss this matter in a serious way. [Interruption.] None of those hon. Members who are interrupting have read the Bill, so what does it matter? I hope the hon. and learned Gentleman will have another look at this suggestion. I think he will see—and I am quite sure that the Chancellor will—that on consideration there are other perfectly suitable authorised depositaries for his purpose. It is not at all true to say that the average person leaves his bearer securities in the bank and nowhere else. Has

    465
    the learned Solicitor-General never heard of the "City Safe Deposit" where hundreds of clients keep their securities and have kept them for many years, checking them from time to time? That is a perfectly respectable institution. If the hon. and learned Gentleman walks down Throgmorton Avenue he can inspect the premises for himself, so long as he knows the pass-word, which will be "Laski," or something of that sort, when this Bill becomes law. I suggest to the hon. and learned Gentleman that that perfectly normal procedure, by which people place their securities in safe custody, will be illegal under this Bill as it is at present drafted, and certainly in view of what the hon. and learned Gentleman said a few minutes ago in reply to this Amendment. If only for that reason, I suggest that it might be a good thing to have another look at this matter between now and the Report stage. Our form of words, like any other, may be capable of improvement. I was hoping that the hon. and learned Solicitor-General, who is now being suppressed by his right hon. Friend—
    It being Ten o'Clock, the CHAIRMAN left the Chair to make his Report to the House.
    Committee report Progress; to sit again Tomorrow.

  RETAIL BUSINESSES (EX-SERVICEMEN)
  Motion made, and Question proposed, "That this House do now adjourn."— [Mr. Michael Stewart.]
  10.0 p.m.
  Mr. Sidney Shephard: For some hours now we have been discussing control over money. For the next few minutes I want to speak about another form of control, equally important, that over ex-Servicemen. I think that almost every hon. Member of this House has, at one time or another, received complaints from an ex-Serviceman who has tried to establish himself without success in a business of his own. In fact, on more than one occasion, individual cases have been brought up in this House. But tonight I want to deal with this grievance in a general way, and not as applying either to any particular Ministry or any particular individual. Although the Parliamen-
  466
  tary Secretary to the Board of Trade is to reply, I hope he will appreciate that my purpose in bringing this matter forward is not to elicit an explanation as to the action his Department takes, but to try to find out what is the Government's attitude towards the principle that an ex-Serviceman should be able to set up in business for himself, whatever that business may be.
  During the war, many thousands of these men planned that, when they were demobilised, they would come home and launch out for themselves. In point of fact, I think that I am right in saying that they were never warned while they were in the Services that they would not be able to do so. Most of them are now back, but very few have succeeded in getting permission to start up for themselves. I know that there are exceptions. For instance, there are the disabled men, in respect of whom I give full marks to all the Ministries concerned. They have done their very best to give these men every facility and to encourage them to establish themselves. But I am not dealing with the disabled tonight; I am dealing with the ordinary ex-Serviceman.
  I will give one or two examples to illustrate my point. Let us take the case of the man who wants to start up as a cabinet maker. He may have been a skilled craftsman and quite capable of making a success of his venture. To get his timber he needs a licence, so he applies to the Timber Control. The answer, of course, is, "We are very sorry. We are very short of timber, so you cannot have a licence." Therefore, that man is condemned to go on working for someone else. Take another case, a very humble one, the man who wants to open a fried fish and chip shop. There are many thousands of men who do. I know of the case of a disabled man being refused a licence on the ground that there is an insufficiency of fats. May I quote just one more? The man who wants to start as a journeyman builder has to get a licence from the Ministry of Works. There, again, he receives the same answer, "Shortage of materials prevents us giving you a licence."
  One could, of course, go on giving examples covering almost every trade and every branch of industry. I think it is acknowledged that, broadly speaking, the restriction, or prohibition—call it what you will, Mr. Deputy-Speaker—applies to the

  467
  whole field of trade, industry and distribution. I am certain that no hon. Member of this House wants to encourage an ex-Serviceman to set up in business unless he has a reasonable chance of success. We do not want to see him put his savings or his gratuity into a business which is likely to lead to failure. We can all remember what happened after the first world war, and the human tragedies— and they were tragedies—which occurred. Many ex-Servicemen became the prey of sharks; many of them started up with no experience and very little capital, and, of course, as a rule they lost their money. But today there are many cases of ex-Servicemen with the capital and the experience who, if allowed to launch out for themselves, would undoubtedly make a success of their ventures. Who knows how many budding Nuffields there may be who are at present kicking their heels, waiting for the opportunity?
  It seems to me that Government Departments have laid down three arbitrary rules covering the granting of these licences and permits. In the case of a man wanting to open a shop, consumer need plus an availability of supplies appears to be the deciding factor. In the case of a man wanting to set up in a trade or manufacturing industry, it is the supply position of the materials which governs the decision. In the case of a man wanting to start as a merchant, the decision is dependent on whether, in the view of the Ministry, the number of merchants already established in the business are capable of dealing with the business available. Whatever the business, there seems to be very good reason from the point of view of the Ministry why the man should not be allowed to start. Surely, with these ex-Servicemen other factors should be taken into account? The war has been over 18 months now; many of these men are getting on for middle age, and unless they start now they never will start. I think we all know that the older we are the less risks we take. Surely, they are entitled to know where they stand, and for how long these prohibitions and restrictions will be in force?
  I want to ask the Parliamentary Secretary three questions, and I hope he will give me straight replies, because, if he does, it will either allay the suspicions of the ex-Servicemen, or it will comfort them. The first question is: Is it the policy of the
  468
  Government that there shall be no new competition in trade and industry while these shortages exist? In other words, is the closed shop principle to be applied to those already existing? The second is: Have these men to wait until controls and licences are removed before they can start? The third and last point is, Is the ex-Serviceman to get any preference over the civilian, all other things being equal?
  This is not a political matter, and I hope hon. Members on all sides of the House will support this plea. We owe these men a debt, and I for one want to see it repaid. If I may, I will just quote these words said by Theodore Roosevelt after the first world war:
  "A man who is good enough to fight for his country is good enough to be given a square deal afterwards."
  That is not more than any man expects; not less than that which we must give.
  10.11 p.m.
  Mr. Leslie: With much of what the hon. Gentleman the Member for Newark (Mr. Shephard) has said I think we can all agree, and it is our duty to do our best to assist those who fought for us in the late war. But I hope the Minister will be very careful in the granting of licences, and take into careful consideration the needs of a district. Those of us who have had experience of the distributive trades know what happened after the first world war. Many ex-Servicemen were cajoled into taking over businesses for which they had no training and no experience. What was the result? Shops were opened all over the country, entering into competition with existing traders. The ex-Servicemen, in the necessity of making a living, simply kept open from early morning until dewy eve seven days a week. They broke all the Shops Acts, and when the Sunday Trading (Restrictions) Bill was introduced they were its severest opponents. Think what it meant to those men. We know that hundreds of them lost their all. They became insolvent because they were unable to compete with the existing traders who knew the business and had been trained for it. Therefore, we must be very careful that we do not do as we did after the first world war.
  What is really wanted for the ex-Servicemen, in their best interests, is training in productive industries, because, as a matter of fact, there are far too many

  469
  shops. A committee of the distributive trades showed that there were far too many shops, and that in some towns there was a shop for every 30 of the population. Well, it is obvious that that is uneconomic, and it simply means bankruptcy sooner or later. Therefore, I say to the Minister that he must exercise very extreme care before he grants licences to open any more shops.
  10.13 p.m.
  Mr. Baldwin: I am sure we all have sympathy with the cases where these men are not getting their licences because the Ministeries are watching over their welfare. But that is not always the case. Only this morning I replied to a young man who joined up in 1939. He was the son of a butcher having a big business in a good sized town. This young man was promised by his father that he should have a meat business when he became 21. He has lost seven years of the best part of his life, and he now wants to start a manufacturing meat business in this town. The shop is available; his father's experience is available; there is no question of this young man going into a business and losing his money. The fact remains he is refused the licence, and that, I think, is the sort of case my hon. Friend the Member for Newark (Mr. Shephard) had in mind when he opened this Debate. I hope that the Ministeries concerned with granting licences will give every consideration to these young men who have lost the best part of their lives fighting for their country.
  10.14 p.m.
  Mr. ShurmerI am glad this matter has been brought forward tonight. I agree with the hon. Member for Sedgefield (Mr. Leslie) who raised the question regarding the grant of licences. We all know what happened after the last war when private enterprise built any number of shops and sold them to people; and we know what happened during the great slump. What I want to emphasise is that the regional offices are not too keen to help ex-Service-men who have had businesses before the war in the great towns and cities, and whose businesses, unfortunately, have been bombed, so that they have to find premises in another district.
  Let me quote one experience, and I have been on this case now for nearly five months. It concerns a man who,
  470
  unfortunately, is suffering from a disease from which he may at any time drop down dead. It is not attributable to war service, although he served for quite a long period during this war. He was a boot repairer, and his whole house and premises in a certain district in Birmingham were bombed. He came back and started in another district, and all that he can get from the Ministry, despite the fact that he is not able to carry on at work for a whole week—though people are sympathetic and are prepared to give him shoe-mending to do—is the reply that the consumer need in that district is sufficiently met. I want to suggest that, even if the consumer need in that district was sufficiently met during the war period, there are now hundreds and hundreds of men who have come back from the war. What is wanted is a little less red tape in the regional offices, so that these men can start in business. I reiterate that I do not want to see a wholesale starting of businesses such as happened after the last war, but I do think we need to relax the restrictions a little for those ex-Servicemen who are genuinely able to open a business and can prove that such a business will flourish in the district where they want to open.
  10.17 p.m.
  Mr. Gammans: I want to make a protest against this ridiculous phrase "consumer need." It is used so often when an ex-Serviceman applies for a licence to drive and to own a hired car. He buys the car, and then he is told that there is no consumer need. What does it mean in the end? It means that some temporary civil servant, very often a man who has been a conspicuous failure in everything he has undertaken, turns round and advises some committee which is not on the spot that there are enough taxis there already, What does he know about it? In the old days we used to test consumer need in a far more practical and sensible way. If there was consumer need, a man got on and made money; if there was not, he went bust. I know that is a rough and ready way of doing it, but it is a far more accurate and sensible way than for some civil servant to sit down and say there is no consumer need. The time has come when the ex-Serviceman should at least be given the liberty of risking his own money and his own future in some venture which he is satisfied is likely to succeed. At any rate,

  471
  I think the vast majority of them would far sooner submit to that acid test than to the test of some civil servant sitting in an office. Therefore, I hope the time is not far distant when we shall abandon this ridiculous phrase "consumer need," and get back to some sense.
  10.19 p.m.
  The Parliamentary Secretary to the Board of Trade (Mr. Belcher): I am very grateful to the hon. Member who raised this issue for the brevity and the reasonable nature of his statement. First, I should like to state our general attitude towards this problem. Over the range of consumer goods covered by the Board of Trade, our attitude to requests for help from ex-Servicemen is generally sympathetic, particularly in the case of disabled ex-Servicemen. In the case of some industries which were severely concentrated during the war or were restricted in their activities, and where established manufacturers are still required to limit the supplies which they may make to the home market, we still refuse licences to newcomers, even when they are ex-Servicemen, so far as home trade is concerned, although we allow all newcomers to enter the industry and supply unrestrictedly for export, except in the case of furniture. Even in these industries, we temper our attitude in certain cases, for instance, where ex-Servicemen desire to set up in a Development Area. In such a case we would allow him a quota for home trade.
  Our limiting factor all the time is the raw material situation. The hon. Member for Newark (Mr. Shephard) seemed to me to imply that he realised that our attitude was very largely determined by the supply of raw materials. He mentioned a specific case, that of the cabinet-maker who was unable to obtain a licence to acquire timber. Every hon. Member knows perfectly well that timber is in short supply, and that we have recently had to restrict the supply to established manufacturers. What in fact is being asked for, when it is suggested that we should give to newcomers to the cabinet-making industry licences to acquire timber? It is being suggested that we should take, from already restricted and insufficient supplies to established manufacturers, timber which they require, thereby diminishing still further the supply available to them. I suggest it is quite possible that the estab-
  472
  lished manufacturers, who would be deprived still further of their raw materials, might themselves be ex-Service-men or have ex-Servicemen in their employment, who might lose their jobs, or go on short time as a result of further restrictions on timber supply. Similarly, with a man who wishes to set up a fish-frying business, the limitation is not the shortage of fish, but the shortage of fats. Despite all efforts of the Government Departments concerned to remedy the shortage, there is not sufficient fats to give to those people who are already engaged in the business to keep them going at full strength.
  Mr. Jennings: The Government have just given power to local authorities throughout the country to open British Restaurants.
  Mr. Belcher: I suggest that that is entirely outside the point. Whether or not these British Restaurants, which are already established, will in the future consume more fats than in the past, I do not know. My point is, and hon. Members opposite know it to be perfectly true, that established fish fryers cannot obtain enough fats to meet the demands they are called upon to supply, and would like to supply. To admit without restriction ex-Servicemen to that trade, would only have the effect of further diminishing the supplies available to those people already trying to make a living in it. I suggest that not only would that be against the public interest, but as my hon. Friend the Member for Sedgefield (Mr. Leslie) intimated, it would certainly be against the interests of the newcomers—we had experience of that after the first world war. It would be indicating a lack of responsibility on the part of this Government, if we were to throw open all these trades where raw materials are in short supply, to anyone who has served in His Majesty's Forces who thinks he might have an opportunity to make a living. The hon. Member mentioned a third instance, which was the case of a man who wished to go into the building trade. While there was a severe restriction in granting licences to people wishing to go into the trade, I would point out that since March, 1946, all applications for licences as registered builders have been granted, provided that a certificate previously issued had not been revoked or cancelled.
  Mr. Sidney Shephard: We are talking about ex-Servicemen wanting to start for the first time.
  Mr. Belcher: There has been no restriction since March, 1946, on people wishing to enter the building trade applying for licences, and, in fact, since June, 1946, out of the present total of 169,000 building licences extant, some 30,000 new contractors have entered the market. There is a total at present of 169,000, 30,000 of whom have entered since June, 1946, as new entrants under unrestricted licences' My hon. Friend the Member for Spark-brook (Mr. Shurmer) suggested there was a lack of sympathy in regional offices. I have not been aware of it. I freely confess it may be possible that, when an application is made to a busy regional office, some factor may be overlooked which subsequently is brought to the notice of a higher authority, and the thing is then put right. That may give cause for my hon. Friend to suggest that lack of sympathy exists in regional offices, but I have not been aware of it.
  My hon. Friend cited the case of a man who wished to start a shoe-repairing business. That links up with what was said by the hon. Member for Hornsey (Mr. Gammans). It is not that we wish to discourage people who want to go into shoe-repairing, or any other trade, just for the sake of discouraging them, or denying them the opportunity to make a fortune or "go bust." I think the tendency at the present moment would be in favour of their "going bust." I do not want to see that happen. It is simply that there is not enough shoe leather to go round, and we are compelled, in the interests of those who are already working in this industry, to have regard to whether or not a new need exists in a particular district. It would be absolute folly for us to grant indiscriminately licences to men who wish to become shoe repairers in districts where already there is an adequate service—
  Mr. Gammans: How is that known?
  Mr. Belcher: —thereby, possibly, denying to people who wish to start business in an area where there is an inadequate service the opportunity of acquiring raw material.
  Mr. Gammans: How does the Board of Trade know?
  Mr. Belcher: Of course, we know.
  Mr. Gammans: How?
  Mr. Belcher: Because officers of the Board of Trade go into the district, they find out how many shops there are repairing shoes in that district, they know the population, they ascertain how long it takes for shoe repairs to be done, and they present a report to the issuing officer which indicates whether or not a licence ought to be granted. I assure the hon. Gentleman that these things are not done in a haphazard fashion, but with regard to the facts. I have only time to reply as quickly as I can to the three questions asked by the hon. Member who opened the Debate. He asked, Is there to be no new competition in trade and industry, is the closed shop principle to remain and apply only to those already established, thus shutting out ex-Servicemen? The answer is, "No, not precisely in those terms." I have indicated that the ex-Serviceman is admitted where it is felt that a need for his services exists, and the granting of a licence to him will not interfere with those already established in business.
  Secondly, he asked whether these men have to wait until controls and licences are removed. They do not have to wait now, since, where there is a case to be made out on raw material grounds, or on grounds of consumer need, they get their licence, They do not have to wait until controls and licences are removed. Thirdly, he asked whether they have to wait until all shortages disappear before licences become necessary. The answer is "Yes." The announced policy of the Government is to retain controls over distribution and prices, and licences of all kinds, until the plenitude of raw materials and goods makes it unnecessary to license, to control and to ration in the interests both of the people who are manufacturing and selling and those who are buying—in other words, the consumers. This policy is a deliberate policy of holding back in the interests of producer, distributor and consumer until there is an ample supply of the goods and raw materials which will make it unnecessary for the controls and the licences to remain. They are not there because of any particular love for licensing and controlling on the part of His Majesty's Ministers. They are to protect the people of this country against the thing which every hon. Member knows would happen if those controls were re-

  475
  laxed. It is in the interests of the ex-Serviceman himself, and in the interests of the nation—[An HON. MEMBER: "He does not think so"] He may not think so, but he may not be the best judge of his own cause.
  Sir Wavell Wakefield (St. Marylebone): Dictatorship.
  Mr. Belcher: The hon. Member for Hornsey suggested that the alternative
  476
  before the ex-Serviceman was to make a fortune or "go bust." In most cases he would "go bust," and we prefer not to take the chance of allowing these men, who come out of the Forces with bright ideas in their heads, to "go bust." It is far better that they should carry on as they are now.
  It being Half-past Ten o'Clock, Mr. DEPUTY-SPEAKER adjourned the House, without Question put, pursuant to the Standing Order.