Commons Sitting of 2 December 1947

Preamble
The House met at Half past Two o'Clock
PRAYERS
[Mr. SPEAKER in the Chair]
DEATH OF A MEMBER
Mr. Speaker: I regret to have to inform the House of the death of William Foster, Esquire, Member for the Borough of Wigan, and I desire, on behalf of the House, to express our sense of the loss we have sustained and our sympathy with the relatives of the honourable Member.
ORAL ANSWERS TO QUESTIONS
  SCOTLAND

    School Buildings, Clarkston
    Major Guy Lloydasked the Secretary of State for Scotland whether he is aware that building work on temporary buildings at St. Joseph's School, Clarkston, has been at a standstill since early September; and whether he will arrange for work to recommence at once, in view of the bad state of the present school buildings.
    The Joint Under-Secretary of State for Scotland (Mr. Thomas Fraser): My right hon. Friend is aware that work at this school has been temporarily held up and no progress can be made until the necessary hutment components have been supplied. The Ministry of Works have informed my right hon. Friend that every effort will be made to ensure delivery during the next three or four weeks.

    Vacant Premises, Glasgow
    Mr. J. L. Williamsasked the Secretary of State for Scotland, if he is aware that dwelling-houses at 191, Hill
    170
    Street, Charing Cross, Glasgow, have been vacant since five families were evicted from them in July last; and if he will take steps, on a recommendation from the local authority, to have them requisitioned for dwelling purposes.
    Mr. T. Fraser: My right hon. Friend authorised Glasgow Corporation to take possession of this accommodation on 12th September, and formal notice was served on the owners on 16th September. The owners represented that the accommodation had been bought for occupation by a homeless ex-Service man and, after consultation with the Corporation, its release was agreed to. I understand that the condition of the accommodation is unsatisfactory and that fairly extensive works will be required to make it suitable for occupation.
    Mr. Williams: Is my hon. Friend aware that this promise was made by the owner last September, but that the premises are still empty?
    Mr. Fraser: I think the premises were bought by the present owner about December, 1946, and that people have been living in the house since then. The question of its being requisitioned was raised during the summer months, and I have indicated to my hon. Friend what has happened since then.

    Cream Separators
    Mr. Thornton-Kemsleyasked the Secretary. of State for Scotland if he is aware that dairy farmers are having to wait over two years for the delivery of cream separators, without which it is extremely difficult for them to make good butter; and whether he will make representations to the Ministers concerned, urging that the manufacturers of separators should be allowed at least a limited amount of the materials and labour they require for production.
    Mr. T. Fraser: My right hon. Friend is aware that no farm-type cream separators are being delivered at the moment. In order to ensure that liquid milk is used in the best national interest, it is the Government's policy to encourage the sale of the maximum quantity through controlled channels. In these circumstances materials in short supply cannot at present be allocated for the manufacture of farm type cream separators for use at home.
    Mr. Thornton-Kemsley: Is the hon. Gentleman aware that in many stock-rearing counties of Scotland milk is used for rearing livestock, and that it is wasteful to feed whole milk to livestock, it being far better to separate it and use the butter fat for making butter for human consumption, and the separated milk for feeding the livestock? In view of that, will he not allow some cream separators to these farmers?
    Mr. Fraser: No, I do not think that a case can be made out for the allocation of materials and labour for the manufacture of cream separators during the present conditions of shortage.

    DISABLED PERSONS (UNEMPLOYMENT ALLOWANCE)
    Lord Willoughby de Eresbyasked the Minister of Pensions whether he can give any further information regarding the question of paying an additional supplement to men who are temporarily unemployable owing to their war disablement, following a period of treatment, and who are not entitled to draw National Health Insurance benefit.
    The Minister of Pensions (Mr. Buchanan): I have given careful consideration to this matter in the light of discussions with ex-Service organisations. It is undesirable in the pensioner's own interest that in the circumstances in question he should be termed unemployable since with modern methods of treatment and training many such men should ultimately be brought back into industry. Where, however, on the completion of a course of approved institutional treatment the period of necessary abstention from work is likely to be a month or more, a special allowance (inclusive of any health insurance benefit) of 20s. a week will be paid so long as the pensioner is compelled to abstain from work because of the condition for which the treatment was received.

  BRITISH ARMY

    Illegitimate Children, Germany
    Mr. William Shepherdasked the Secretary of State for War the total amount paid to the German Government by the British Government for the maintenance of illegitimate children arising out
    172
    of the occupation of Germany after the first world war; and whether consideration has been given to employing a similar system to cover the present occupation.
    The Secretary of State for War (Mr. Shinwell): I am not aware of any such payment as that referred to in the first part of the Question. The answer to the second part is in the negative.
    Mr. Shepherd: Is the Minister satisfied with the present arrangement? Does he feel that in the circumstances it is just?
    Mr. Shinwell: The present arrangement has nothing to do with the Question that was asked.

    Polish Forces
    Mr. Geoffrey Cooperasked the Secretary of State for War what is the present total of the Polish Armed Forces now under British command; and if it is still his intention that by 1st January, 1950, all members of these Forces will have been demobilised, and transferred to the Polish Resettlement Corps, or will have obtained productive work in industry or have been returned to Poland.
    Mr. Shinwell: The total of the Polish Armed Forces under British command administered by my Department at 1st November was approximately 17,000. I hope that these Forces will be closed down and their personnel have been repatriated, transferred to the Polish Resettlement Corps or otherwise have ceased to belong to the Polish Armed Forces by 1st July, 1948.
    Mr. Cooper: Does my right hon. Friend realise that his predecessor gave an undertaking to see that this question was settled by 1st January, and could he look into it again? Does he think it is fair to workers in this country that they should be saddled with this responsibility any longer?
    Mr. Shinwell: We are hurrying on resettlement or repatriation as speedily as possible.
    Sir Waldron Smithers: Can the Minister give an undertaking that none of the Polish Armed Forces will be sent back to Poland against their will, especially in view of the fact that they may be transferred to Russia?
    Mr. Shinwell: We are doing everything possible to meet the wishes of the men concerned.
    Squadron-Leader Fleming: Are these men the Poles who refused either to join the Resettlement Corps or to return to Poland?
    Mr. Shinwell: I am afraid that I must have notice of that question.

    Territorial Buildings, Northern Ireland
    Sir Ronald Rossasked the Secretary of State for War whether he is aware that no drill halls or other Territorial Army buildings exist in Northern Ireland; and that it is impossible for the Government of Northern Ireland to allot building materials for the erection of such buildings from their share of materials for domestic use; and what steps are being taken to deal with this situation.
    Mr. Shinwell: There are at present four drill halls, three offices and ten hutted camps for the Territorial Army in Northern Ireland, but I am aware that the accommodation is far below requirements. The difficulties regarding the supply of building materials for this purpose are being examined.
    Sir R. Ross: Is the right hon. Gentleman aware of the great advantage which Great Britain has in already having drill halls, and the impossibility of starting a Territorial Army in Northern Ireland for the first time unless some special arrangements are made to expedite the building of drill halls and other building?
    Mr. Shinwell: The hon. Gentleman suggested in his Question that there were none. As I have indicated in my reply, there are some, and we are doing everything we can to provide others.
    Sir R. Ross: Is the Minister aware that the last thing I wished to do was to call in question what he said, but that if he saw what he calls drill halls, and such like, he would not think them very good?
    Mr. Shinwell: I quite agree. It may be that they are inadequate for the purpose. We have to make the best of the present situation, but I am fully conscious of what is required.
    Sir Ralph Glyn: The right hon. Gentleman said in his answer that he is considering the supply of materials for this
    174
    purpose for Northern Ireland. Is he also considering the supply of materials to this part of the United Kingdom?
    Mr. Shinwell: Very much so.
    Mr. Gallacher: Does not the Minister agree that if partition were removed, there would be no need for these drill halls?
    Mr. Speaker: That is another question.

    Young Soldiers (Overseas Postings)
    Captain John Crowderasked the Secretary of State for War if he will give instructions that boys serving in the Army shall not be sent to Palestine before they are nineteen years of age.
    Mr. Shinwell: It was decided last April that since garrisons overseas could not be kept up to strength by any other means the lower age for posting men beyond Europe would have to be reduced from 18 years 6 months to 18 years 3 months. In consequence some soldiers of little more than 18 years 3 months have been sent to Palestine and are serving there. In view, however, of the decision to evacuate Palestine, the whole matter must obviously be made the subject of further review.
    Captain Crowder: Would the Minister bear in mind that, under a new order, recruits are not allowed to join the Palestine Police until they are 19½?
    Mr. Shinwell: This Question does not relate to the Palestine Police.
    Mr. Sydney Silverman: Quite apart from the effect of the recently announced policy of withdrawal, does not my right hon. Friend consider that, in the circumstances which have prevailed in Palestine for the past two and a half years, it was a very cruel and inefficient thing to send boys of this age to that area?
    Mr. Shinwell: I am not called upon to pronounce on what was done before I came to the War Office.

    Ballater Barracks
    Mr. Thornton-Kemsleyasked the Secretary of State for War if he is aware that the Military Barracks at Ballater, Aberdeenshire, are unoccupied; and whether it is intended that they shall be used by his Department in the near future or whether they can be made available as

    175
    married quarters for civilian housing purposes, having regard to the serious shortage of accommodation.
    Mr. Shinwell: It is intended to reoccupy these barracks in the near future. I regret, therefore, that the suggestion made in the last part of the Question cannot be adopted.
    Mr. Thornton-Kemsley: Would it not have been better if instead of these barracks remaining unoccupied, they had been used for housing military pensioners, or something like that, because they are buildings of the cottage type, each capable of housing a family?
    Mr. Shinwell: I think there were special circumstances in connection with this matter. In any case, we now propose to occupy them.

    Soldier's Wife, Haifa (Passage)
    Air-Commodore Harveyasked the Secretary of State for War what steps are being taken to get a passage for Mrs. Janet Buckley, wife of Driver K. Buckley, T.14050158, H.Q., Coy., R.A.S.C., No. 3, Training Bn., Elles Barracks, Farnborough, Hants, from Haifa to this country, details of which have already been sent to him.
    Mr. Shinwell: The military authorities in Palestine have been asked to arrange for this soldier's wife to be sent to the United Kingdom. The actual date of her passage will be a matter for the overseas Command.
    Air-Commodore Harvey: Is the right hon. Gentleman aware that since I put down this Question, I have been informed by the soldier that he was told by Capt. Hargraves that if he got into touch with me, he would get into very serious trouble; and will the Minister give an assurance that there will be no victimisation of soldiers in that way?
    Mr. Shinwell: I am afraid that I cannot give any assurance until the facts are placed before me—[HON. MEMBERS: "Oh."] In the absence of definite information, it is obviously impossible for me to give any assurance. I want the facts established. If the hon. and gallant Member can establish the facts, he can rest assured that I will not allow that sort of thing to happen.
    Air-Commodore Harvey: Is the right hon. Gentleman aware that I interviewed this man personally and made notes of his statement, which I will gladly send to him? Will he give me an asurance that, in the meantime, this soldier will not suffer at the hands of a senior officer for having communicated with his Member of Parliament?
    Mr. Shinwell: All I can say is that I am astonished to hear that any soldier would suffer in consequence of any statements he made to a Member of Parliament.

    Officers (Waiting Period)
    Major Legge-Bourkeasked the Secretary of State for War how many newly commissioned National Service Officers are on indefinite leave.
    Mr. Shinwell: Indefinite leave is not granted in the Army. Circumstances may, however, arise in which an officer is held temporarily on the strength of his depot whilst waiting for shipping or being found suitable employment. In such a case, if there is no temporary employment for him at the Depot, he may be allowed to live at home. Information is not readily available as to the number of such officers at any one time, nor could it be obtained without a disproportionate amount of work.
    Major Legge-Bourke: Would the right hon. Gentleman say what sort of limit of time is set in cases where young officers newly commissioned cannot be employed immediately? Is there any limit of time before they are posted?
    Mr. Shinwell: That is not the original Question. If the hon. and gallant Member puts it down, I will try to give an answer.

    Recruiting Advertisement
    Mr. Michael Astorasked the Secretary of State for War whether in the advertisement for recruiting for five years in the new Regular Army, under the caption, "George—you're kidding," he will have deleted the two sentences which imply official Government approval to the contention that a skilled worker cannot compete in industry today without a union card.
    Mr. Shinwell: This section of the advertisement was intended merely to bring out the fact that, as announced by

    177
    my predecessor on 17th June in reply to a Question by my hon. Friend the Member for Reading (Mr. Mikardo), the recognised soldier tradesman is not debarred from the advantage of trade union membership in civil life. I am, however, having the text revised so as to remove any mistaken impression which might be created by the present wording.
    Mr. Astor: While I will wait to see what the revision will be, can the Minister assure the House that this caption, "George—you're kidding," is not a veiled reference to the Minister of Labour?
    Mr. E. P. Smith: On a point of Order. Is it not a fact that no quotations are allowed in Questions? If so, could you, Sir, give your Ruling whether in future quotations might be allowed?
    Mr. Speaker: I did not get the point. Would the hon. Member make it again?
    Mr. E. P. Smith: There is a quotation in Question No. 16—"George—you're kidding."
    Mr. Speaker: As the Question has passed the Table, I am sure that it is in Order.

    Release Benefits
    Mr. J. L. Williamsasked the Secretary of State for War whether, in view of the dissatisfaction among soldiers with regard to release or terminal benefits, he will take steps to grant civilian outfit or cash grant in lieu of same on release.
    Mr. Shinwell: I am not aware of any general dissatisfaction among soldiers about release benefits. All men called up before 1st January, 1947, receive a civilian outfit on release provided they satisfy the necessary conditions.
    Mr. Williams: Is my right hon. Friend aware that many private soldiers are unable to save that money from their Army pay in order to buy civilian outfits at the prevailing prices?
    Mr. Shinwell: I am not aware of it, but if my hon. Friend has some information, perhaps he will let me have it?

    Requisitioned Premises, Windsor
    Major Mott-Radclyffeasked the Secretary of State for War for what purpose his Department continue to hold the Imperial Service College premises in Windsor under requisition.
    Mr. Shinwell: These premises at present accommodate the A.T.S. Officer Cadet Training Unit and Junior Officers' School.
    Major Mott-Radclyffe: Is the right hon. Gentleman aware that these premises were bought during the war by the Windsor Borough Council, because they were urgently required as soon as the war was over for borough council staff, and will he say what steps his Department are taking to find an alternative building?
    Mr. Shinwell: We are trying to find alternative accommodation, and I am sure that, as soon as it is found, we will use it.

    Officer's Arrest, Colombo
    Mr. Gammansasked the Secretary of State for War if he is aware that Captain S. L. Roxburgh of the Command Ordnance Depot, Colombo, has been in close arrest awaiting trial since March, 1947; that although his court martial started in October, no verdict has yet been given; and if he will take steps to expedite this matter.
    Mr. Shinwell: I have called for further information about this case by cable from the military authorities overseas, and I will write to the hon. Member when it has been received.
    Mr. Gammans: How comes it that an officer can remain for seven months under close arrest before being brought to trial? Can the right hon. Gentleman say how that could possibly happen without questions being put asking for more urgent steps to be taken to look into the matter?
    Mr. Shinwell: That is precisely what I am trying to find out.
    Mr. Manningham-Buller: Does the right hon. Gentleman think that the War Office was in ignorance of the fact that this officer was kept under close arrest as long as that?
    Mr. Shinwell: I am informed that there was some difficulty about witnesses and the like. It is precisely because I am dissatisfied, and because a Question was put dow on the Order Paper, that I am trying to ascertain the facts.

    Tank Training Ground, Netherlaw
    Mr. McKieasked the Secretary of State for War whether a final decision has yet been reached regarding the permanent retention of the tank training ground at Netherlaw, near Kirkcudbright.
    Mr. Shinwell: No, Sir.
    Mr. McKie: Is the Minister aware of the necessity for reaching a decision as soon as possible, because more than 5,000 acres of the best agricultural area in Scotland are being retained? When he does come to a decision, if he should come to an affirmative decision in regard to the retention of this land, will he keep in mind the necessity for carefully revising the existing boundaries in order to ensure the minimum loss to agriculture?
    Mr. Shinwell: I am fully conscious of the need for coming to a decision on this matter, and also of the need for liberating as much agricultural land as possible, but this matter is under consideration by an Inter-Departmental Committee and they have not yet reached a conclusion.
    Mr. Emrys Hughes: Is my right hon. Friend aware that, in the Debate on Scottish agriculture yesterday, there was great anxiety expressed in all parts of the House about the occupation of land by the War Office in Scotland, and will he take into earnest consideration the desire felt in Scotland to evict the War Office altogether from Scotland?
    Mr. Shinwell: I am afraid that, in this matter, my hon. Friend does not speak for Scotland.

    Brigade of Guards (Dress)
    Mr. John E. Haireasked the Secretary of State for War whether the Brigade of Guards, when doing guard duties in London, can wear full dress.
    Mr. Shinwell: No decision has yet been made regarding the future dress of the Brigade of Guards.
    Mr. Haire: In view of the appreciation shown by the people of London and others on the recent occasion when the Life Guards were turned out in full dress for the Royal Wedding, would not my right hon. Friend give an early decision on this matter?
    Mr. Shinwell: That required a special effort for a special occasion, and I cannot promise to repeat it in the near future.
    Mr. Mellish: Would my right hon. Friend ask the Guards whether they want to wear full dress?
    Mr. Shinwell: There was some difficulty about the wearing of full dress, but we overcame the difficulty.
    Lieut.-Colonel Kingsmill: What has happened to the full dress uniforms which were put into store in 1939?
    Mr. Shinwell: There is a lot of misunderstanding about the full dress uniforms put into store between 1939 and the end of the war. A lot of things happened to those uniforms.

    Regular Engagements (Young Soldiers)
    Mr. Medlicottasked the Secretary of State for War whether his regulations permit soldiers under 21 to sign regular engagements to serve for a period of years over and above the term of their liability under the National Service Acts.
    Mr. Shinwell: Yes, Sir.
    Mr. Medlicott: Is the Minister aware that the Infants Relief Act of 1874 was passed so as to protect young people from the consequences of contracts which they have entered into whilst under age, and does the Minister consider it satisfactory that young lads of 18 and 19 are allowed to bind themselves to serve in the Army for seven, eight and even nine years ahead?
    Mr. Shinwell: The hon. Member asked for information, and I have given him the answer.

    Missing Valuables, Glucksburg Castle
    Mr. Stokesasked the Secretary of State for War whether the inquiry instituted by the C.C.G. into the theft of valuables from Glucksburg Castle has yet been completed; and what action has been taken.
    Mr. Shinwell: The inquiries into this case are still being pursued both in Germany and in this country. The length of time which this is taking is regrettable, but I must remind my hon. Friend that the alleged theft took place at the time of the capitulation of Germany when conditions were in a highly confused state.

    181
    Subsequent moves of units and individuals hampered inquiries, and he will, I am sure, appreciate the difficulties of bringing the investigations to a satisfactory conclusion in the circumstances.
    Mr. Stokes: Can my right hon. Friend give any kind of indication as to when he thinks the investigations will be completed? Will it be another year?
    Mr. Shinwell: According to the information that I have, it seems to me to be beyond the capacity of anybody to discover how this affair occurred.

  PRISONERS OF WAR

    Batford Camp (Petrol Consumption)
    Mr. Dumpletonasked the Secretary of State for War why money payments to billeted prisoners of war are distributed each week from Batford Camp, Hertfordshire, by lorry over a wide area; and what petrol consumption is involved in this procedure.
    Mr. Shinwell: Billeted prisoners of war administered by this camp are paid once a month, not weekly. It is, however, necessary that they should be visited twice a month, not only that they may receive their pay, but for other administrative purposes, such as clothes changing. A 15-cwt. truck or a light car is used for these journeys and the petrol consumed on them at this particular camp has in the past been approximately eight gallons a month.

    Repatriation
    Mr. Stokesasked the Secretary of State for War whether he has been able to make arrangements to speed up the return to Germany of prisoners of war due for repatriation and held in transit camps.
    Mr. Shinwell: Yes, Sir. Arrangements have now been made to reduce the time spent in transit to a maximum of five days and a minimum of two.
    Mr. Stokes: Can my right hon. Friend assure the House that some arrangements have been made so that the kits and other packages which a prisoner takes back with him are not tampered with in the transit camps?
    Mr. Shinwell: Of course, they are subject to search by the Customs.
    Sir Frank Sanderson: Can the Minister say when German prisoners will be permitted to remove their identification discs?
    Mr. Shinwell: I was not aware that that was contained in the original Question.
    Mr. Pagetasked the Secretary of State for War the number of German prisoners of war who have been repatriated from the Middle East; the number still to be repatriated; and the present rate of repatriation.
    Mr. Shinwell: Approximately 35,000 prisoners of war have been repatriated from the Middle East and some 61,000 remain to be repatriated. It is now hoped to repatriate 1,000 during December, and to raise the rate to an average of approximately 5,000 a month during the first three months of next year.
    Mr. Paget: Why has the rate been slowed down?
    Mr. Shinwell: There have been considerable shipping difficulties.
    Mr. Stokes: Can the Minister so arrange things that the official repatriation of these men coincides with the official repatriation of men from this country, that is, at the end of August?
    Mr. Shinwell: I would like to look into that.
    Mr. Stokesasked the Secretary of State for War whether he is yet in a position to make a statement with regard to the continued policy of taking into consideration political grading in considering repatriation of prisoners of war from the Middle East, in view of the fact that this practice has already been abandoned in the United Kingdom.
    Mr. Shinwell: Yes, Sir. I have decided that the regulations in the Middle East can be brought into line with those in force in the United Kingdom, so that in future no differentiation will be made between prisoners of war of political categories B and B minus in deciding their order for repatriation.

    Concert Performance, Ashurstwood
    Colonel Clarkeasked the Secretary of State for War if he is aware that, although a successful charity concert in aid of the Children's Home, East Grinstead, was given by German prisoners

    183
    of war in mid-October last, the holding of a repeat performance at Ashurstwood for the same charity was forbidden by the War Office; and what was the reason for this refusal.
    Mr. Shinwell: The prisoners of war were permitted to give the charity concert at East Grinstead owing to certain regulations being overlooked. These regulations have been correctly applied in the case of the concert at Ashurstwood.
    Colonel Clarke: Does the Minister understand that the application of these regulations was due to a protest on the part of the Musicians' Union, and does he consider that it is right that the policy of the War Office and charitable actions on the part of prisoners of war should be controlled by unions and not by himself?
    Mr. Shinwell: I understand that some difficulty arose because there was a charge for admission, and there was some protest about it. Of course, while we are not in the hands of the Musicians' Union or any other union, we must pay due regard to their representations.
    Vice-Admiral Taylor: Is the Minister satisfied that these regulations are really necessary at present, and will he look into the matter again?
    Mr. Shinwell: I have not yet had an opportunity of doing that.
    Colonel Clarke: Does the Minister realise that a charity concert at which there is no charge for admission is of very little use?

  NATIONAL INSURANCE

    Approved Societies' Employees (Compensation)
    Captain Crowderasked the Minister of National Insurance if he is aware that distress is being caused to old-established employees of approved societies who are receiving notices from his Ministry to the effect that no appointment can be offered to them in his Department, and that no decision has yet been reached regarding the terms and conditions governing eligibility for compensation; and how soon he will be able to make a statement regarding compensation to former approved society staffs who cannot be offered employment in his Ministry, so as to put an end to the existing uncertainty.
    The Minister of National Insurance (Mr. James Griffiths): The interviewing and selecting of these candidates for posts in my Department is in the hands of the Civil Service Commission, and the proportion of rejections is less than 2½ per cent. Pending the final settlement of the detailed terms of compensation, I am arranging for provisional sums to be paid on account, and regulations for this purpose will be laid before the House as soon as possible.
    Captain Crowder: Is the Minister aware that his Department are writing letters to employees of approved societies who cannot be taken over by his Department stating not only that they cannot say how much compensation is to be paid, but whether any compensation can be paid at all?
    Mr. Griffiths: The final terms of compensation have not yet been settled. Pending the final settlement, I am arranging in such cases to pay the provisional amounts.

    Women Contributors
    Mr. Perrinsasked the Minister of National Insurance the estimated number of women between the ages of 54–60 years now contributing to National Insurance, differentiating between spinsters, married women and widows.
    Mr. J. Griffiths: It is estimated very approximately that contributors in this age group number about 200,000 single women and 250,000 married women and widows.
    Mr. Perrins: Is my right hon. Friend aware that 200,000 of the women mentioned in the first part of the Question are still looking hopefully to him to grant their claims for a retiring pension at 55 years of age?
    Mr. Griffiths: Single women are provided with a retiring pension at the age of 60. The reason we cannot accept the lower age has been made clear more than once in this House.

    Industrial Injuries Advisory Council (Membership)
    Mr. Henry Whiteasked the Minister of National Insurance whether he has yet appointed the Industrial Injuries Advisory Council to consider and advise him on questions relating to the National Insurance (Industrial Injuries) Act, 1946.
    Mr. J. Griffiths: I am glad to announce that the Industrial Injuries Advisory Council has now been appointed. Sir Wilfrid Garrett, late Chief Inspector of Factories, has been appointed Chairman of the Council, and there are 15 other members whose names I will circulate in the OFFICIAL REPORT. The Council will consider and advise me on the regulations proposed to be made under the Act, and any other questions relating to the Act which I may, from time to time, refer to them.
    Following are the names:

    Sir Wilfrid Garrett (Chairman).

    Mr. J. R. Allan.

    Mr. J. Bradshaw.

    Mr. E. De'Ath.

    Mr. E. C. Happold.

    Professor R. E. Lane, F.R.C.P., M.R.C.S.

    Mr. Will Lawther.

    Mr. T. A. E. Layborn, C.B.E.

    Alderman D. B. Lewis.

    Miss Anne Loughlin, D.B.E.

    Mr. John Megaw.

    Mr. H. W. Naish.

    Mr. E. A. Nicholl, M.D., F.R.C.S. (Ed.).

    Mr. Alfred Roberts, O.B.E.

    Mr. Clifford C. Trollope.

    Mr. Frank Wolstencroft, C.B.E., and one other woman member still to be appointed.

  EMPLOYMENT

    Ex-W.A.A.F. Officers
    Mr. Goronwy Robertsasked the Minister of Labour how many ex-W.A.A.F. officers have been placed in appointments by the Appointments Board.
    The Minister of Labour (Mr. Isaacs): I regret that this information is not available. Since V.E. Day the Appointments Department has placed 1,075 women ex-officers in employment, but this figure cannot be split between the three Services.

    Vocational Training Scheme
    Sir Ian Fraserasked the Minister of Labour to what extent vocational training schemes for ex-Service men are to be curtailed; and whether the right to training will be preserved.
    Mr. Isaacs: The extent of the training given under the vocational training
    186
    scheme has recently been reduced owing, mainly, to the suspension for the present of the training of men for building occupations in large numbers. But the conditions of eligibility for training remain unchanged.
    Sir I. Fraser: Does the Minister's reply mean that whatever time elapses the right to training will continue?
    Mr. Isaacs: Yes, Sir, most certainly. The training is going on for small numbers now, but not for the same numbers as before.
    Mr. Godfrey Nicholson: Does that mean that there are particular subjects on which the training has been reduced, or that the training has been reduced equally over all the different subjects?
    Mr. Isaacs: No, Sir. The reduction has mainly taken place in building training. There has been some slight reduction in other industries due to the shortage of raw materials. I will let the hon. Gentleman have particulars of those.

    Disabled Persons
    Sir I. Fraserasked the Minister of Labour to what extent the proposal to limit capital expenditure will curtail or delay the opening of the full number of Remploy factories which was originally contemplated.
    Mr. Isaacs: The programme of the Disabled Persons Employment Corporation provides a total of 107 factories eventually. Of these, 12 are already open, and 23 are in course of erection. As I informed my hon. Friend the Member for Accrington (Mr. Scott-Elliot) on 6th November, the Government will facilitate the completion of the programme to the maximum extent consistent with the needs of the present economic situation. In addition, it is the intention to make available to the Corporation accommodation in certain Government Training Centres which has now become surplus to training requirements, and to the extent to which this is done, it will accelerate the programme.
    Sir I. Fraserasked the Minister of Labour what steps he is taking to inform employers of their liability to employ a quota of disabled persons under certain conditions under the Disabled Persons (Employment) Act; and what proportion of employers are employing their quota.
    Mr. Isaacs: All the means at my disposal, including the use of leaflets, posters, Press and radio have been used to inform employers of their quota obligations under the Act. Local disablement advisory committees have also assisted in informing employers. The Act requires employers to keep records, and empowers me to inspect them, and this is being done, but precise information about the proportion of employers who are employing their quota is not available.
    Sir I. Fraser: Did not the right hon. Gentleman promise, of indicate, some months ago that he was getting a return from employers which would show him, either wholly throughout the country, or by sample, what proportion were employing their quota and what were not?
    Mr. Isaacs: It was not quite that. I did promise to make an investigation, and that is being done. The information is being collected, but, at the moment I cannot give the percentage asked for as to who are employing their quota and who are not. In the main, employers are carrying out their obligations honourably, and we are trying to get the matter straightened up without exerting undue pressure.
    Sir I. Fraser: In view of the large number of disabled men unemployed, can the right hon. Gentleman say when we shall get the information?
    Mr. Isaacs: I will let the House have it as soon as the inquiry has been completed.
    Mr. Hardyasked the Minister of Labour what types of production are being carried on in the factories of the Disabled Persons Employment Corporation.
    Haleasked the Minister of Labour what are the varieties and types of employment now available in the Disabled Persons Employment Centres; and for what categories of disabled persons employment is provided.
    Mr. Isaacs: The work available to disabled persons employed in the factories of the Disabled Persons Employment Corporation varies in the different workshops. As the list is lengthy, I will, if I may, circulate it in the OFFICIAL
    188
    REPORT. Employment in the Corporation's workshops is provided for any disabled person whose disablement is so severe that he is unlikely to be able to work under ordinary conditions, and thus needs special conditions such as the workshop provides, that is, anyone who qualifies under Section 15 of the Disabled Persons (Employment) Act.
    Mr. Hardy: Can my right hon. Friend say whether it is intended to extend the list in the near future?
    Mr. Isaacs: No, Sir. The list which I will circulate is complete as far as it covers those already in operation but this is not the end of the operation. Many others will be added from time to time.
    Mr. Erroll: Is it intended that these factories should operate at a profit or a loss, or should they balance out over a period of years?
    Mr. Isaacs: The hope is that they will work at a profit, as, indeed, some of them are. The Act provides that the main purpose of these workshops is to provide employment at proper wages for the persons engaged in them. Should there be a loss, the State bears that loss.
    Following is the list:
    Manufacture

    Boxes, cardboard and wooden.

    Bookcases.

    Christmas crackers.

    Curtains and Soft furnishings.

    Electrically heated pads and blankets.

    Engineering—light assembly.

    Farm gates and other agricultural wood-work.

    Furniture, utility and nursery.

    Kitchen woodware.

    Ladies' handbags.

    Leather goods, including industrial mittens, gloves and knee pads. Ordinary straps and straps for the carriage of kettle drums.

    Poultry houses.

    Soft toys.

    Step ladders.

    Tea Trolleys.

    Violins, bows and cases.

    Repairs

    Battery boxes.

    Metal Bedsteads.

    Upholstery.

    Watches and Clocks.

    Wooden lockers.

    Unemployed Persons (Franked Cards)
    Lieut.-Colonel Geoffrey Clifton-Brownasked the Minister of Labour why people in receipt of unemployment benefit are unable to get franked cards as they have done in the past years; and whether he is aware that if such emergency cards are not issued in time for their dispatch to their approved societies by 30th November, 1947, their entitlement to benefits under National Health Insurance during 1948 may be seriously affected.
    Mr. Isaacs: I understand the hon. and gallant Member's Question refers to delay in issuing cards to two persons in Barrow and Wickhambrook. This was due to a clerical error, and the cards were issued last week in ample time to be forwarded to the approved society before 30th November.
    Lieut.-Colonel Clifton-Brown: Can the Minister say why no action was taken on the repeated applications of the persons concerned?
    Mr. Isaacs: I am not aware that they have made repeated applications, but I will make inquiries about it. This was a pure error; the papers slipped into the wrong file in the office.

  AFRICAN COLONIES
  Mr. Bartlettasked the Prime Minister whether, in view of the increasing importance of the African Colonies and the similarity of the problems most of them have to face, he will appoint an Under-Secretary of State for the British-African territories.
  The Prime Minister (Mr. Attlee): I do not think that the proposal of my hon. Friend for the appointment of an Under-Secretary to deal with a specific group of Colonies would be administratively convenient or practical.
  Mr. Bartlett: Will the Prime Minister bear in mind the fact that these problems are becoming very much greater now, and that the time has come for some regional consideration?
  The Prime Minister: I think there is a good deal of consideration of these problems within the Colonial Office, but I do not think the specific proposal would be wise.
  Mr. W. R. Williams: Is not my right hon. Friend aware that there is a growing feeling among many hon. Members interested in the development of the Colonial Empire that it will be extremely difficult for the Secretary of State for the Colonies to face up to his very onerous tasks in the future unless such an appointment is made, which would make consultation on the spot available to both the Colonial Governments and the home Government?
  The Prime Minister: I am quite well aware of the need for consultation on the spot by Ministers, but I was dealing with the position as a whole.

  NATIONAL FINANCE

    Foreign Travel (Switzerland)
    Mr. Sidney Shephardasked the Chancellor of the Exchequer what negotiations he is undertaking with the Swiss Government with a view to enabling British citizens to visit Switzerland for the winter sports.
    The Chancellor of the Exchequer (Sir Stafford Cripps): None, Sir.
    Mr. Shephard: Is the right hon. and learned Gentleman aware that his answer will put an end to the rumours which have been circulating, and also encourage the Scottish winter sports resorts to plan accordingly?

    Purchase Tax
    Sir W. Smithersasked the Chancellor of the Exchequer if he will take steps to ensure that articles, and especially articles of clothing, particulars of which have been sent him, ordered before the Budget, shall not be liable to increased Purchase Tax.
    Sir S. Cripps: No, Sir. Under the law, the rate of tax payment depends on the date of delivery of the goods by the registered supplier, not on the date of the order; and I cannot make any exception to this rule.
    Sir W. Smithers: Is the Chancellor of the Exchequer aware of the many cases which have been brought to the notice of hon. Members? One typical case is that of a Merchant Navy officer who ordered his suit, tried it on, but could not take delivery of it because he was on the high seas bringing food to this country.
    Sir S. Cripps: I am aware that in the imposition of any taxation there are bound to be a few hard cases.
    Mr. Boyd-Carpenterasked the Financial Secretary to the Treasury whether he has considered the hardship caused by the imposition of additional Purchase Tax on suits ordered from tailors before 12th November, 1947, and delivered after that date; and whether he proposes to provide for the payment of compensation to persons adversely affected by this.
    Mr. Glenvil Hall: No, Sir. Under the law, the rate of tax payable depends on the date of delivery of the goods by the registered supplier, not on the date of the order; I regret that it is impossible to make exception to this rule.
    Mr. Boyd-Carpenter: Is the right hon. Gentleman aware that hardships of this sort were not inflicted in the nineteenth century? Is there any reason why, to deal with a very small number of very hard cases, a system of rebates should not be introduced?
    Mr. Glenvil Hall: We obviously cannot confine this to the small number which, I know, the hon. Gentleman has in mind. If this is done, it must be done over the whole field. When this arrangement was made and the Purchase Tax was first implemented and arrangements made with the trades, it was decided, after very careful thought, that the wholesale stage was the point at which this Tax should attract itself to the goods in question.
    Major Legge-Bourke: Will the right hon. Gentleman recall the remark of his right hon. Friend the Minister of Health, who said the other day that "bigness is the enemy of humanity"?

    Three per cent. Conversion Loan (Redemption)
    Sir W. Smithersasked the Chancellor of the Exchequer if he proposes to convert or pay off the £302 million of 3 per cent. Conversion Loan on 1st March, 1948.
    Sir S. Cripps: Notice was given in the Gazette on the 28th November that this loan will be redeemed at par on the 1st March, 1948.
    Sir W. Smithers: Will the Chancellor of the Exchequer give an assurance that
    192
    he will not repeat the folly of his predecessor in trying to buy back Gilt Edged securities at 2½ per cent. on a long-term basis in order to try and redeem this amount more cheaply?
    Sir S. Cripps: I shall try to carry out the wise policy of my predecessor.

    Budget Changes (Notice to Traders)
    Mr. E. P. Smithasked the Chancellor of the Exchequer why the Paper C.22035, giving the budgetary increases in Purchase Tax, was circulated and delivered to business offices before the speech of the Chancellor of the Exchequer on Budget day.
    Sir S. Cripps: The leaflet referred to was not even printed until after the Budget Speech. But, as is usual on these occasions, a notice was issued giving the precise information which traders concerned need to have at the earliest possible moment to enable them, where necessary, to adjust their selling prices. Great care is taken in timing the distribution of these notices to ensure that they are delivered on, but not before, the morning after the Budget Statement. I have no reason to think that the safeguards against leakage are inadequate.
    Mr. Smith: Is the Chancellor aware that the allegation that information was given to the trade on the morning of Budget day was made a week ago in open debate in this House, and that although there was a representative of the Treasury on the Front Bench he did not deny it?
    Sir S. Cripps: A good many remarks are made in open debate which are not immediately denied by the Minister, but which are none-the-less inaccurate.
    Lieut.-Commander Gurney Braithwaite: Is the right hon. Gentleman aware that I supplied his predecessor with information to the effect that this information was, in fact, released early last April?
    Sir S. Cripps: I presume the hon. Gentleman got the same sort of answer.
    Sir W. Smithers: Will the right hon. Gentleman differentiate between the leaflet that was, in fact, sent out, and the leaflet referred to in the Question? Is he aware that 120,000 copies were sent out? A business friend of mine tells me they were

    193
    marked, on the morning of the Budget, "Not to be opened till five o'clock." By what right and authority did he print these leaflets before the increases were passed by this House?
    Mr. Speaker: In the guise of a question the hon. Gentleman must not repeat the speech he made the other night.

    Savings Certificates (Purchasing Power)
    Mr. Osborneasked the Chancellor of the Exchequer what is the approximate purchasing power today of a Savings Certificate purchased in August, 1939; and if he will assure purchasers of Savings Certificates that there will be no loss to them of purchasing power in the future.
    Sir S. Cripps: A 15s. Savings Certificate bought in August, 1939, is worth 18s. 9d. today. Its future purchasing power, if cashed, depends on what is bought with the money, and it is therefore impossible to consider any such assurance as that suggested by the hon. Member.
    Mr. Osborne: May I ask the Chancellor of the Exchequer why he has deliberately misinterpreted the meaning of the Question? I want to know what is the purchasing value in normal commodities of a certificate now as compared with 1939. Is he not aware that inflation is a deterrent to the Savings Movement?
    Sir S. Cripps: It is quite impossible to state what the purchasing power is, unless we know on what the money is to be spent. Some foodstuffs, for example, are at prewar prices. If it is spent on those, then the purchasing power is the same as in 1939. Other articles are more expensive.
    Mr. W. Shepherd: Would the purchasing power be more or less?
    Sir S. Cripps: In some cases it would be more.

    Railway Stocks (Exchange of Securities)
    Mr. McKieasked the Chancellor of the Exchequer whether, in view of the fact that a large number of holders of railway stocks have, of necessity, to hold their securities until they are entitled to the forthcoming dividends, and that they may not be able to continue to hold the new transport stock owing to reduced income on reduced capital, he will take steps
    194
    to secure that these investors will receive the cash value for their securities as indicated by the take-over price.
    Sir. S. Cripps: I must ask the hon. Member to study the arrangements for exchange of securities, details of which will be published on 9th December.

    Note Issue
    Mr. Austinasked the Chancellor of the Exchequer whether he is satisfied that the contraction of the active note circulation by £19,769,000 in the past fortnight is not in some degree due to black market operators disposing of illicit gains; and whether he will now therefore give further consideration to the recall of the currency.
    Sir S. Cripps: I have nothing to add to the reply which I gave to the hon. Member for Bucklow (Mr. Shepherd) on 18th November.
    Mr. Austin: While appreciating the importance of the element of surprise in this matter, will the Chancellor continue to bear in mind the enormous volume of the transaction involved?
    Sir S. Cripps: If the hon. Member will look at the answer I gave, I think he will be satisfied.
    Lieut.-Commander Braithwaite: Would not the Chancellor agree that the discussion during the Budget Debates on recalling the note issue has caused some embarrassment in the black market?
    Sir S. Cripps: It has apparently caused embarrassment to somebody.

    Income Tax (Wife's Earned Income)
    Mr. Austinasked the Chancellor of the Exchequer whether he will now consider, as an inducement and incentive to tens of thousands of former women operatives and new women recruits whom he has required to return to textile factories, a tax concession for married women in industry.
    Sir S. Cripps: I would remind my hon. Friend that the additional relief allowable in respect of a wife's earned income was increased from £80 to £110 by the Finance Act, 1946.
    Mr. Austin: In view of the fact that only last week the right hon. and learned Gentleman made an appeal for such

    195
    women to return to work, will he not now give some further concession to them? Otherwise it would appear that the clothing ration will be endangered in the future.
    Sir S. Cripps: My hon. Friend will be glad to hear that there is a good response in the textile industry to the appeal for the return of this type of labour.

    Capital Issues Committee (Memorandum)
    Mr. Palmerasked the Chancellor of the Exchequer if, in view of the Government's revised capital programme, he proposes to make any change in the instructions to the Capital Issues Committee.
    Sir S. Cripps: Yes, Sir. I have today addressed a Special Memorandum to the Capital Issues Committee, drawing their attention to the principles set out in the White Paper on Capital Investment in 1948, and instructing them not to recommend consent to the raising of money for fresh capital outlay, except where the reports received by them from Government Departments show that the scheme is in full accord with the revised general programme. The Committee have for some time, with my predecessor's approval, been adopting a more restrictive attitude towards applications, and the purpose of the new memorandum is to give clear and formal expression to the revision of emphasis required by our economic position. I propose, with the permission of the House, to circulate the text of the Special Memorandum in the OFFICIAL REPORT. For convenience of reference it will be reprinted as a Command Paper at an early date.
    As regards bank advances, the banks having during and since the war given most valuable help in restricting credit facilities to conform with the general policy of the Government. It is more important than ever that this co-operation should be continued, and the banks will be asked to observe the intentions of the new memorandum to the Capital Issues Committee.
    Following is the text referred to:
    The Memorandum of Guidance issued to the Committee on 31st May, 1945 (Cmd. 6645) laid down the general conditions governing the grant of Treasury
    196
    consent to new issues of capital (other than overseas issues). That Memorandum has been re-examined in the light of current conditions. It is not proposed at the present time to lay down a revised list of eligible categories of issues, but the serious changes in the balance of payments position and the consequent need for internal economic adjustments call for a considerable revision of emphasis in the instructions upon which the Committee work.
    The capital programme of the country as a whole has been reviewed by the Government in the White Paper on Capital Investment in 1948 (Cmd. 7268). It has been decided that substantial modifications must be made. The main objectives are:

    (a) to reduce the total demands of capital projects upon manpower and upon steel, coal, and other materials in order that the requirements of the export industries and other vital purposes may be met;

    (b) to ensure that there is a concentration of effort on completing as rapidly as possible the most important schemes.

    Much of the reduction in the programme will fall on schemes which are directly or indirectly within the field of national and local government. But the same principles will be applied to private industry, with which the Capital Issues Committee is mainly concerned. The general rule must be postponement of capital outlay, whether on building or on plant and machinery, except where the project gives a considerable return, directly or indirectly, in increasing exports or saving imports from difficult sources, or is of importance to such basic industries as agriculture, coal and steel production.
    The various Government Departments will of course be responsible for implementing the revised programme. It has always been a cardinal feature of the administration of Capital Issues Control that the Committee should refer applications for advice to the appropriate Departments and should take account of any advice that may be so received. This consultation is of even greater importance in present circumstances, and the Committee is asked, when considering applications to raise money for fresh capital outlay, not to recommend consent, except to the extent to

    197
    which they are definitely assured by the terms of the Departmental reports that the scheme is in full accord with the revised general programme of capital investment.

    Postwar Credits
    Mr. John Hyndasked the Chancellor of the Exchequer whether pending the possibility of releasing general postwar credits, he is prepared to consider measures for releasing these credits in individual cases of special hardship.
    Sir S. Cripps: No, Sir. I regret that further payments of postwar credits cannot yet be made beyond those already authorised.
    Mr. Hynd: Is not the Chancellor aware there are numerous cases of very great hardship which he ought to consider? Will he further realise that the local officers are giving a very widespread impression that no one in any circumstances can obtain their postwar credit until they or their successors reach 65 years of age?
    Sir S. Cripps: The limitation by age applies to men over 65 and to women over 60. That class was selected because it was thought that holding up of the credits would be hardest on them.
    Mr. Hynd: I would like to press the point that the local officers are giving that false impression, and it should be cleared up quickly.
    Mr. T. J. Brooks: Would the Chancellor consider paying the credits to the next-of-kin in cases where the owner has passed away and where, in many cases, there is a tremendous hardship? That would not take much money from the Treasury. I have in mind a case of a woman, aged 40, who has written to me. She is the next-of-kin and cannot get the money.
    Lieut.-Commander Braithwaite: In the future release of postwar credits, will the right hon. and learned Gentleman bear in mind that age is not the only criterion of poverty?
    Sir S. Cripps: I certainly will bear that and other matters in mind.
    Mr. Hynd: I beg to give, notice that I will raise this matter on the Adjournment at the earliest possible opportunity.

    Ministers of the Crown (Official Residences)
    Mr. Boyd-Carpenterasked the Financial Secretary to the Treasury whether any assessment for purposes of Income Tax or Surtax is made on the free living accommodation provided for certain Ministers of the Crown.
    The Financial Secretary to the Treasury (Mr. Glenvil Hall): No, Sir. These official residences have never been charged to Income Tax since the middle of the nineteenth century.
    Mr. Boyd-Carpenter: Does that answer mean that the right hon. Gentleman in such matters will follow the procedure of the nineteenth century?
    Mr. Glenvil Hall: I think it means that the hon. Member is probably living in the past.

    Tobacco Duty Relief (Lost Coupons)
    Mr. Draysonasked the Financial Secretary to the Treasury what is the procedure to be adopted by old age pensioners to obtain replacement of tobacco coupon books lost through accident or theft.
    Mr. Glenvil Hall: I regret that books of Tobacco Duty relief tokens lost through accident or theft cannot be replaced, because to do so would promote abuse of the concession.
    Mr. Drayson: Would the right hon. Gentleman consider this matter again, because surely tobacco coupons, like clothing coupons, can be replaced if they are lost?
    Mr. Glenvil Hall: The difference is that a clothing coupon book is numbered and also has the name of the owner on it. That is a considerable difference.

    PERMANENT SECRETARY TO THE TREASURY (DUTIES)
    Major Legge-Bourkeasked the Chancellor of the Exchequer (1) what were the original duties of the Head of the Civil Service at the time of the first appointment to that office; in what respects those duties have since changed; if he is satisfied that in the light of

    199
    experience there is any justification for the continuance of this office; and on what grounds;
    (2) whether the assurance given by His Majesty's Government on 13th December, 1944, that the authority of the Head of the Civil Service no longer extended to the Foreign Office, still applies; to what other Departments it has ceased to extend, and what further alterations of this authority he intends to make.
    Sir S. Cripps: It was laid down in 1919 that the Permanent Secretary to the Treasury should act as permanent head of the Civil Service and should advise the First Lord (the Prime Minister) in regard to higher Civil Service appointments. There is no office of permanent or official head of the Civil Service. That is simply a designation which has attached to the holder of the post of Permanent Secretary to the Treasury. I am not aware of any change in the duties of the Permanent Secretary to the Treasury since 1919, and none is contemplated, other than the fact that the Foreign Service has, since 1944, been entirely separate from the Home Civil Service. As I explained in the answer which I gave the hon. and gallant Member on 18th November, the Permanent Secretary to the Treasury has no authority over any Department other than the Treasury.

  GOVERNMENT DEPARTMENTS (FORMS)
  Brigadier Raynerasked the Financial Secretary to the Treasury what is the total number of forms in use in each Department of State compared with the number in 1938.
  Mr. Glenvil Hall: I regret that this information is not available. To obtain it would involve an excessive expenditure of manpower.

  TRADE AND COMMERCE

    Softwood Quotas
    Brigadier Raynerasked the President of the Board of Trade whether all buyers of softwood were offered and accepted 90 per cent. of their quotas by 15th November as anticipated by the Timber Control of his Department in a
    200
    communication to the trade dated 29th September last; and, if not, for what reasons.
    The Parliamentary Secretary to the Board of Trade (Mr. Belcher): All first hand buyers of imported softwood were offered 90 per cent. of their original quotas, most of them by 15th November, and the others by a day or two later. With two exceptions, all accepted the offer in full. First hand buyers are entitled to replace to an equivalent value their sales to buyers at second hand. Replacements have been offered to all the first hand buyers concerned, and my latest information is that only five have not taken them up fully. It is the practice, however, to allow fifteen days' grace to clean up replacements of sales at the end of the quota period, and it may be that those five firms have by this time taken up their full replacement quantities. I cannot say why the two firms concerned did not take up the full amounts to which they were entitled.

    Herring Drift Nets
    Air-Commodore Harveyasked the President of the Board of Trade if he is aware of the acute shortage of herring fishing nets; and what steps he is taking to improve the position.
    Mr. Belcher: I am aware that supplies of herring drift nets are at times difficult, but I am satisfied that the manufacturers are doing their utmost within the limits imposed on them by shortages of materials and labour.
    Air-Commodore Harvey: Is the hon. Gentleman aware that that is not good enough, that herring nets ordered now will not be delivered until well into 1949, and that the Scottish drifters have had to return from East Anglia because they have not nets? As the British will have to depend for food to a great extent on herrings, will he treat this matter with the utmost urgency?
    Mr. Belcher: The matter is being treated as a most serious one. We are prepared to do all we can to assist manufacturers, but there are difficulties of labour and materials. However, we have had no representations from the industry until today.

    Women's Footwear (Large Sizes)
    Mr. Hollisasked the President of the Board of Trade whether he is aware that in the County of Somerset it is impossible for women, with exceptionally large feet, to get any boots; and what steps he is taking to improve supplies.
    Mr. Belcher: I know that the larger sizes of women's footwear are not easy to get; but I was not aware that the position was particularly difficult in Somerset. If the hon. Member will give further particulars, I will look into the matter.
    Mr. Hollis: Is the hon. Gentleman aware that the position is particularly difficult everywhere, but the particular difficulty in Somerset, if he wishes to know, is that representations have been made by the Women's Institutes in that county? Is it the hon. Gentleman's policy to cut the boots to fit the feet, or to cut the feet to fit the boots?
    Mr. Belcher: I do not do any cutting at all. That is left primarily to the manufacturers of these articles. If there is any difficulty about any particular size and the hon. Gentleman will get in touch with me about it, I shall do what I can.
    Mr. Bartlett: Will the hon. Gentleman bear in mind that there is no such complaint in the Bridgwater Division of Somerset?
    Mr. Belcher: I am glad to hear that feet are smaller in the Bridgwater Division. The point is, however, that manufacturers tend to concentrate on the easily saleable lines, and it is very difficult to persuade manufacturers to make these outsizes.
    Lieut.-Colonel Sir Thomas Moore: The hon. Gentleman is wrong. Is he not aware that, owing to the number of hours spent in queues, large feet are now wide-spread?

    Non-Utility Woollen Cloth
    Mr. Errollasked the President of the Board of Trade why the permitted wholesale profit margin on controlled non-utility woollen cloth is being reduced; and how he intends to ensure that this reduction is passed on to the public and not retained by the tailors.
    Mr. Belcher: My right hon. Friend has not yet come to a decision on this matter.
    202
    The second part of the Question does not, therefore, arise.
    Mr. Erroll: While the hon. Gentleman is making up his mind, will he bear in mind the importance of not merely transferring profit from one section of the community to another?
    Mr. Belcher: Certainly.

    Building Licences, Lancashire
    Mr. John Lewisasked the President of the Board of Trade (1) if he will make a full statement on the conversion of the Embassy Cinema in Deansgate, Bolton, into a distributive store for Messrs. Littlewoods, stating the grounds upon which his Department recommended that the Ministry of Works licence should be granted to Messrs. Littlewoods, and to include particulars of the location of other similar stores in the vicinity;
    (2) if he will reconsider his decision to sponsor the licence granted to Messrs. Littlewoods, of Liverpool, to convert the Embassy Cinema, Deansgate, Bolton, into a distributive store, in view of the fact that the Bolton Corporation have protested against the grant of this licence on the grounds that there is no consumers' need.
    Mr. Belcher: My right hon. Friend wrote to my hon. Friend on 5th November explaining at some length the reasons why the Board of Trade raised no objection to the Ministry of Works issuing a licence to Littlewoods. The Board of Trade have received no representations from the Bolton Corporation. I understand that there are seven department stores in the vicinity.
    Mr. Lewis: Will my hon. Friend state now quite categorically whether or not his Department sponsored the granting of this licence by the Ministry of Works? In view of the statement made by the Chancellor of the Exchequer today, that there has been a very good response to the appeal for the return of labour to the textile industry, does not my hon. Friend think that the efforts now being made to set up a further retail distributive store in Bolton will have the effect of taking women out of the cotton mills and will undermine recruitment by his Department?
    Mr. Belcher: So far as the second part of the supplementary question is con-

    203
    cerned, it is purely hypothetical, and I cannot say what labour would be attracted by this store. As for the first part of the supplementary question, while not sponsoring the application, the Board of Trade did not oppose it.
    Mr. Lewis: Do I understand from my hon. Friend that it is in accordance with the Government's policy that a further retail store should be set up, which would have the effect of taking women away from the mills, when there is a Marks and Spencer's opposite and a Woolworth's next door?
    Mr. Belcher: Quite obviously, it would not be the Government's policy to do that.
    Mr. J. Lewisasked the President of the Board of Trade on how many occasions during the last six months his Department have been requested to recommend to the Ministry of Works that licences be granted to business concerns in Lancashire to enable them to carry out renovations, repairs or reconstruction to their premises, and on how many occasions during this period has his Department refused to give this recommendation.
    Mr. Belcher: I regret that the information for which my hon. Friend asks is not readily available, and I do not consider that the time and manpower required to provide it could justifiably be diverted from more urgent work.
    Mr. Lewis: In view of the fact that many small shopkeepers and other business concerns have been refused these licences to carry out these renovations and repairs, what justification is there for the granting of a licence by the Ministry of Works—perhaps sponsored by my hon. Friend's Department—to set up a further retail distributive store?
    Mr. Belcher: That seems to refer to the previous Question, which has already been answered.

    Chutney (Export Samples)
    Mr. Douglas Marshallasked the President of the Board of Trade why he has refused to grant a licence to export samples of English chutney to Canada.
    Mr. Belcher: No record of any such refusal has been found. If the hon. Member will let me have details of the case
    204
    he has in mind, I will make further inquiries.

    Foreign Import Restrictions
    Mr. Sidney Shephardasked the President of the Board of Trade if he is aware that there is a total prohibition against the importation of British hosiery into many countries; and what action is he taking to enable this trade to achieve its export target for 1948.
    Mr. Belcher: I am aware that restrictions have been imposed by certain countries on the importation of hosiery from the United Kingdom. Negotiations are proceeding with a number of countries to secure a modification of their licensing systems to permit expansion of our exports.
    Mr. Shephard: When shall we know the results of these negotiations that are taking place?
    Mr. Belcher: As soon as it is possible to let the hon. Gentleman know.
    Mr. Shephard: Is the hon. Gentleman aware that there is widespread anxiety not only in this trade but in many other trades, and that producers are most anxious to fulfil their export targets and cannot do so because of these closed markets? That is his responsibility.
    Mr. Belcher: Of course, I am aware of the anxiety, which is not confined to the trades. His Majesty's Government share the anxiety. But this is a matter of bilateral negotiations, and however much we may desire to reach an agreement, it depends on the willingness of the other party to the negotiations as to when agreement will be reached. As soon as agreement is reached, we shall let the House know.
    Mr. S. Shephardasked the President of the Board of Trade which hard currency countries are closed to the importation of British textiles.
    Mr. Belcher: Of the principal countries to whom we are particularly desirous of increasing our exports, only Argentina is operating restrictions which result in almost complete exclusion of British textiles.
    Mr. Shephard: Are there other hard currency countries which have a partial ban on British textiles; and if so, will the hon. Gentleman say which they are?
    Mr. Belcher: I can say that of the so-called hard currency countries—although it is very difficult to define exactly what is a hard currency country—in the United States there are no restrictions; in Canada there is a quota of 400 per cent. of the average imports of the immediate prewar years; we are about to conclude negotiations with Sweden; Argentina I have already announced; and in Switzerland and Portugal there are no restrictions at all.
    Mr. Osborne: Unless these restrictions are taken away, does the Parliamentary Secretary think it is fair to ask the hosiery trade to complete its great export target which his Department set it?
    Mr. Belcher: I think it is fair to ask the hosiery trade to reach its target, and I think it is fair for the hosiery trade to ask His Majesty's Government to do all they can to assist.
    Sir W. Smithers: Is not the Parliamentary Secretary aware that the difficulties referred to in this and the previous Question are due to Government interference, and their not allowing ordinary traders to continue with their own businesses?
    Mr. Speaker: The hon. Member is now making allegation, and not asking a question for information.

    QUESTIONS TO MINISTERS
    Mr. Bossom(by Private Notice) asked the Chancellor of the Exchequer whether he will extend the time for receiving applications for the granting of refunds of the motor car licence tax, for which application should have been dispatched by the last day of November, until the various petroleum controllers have rendered their decision on the granting or otherwise of supplementary petrol?
    Sir S. Cripps: I regret to say that I have had no notice of this Question. It has not reached me.
    Mr. Bossom: I must apologise, Mr. Speaker, if that is the case. This morning I sent the Question to your office, who called up my office and asked if it was all right for the Question to go forward today, and they said, "Yes."
    Mr. Speaker: Surely, the hon. Member has learned by this time that he is responsible for informing the Chancellor of any Question which he proposes to ask. He is also responsible for informing me, which he did, and I assumed that he had informed the Chancellor. It is not my business to go round seeing if hon. Members have done their duty properly. I am sorry, but there it is.
    Mr. Bossom: In the circumstances, I must apologise for accusing you of not having forwarded the Question. Of course, I was responsible.

BUSINESS OF THE HOUSE
Mr. Eden: May I ask the Leader of the House if he has any changes to announce in the Business for tomorrow?
The Lord President of the Council (Mr. Herbert Morrison): Yes, Sir. We hope that it will be possible to conclude the Committee stage of the Finance Bill at an early hour tomorrow, Wednesday. Afterwards, we shall ask the House to take the Second Reading of the Ministers of the Crown (Treasury Secretaries) Bill, and, as a matter of urgency, to take the Committee and remaining stages on the same day. The Bill will require a Money Resolution, and, in order that that may be dealt with at the same time, it will be necessary to move a Special Procedure Motion. There are precedents for this. The Government ask the House to treat the Bill as a matter of urgency in order that another Secretary to the Treasury may be appointed to assist my right hon. and learned Friend the Chancellor of the Exchequer with the economic side of his work. The Bill is being presented today, and copies will be made available in the Vote Office later this afternoon. There are also a number of Electricity and Gas (Special) Orders on the Paper for consideration tomorrow, as well as a Prayer in the name of the right hon. and learned Member for Montgomery (Mr. C. Davies) relating to the Registration for Employment Order.
Mr. Eden: With regard to the Bill to which the right hon. Gentleman has just referred, I realise, of course, the conditions in which the Government ask for this exceptional speed, but I should like to have an assurance from the Govern-

207
ment that we are not to regard this as a precedent, because I think the House generally is always most reluctant to pass all stages of a Measure in one day.
Mr. Morrison: Certainly. I appreciate the reasonable attitude which the right hon. Gentleman has adopted. This is very exceptional, and certainly I would not argue that this should be a precedent. This procedure is to be engaged in only in special circumstances and in exceptional cases.

NEW MEMBERS SWORN
George William Odey, Esquire, C.B.E., for County of York, East Riding (Howdenshire Division).
John Thomas Wheatley, Esquire, for Burgh of Edinburgh (East Division).

BILL PRESENTED
  MINISTERS OF THE CROWN (TREASURY SECRETARIES) BILL
  "to provide for the salary of an Economic Secretary to the Treasury, and to render the holder of that office capable of being elected to, and of sitting and voting in, the House of Commons," presented by the Chancellor of the Exchequer; supported by the Prime Minister and Mr. Herbert Morrison; to be read a Second time Tomorrow, and to be printed. [Bill 21.]
  ORDERS OF THE DAY

    FINANCE BILL
    Considered in Committee.
    [Major MILNER in the Chair]

    FINANCE BILL

      CLAUSE 1.—(Beer.)
      Motion made, and Question proposed, "That the Clause stand part of the Bill."—[Sir S. Cripps.]
      3.40 p.m.
      Captain Crookshank: The enormous increase in the Beer Duty should not be allowed to pass without any reference being made to it at this stage of our deliberations on the Finance Bill. In other times, no doubt, we would have had a great discussion on these Clauses in regard to the relative differences between direct and indirect taxation, but we recognise the position of the Government, and that they are making terrific increases in taxation with a view to closing the inflationary gap, to which so much reference has been made. While we do not propose to delay the Committee on this Clause, or to divide against it, we ought to make it clear that in our view, this increase is only necessary because of the bad financial and economic policy of the Government, and each time anyone drinks a glass of beer at the enhanced price he should be reminded where the responsibility lies for the increased price, always excepting those who are teetotallers who prefer water the price of which has not been increased. [HON. MEMBERS: "It has."] Not by this Budget.
      It is timely to remind the Committee of the enormous contribution which is

      209
      now being made to our finances by this section of the community, generally described nowadays as the "lower income groups," which both they and others recognise better as being the working man whe enjoys a glass of beer. In the Budget, the total taxation on beer is estimated at the colossal sum of £260 million. This Budget increases that amount by £10 million for the rest of the year, making an estimated total of £270 million for this year, and, unless there is to be any change, a total of £295 million for next year.
      This is a tremendous sum to exact from those who find some solace in an occasional half pint of beer in "the local." The Chancellor of the Exchequer ought to be able to give an assurance on behalf of the Government that there will be the beer to drink, if there is to be this increased price, because, in spite of the high taxation last year, beer was apt to run out during the summer harvest and most of the festive seasons. On many occasions there have been real shortages in different parts of the country, particularly at harvest time, which is a matter of some consequence in the countryside.
      The Chancellor of the Exchequer (Sir Stafford Cripps): It ought to run out.
      3.45 p.m.
      Captain Crookshank: The right hon. and learned Gentleman should be the last person to say that, because he is looking for revenue, and if the beer runs out, his revenue drops, unless there are more barrels to be opened. In spite of the levity, which I can appreciate, it is stating the obvious to point out that the amount of taxation to be raised depends upon how much beer is available, and that depends on how much raw materials, apart from water, the Ministry of Food are prepared to make available. I hope that the right hon. and learned Gentleman will give us an assurance that beer will be available, even at these high prices, for those who wish to pay this contribution to our national difficulties.
      The Chancellor of the Exchequer, in reply to a Question on 19th November, said that for a pint of beer at the present reduced average strength of beer, the duty amounted to 8d., and the cost of the raw materials and all the rest of it was covered by the small difference between 8d. and whatever might be the total
      210
      charge, according to the quality of the beer. As far as I can see, the Clause and the Schedule are in the common form when there is to be an increase in this type of taxation. If there is any change, I am sure that the Financial Secretary will tell us about it.
      This is a tremendous imposition upon the working people to whom beer is a solace, encouragement in their labours, or provides a pleasurable means of meeting their friends, quite apart from the drink aspect, because in these days the beer is very weak, and therefore it hardly comes into the picture. This is an enormous sum to raise from this section of the community, but, from the point of view of checking inflation the right hon. and learned Gentleman is probably right in his contention that there is some purchasing power which can be mopped up without necessarily creating very great hardship, because, like all these indirect taxes, it is left to the option of the individual whether or not he pays the tax. It should be noted that, in this year of grace, no less than £270 million is to be raised from our fellow countrymen who choose to drink beer.
      All I ask is that the right hon. and learned Gentleman and the Government will do their part, and if they want to get this revenue, they will see that the beer is available. There should not be these shortages, not only because of the inconvenience caused to potential customers, but because of the hardship caused to publicans who frequently by law have to keep their establishments open in spite of the fact that they have nothing to sell. We shall let this Clause go through because we consider this is one of the important aspects of the economic problem the Government have put before the Committee, but we must again remind everyone concerned that if it had not been for the folly of the Government and the incompetent handling of our finances by the right hon. and learned Gentleman's predecessor, none of these things would have been necessary. It is due entirely to the Government that it has been found necessary to do this at all, and I hope that everyone will always remember that.
      Mr. Charles Williams: I wish to declare to the Committee that I have no direct interest in this matter, because I do not happen to be a consumer of this

      211
      commodity. Perhaps I may gain some small credit for that with the hon. Member opposite who may follow me. I am not asking the Treasury to look at this matter solely from the agricultural point of view, which has already been referred to by my right hon. and gallant Friend the Member for Gainsborough (Captain Crookshank). This increase is a very heavy burden on certain sections of the community, and it can have a very bad effect on production in the case of the heavy industries, such as steel, shipping, mining and particularly quarrying in my particular area. These workers, with few exceptions, look forward to having their beer fairly regularly.
      As we are accepting this tax unwillingly, knowing that we cannot get out of it, I would ask the Government to see that in future there is a reasonably plentiful supply of beer for those engaged in heavy industries as well as agriculture. I would like to make a special appeal to the Government to see that more beer is available in our seaports, not only at great ports like Liverpool, but the smaller ones, particularly the naval ports. Often sailors come back to shore after a very long time at sea, during which they have not had any beer in England. [An HON. MEMBER: "What about the beer on board?"] They do not get so much there as they ought to be allowed, and, in any case, no sailor would ever want to take an unfair share of beer. As we are being asked to pay a very much heavier tax, and as the Government are doing so well out of the beer drinker, I am asking that there should be adequate supplies of beer.
      I would like to put this point of view from another angle. We are being told by the Government to encourage visitors from abroad. Besides such small resorts as Brighton and places in Scotland, there are the leading health resorts, such as Torquay and Paignton, to which Members opposite go and afterwards say that they have never had a better time in their lives. I am asking that during the summer season especially, when these places have so many visitors, there should be an adequate supply of beer. It is not a good thing to be short of beer when there are visitors from abroad. It is not a good thing, if there is an American ship lying off Torbay, and their sailors come ashore, to be told that all the beer has been sold. Further, an adequate supply of beer at
      212
      these resorts enables our own people to build up their strength while on holiday, and go back to work rejuvenated. That is the main object of holidays with pay. Those who drink beer—and, as I have said, I am not among them; I am putting a completely disinterested point of view—ought to be able to have a sufficient supply of beer.
      I do not wish to take up a lot of time on this matter, because I realise I have not the sympathy of the plutocrats sitting opposite. I am appealing as a representative of ordinary people, working men and women, that they should be allowed to enjoy one of the luxuries of life. The Treasury are making people pay through the nose for this luxury—though it is not a luxury to many, but a necessity. It is one of the few things which people have left to them today at a time when the country is suffering severely from the actions of this Government. I believe that I am about to be supported by one of the strongest supporters of the Government, the hon. Member for West Ealing (Mr. J. Hudson). I am sure he will join with me in urging that beer, which cannot be called anything but a teetotal drink nowadays, should be supplied to the people of this country in adequate quantities. I hope that the Treasury representative will say, in reply, that he will put pressure on to his partners in the Government to see that adequate supplies of beer are provided, especially for the West Country.
      Mr. James Hudson: I am very glad to support the Government and their proposals in this Clause. I gather, from what the right hon. and gallant Member for Gainsborough (Capt. Crookshank) said, that the Opposition will support the Government as well; at any rate, by their acquiescence if there is no Division. The Opposition have managed to find an opportunity to put forward a good many inconsequential statements about this increased beer tax. It was suggested that there would be a heavy burden on the working classes as the result of this increase and, at the same time, that there should be a plentiful supply of beer. I support the Government because their aim is to attempt, by a process of taxation, to limit what we cannot afford to have today. They are doing with beer what they have attempted to do with tobacco. I must point out, however, that if taxation is the only thing

      213
      which the Government can rely on they are not likely to secure the aim they have in view.
      In the last few years, while taxation on beer has been heavy, supplies have become more and more plentiful with every increase in that taxation——
      Mr. Scollan: How does my hon. Friend know?
      Mr. Hudson: I can tell from the published figures. I do not drink beer myself, but there are means of finding out how much other people drink. In 1938, the total consumption of beer was 24 million barrels. Consumption advanced steadily, and in the following year the total was 25 million barrels. By the middle of the war the figure was 29 million, at the end of the war 31 million, and it is now practically 32 million. I know that someone will say that the water put into it has added to the barrel-age, but that cannot be substantiated.
      4.0 p.m.
      There has been, in addition to the inclusion of water, a considerable increase in the commodities for the making of beer, which this country badly needs in other directions. This is particularly so with regard to sugar. Up to recently, when the Government made their decision about the reduction of sugar, the amount which the brewers were using was nearly the same as at the beginning of the war. I suggest to the Government that if their intention with regard to beer is the same as it was stated to be with regard to tobacco, to reduce the amount at the time of the present crisis, so that there shall not be wasted in the manufacture of beer what is badly needed in food and by way of provender for cattle, they will not be able to rely on the process of taxation alone. I agree that they must use the tax instrument to whatever extent is possible, but there still remains this dreadful question of wastage of absolute necessities as a result of continuing to brew beer to the present extent.
      On behalf of the sailors, who, according to the hon. Member for Torquay (Mr. C. Williams), must have plentiful supplies of beer, and on behalf of the steel smelters, I would remind the hon. Gentleman that there are many steel smelters today who have discovered, what the miners discovered earlier, that it is better from the point of view of their own safety—whatever it may be with regard to
      214
      efficiency—to keep work in the coalmines and the supply of beer entirely separate. It is a law today that liquor, like matches, may not be taken into a coalmine. For people engaged on steel smelting, I admit that the temptation must be very great, on account of the onerous nature of the jobs which they have to do, to turn to anything in the drink form which will help them to face up to their work; but beer is not really an aid to their work. Indeed, the Royal Commission dealing with this question of beer, in its report in 1929, explicitly stated that, whatever other merits it may have, it should not be regarded in that light.
      I suggest to hon. Members opposite, and, perhaps, to some of my hon. Friends on this side of the House who are unduly impressed by the experiences of the last war, when in a number of towns there was an agitation because beer supplies became short, that we are not in that position today. In 1917 and 1918, during the first European war, resentment was expressed that the supplies of beer under the operation of the Liquor Control Board in the time of Mr. Lloyd George's Government were intended to fall to 10 million barrels in the year. It never, however, reached that figure. It actually reached between 15 million and 16 million barrels, and it was at that time of shortage in supply that public agitation took place, which is so much in the memories of people today who protest about the nature of the supply of beer. We are not in that position at all.
      I beg of the Government to proceed with this tax and any other measures which they may consider necessary to do the job which they have set out to do. I hope that the right hon. and gallant Gentleman opposite, when he talks about the economic problem, will support the Government in continuing their work along these lines. I am very glad to be able to support the Government in the proposal which they make.
      Mr. Piratin: The Committee has listened with interest to the speech of the hon. Member for West Ealing (Mr. J. Hudson). I am sure that, whatever our attitude towards drinking beer, we all have a deep sympathy for his sincerity, and for that of all other hon. Members who have addressed the Committee in similar terms. I do not, however, think that now is the opportunity

      215
      to discuss the merits or demerits of abstention. The question before the Committee is the merits of the Clause. I think that the hon. Member for West Ealing drew a red herring across the purpose of this Clause. It is to raise £35 million in a full year from beer drinkers who, in the main, are working people. On average, this works out, in my calculation, at about 1s. per week per beer drinker. Some people may say that that is not much, but for the working man today, who cannot find it possible to make ends meet, it is a lot.
      No matter what we think on this side about the sincerity of the views held by hon. Members on the other side, the fact is that this is a burden on the working people. That much has to be acknowledged. I regret that the Government have brought in this Clause in their Supplementary Budget, because it is a burden on the workers and, at the same time, as pointed out from all sources and in papers representing all parties, the supplementary Budget as a whole has not really made any large contribution to closing the inflationary gap. Therefore, although I do not expect the Government to withdraw this Clause because the feeling of the House is in support of it, I personally regret that it has been introduced.
      Mr. Oliver Stanley: I intervene now because I am anxious that the Financial Secretary should reply to one aspect of the Debate. I was extremely interested in the short speech of the hon. Member for Mile End (Mr. Piratin) and his very decided view that this tax constitutes a burden on the working-class. I ventured to suggest that in my speech on the Budget Resolution, and I was immediately contradicted by the hon. Member for North Portsmouth (Major Bruce), who speaks on all these matters with such authority—an authority added to by the position which he occupies in the House on the bench opposite at the head of the queue. Incidentally, I congratulate the hon. Member for Chesterfield (Mr. Benson) on making an unexpected appearance in that position. I only hope that it is significant. The hon. Member for North Portsmouth denied my suggestion at once, and said that it constituted no burden at all. I will leave it to the two hon. Members to fight it out between themselves.
      216
      The hon. Member for West Ealing approached this matter largely from the moral aspect which is a different angle from the one which I wish to pursue, but he posed the question whether this extra taxation was intended to reduce the consumption of beer.. That is a question to which the right hon. Gentleman ought to reply. We support this new taxation, burdensome though we think it is, because we believe it to be one of the ways of combating inflation, but a tax of this kind is only operative in mopping up purchasing power and combating the vast amount of money in circulation if the supplies upon which it is imposed are available. It obviously has no effect whatsoever in reducing the amount of money available if, pro tanto, the amount of beer is reduced, and, therefore, the total expenditure on beer, including the new tax, is the same as it was before. There is a great fallacy in the hon. Member for West Ealing comparing this with the Tobacco Duty, which is set on an entirely different footing. There the idea was not to combat inflation, but to reduce the amount of tobacco imported from abroad, so that it was a tax introduced for a wholly different purpose.
      It has become of great importance that the right hon. Gentleman should tell us what is in the Government's mind as to the operation of this tax. Is it their view that it is intended to reduce the consumption of beer which possibly would result in a trivial reduction in the materials which are used, or is it their intention to use sales of beer as a means of mopping up purchasing power which otherwise would be diverted into other channels? That really is fundamental to the whole of the economic conception lying behind the new tax proposed in this Bill. I look forward to the answer of the right hon. Gentleman, because I think this afternoon he will be in particularly good form. After all, only a short time ago he listened to the pleasant announcement that tomorrow he will have a little baby brother or possibly a little baby sister. I can only assure him that this Benjamin will not in any way supplant the right hon. Gentleman in the affection which the House has towards him.
      Lieut.-Colonel Sir Thomas Moore: I should like to say one word with regard to the speech of the hon. Member for Mile End (Mr. Piratin). I do

      217
      not know whether my arithmetic is wrong or whether his is wrong, but he said that a penny on a pint of beer was going to mean a shilling on a working class home each week.
      Mr. Piratin: What I said was that in my calculation the increased taxation amounting to £35 million would be roughly equivalent to one shilling per beer drinker per week—not per home but per drinker. I am sure that in the home of the hon. Member for West Ealing (Mr. J. Hudson) there is no beer drinker.
      Sir T. Moore: I thought the hon. Gentleman was endeavouring to protect the beer drinkers, who, as he said, are the working class of this country. The other day those of us who thought that the food subsidies might be looked at again were accused of making an attack on the working classes, because they represent 125. 6d. a week in a four-member family, but here this additional tax, according to the hon. Member for Mile End, will mean a cost to the working people per drinker of about 12s. to 14s. a week. [HON. MEMBERS: "No."] Then I can only assume that my arithmetic has been wrong, and so I will resume my seat.
      4.15 p.m.
      The Financial Secretary to the Treasury (Mr. Glenvil Hall): First may I say in reply to the hon. and gallant Member for Gainsborough (Captain Crookshank) that this Clause is in common form, and there is nothing in it which is not plain to previous and distinguished holders of the office which I have the honour to occupy. I agree that this is a very heavy tax, and, taken with the impositions which have been placed on beer before, the amount now to be taken out of the pockets of those who drink beer is very considerable. As I sat listening to the Debate I went back over the figures for previous years, and the Committee might like to be reminded that in August, 1914, the duty on beer was no more than 7s. 9d. a standard barrel. It is today 159s. 9d. a bulk barrel, apart from the surtax that can be levied for higher strengths. That is an enormous increase and it is true we have in this Budget put an additional duty of 19s. 1½d. on the bulk barrel of 36 gallons.
      This is by no means the highest single increase that has been placed on beer. In September, 1939, the duty was doubled from 24s. to 48s. and the next April it
      218
      was increased again to 65s., a rise of no less than £2 1s. in about six months. It is true that that occurred during the war, and further increases were made as the war proceeded, but I would remind the Committee that no increase in the duty on beer has been proposed by any Chancellor of the Exchequer since April, 1944. As other things have gone up and as Purchase Tax has been very steeply increased on so many articles of consumption, it is not unreasonable that something should be done about beer in our present general mopping up process. On the ordinary pint of beer of average strength, the increase works out at something just under 1d. per pint. It has been agreed by the Brewers' Society that the difference between one penny and the actual amount of the new increase will go to the publican, who it is realised, has considerable overheads and has, in the past at any rate, been short of supplies. Therefore, what is called a turn of 1s. 4d. on the barrel will be passed on to the retailer, with the agreement of the brewers.
      As to whether supplies can be kept going it is not for me to say. As the right hon. and gallant Member for Gains-borough very properly said, that is more a matter for the Minister of Food than the Chancellor of the Exchequer. All I can say is that the expected yield during this year is practically the same as this tax yielded during the last financial year. The assumption from this is that it is expected that supplies will be running more or less as they ran last year, that is at the rate of about 30 million bulk barrels a year. I should add that it is quite impossible in my capacity either to prophesy or to give an assurance. It is only the Minister of Food who can speak in regard to the materials for the making of beer during the coming months, but it is possible that even he may not know at this juncture. None of us can see what changed circumstances there may be. So far as we know and so far as the Ministry can be any judge, it looks as though the amount that will be manufactured will be about as much as was manufactured during the previous year. As I say, I can give no assurance on that point, and what I am now saying may turn out to be wrong.
      I was asked by the right hon. Member for West Bristol (Mr. Stanley) to reply to the observations of my hon. Friend

      219
      the Member for West Ealing (Mr. J. Hudson) and to give some indication of whether the tax increase was intended to lower the consumption of this beverage or to mop up excess purchasing power and prevent an increased risk of inflation. The short answer is that this is one of the ways devised by the ex-Chancellor of the Exchequer for preventing the inflationary pressure becoming too great. The increased duty is not intended in itself to reduce the consumption of beer. If it were, the increase would have had to be a great deal bigger. So far as I know, those who like beer are hardly likely to be deterred by an increase of a penny on the pint on average strength beer. The Tobacco Duty was, of course, increased to a considerable degree for the purpose of reducing consumption. Although it is obviously desirable that people should not drink too much beer and that they should keep their appetite within bounds, nevertheless, we are not here legislating for that sort of thing.
      This is one way of mopping up the present excess of purchasing power and we feel that we are levying a not unreasonable increased duty on those who drink beer in order to tax them just as we tax those who buy other consumable goods and spend their money in other ways. We are grateful to the Committee for realising that this clause is necessary and to the Opposition for not taking it to a Division.
      Mr. C. Williams: The Committee as a whole have accepted this proposal to raise a vast sum of money, and the only request that has been made is that the supply should be adequate. Whether that is possible or not I do not know, but that is the Committee's request. The Financial Secretary to the Treasury said that he could not guarantee that but that it was a matter for the Ministry of Food. I shall not go into this in detail, because many of us realise the difficulty of his position, but when the Committee on a Clause such as this, which places a vast burden on the community, asks for a guarantee before money is voted, it is a very bad precedent if we are given absolutely no assurance that the matter will be looked into by the appropriate Minister. If we are to have any power whatever over finance, it is no good making our complaint and then whatever happens voting
      220
      for the proposals and not protesting very strongly when the Government show absolutely no inclination to meet the difficulties of the ordinary taxpayers.
      Question put, and agreed to.
      Clause ordered to stand part of the Bill.

      CLAUSE 2.—(Spirits.)
      Motion made, and Question proposed, "That the Clause stand part of the Bill."
      Mr. Godfrey Nicholson: I do not want to repeat the Debate which has just taken place, nor to go into the actual merits of this case. I am a distiller myself and I do not wish to raise my own personal interests in the Committee. As a consumer of spirits I shall accept this increase in price, always bearing in mind that the Chancellor of the Exchequer the other day said that the purpose of the Budget was,
      "… to reduce the inflationary pressure consequent upon the economic action which is being taken by the Government."—[OFFICIAL REPORT, 25th November, 1947; Vol. 444, c. 1917.]
      That seems to put it quite bluntly that they have got us into a mess and this is how they are trying to get out of it. I now have a technical question which may be of general interest. What considerations governed the exact sums by which the Spirit Duty has been raised?
      I have tried to find some parallel between the figures in this Budget and the amounts by which the duty has been raised on previous occasions, but I cannot find any relationship between them. No relationship may be intended, but as a matter of interest, I would like to know upon what calculations and considerations these figures were based.
      Captain Crookshank: Apart from that, which I hope the right hon. Gentleman will be able to tell my hon. Friend, it must here again be noted how great a contribution is being made by this sector of the community, which is not exactly the same as the last. The price of spirits is so high that I do not think that very many of the lower income tax groups, alias the working class people, can use them, but, of course, it is true that the higher the duty on spirits becomes, the greater the hardship on certain people who have to have spirits for reasons of health. That applies in all sections of the community. There are many doctors

      221
      who prescribe—rightly or wrongly, I do not know, because I am not a doctor—that in certain cases small quantities of spirits should be available. It is very hard upon those people that what is prescribed to them for health reasons is so very expensive.
      Here again, the figures are very large. In the original Budget £70 million were to be raised from these duties. The emergency Budget now brings that figure up to £75,500,000 this year and £84,500,000 next year, a very large sum, particularly when one bears in mind the information which the Chancellor of the Exchequer gave on 19th November that, taking the price of a bottle of whisky at 30s., no less than 22s. 3d. of that was duty. That is an enormous impost. We are driven to accept this as one of what the right hon Gentleman the other day called the sandbags against the inflationary pressure and as being, in the considered view of the Government, one of the things which ought to be done, but we cannot help once again pointing out that none of this would have been necessary had there been a better and wiser financial and economic policy on the part of the Government.
      Mr. Glenvil Hall: The only question that needs an answer is that put by the hon. Member for Farnham (Mr. Nicholson). He asked how the amount of 33s. 4d. a proof gallon by which this tax has been increased this time had been arrived at. It was thought that this was a reasonable figure in itself, and that it would make the price of a bottle of whisky something like 30s. As those who have followed these matters will have noticed, up to now the duty has broken itself up to odd halfpennies. In the figure now given we have got away from that. Taking, as we always do, the basis that the duty should relate to the circumstances of the time, we thought that reasonable, and it made the amount a round figure. As the Committee know, the distillers have not made the price of a bottle of whisky 30s., but have increased it to 31s. That is for reasons of their own and is not because of the extra duty.
      Mr. Keeling: Would the right hon. Gentleman be a little more specific and say whether this increased
      222
      duty and the proposed price for a bottle of spirits will mean that (a) the distiller and (b) the retailer will get more than at present?
      Mr. Glenvil Hall: That is not for us to decide. The price of a bottle of whisky is not fixed by the Treasury, but by the distillers. They decide what the consumer will pay and make their price accordingly. Therefore, in that sense we do not come into it. We come into it only in so far as we levy a duty on spirits.
      Mr. Keeling: I referred to the proposed price of 31s. On that basis, what is the answer to my question?
      Mr. Glenvil Hall: If I understand the hon. Gentleman aright, he wants to know why 31s. was fixed—
      Mr. Keeling: No. What I asked was whether the proposed retail price of 31s. would give a larger return (a) to the distiller and (b) to the retailer.
      4.30 p.m.
      Mr. Glenvil Hall: I understand that the answer is "Yes" and that that is why the amount has been increased. It has gone up by more than the immediate increase in the duty, because distillers feel that prices are rising, that their costs are greater and that they must, in fairness to the retailers with whom they do business, make this extra charge. I am sorry that did not quite follow what the hon. Gentleman said earlier.
      Mr. Nicholson: I am not a whisky distiller so I cannot speak from first-hand knowledge in that respect, but the Committee must be aware that there is a terrible temptation to any producer of whisky to sell it in the black market and that the whisky distillers of this country have resisted that temptation.
      Mr. Glenvil Hall indicated assent.
      Mr. Nicholson: They have not profiteered. So far as the gin distillers are concerned, the wholesale price of gin has gone up 1s. 4d. per dozen bottles, over and above this increase in the duty, that is, under 1½d., actually 1⅔ of a penny per bottle. That increase is more than accounted for by the extra cost of bottling materials since the duty was last raised in 1943. The industry can be completely acquitted of any attempt to profiteer. In fact, I think they are one of

      223
      the most admirable sections of the community. If there is any discrepancy it is in the course of distribution, by retailers and people like that, whose overheads have gone up out of proportion to the quantity of the goods they sell, and because of the great restriction of the goods.
      Lieut.-Commander Gurney Braithwaite: I was rather disappointed to hear the Financial Secretary say that the only point to which he had to reply was one made by my hon. Friend the Member for Farnham (Mr. Nicholson). I was hoping we would hear something in reply to the speech made by my right hon. and gallant Friend the Member for Gainsborough (Captain Crookshank) who produced arguments of very great importance about the effect of the increased duty upon people who take spirits on medical grounds. I understood the Financial Secretary to say that the figure of the new duty had been fixed largely with the desire to get rid of the ha'pence and to keep to nice round figures, by taking the duty up 6d. or 1s. at a time. That may be more convenient, but it is a very unsound theory to come from the Treasury. The steep steps which we are now experiencing in these duties mean that spirits such as whisky and brandy have been placed out of the reach altogether of what we call the lower income groups, despite the fact that many people in those groups may be prescribed whisky or brandy by their doctors as a stimulant in illness.
      I wonder what has become of the Government's slogan of fair shares for all. Here are these spirits placed entirely out of the reach of very large sections of the community. The experts of the right hon. and learned Gentleman might go into this matter again with very much the same motive as in the case of the increased Tobacco Duty last April. Here is a problem for the acute brains of the Treasury, and I am certain they can solve it. If they cannot, then the new Chancellor of the Exchequer can, because he is very competent at statistics.
      Why could not old age pensioners and sick people, upon production of a proper medical certificate, have a supply of spirits at the pre-Budget level, or even below it? Even the late Chancellor of the Exchequer, before he left us in a cloud of smoke, succeeded in settling a problem
      224
      for old age pensioners in a similar case. I ask the Government to look at the matter again. There is plenty of time. There will be the Report stage and the Third Reading of the Bill, and then another place. There will be plenty of opportunity. I make this suggestion not in order to embarrass the right hon. and learned Gentleman but as a serious point. Where a medical certificate can be produced on behalf of an old age pensioner or a person similarly circumstanced, a concession might be made by which they would not be called upon to pay the extra duty.
      Sir S. Cripps: The hon. and gallant Member may remember a lot of difficulty which arose in regard to prescriptions in the United States of America, when there were certain prohibitions, and the legislation which ensued upon it. I do not think it would be wise for us to embark upon it in this country.
      Lieut.-Commander Braithwaite: That is a most alarming intervention by the Chancellor of the Exchequer. Are we now peeping into the future? Are we to find ourselves saddled with prohibition or something like that? [HON. MEMBERS: "Oh."] Oh, yes. It is no use the right hon. and learned Gentleman citing to us what happened under prohibition when we live in a country where prohibition does not exist. I know there are difficulties in the matter, and that they can be accentuated where there is complete prohibition because of the most ingenious methods which have been devised, but there is no prohibition in this country. We are still permitted to drink, if we can afford to do so. All we ask is that certain sections of the community should be enabled to obtain those spirits at a lower figure. I am sure that the right hon. and learned Gentleman is as capable as was his predecessor of getting round the difficulties and of allowing the old people to have their liquor at a more reasonable price. Prohibition does not enter into it, unless we are getting a peep into the future.
      Question put, and agreed to.
      Clause ordered to stand part of the Bill.
      Clause 3 ordered to stand part of the Bill.

      CLAUSE 4.—(Sweets.)
      Motion made, and Question proposed, "That the Clause stand part of the Bill."
      Mr. Boyd-Carpenter: The Clause introduces a substantial change into once branch of excise practice. The Financial Secretary will no doubt recollect that when he spoke on the Second Reading of the Bill he said:
      "For the first time in history, British wines are to be divided into two groups, light and heavy. No doubt there will be a discussion of this arrangement when we reach the Committee stage, and that criticism will be levelled at the fact that this has been done for the first time."—[OFFICIAL REPORT, 25th November, 1947; Vol. 444, c. 1816.]
      The right hon. Gentleman was wholly right when he invited attention to the fact that the Clause introduces a change into the system of levying Excise Duty upon British manufactured wines. The change is that in future British wines shall, for excise purposes, be divided into two categories and that the dividing line shall be the strength 27 degrees. The difficulty arising from the change is the matter to which I wish to draw the attention of the Chancellor of the Exchequer.
      I am advised that the great bulk of British wines is in the category from 27 to 29 degrees of strength. That is to say, they are just over the border into the heavier category. The greater part of the output of British wines, therefore, suffers the increased Excise Duty without going very far into the heavier category. I believe that the change and the selection of the figure 27 for the line of demarcation was intended to bring the position in respect of British wines into a position parallel to that of Empire wines. In the case of Empire wines there are already two categories, and have been for a good many years, with the line of demarcation at 27.
      That is, on the face of it, a not unreasonable change, but there is a factor which makes it rather less reasonable than it would first appear. It is that over a number of years, under an excise regulation whose number I cannot recollect, Empire wines imported under this scheme, with a demarcation line of 27, have had the valuable privilege of permission to fortify—that is, raise the strength—in bond by the addition of duty free spirit which has been, and is, very valuable to them. British wines have not that privilege, and therefore it seems unfair that
      226
      if, on the one hand, British wines are to be placed in the same position as Empire wines, they should not at the same time be given the privilege of fortification in bond. At the moment they are getting the worst of both worlds—they are losing the advantage they had previously, without being given any compensation such as, for example, a share in the privilege of fortification in bond.
      In those circumstances it seems a curious moment to handicap a home product, which involves much less strain on the resources of foreign currency than any imported products can do, and I wonder if this aspect of the matter was overlooked when this change was made. I would be grateful if the right hon. and learned Gentleman would consider in a dispassionate and reasonable frame of mind the point I have put, that is, that British wines have been put in the same position as Empire wines, while being denied the valuable privilege which Empire wines are enjoying.
      Mr. Glenvil Hall: I think I can give this assurance, on behalf of my right hon. and learned Friend, that he will look at this matter between now and next April and consider what should be done, if anything, to alter these proposals which may possibly become law in a week or two. It is true that this is the first time that this differentiation between light and heavy has been applied to British wines, though it has been applied to Empire wines for some time. Empire wines have been allowed, in addition, to fortify the spirit while only paying the same duty as on wine. That will not apply to British wines, and the British wine industry is afraid that it may affect their industry in the coming months. We recognise all that, and I have the authority of my right hon. and learned Friend to say that in the intervening months between now and the next Budget he will watch this and, if it is essential to do something in order to be just to the British wine industry, he will certainly take whatever course is desirable.
      Mr. Assheton: Though, of course, we are most grateful to the right hon. Gentleman for telling us that the Chancellor of the Exchequer will look at this matter, it seems rather hard that we should have to wait until next April for the result of this examination because, as I understand this, it is to

      227
      come into effect forthwith. I should have thought we would not be going too far in asking the Chancellor of the Exchequer to look at it before the Report stage of this Bill. After all, the Report stage is next week, and it would not be a big matter for the Board of Customs to have some discussions on this matter. It would be more satisfactory if the right hon. and learned Gentleman could assure us that the matter will be dealt with now, and not next April.
      Mr. Keeling: I ask the right hon. and learned Gentleman to agree to that course. I cannot think there is any precedent on the Committee stage of a Finance Bill, when a prima facie case for an Amendment has been made out, for the Government to say that they will wait three or four months before considering it. Why not look into this before the Report stage next week? The wine manufacturers concerned are being subjected to treatment which they think is unfair and shows bias against them, and it will be serious if they have to suffer this unfair burden for another four or five months. I cannot help thinking that the Financial Secretary meant to say "before the Report stage," and I hope he will now undertake so to consider it.
      4.45 P.m.
      Mr. Joynson-Hicks: The right hon. Gentleman has told the Committee that he is aware that the industry in question is disturbed about this. What is the point of introducing this new system with the knowledge that it may only be operative for a maximum of five months? If in April, when the next Budget comes along, the right hon. and learned Gentleman has thought again and, after consultation with the industry, has come to the conclusion that something on the lines of this Amendment should be accepted, surely the comparatively trivial amount of money which the Treasury will receive as a result of not accepting this Amendment now is not worth while?
      The Chairman: May I draw the hon. Member's attention to the fact that there is no Amendment before the Committee? I have not selected the Amendment. The Question is, "That the Clause stand part of the Bill."
      Mr. Joynson-Hicks: I am sorry, Major Milner, I had overlooked that minor
      228
      point. The argument upon the Clause standing part has largely been directed towards the point of an Amendment which has not been called. I would urge the right hon. and learned Gentleman to consider what would be the financial advantages to the Treasury in putting into operation the Clause as it now stands for a period of four or five months, if he were to decide at the end of that time to introduce into the next Budget an Amendment which would meet the point raised by my hon. Friend.
      Mr. Glenvil Hall: May I make quite clear what is in the mind of my right hon. and learned Friend? If, by my phrasing, I gave the Committee to understand that I was, on his behalf, practically undertaking that he would do something to bring the British wine industry into line with the wine industries of other countries, particularly those of the Empire, I am sorry, for I did not intend anything of the kind. All I intended to say, and all that I will say, is that this division between light and heavy is something new so far as the British industry is concerned. It is therefore, a step in the dark. As has been said, the British industry is perturbed about it, and we must see whether the fears they have expressed eventuate. We do not know that they will. We think that six months is not a long time, but it is certainly long enough to give my right hon. and learned Friend a chance to see whether there is something in the fears expressed to us at the Treasury, and by certain hon. Members opposite. It is a reasonable attitude to take in the circumstances.
      I would add that about 80 per cent. of the product of the British wine industry is composed of port and sherry types, which are heavy wines. If we take into account that the duty is the same as on Empire wines—10d. and 1s. 8d. respectively—it is not a great increase and we think they will not be ruined. In fact, it may well he that, between now and April, they will find a good deal to be said for this change. I have not gone into this for obvious reasons. However, there is a case to be made for it.
      Mr. Vernon Bartlett: May I urge my right hon. and learned Friend not to take this too seriously, but to bear in mind the respective influence on the palate of the consumer of an Empire or foreign wine made from fresh grapes on

      229
      the spot, and of a wine which is certainly not made from fresh grapes in this country?
      Mr. Stanley: I hope we shall not allow the intervention of the hon. Member for Bridgwater (Mr. Bartlett) to deflect us into the pleasant paths of wine connoisseurship from what we are discussing, namely, the effect of this duty on a not unimportant section of British industry. I was rather disconcerted by the second reply of the Financial Secretary to the Treasury. He told us that there was a case for the duty, but, because by next April his right hon. and learned Friend may or may not have looked at the matter again, he did not think it worth while at this moment to tell us what the case is. I do not think the Committee can be satisfied with that. I do not pretend to understand the technicalities of the case, but we are informed that the British wine industry is seriously perturbed about the repercussions on that industry, and we are entitled to a definite statement by the Government of the reasons for the tax, and why they think this new step in the dark, as the Financial Secretary called it, is not likely to be injurious to the trade. It had not been our original intention to divide against this small measure, but, unless we can be given
      some more adequate explanation than we have had already, it will be our duty to take the matter into the Division Lobbies.
      Mr. Boyd-Carpenter: I was a little disquieted by the second intervention of the Financial Secretary. He gave me the impression that he did not really understand the problem. I think he said that the bulk of British wines—he used the expression 80 per cent.—were heavy stuff, but I am advised that that is quite wrong, and that the greater part of the production is in the 27–29 group. That is just inside the heavy category, and is the category most hit by this duty. The right hon. Gentleman did not touch on the second argument, that if this 27 line of demarcation is to be introduced, the alternative possibility of giving to the-home product the privilege of duty free fortification in bond already enjoyed by Empire wines should be considered. He did not address his mind to that. All he said was that there was an argument for the change, an argument of which he was aware, but which, for some reason or other, he was not prepared to give to the Committee.
      Question put, "That the Clause stand part of the Bill."
      The Committee divided: Ayes, 265; Noes, 135.

      Division No. 35.]

      AYES.

      [4.53 p.m.

      Allen, A. C. (Bosworth)

      Chetwynd, G R.

      Evans, E. (Lowestoft)

      Allen, Scholefield (Crewe)

      Cluse, W. S.

      Evans, John (Ogmore)

      Anderson, A. (Motherwell)

      Cocks, F. S.

      Evans, S. N. (Wednesbury)

      Attewell, H. C.

      Coldrick, W.

      Ewart, R.

      Austin, H. Lewis

      Collick, P

      Farthing, W. J

      Awbery, S. S.

      Collindridge, F.

      Foot, M. M.

      Ayles, W H.

      Colman, Miss G. M

      Forman, J. C.

      Ayrton Gould, Mrs. B.

      Comyns, Dr. L.

      Fraser, T. (Hamilton)

      Bacon, Miss A.

      Cook, T. F.

      Gaitskell, Rt. Hon. H. T. N.

      Balfour, A.

      Corlett, Dr. J.

      Ganley, Mrs. C. S.

      Barstow, P. G.

      Corvedale, Viscount

      George, Lady M. Lloyd (Anglesey)

      Bartlett, V.

      Cove, W. G.

      Gibbins, J.

      Barton, C.

      Crawley, A.

      Gilzean, A.

      Battley, J. R.

      Cripps, Rt. Hon. Sir S

      Glanville, J. E. (Consett)

      Bechervaise, A. E

      Daggar, G

      Gordon-Walker, P. C.

      Benson, G.

      Daines, P.

      Greenwood, Rt. Hon. A. (Wakefield)

      Beswick, F.

      Davies, Clement (Montgomery)

      Greenwood, A. W. J. (Heywood)

      Bing, G. H. C.

      Davies, Edward (Burslem)

      Grenfell, D. R

      Binns, J.

      Davies, Harold (Leek)

      Grey, C. F.

      Blackburn, A. R.

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

      Grierson, E.

      Blyton, W. R.

      Davies, R. J. (Westhoughton)

      Griffiths, D. (Rother Valley)

      Bowden, Flg.-Offr. H. W.

      Davies, S. O. (Merthyr)

      Griffiths, W. D. (Moss Side)

      Bowen, R.

      Deer, G.

      Gunter, R. J.

      Bowles, F. G. (Nuneaton)

      do Freitas, Geoffrey

      Haire, John E. (Wycombe)

      Braddock, Mrs. E. M. (L'pl, Exch'ge)

      Delargy, H. J.

      Hail, Rt. Hon. Glenvil

      Braddock, T. (Mitcham)

      Diamond, J.

      Hannan, W. (Maryhill)

      Brook, D. (Halifax)

      Dobbie, W.

      Hardy, E. A.

      Brooks, T. J. (Rothwell)

      Dodds, N. N.

      Harrison, J.

      Brown, George (Belper)

      Driberg, T. E. N.

      Hastings, Dr. Somerville

      Bruce, Maj. D. W. T.

      Dumpleton, C. W

      Haworth, J.

      Butler, H. W (Hackney, S.)

      Dye, S.

      Henderson, Joseph (Ardwick)

      Castle, Mrs B. A.

      Ede, Rt. Hon. J. C.

      Herbison, Miss M.

      Chamberlain, R. A.

      Edelman, M.

      Holman, P.

      Chater, D.

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

      Holmes, H. E. (Hemsworth)

      Hoy, J.

      Morris, P. (Swansea, W.)

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

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

      Morris, Hopkin (Carmarthen)

      Solley, L. J.

      Hughes, Emrys (S. Ayr)

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

      Soskice, Maj. Sir F

      Hughes, Hector (Aberdeen, N.)

      Mort, D. L.

      Sparks, J. A.

      Hughes, H. D. (W'lverh'pton, W.)

      Moyle, A.

      Stamford, W.

      Hutchinson, H. L. (Rusholme)

      Murray, J. D

      Steele, T.

      Hynd, H. (Hackney, C.)

      Naylor, T. E.

      Stokes, R. R.

      Hynd, J. B. (Attercliffe)

      Neal, H (Claycross)

      Stubbs, A. E.

      Irvine, A. J. (Liverpool, Edge Hill)

      Nicholls, H. R. (Stratford)

      Swingler, S.

      Irving, W. J. (Tottenham, N.)

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

      Sylvester, G. O.

      Jay, D. P. T.

      Noel-Buxton, Lady

      Symonds, A. L.

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

      O'Brien, T.

      Taylor, H. B. (Mansfield)

      John, W.

      Oldfield, W. H.

      Taylor, R. J. (Morpeth)

      Jones, D. T. (Hartlepool)

      Oliver, G. H.

      Taylor, Dr. S. (Barnet)

      Jones, Elwyn (Plaistow)

      Paget, R. T.

      Thomas, D. E. (Aberdare)

      Keenan, W.

      Paling, Will T. (Dewsbury)

      Thomas, I. O. (Wrekin)

      Kendall, W D

      Parker, J.

      Thomas, John R. (Dover)

      Kenyon, C.

      Parkin, B T.

      Thorneycroft, Harry (Clayton)

      Kinghorn, Sqn.-Ldr. E.

      Paton, Mrs. F. (Rushcliffe)

      Thurtle, Ernest

      Kinley, J.

      Peart, T. F.

      Tiffany, S.

      Lang, G.

      Perrins, W.

      Titterington, M. F

      Lawson, Rt. Hon. J. J.

      Piratin, P

      Tolley, L.

      Lee, F. (Hulme)

      Pools, Cecil (Lichfield)

      Usborne, Henry

      Leonard, W.

      Popplewell, E.

      Vernon, Maj. W. F.

      Lever, N. H.

      Porter, E. (Warrington)

      Viant, S. P.

      Levy, B. W.

      Porter, G. (Leeds)

      Wadsworth, G.

      Lewis, T. (Southampton)

      Price, M. Philips

      Walker, G. H.

      Lipson, D. L.

      Proctor, W. T.

      Wallace, H. W (Walthamstow, E.)

      Lipton, Lt.-Col. M.

      Pryde, D. J.

      Warbey, W. N.

      Longden, F.

      Pursey, Cmdr. H.

      Watkins, T. E.

      Lyne, A. W.

      Randall, H. E.

      Watson, W. M.

      McAdam, W.

      Ranger, J.

      Webb, M. (Bradford, C.)

      McEntee, V. La T

      Reeves, J.

      Wells, P. L. (Faversham)

      McGhee, H G.

      Reid, T. (Swindon)

      Wells, W. T. (Walsall)

      McGovern, J.

      Rhodes, H.

      West, D. G.

      Mack, J. D.

      Ridealgh, Mrs. M.

      Wheatley, J. T. (Edinburgh, E.)

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

      Robens, A.

      White, C. F. (Derbyshire, W.)

      Mckinlay, A. S.

      Roberts, Emrys (Merioneth)

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

      Maclean, N. (Govan)

      Roberts, Goronwy (Caernarvonshire)

      Whiteley, Rt. Hon. W.

      McLeavy, F.

      Rogers, G. H. R.

      Wilkins, W. A.

      MacMillan, M. K. (Western Isles)

      Ross, William (Kilmarnock)

      Willey, O. G. (Cleveland)

      Macpherson, T. (Romford)

      Royle, C.

      Williams, D. J. (Neath)

      Mainwaring, W. H.

      Scollan, T.

      Williams, J. L. (Kelvingrove)

      Mallalieu, J. P. W

      Scott-Elliot, W.

      Williams, W. R. (Heston)

      Mann, Mrs. J.

      Segal, Dr. S.

      Willis, E.

      Manning, Mrs. L. (Epping)

      Shackleton, E. A. A.

      Wills, Mrs. E. A.

      Marquand, H. A.

      Sharp, Granville

      Wise, Major F J

      Marshall, F. (Brightside)

      Shawcross, C. N. (Widnes)

      Woods, G. S.

      Mathers, Rt. Hon. George

      Shinwell, Rt. Hon. E.

      Wyatt, W.

      Mellish, R. J.

      Silverman, J. (Erdington)

      Yates, V. F.

      Middleton, Mrs. L.

      Silverman, S. S. (Nelson)

      Younger, Hon. Kenneth

      Mitchison, G. R.

      Simmons, C. J.

      Monslow, W.

      Skeffington, A. M

      TELLERS FOR THE AYES:

      Moody, A. S.

      Skeffington-Lodge, T. C

      Mr. Pearson and

      Morgan, Dr. H. B.

      Skinnard, F. W.

      Mr. Richard Adams.

      Morris, Lt.-Col. H. (Sheffield, C.)

      Smith, Ellis (Stoke)

      NOES

      Amory, D. Heathcoat

      Cuthbert, W. N.

      Henderson, John (Cathcart)

      Assheton, Rt. Hon. R.

      Darling, Sir W. Y.

      Herbert, Sir A. P

      Baldwin, A. E.

      Davidson, Viscountess

      Hollis, M. C.

      Barlow, Sir J.

      Digby, S. W.

      Howard, Hon. A.

      Beamish, Maj. T. V. H

      Dodds-Parker, A. D.

      Hulbert, Wing-Cdr. N. J.

      Beechman, N. A.

      Drayson, G. B.

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

      Bennett, Sir P.

      Drewe, C.

      Jeffreys, General Sir G.

      Birch, Nigel

      Dugdale, Maj. Sir T. (Richmond)

      Jennings, R.

      Boles, Lt.-Col. D. C. (Wells)

      Duthie, W. S.

      Joynson-Hicks, Hon. L W

      Bower, N.

      Eccles, D. M.

      Keeling, E. H

      Boyd-Carpenter, J. A.

      Eden, Rt. Hon. A.

      Lambert, Hon. G.

      Braithwaite, Lt.-Comdr. J. G.

      Elliot, Rt. Hon. Walter

      Lancaster, Col. C. G.

      Bromley-Davenport, Lt.-Col. W

      Erroll, F. J.

      Langford-Holt, J.

      Buchan-Hepburn, P. G. T

      Fraser, Sir I. (Lonsdale)

      Law, Rt. Hon. R. K.

      Butcher, H. W.

      Galbraith, Cmdr. T. D

      Legge-Bourke, Maj. E. A. H

      Challen, C.

      Gammans, L. D.

      Linstead, H. N.

      Channon, H.

      Glyn, Sir R.

      Lloyd, Major Guy (Renfrew, E.)

      Churchill, Rt. Hon. W. S

      Gomme-Duncan, Col. A

      Lloyd, Selwyn (Wirral)

      Clarke, Col. R. S.

      Grant, Lady

      Low, A. R. W.

      Clifton-Brown, Lt.-Col. G.

      Gridley, Sir A.

      Lucas-Tooth, Sir H.

      Cooper-Key, E. M.

      Grimston, R. V.

      Lyttelton, Rt. Hon. O

      Corbett, Lieut.-Col U. (Ludlow)

      Hannon, Sir P. (Moseley)

      MacAndrew, Col. Sir C.

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

      Harvey, Air-Comdre, A. V.

      Macdonald, Sir P. (I. of Wight)

      Crosthwaite-Eyre, Col. O. E

      Head, Brig. A. H.

      Mackeson, Brig. H. R.

      Crowder, Capt. John E.

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

      McKie, J. H. (Galloway)

      232

      233

      Maclay, Hon. J. S.

      Poole, O. B. S. (Oswestry)

      Studholme, H. G.

      MacLeod, J.

      Prescott, Stanley

      Sutcliffe, H.

      Macpherson, N. (Dumfries)

      Prior-Palmer, Brig. O.

      Taylor, C. S. (Eastbourne)

      Manningham-Buller, R. E.

      Raikes, H. V.

      Taylor, Vice-Adm. E. A. (P'dd's'n, S.)

      Marlowe, A. A. H.

      Rayner, Brig. R.

      Teeling, William

      Marsden, Capt. A.

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

      Thorneycroft, G. E. P. (Monmouth)

      Marshall, D. (Bodmin)

      Roberts, Major P. G. (Ecclesall)

      Thornton-Kemsley, C. N.

      Mellor, Sir J.

      Ropner, Col. L.

      Thorp, Lt.-Col. R. A. F.

      Molson, A. H. E.

      Ross, Sir R. D. (Londonderry)

      Touche, G. C.

      Moore, Lt.-Col. Sir T.

      Sanderson, Sir F.

      Turton, R. H.

      Morris-Jones, Sir H.

      Scott, Lord W.

      Vane, W. M. F.

      Morrison, Maj. J. G. (Salisbury)

      Shephard, S. (Newark)

      Walker-Smith, D.

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

      Shepherd, W. S. (Bucklow)

      Ward, Hon. G. R.

      Mott-Radclyffe, Maj. C. E.

      Smiles, Lt.-Col. Sir W.

      Wheatley, Col. M. J. (Dorset, E.)

      Neven-Spence, Sir B.

      Smith, E P. (Ashford)

      White, Sir D. (Fareham)

      Nicholson, G.

      Smithers, Sir W.

      White, J. B. (Canterbury)

      Noble, Comdr. A. H. P.

      Snadden, W. M.

      Williams, C. (Torquay)

      O'Neill, Rt. Hon. Sir H.

      Spearman, A. C. M.

      Willoughby de Eresby, Lord

      Osborne, C.

      Stanley, Rt. Hon. O.

      Peto, Brig. C. H. M.

      Stoddart-Scott, Col. M.

      TELLERS FOR THE NOES:

      Pitman, I. J.

      Strauss, H. G. (English Universities)

      Sir Arthur Young and

      Major Conant.

      CLAUSE 5.—(Increase of rates of Purchase Tax.)
      Mr. Turton: I beg to move, in page 3, line 3, to leave out "one-third," and insert "one-quarter."
      On the previous Clause the Financial Secretary described the Government's intention as a general mopping up process. The question why the Purchase Tax on necessities has increased by 100 per cent. requires an explanation. If the purpose of this tax is to bring in extra revenue, I do not think the Committee would like to extract that revenue from the poorer section of the population. If, on the other hand, the purpose is to prevent unnecessary spending, one would expect that the highest increase would have gone on the luxuries in order to stop people wasting their money. The Committee will probably recollect the origin of the Purchase Tax. It was introduced in 1940, with a basic rate of 33⅓ per cent. and a reduced rate of exactly half. Superimposed on it later we had the higher rate in respect of luxuries, and the intermediate rate which was graded so that it was twice the basic rate. The higher rate was three times the basic rate.
      The former Chancellor in introducing this Budget has upset that ratio completely. He has doubled the tax on the reduced rate in respect of the necessaries of life. He has increased the tax by 50 per cent. on the basic rate, by 12½ per cent. on the intermediate rate and by only 25 per cent. on the higher rate in respect of luxuries. I submit that that is an unfortunate state of affairs, and, therefore, I am moving this Amendment to bring the reduced rate—that is the tax on the necessaries of life—to 25 per cent.,
      234
      so that it shall have the same proportionate increase as the increase on the remainder. I appreciate that according to an answer which I received yesterday from the Financial Secretary, there will be a loss to the Revenue in the current financial year of £2 million, and an estimated loss of £16 million in the succeeding financial year. It is not open to me as a Private Member to make any suggestions as to how that position should be redressed, but it is quite clear that if it is important to obtain revenue, that redress should be obtained from taxation on luxury goods rather than on necessities.
      I would remind the Committee of the types of articles which come under this grouping of the reduced rates. They include clothes; rubber boots for children as well as for grown ups, which is an important matter in rural districts; Thermos flasks; holloware; drugs and medicines; and wallpaper. Those articles are certainly indispensable. One cannot suddenly say, "I am going to try to save and not wear any clothes," or that one will do wallpaper drugs and medicines or even wallpaper in the house. Nobody can suggest that there should be no expenditure on those items at the present time. Therefore, I hope the Chancellor will look with a friendly eye on this Amendment, which is not intended as a wrecking Amendment, but is intended to improve the financial measures which he has adopted,
      I wish the Financial Secretary were present, because I feel sure that he at least would be sympathetic. When the Finance Bill was adopted in 1940, and the Minister of Transport of the present

      235
      Government described it as unfair, undemocratic and vicious in its impact on prices and wages, the Financial Secretary voted against the reduced rate of Purchase Tax, because in his view it inflicted too great a burden on the poorer people. I do not believe that in this short space of seven years there can be a great change in the Financial Secretary's opinion. Perhaps that is the reason why he is not present on the Treasury Bench. I would like to give an illustration, taking a guinea's worth of goods in the four Budget groups. The price of the necessities of life has gone up by 3s. in the guinea. The price of articles in the basic group, like hats, gloves and toys, is going up by 2s. 7¼d. in the guinea. The price of articles in the intermediate group, such as electric heaters and mirrors, is going up by is. o¼d. in the guinea; and the price of luxuries, like cosmetics and jewellery, is going up by 2s. 7¼d. in the guinea.
      I submit that these figures alone show that there is something wrong with the Chancellor's proposals as they are at present drafted. We propose that these necessities of life should only go up by is. 6d. instead of 3s. They will then be at a lower rate than cosmetics and jewellery, which is only just at the present time. I ask Members of all parties to support me in this appeal. We are facing a hard winter, and we should not, therefore, make the necessities of life even harder to obtain than they will, of necessity, be during this winter. Unless this Amendment is carried, there will be a heavy increased burden on the poorer section of the community.
      Mr. Baldwin: I think that the figures which have been given by my hon. Friend the Member for Thirsk and Malton (Mr. Turton), who so ably moved this Amendment, show that due thought has not been given to the effect of this increase in Purchase Tax. As he rightly pointed out, the large percentage rise will weigh on the lower range of incomes, and by "lower range of incomes" I mean not only working people, but old age pensioners and those with fixed rates of income, particularly the two latter classes. We see continual little rises going on in the price of what are necessaries of life, and if these do not stop the effect will soon be that the old age pension of 26s.
      236
      will buy no more than the original pension of 5s. a week.
      The effect of this increase, taking the index figure of 100 for 1942, is that the index figure for household goods now rises to 215, which is a pretty substantial rise in five years. Wearing apparel, etc. will rise from 100 to 152, again a substantial rise. The percentage rise on the various items is out of all proportion and bears excessively on the lower range of incomes. It is fantastic to think that the effect of these increases will be that the lower range of incomes will be called upon to pay to the Exchequer money which has to be made available to be paid out on various forms of subsidies. If any subsidies are to be paid, they should not be paid from a levy on the lower range of incomes.
      The Chancellor of the Exchequer (Sir Stafford Cripps): One always has great sympathy for people who are suggesting that a rising tax should be lowered, especially when that tax may effect some very small section of the poorer class. I would first point out to the Committee that the hon. Member for Thirsk and Malton (Mr. Turton) spoke of the wide range of goods covered by the tax, but he omitted altogether the qualification that it does not cover utility garments and footwear at all. It is utility garments and footwear which the poorer sections of the people buy, and it is for the very purpose that they should be able to buy them at a cheap rate that the utility scheme was worked out. The goods embraced by those utility schemes have never attracted Purchase Tax. That has been purposely arranged in order that a range of goods might be available without Purchase Tax.
      There are some other goods, such as rubber boots, Thermos flasks and hollowware, but only certain parts of the hollow-ware range are covered by the tax, a great number have already been excluded from Purchase Tax. Lawnmowers are not a thing used exclusively by the poorer sections of the population, and as for sports requisites, a large reduction of tax was granted as a concession in the last Finance Act, owing to legitimate pressure then brought upon the Chancellor to encourage sports. There is, indeed, a wide range of these goods, which covers all classes of the public who purchase goods of this kind. Therefore, one

      237
      cannot, as the hon. Member seemed to do, deal with this matter as if it were something aimed at one particular section of the community. Nor, indeed, can one deal with this as a matter of percentage increases in the existing duty; that is a perfectly irrelevant consideration.
      5.15 p.m.
      What the late Chancellor did, in introducing these new scales of Purchase Tax, was to be a new floor, a new minimum, which he made 33⅓ per cent. and he did that both in order to support the increases in the higher level, and to attract more money into the Treasury to counteract the inflationary tendencies. If one were to go back on that, it would only mean that one would be knocking out of the Budget a large block of money which would otherwise be attracted by this increase, and one would be driven to finding the money somewhere else. There are definite limits in the higher ranges beyond which it is really impossible to tax, because evasion reaches such a scale that the tax is not recovered. It was on that basis that the 100 per cent. tax was only increased to 125 per cent. There is a limit to which it can be done, and that was thought to be the limit.
      The Chancellor raised the floor or the base of this taxation, and then made increases in the higher ranges. He expressly stated that as this was an emergency Budget, and it was not possible to embark upon a lot of elaborate recasting, he had not touched the classifications. He also stated that before the next Budget the whole matter of the classifications would be gone into in the light of these changes which are made by this Budget, and if it was necessary to change goods from one class to another, or to take goods out of one class altogether, that will be considered. If one is bringing forward an emergency Measure for the purpose of quickly raising money one cannot undertake all the elaboration which is dealt with in the usual course of the ordinary Budget of the year. I can assure hon. Members that before the April Budget we shall be reconsidering the effect of this taxation—this uniform rise per class on the goods in the various classes—to see whether any consequential adjustments should be made as regards the classification of goods.
      It is a complicated matter; it is not as simple as it may seem to be. A good deal
      238
      of consideration is needed whether there is any case for changing the classification of these goods. I hope that in the light of the explanation I have given, the Committee will allow this charge to remain, and this hierarchy of charges, if I may use that expression, to proceed, as we believe it is the only way in which we can obtain the amount of money which we think it desirable to raise by this means.
      Mr. Stanley: I am sure that the Committee are grateful to my two hon. Friends for raising this point. It is a serious matter, and it is in that spirit that the Chancellor of the Exchequer has replied to their speeches. I was particularly glad to hear him reaffirm, and, indeed, strengthen the promise given by his predecessor that before next April the whole question of classifications would be looked into again. We on this side of the Committee are prepared to accept the proposals in this Bill as emergency proposals, and we recognise that it would be inappropriate, as they are such, to go through the whole of the details of the contents of each class. But we also feel that any sharp rise in the amount of tax, such as is introduced in this Bill, creates a necessity for looking anew at the classes in which the various goods are put. We are glad to hear that between now and April that task will be undertaken by the Chancellor of the Exchequer. I recognise that if this Amendment were carried it would result in the loss of a very substantial amount of revenue which, as far as I personally am concerned, is revenue obtained in a way which I regard as perhaps the most appropriate method for combating inflation.
      There is considerable force in the Chancellor's reply to the perfectly logical case put up by my hon. Friends, that is the case that the percentage increases in the higher ranges ought to be higher than they were in the lower ranges. The Chancellor's answer that if the higher taxes were increased too much we would run into a series of evasions by which the amount we would receive would not be increased but actually would be decreased, is an effective one. Therefore, I hope that my hon. Friends will feel satisfied that they have achieved their purpose in the pledge which the right hon. and learned Gentleman has given for an investigation before next April, and that they will not feel it necessary to take this matter to a Division.
      Mr. Turton: As this is an interim Finance Bill, and in view of the assurance given by the Chancellor of the Exchequer. I beg to ask leave to withdraw the Amendment.
      Amendment, by leave, withdrawn.
      Mr. Selwyn Lloyd: I beg to move, in page 3, line 13, at the end, to insert:
      "or drugs or medicines manufactured or prepared."
      Sir T. Moore: On a point of Order. Could you, Major Milner, tell us what is your intention in regard to the various Amendments to Clause 5 which follow more or less upon this one? Is it your intention to take them together? Will there be a general discussion?
      The Chairman: I am obliged to the hon. and gallant Gentleman. After some hesitation, I have decided to call the proposed Amendments to the Purchase Tax. Many of these matters were fully discussed in the last Finance Act and I hope hon. Members will not take too long. I do not want this course to be taken in any way as a precedent and I hope that hon. Members will make their points shortly.
      Mr. Stanley: I quite agree with what you have said, Major Milner, but you will realise that we have deliberately refrained on this occasion from raising a great mass of detailed Amendments which we would have done on a normal Finance Bill. I hope that when we come to the Finance Bill in April it will not be held that we have missed our chance because we did not take it now in the same Finance Bill as that in which the Government were making the alterations.
      The Chairman: I said that this course was not to be regarded as a precedent. The proceedings on this particular Bill are different because this Bill has only a limited and not a general ambit.
      Mr. Selwyn Lloyd: The purpose of this Amendment is to exclude from the increase in Purchase Tax drugs and medicines manufactured or prepared. At the moment, drugs and medicines are subject to a tax of one-sixth, which is now to become one-third, of the wholesale value of the goods. The object of this Amendment is to ensure that that increase should not apply. As you have pointed out, Major Milner, this matter
      240
      was dealt with during the Debate on the last Finance Act. I do not propose to go again into all the arguments referred to then. When my right hon. Friend the Member for West Bristol (Mr. Stanley) spoke on this subject on that occasion, he succeeded in extracting from the Financial Secretary to the Treasury a promise that during the 12 months after that date, which was 17th June, he would look into the matter of drugs and medicines and would examine the illogicalities which he admitted existed. He promised to bring the matter before us again. I suggest that this is a convenient moment for the Financial Secretary, or someone on his behalf, to make a progress report upon how far he has gone in looking into a matter which was so full of illogicalities.
      The Financial Secretary also said on that occasion that no one could say that these medicines or drugs were essential to the life of the community. That is an interesting view. Over the week-end I attempted to find out which drugs and medicines were subject to Purchase Tax and which were not. I do not think that the right hon. and learned Gentleman the Chancellor of the Exchequer will be able to rely upon his utility argument in this case. For example, a simple medicine very commonly used is iodine which, I understand, is subject to Purchase Tax. One cannot help being rather surprised that a Government so prone to making cuts should be keen on doubling the Purchase Tax on so simple an antiseptic. Again, in regard to quinine, I am told that that will be subject to this increase. Is it not rather surprising that a Government who have succeeded in bringing as much cold and misery to most homes as an Government before, should double the tax on so simple a cold preventive.
      I am told that all the simpler forms of nerve tonic will be subject to this increase. The Government lead us on from crisis to crisis. Is it not rather sadistic that they should double the Purchase Tax on these simple remedies? With regard to aspirin, I suppose, in view of the firm attitude taken in regard to earlier alcoholic Clauses, that perhaps the right hon. and learned Gentleman is on rather stronger ground in relentlessly doubling the Purchase Tax. On the other side of the sheet, I am told that many of the simpler forms of poison are on the free

      241
      list. It may be that that is a deliberate act of Government policy and that from the humanitarian point of view, they are providing a cheap means of escape for those not able to face the brave new world of Socialism.
      However that may be, the fact is that many simple, ordinary, common medicines and drugs will be subject to this doubling of the Purchase Tax. I am told that almost all the ingredients of the common cough mixtures, certain of the drugs for relieving pain and many of the simpler medicines, will be subject to the increase. There are also other illogicalities. I understand that vaseline bought in a four ounce tin is free from tax, but if it is bought in a smaller tin it is not. I put these matters before the Committee on information given to me. I confess quite frankly that the schedule shown to me was so obscure and difficult to follow that I may not have been wholly accurate in what I have said. It is difficult sometimes to follow the technical descriptions of most of these drugs.
      5.30 p.m.
      The arguments in favour of my Amendment for the exclusion of drugs and medicines can be shortly summarised. This imposition constitutes an additional tax on sickness, and it constitutes a tax on things which may prevent minor ailments from becoming more serious. If it is meant to be a mopping up of purchasing power and an anti-inflationary measure, I would say that if a minor ailment is permitted to develop into a major ailment, which probably means hospital treatment, nursing and so on, it may easily defeat its purpose. Anyhow, the Government are very large purchasers of these drugs and medicines, and, therefore, the financial aspect of the matter is not as important as it would appear. The present classification is hopelessly illogical, and I suggest that it would be wise for the Government to accept this Amendment.
      Sir Henry Morris-Jones: I beg to reinforce the plea made by my hon. and learned Friend, and to suggest that we ought to have some explanation from the Government on this question. Personally, I have never been able to understand why these drugs and medicines were subject to Purchase Tax at all, because there is no really solid argument for taxing medicine, any more than there is for taxing food, so far as I can see. In the
      242
      overwhelming proportion of cases, medicines are a necessity. It may he that there is an infinitesimal proportion of people who take medicines and who do not need them, but the number must be very small. On the other hand, there is a substantial category of people who take medicines because they think they do them good, and, if they think so, it is quite as important as doing them good.
      A drug like iodine, which is a great preventive, is capable of rendering very great economic help in the prevention of colds. I do not pretend to be giving advice, though I use it myself, and for the prevention of colds it is a very fine remedy. If we can prevent colds in 100 people in this country, we are doing something which will be of real value at a time when we are wanting the maximum productive effort from our people. It is true that this is an interim Bill, and that the Chancellor, in an earlier speech, promised us that further consideration will be given to the whole question of the categories liable to Purchase Tax, but I would suggest that the point made by my hon. and learned Friend was a cogent one, and that, at this stage of an interim Finance Bill, we should give consideration to the cases of medicines which are necessities of life, preventives or sedatives, as in cases of sleeplessness. There are some drugs which are subject to double tax and which are of very great help in combating sleeplessness, and, under the present strain and stress of modern life, the loss of sleep to our working population is a vital matter. Surely, for the sake of the amount of money which the right hon. and learned Gentleman hopes to get from this extra tax on medicines, he will reconsider the schedule, or, perhaps, consider abolishing it altogether?
      Mr. Erroll: I wish to raise in particular the difficulties of the chronic sick, who can hardly be said to be adding to the inflationary pressure of the country at the present time. A great many of the old and infirm have a very real need of medicines and drugs from time to time, and the extra Purchase Tax represents, in many cases, a very serious addition to their weekly budget. We here may not think that a few pence or shillings matter very much, but, to such people they matter a

      243
      very great deal on top of the many other increases in the cost of living for old and infirm people today.
      In addition to the increase, this tax operates most unfairly and discriminates between different types of diseases. While we have got an amazing list of drugs and medicines on which the increased tax is to be levied, there are certain notable exemptions brought about by the Purchase Tax (Exemption) Order, 1945, which exempts, amongst other drugs, penicillin, the sulphonamide group, vaccines and morphine. We tax the curing of toxic goitre and malaria, and leave free the curing of pneumonia and gonorrhœa. We ought to have a sense of logic in these matters, and have matters so arranged that all important diseases can be cured without the higher rate of Purchase Tax being imposed on the drugs and medicines necessary to effect the cure.
      There is the further point of the dispensing practitioner who makes up medicines for the use of his patients, and who, particularly when a panel doctor, receives a certain fixed rate for such medicines as he supplies, so that any increase in the Purchase Tax on the ingredients for those medicines must be entirely borne by him. This can scarcely be regarded as a tax to prevent inflationary pressure, because there is no inflationary pressure here. For these reasons, and for those advanced by my hon. and learned Friend, I hope the Chancellor will reconsider the matter and accept this small Amendment.
      Mr. Linstead: In supporting the Amendment, I would ask the Chancellor to take this opportunity of having a look at the whole operation of the Purchase Tax as it affects medicine. When we last discussed this question in Committee, the then Chancellor of the Exchequer indicated that he could not afford the loss of revenue which the remission of the tax would entail. I think the figure is something like £9 million. If we double that, and assume that we are going to lose a revenue of £18 million, that is not merely the measure of the lost taxation, but the measure of the amount we are going to extract from the sick. There is, of course, machinery for exempting from the tax costly and essential drugs, but, as the examples given by my hon. and learned Friend show, that machinery has been used in a very
      244
      restrained way, and it is very difficult to see why somebody suffering from malaria should pay the tax, while someone else requiring to take a drug regularly, though it is not an essential drug, should pay the full rate of tax. One has only to look at the long list of articles exempted from Purchase Tax to realise how anomalous is any tax on drugs which are essential to sick persons. I think we all feel that the Chancellor is in good form today in answering questions. I would like to put this question to him. Wigs are exempted from Purchase Tax and, that being so, why are not hair restorers also exempted?
      It was said in the Debate on the Second Reading of the Bill that the Treasury could not afford not to have the revenue from this tax. But the situation now is entirely changed; it is no longer a question of balancing the Budget. The whole point of this tax is to absorb surplus purchasing power by curtailing purchasing power on non-essentials. I do not think anybody could seriously maintain that expenditure on drugs and medicines is expenditure on non-essentials. If the Chancellor imposed additional taxation on patent medicines, there would, possibly, be a good deal of sympathy with it. If he wants to do that, then this is the opportunity for the whole question of the taxation of medicine to be examined with a view to seeing whether some definitions can be arrived at which do more justice to sick people than the present definitions employed in the operation of this tax. That would enable the Treasury, if they feel they must do it, to take the tax off the large nationally advertised medicines while, at the same time, making sure that the sick person is having to bear, in respect of the things he really needs, not merely the 16⅔ per cent., but this heavy additional tax which it is now proposed to impose.
      Mr. McKie: I wish to support this Amendment. My hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd), as far as I understood him, said that he was not sure whether certain drugs and medicines be mentioned would be included within the scope of the Purchase Tax. Last Saturday afternoon I made a special visit, at his request, to a member of the pharmaceutical profession in my constituency. I can assure my hon. and learned Friend that that gentleman will give full con-

      245
      firmation of the fact that the drugs and medicines which he listed come within the scope of this proposed 100 per cent. increase on the tax hitherto in existence. I will go even further than my hon. and learned Friend and associate myself with the hon. Member for Denbigh (Sir H. Morris-Jones), who said he could not see why on earth it was necessary to include drugs and medicines at all. I was certainly horrified to hear him say that iodine and quinine, two of the most valuable drugs, especially at the present time, are going to be included in this list.
      Nobody knows what the coming winter is going to be like. I think that hon. Members will agree with me that it is looked forward to with a great deal of anxiety, and even dread, by a large number of people in Great Britain at the present time, particularly those belonging to the working classes. That being so, I am greatly surprised that we have not yet had one speech from hon. Members opposite in support of this very valuable Amendment. I cannot, for the life of me, see why that should be. Nobody knows what the winter is going to be like. It is already giving promise of being quite a hard winter. These things go in cycles, and we may even have a repetition of the hard climatic conditions which prevailed in February and March this year. Then, owing to the lowered vitality of the people, we might easily have serious epidemics. I am sure that nobody on the Treasury Bench will attempt to deny that the vitality of the people is lowered. The fact that there were 2,500 cases of fainting in the streets of London on the day of the Royal Wedding is direct proof that the vitality of the people of this country is considerably lower than it was.
      5.45 P.m.
      If I am right in my supposition—[Laughter.] In spite of the hilarity on the other side of the Committee, I am completely unmoved. If that is the position at the beginning of December, what are we going to be like when we get to January? What is the health of the people going to be like in January, February and March, and particularly in February, which is always a testing time in this country. That, I am sure, nobody will dispute. If these two drugs—iodine and quinine—are going to be subject to this heavy additional impost, I would ask hon. Members opposite, who take this in
      246
      such a lighthearted manner, to realise the hardships which will rest upon those in their constituencies who are affected by it. I only hope that particular note will be taken by their constituents of the lighthearted manner in which they are disposed to regard this matter.
      In the last few minutes, I have been reading a written answer to a Question put to the Chancellor by my hon. Friend the Member for the London University (Sir E. Graham-Little) which seemed to treat in a cavalier way my hon. Friend's suggestion for the reduction of this proposed tax. I am afraid that the right hon. and learned Gentleman does not give us very much of a concession. I can assure him, and those who support him, that if they are prepared so to do, they will not only be acting in their own interests, politically or morally, but will earn the thanks of a very large number of people in this country, not merely the maladcs imaginaires type, but the chronics, and, indeed, of those who are haunted by the fear that if an epidemic takes place in this country they will not be so readily able, as in the past, to buy the necessary drugs. If the right hon. and learned Gentleman is not able to make such a concession, I sincerely hope that my hon. and learned Friend will take this Amendment to a Division, when I shall certainly give it my support.
      Sir S. Cripps: One always has sympathy with any taxation which will increase the cost for anybody. It is necessary just to see what exactly, is the scope of this Purchase Tax. First, there is a very large and long list of excluded drugs which were dealt with by the Exclusion Order, 1945. I may tell the Committee that, for some time, there has been under discussion with the Ministry of Health the question of the extension of that list in order to get it on a sounder and better basis. I am quite prepared to admit that its present basis does not seem to be wholly logical. It has "just growed" and like so much of our legislation which grows up, it does not always grow up on the most logical lines. Therefore, when the opportunity comes—as I hope it will—this is a matter of which, between now and next April, there should be a re-examination, with a view to excluding those drugs which are of real importance.

      247
      I would remind the Committee that prescribed medicines do not, of course, attract the tax. That is to say, by the definition in the Finance Act, 1940, medicines that are made up by a chemist do not attract the tax as a manufactured article. They are not considered to be a manufactured article, and therefore they are not charged the tax, though some drugs in the medicine may be taxed. If one looks at the proportion of the drugs and the cost, compared to the final article, one would come to the conclusion that the incidence is not very heavy. At the present time this tax affects what used to be known as patent medicines.
      The Committee will remember that during the war the medicine Stamp Duty on those was withdrawn and Purchase Tax was substituted. It would be found, so far as the vast majority of receipts from this tax are concerned that they are really a substitution for the old medicine Stamp Duty. The fact that it was made rather wider in its application, and certain exemptions made, may have left certain things which it may be desired now to remedy. But the basis and foundation of the receipts, the £8 million mentioned by the hon. Member for Putney (Mr. Lin-stead) will be found to be the old patent medicines which attracted in the old days the medicine Stamp Duty and which I think nobody would deny are a very good subject matter for taxation.
      I know this is a matter on which hon. Members may differ a good deal, but I cannot believe that the taking of patent medicines without the advice of a doctor is a very good way of dealing with the health of any population. A great many doctors certainly would say it is a most undesirable and unhealthy practice, and one that ought to be avoided as far as possible. It is not always known whether the contents of these medicines, as they are called, will be very good, either to accomplish the ends which they are advertised to accomplish, or, indeed, to accomplish any ends at all. If there are some inclusions in this list which it would be desirable to remove when the list can be properly considered, the Committee can take it that the bulk of this increase in taxation will fall on those classes of goods which formerly used to be subject to the Stamp Duty, and I am sure that the Committee would not object.
      248
      Therefore, I am afraid I cannot accept this Amendment, though it is a matter which I propose to look into before next April to see whether there cannot be more logical and better arrangements about exemptions from this Clause. We shall be very much assisted by the fact that the new Health Service Act will be coming into operation and we shall have the assistance of the Ministry of Health. They will be very large users in the various hospitals and in connection with other matters with which they will be concerned. I hope that on that basis the hon. Member will be able to withdraw his Amendment.
      Mr. Stanley: I hope the Committee realises that we are really only discussing this Amendment now because the Treasury have been so dilatory in the past. Certainly so far as I am concerned, and, I think, as far as the mover and the supporters of the Amendment are concerned, this would never have been put down if the promise of the Treasury to remove from this Clause the real essential medicines had been carried out. If all we were discussing was a tax upon the kind of patent medicines to which the Chancellor referred, I would have no sympathy with this Amendment. The Chancellor's words would have carried with me a great deal more weight had he not said exactly the same thing in more or less the same words that the Financial Secretary to the Treasury said many months ago. When the Financial Secretary said it we thought that something was going to happen. But nothing has happened. All we get now is a promise by the Chancellor of the Exchequer in December, to say he will look again, before April, at what the Financial Secretary promised on 17th June last, would be a matter for immediate steps. In those circumstances I find myself in a very considerable difficulty.
      The reference by the Chancellor of the Exchequer to the effect of patent medicines opens up a vista of pleasant debate which my hon. Friends may wish to continue, and it is one on which we may all take different points of view. I agree with the Chancellor of the Exchequer. I do not believe that a patent medicine taken without a doctor's prescription is likely to do much good. I think that there are a good many cases in which it does a considerable amount

      249
      of harm. All of us will agree that there are included in this list a certain number of essential medicines which cannot in any circumstances fall into the sort of class to which the Chancellor has referred. They have been much too long included. We have been promised their removal in the past, and nothing has been done to implement that proposal. Certainly, if the matter were to be taken by my hon. Friends to a Division, I should not only be voting for a reduced tax on a class of patent medicines but registering a protest against the grave ineptitude of the Government in failing to remove essential drugs which they have still included in the list.
      Mr. I. J. Pitman: I have two remarks I would like to make, but before I do so I would like to protest against this suggestion that when anybody has anything wrong with him he must take up the time of a doctor and impose an additional strain upon the medical profession in curing what may be a minor ailment. In my own home in my early youth—and it is being repeated in the case of my sons and daughters—we did not go to the doctor for every conceivable ailment. We combated it with commonsense and som knowledge of a particular medicine or by rubbing something on the chest, or by giving an aperient and sending the child quickly and early to bed. I think we are barking up an entirely wrong tree in suggesting that these proprietary brands, and other brands, should always be administered only after they have been prescribed by a doctor.
      If the Chancellor is going to look at this list surely he could act quite apart from Budget day, and could do it now or at any minute. He could give instructions to his civil servants to look at the list of exemptions and put into it a great number of the drugs, if not all of them, about which we have been talking this afternoon. I would say both in fairness and from the point of view of getting the drugs available in the shops—the business about retailers is a very good instance of what happens to drugs when they think the tax is going to be taken off—he should do that now, and not wait until April. If he cannot do it now, let him look at the grants paid to doctors doing their own dispensing under the Health Acts, because grants to the doctors are low enough as it is and their expenses will now be
      250
      increased. I hope that is something he can do, and can handle at once.
      6.0 p.m.
      Lieut. -Commander Braithwaite: I think that on this side of the Committee it is not difficult to detect that the Chancellor's attitude to this Amendment is less austere and more sympathetic that it was to those which preceded it. I think we can see from these benches the main difficulty in which the right hon. and learned Gentleman is placed. First, he has this yawning gap in front of him. [HON. MEMBERS: "Where are all the Opposition leaders?"] I am always glad to give a little cause for hilarity amongst hon. Members opposite. I meant, this yawning financial gap. He has inherited a bankrupt estate in this Budget. My right hon. Friend the Member for West Bristol (Mr. Stanley) pointed out just now that the Government have been considering this for some time and have not yet arrived at a decision. It is only fair to add that the new Chancellor has not been cogitating this particular matter very long, and he may want to give it further thought between now and April.
      I would, however, submit to him, in view of the arguments that have been urged, that this impost does run counter to the main objectives of this Budget, which are to take counter-inflationary steps and to mop up unnecessary expenditure. No one can accurately describe someone lying ill in bed as mopping up anything, except occasional doses of broth, and so on; and no one can describe these medicines or drugs in any way as luxuries. They are not optional. In many cases, they are necessities. I do not pretend to enter into the controversy whether the taking of patent medicines is good or bad. I think that the hon. Member for Denbigh (Sir H. Morris-Jones) probably put his finger on the spot, as a member of the medical profession, when he said that what mattered was not so much whether a medicine did good or not, but whether the patient thought it did him good—which, I understand, is the chief argument of the medical profession; it is psychological. Surely, to impose Purchase Tax upon these drugs as a deterrent entirely misses the purpose. Nobody takes them for fun. People take them because they are feeling ill.
      I thought that I detected in the remarks of the Chancellor of the Exchequer, not a

      251
      pledge but certainly a very broad hint, that he was likely to take sympathetic action between now and next April. I would put this to him, with the greatest respect—that it is much more important to act now in December than when the winter of our discontent is over. Here I find myself in disagreement with my hon. Friend the Member for Galloway (Mr. McKie). I should have thought that the thing to do was to accept the Amendment now, then have the cogitation between now and next April and, if necessary, in the April Budget put on the taxation which the right hon. and learned Gentleman requires, if he then requires it. I think that would be the more humanitarian approach.
      In any case, I hope that my hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd) will carry the matter a little further, for this reason. There is something in what Sam Weller called "beeswaxing and turpentining" the right hon. and learned Gentleman's memory. If a Division took place now it would impress upon the Chancellor of the Exchequer what the Committee feels on this matter. I cannot believe that it is only on this side of the Committee that these views are held. I am sure that hon. Members opposite are anxious to record in the Division Lobby their anxiety for the sick in their constituencies, and their desire to deal with patent medicines; and I am sure that their constituents are very anxious to see what their views are on this very important matter. So that we can have on the record those who are inclined to succour the sick and those who take the more reactionary view, I hope that the matter will be pressed to a Division.
      Mr. Nicholson: I am very much tempted to follow my hon. Friend the Member for Bath (Mr. Pitman). It was, indeed, a lovely picture that he drew—of prescribing for various members of his family. I wondered, as he drew it, which member of his family prescribed a hair restorer for him. I entirely agree with what the Chancellor of the Exchequer said about patent medicines. There are numbers of people who have the positive vice of constantly dosing themselves. I was always brought up in the tradition of my family. I had a great-aunt who died in the early eighties who had this
      252
      habit—so much so, indeed, that the chemist's boy was under instructions to call for orders every morning. She died young. People like that ought to be stamped out of existence. The people, however, who really will be hit by this extra taxation are the poor who are urgently in need of moderate doses of medicines at a particular time, and I do beg the Chancellor of the Exchequer to think again about this.
      What does concern me—and this applies to the whole of this Budget—is that His Majesty's Board of Customs and Excise have not exercised their usual care. We had an example of that in the Amendment on which we have just divided. Surely, there ought to be more specification in the long Schedule to the principal Act; and there ought to be more specification in this case. I think we are entitled to demand from the Government a little more attention to detail, and I hope that my hon. and learned Friend the Member for Wirral (Mr. S. Lloyd) will not withdraw the Amendment.
      Mr. Linstead: I intervene for a moment or two because it became obvious to me while the Chancellor was replying that in one particular respect he had been misadvised—I think in a rather important respect. He based part of his case for the rejection of this Amendment on the fact that medicines prescribed by doctors would not be increased in price by the effects of the tax.
      Sir S. Cripps: I did not say that. What I said was that they did not attract the tax because the making of the prescription was not manufacture.
      Mr. Linstead: I, of course, accept the Chancellor's phrase, but it still illustrates my point. They will, in fact, attract the tax in so far as they are proprietary medicines. If we set aside medicines prescribed under the National Health Insurance Act, 50 per cent. of the medicines prescribed today are, in fact, proprietary medicines. Therefore, something like 50 per cent. of the non-N.H.I. medicines will attract the full 33½ per cent. tax. The right hon. and learned Gentleman went on to say that, in fact, this tax was nothing more than a repetition of the old medicine Stamp Duty. I do not think he has been informed on this point, that the old medicine Stamp Duty did not apply to medicines which were sent to the chemist to be

      253
      sent out with a medical prescription. Therefore, once again, we are going to have a heavy incidence of tax on medicines which previously did not bear any tax at all. I think that these two particulars missing from the material supplied to the Chancellor of the Exchequer should be brought to light before a decision is taken.
      Mr. Selwyn Lloyd: I am grateful to the right hon. and learned Gentleman for the sympathetic way in which he has dealt with this matter; but his sympathy has been simply verbal. We have had verbal sympathy on previous occasions from the Financial Secretary. What I had hoped to get on this occasion was some action. My fear in putting down this Amendment was with regard to the diminution of the anti-inflationary character of the Chancellor's proposals. That argument has been completely disposed of by the Chancellor of the Exchequer, who said
      that the gain to the revenue will come from the patent medicines, and that he calculates, apparently—or his advisers calculate—that very little of this sum of £8,000,000 or £9,000,000 will come from the essential medicines to which I referred. Administratively, it is a very easy matter for him. Surely, he could have stated that he would add to the list of chemists' medicines and drugs those which I mentioned. In this circumstance, and in view of the fact that the right hon. and learned Gentleman was simply repeating the sort of assurance the Financial Secretary gave in June, I shall ask my hon. Friends to go into the Division Lobby with me.
      Question put, "That those words be there inserted."
      The Committee divided: Ayes, 131; Noes, 278.

      Division No. 36.]

      AYES.

      [6.11 p.m.

      Amory, D. Heathcoat

      Head, Brig. A. H

      O'Neill, Rt. Hon. Sir H

      Anderson, Rt. Hn. Sir J. (Scot. Univ.)

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

      Osborne, C

      Assheton, Rt Hon. R.

      Henderson, John (Cathcart)

      Peto, Brig. C. H. M.

      Baldwin, A. E.

      Herbert, Sir A. P

      Pitman, I. J.

      Barlow, Sir J.

      Hollis, M. C

      Ponsonby, Col. C. E.

      Beamish, Maj. T. V. H

      Holmes, Sir J. Stanley (Harwich)

      Poole, O. B. S. (Oswestry)

      Beechman, N. A

      Howard, Hon. A.

      Prescott, Stanley

      Bennett, Sir P.

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

      Prior-Palmer, Brig. O

      Birch, Nigel

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

      Raikes, H. V.

      Boles, Lt.-Col D. C. (Wells)

      Jennings, R.

      Rayner, Brig. R.

      Boyd-Carpenter, J. A.

      Keeling, E. H.

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

      Braithwaite, Lt.-Comdr. J. G.

      Lambert, Hon. G.

      Roberts, Maj. P. G. (Ecclesall)

      Bromley-Davenport, Lt.-Col. W.

      Lancaster, Col. C. G

      Ropner, Col. L.

      Buchan-Hepburn, P. G. T.

      Langford-Holt, J.

      Ross, Sir R D. (Londonderry)

      Butcher, H W.

      Law, Rt. Hon. R. K.

      Salter, Rt. Hon. Sir J. A

      Challen, C.

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

      Sanderson, Sir F.

      Churchill, Rt. Hon. W. S

      Lindsay, M (Solihull)

      Shephard, S. (Newark)

      Clarke, Col. R. S.

      Linstead, H. N

      Shepherd, W. S. (Bucklow)

      Clifton-Brown, Lt.-Col. G.

      Lipson, D. L

      Smiles, Lt.-Col. Sir W

      Cooper-Key, E. M.

      Lloyd, Maj. Guy (Renfrew, E.)

      Smith, E P (Ashford)

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

      Lloyd, Selywn (Wirral)

      Snadden, W. M.

      Crookshank, Capt. Rt. Hon. H F C

      Low, A. R. W.

      Stanley, Rt. Hon. O.

      Crosthwaite-Eyre, Col. O. E.

      Lucas-Tooth, Sir H

      Stoddart-Scott, Col. M.

      Crowde, Capt. John E

      Lyttelton, Rt. Hon. O.

      Strauss, H. G (English Universities)

      Cuthbert, W N.

      MacAndrew, Col. Sir C.

      Studholme, H G

      Darling, Sir W. Y.

      Macdonald, Sir P. (I. of Wight)

      Sutcliffe, H

      Davidson, Viscountess

      Mackeson, Brig. H. R.

      Taylor, C. S. (Eastbourne)

      Digby, S. W.

      McKie, J. H. (Galloway)

      Teeling, William

      Dodds-Parker, A. D.

      Maclay, Hon. J. S.

      Thorneycroft, G. E. P. (Monmouth)

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

      Macmillan, Rt. Hon. Harold (B'mley)

      Thornton-Kemsley, C. N.

      Drayson, G. B.

      Maitland, Comdr. J. W.

      Thorp, Lt.-Col. R. A. F.

      Dugdale, Maj. Sir T. (Richmond)

      Manningham-Buller, R. E.

      Touche, G. C.

      Eccles, D. M.

      Marples, A E.

      Turton, R. H.

      Eden, Rt. Hon. A.

      Marsden, Capt. A.

      Vane, W. M. F

      Elliot, Rt. Hon. Walter

      Marshall, D. (Bodmin)

      Walker-Smith, D.

      Erroll, F. J

      Maude, J. C.

      Ward, Hon. G. R.

      Galbraith, Cmdr T D

      Mellor, Sir J

      Webbe, Sir H. (Abbey)

      Gammans, L. D.

      Molson, A. H. E.

      Wheatley, Col. M. J. (Dorset, E.)

      Glyn, Sir R.

      Moore, Ll.-Col. Sir T

      White, Sir D. (Fareham)

      Gomme-Duncan, Col. A

      Morris-Jones, Sir H.

      Williams, C (Torquay)

      Grant, Lady

      Morrison, Maj. J. G. (Salisbury)

      Willoughby de Eresby, Lord

      Grimston, R. V.

      Morrison, Rt. Hon. W. S. (Cir'nc'ster)

      Young, Sir A. S L. (Partick)

      Hare, Hon. J. H. (Woodbridge)

      Nicholson, G.

      Harvey, Air-Comdre, A. V.

      Noble, Comdr. A. H. P.

      TELLERS FOR THE AYES:

      Mr. Drewe and Major Conant.

      NOES

      Adams, Richard (Balham)

      Ewart, R.

      Middleton, Mrs. L

      Allen, A. C. (Bosworth)

      Fairhurst, F.

      Mitchison, G. R.

      Allen, Scholefield (Crewe)

      Farthing, W. J.

      Monslow, W.

      Alpass, J. H.

      Field, Capt. W. J.

      Morley, R.

      Anderson, A. (Motherwell)

      Fletcher, E. G. M. (Islington, E.)

      Morgan, Dr. H. B.

      Anderson, F. (Whitehaven)

      Foot, M. M.

      Morris, Lt.-Col. H. (Sheffield, C.)

      Attewell, H C.

      Forman, J. C.

      Morris, P. (Swansea, W.)

      Austin, H. Lewis

      Fraser, T. (Hamilton)

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

      Awbery, S. S.

      Freeman, Peter (Newport)

      Mort, D L.

      Ayles, W. H.

      Gaitskell, Rt. Hon. H. T. N.

      Moyle, A.

      Ayrton Gould, Mrs. B

      Ganley, Mrs. C. S.

      Murray, J. D.

      Bacon, Miss A.

      George, Lady M. Lloyd (Anglesey)

      Naylor, T. E.

      Balfour, A.

      Gibbins, J.

      Neal, H. (Claycross)

      Barstow, P. G

      Gilzean, A.

      Nicholls, H. R. (Stratford)

      Barton, C.

      Glanville J E. (Consett)

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

      Battley, J. R.

      Goodrich, H. E.

      Noel-Baker, Rt. Hon. P. J. (Derby)

      Bechervaise, A. E.

      Gordon-Walker, P. C.

      Noel-Buxton, Lady

      Belcher, J. W.

      Grenfell, D. R

      O'Brien, T.

      Bellenger, Rt. Hon. F. J

      Grey, C F.

      Oldfield, W. H.

      Benson, G.

      Grierson, E.

      Oliver, G. H.

      Berry, H.

      Griffiths, D. (Rother Valley)

      Paget, R. T

      Beswick, F.

      Griffiths, Rt Hon. J. (Llanelly)

      Paling, Will T (Dewsbury)

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

      Griffiths, W. D. (Moss Side)

      Parkin, B. T.

      Bins, G. H. C

      Gunter, R. J.

      Paton, Mrs. F. (Rushcliffe)

      Binns, J.

      Haire, John E (Wycombe)

      Pearson, A

      Blackburn, A. R

      Hall, Rt. Hon. Glenvil

      Peart, T. F.

      Bowden, Flg.-Offr. H. W.

      Hardy, E. A.

      Perrins, W.

      Bowles, F. G. (Nuneaton)

      Harrison, J

      Poole, Cecil (Lichfield)

      Braddock, Mrs. E. M. (L'pl, Exch'ge)

      Hastings, Dr Somerville

      Popplewell, E.

      Braddock, T. (Mitcham)

      Haworth, J.

      Porter, E. (Warrington)

      Bramall, E. A.

      Herbison, Miss M.

      Porter, G. (Leeds)

      Brook, D. (Halifax)

      Holman, P.

      Price, M. Philips

      Brooks, T. J. (Rothwell)

      Holmes, H. E (Hemsworth)

      Proctor, W. T.

      Bruce, Maj. D. W. T

      House, G.

      Pryde, D. J.

      Burden, T. W.

      Hoy, J.

      Pursey, Cmdr. H

      Butler, H. W (Hackney, S.)

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

      Randall, H. E.

      Castle, Mrs. B. A.

      Hughes, Emrys (S. Ayr)

      Ranger, J.

      Chamberlain, R A.

      Hughes, Hector (Aberdeen, N.)

      Rees-Williams, D. R

      Champion, A. J.

      Hughes, H. D. (W'Iverh'pton, W.)

      Reeves, J.

      Chater, D.

      Hutchinson, H L (Rusholme)

      Reid, T. (Swindon)

      Chetwynd, G R

      Hynd, H. (Hackney, C.)

      Rhodes, H.

      Cluse, W. S.

      Hynd, J B. (Attercliffe)

      Ridealgh, Mrs. M.

      Cobb, F. A.

      Irvine, A. J. (Liverpool)

      Robens, A.

      Cooks, F. S.

      Irving, W. J. (Tottenham, N.)

      Roberts, Emrys (Merioneth)

      Coldrick, W.

      Isaacs, Rt. Hon G. A

      Roberts, Goronwy (Caernarvonshire)

      Collick, P.

      Jay, D. P. T.

      Rogers, G. H R

      Collindridge, F.

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

      Ross, William (Kilmarnock)

      Collins, V. J.

      John, W.

      Royle, C.

      Colman, Miss G. M

      Jones, D. T. (Hartlepools)

      Scollan, T.

      Comyns, Dr. L.

      Jones, Elwyn (Plaistow)

      Scott-Elliot, W

      Cook, T. F.

      Jones, P. Asterley (Hitchin)

      Segal, Dr. S.

      Cooper, Wing-Comdr. G

      Keenan, W.

      Shackleton, E. A. A

      Corlett, Dr. J.

      Kendall, W. D.

      Sharp, Granville

      Corvedale, Viscount

      Kenyon, C.

      Shinwell, Rt. Hon. E.

      Cove, W. G.

      Key, C. W.

      Silverman, J. (Erdington)

      Crawley, A.

      King, E. M.

      Silverman, S. S. (Nelson)

      Cripps, Rt. Hon. Sir S.

      Kinghorn, Sqn. -Ldr. E

      Simmons, C. J.

      Daggar, G.

      Kinley, J.

      Skeffington, A. M.

      Daines, P.

      Lang, G.

      Skinnard, F W

      Davies, Clement (Montgomery)

      Lawson, Rt. Hon. J J.

      Smith, C. (Colchester)

      Davies, Edward (Burslem)

      Lee, F. (Hulme)

      Smith, Ellis (Stoke)

      Leonard, W.

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

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

      Levy, B. W

      Solley, L. J.

      Davies, R. J. (Westhoughton)

      Lewis, T. (Southampton)

      Davies, S. O. (Merthyr)

      Lipton, Lt.-Col M.

      Soskice, Maj. Sir F

      de Freitas, Geoffrey

      Longden, F.

      Stamford, W

      Delargy, H. J.

      Lyne, A. W.

      Steele, T.

      Diamond, J.

      McAdam, W.

      Stubbs, A E

      Dobbie, W.

      McAllister, G.

      Swingler, S.

      Dodds, N. N

      McEntee, V. La T

      Sylvester, G. O

      Donovan, T

      McGhee, H. G.

      Symonds, A. L.

      Driberg, T. E. N.

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

      Taylor, H. B. (Mansfield)

      Dumpleton, C. W.

      McKinlay, A. S.

      Taylor, R. J. (Morpeth)

      Ede, Rt. Hon. J. C.

      Maclean, N. (Govan)

      Taylor, Dr. S. (Barnet)

      Edelman, M.

      McLeavy, F.

      Thomas, D. E. (Aberdare)

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

      MacMillan, M. K. (Western Isles)

      Thomas, Ivor (Keighley)

      Edwards, John (Blackburn)

      Macpherson, T. (Romford)

      Thomas, I. O. (Wrekin)

      Edwards, N. (Caerphilly)

      Mallalieu, J. P. W.

      Thomas, John R. (Dover)

      Edwards, W. J. (Whitechapel)

      Mann, Mrs. J.

      Thorneycroft, Harry (Clayton)

      Evans, A. (Islington, W.)

      Marshall, F. (Brightside)

      Thurtle, Ernest

      Evans, E. (Lowestoft)

      Mathers, Rt. Hon. G.

      Tiffany, S.

      Evans, John (Ogmore)

      Medland, H. M.

      Titterington, M. F.

      Evans, S. N. (Wednesbury)

      Mellish, R. J.

      Tolley, L.

      256

      257

      Turner-Samuels, M.

      Wells, P. L. (Faversham)

      Williams, W. R. (Heston)

      Usborne, Henry

      Wells, W. T. (Walsall)

      Willis, E

      Vernon, Maj. W. F

      West, D. G.

      Wills, Mrs. E. A.

      Viant, S. P

      Wheatley, J. T. (Edinburgh, E.)

      Wise, Major F J

      Wadsworth, G

      While, C. F. (Derbyshire, W.).

      Woods, G. S

      Walker, U. H.

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

      Wyatt, W

      Wallace, G. D. (Chislehurst)

      Whiteley, Rt. Hon. W

      Yates, V F

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

      Wilkins, W. A.

      Warbey, W. N.

      Willey, F. T. (Sunderland)

      TELLERS FOR THE NOES:

      Watkins, T. E.

      Willey, O. G. (Cleveland)

      Mr. Joseph Henderson and

      Watson, W. M.

      Williams, D. J. (Neath)

      Mr. Hannan.

      Webb, M (Bradford, C)

      Williams, J. L. (Kelvingrove)

      Question put, and agreed to.

      Mr. C. S. Taylor: I beg to move, in page 3, line 13, at the end, to insert:
      "or batteries or accumulators used in wireless sets which cannot be operated by an electric mains supply."
      Many hon. Members will agree that wireless sets today are almost a necessity in the average household. Certainly it cannot be said that they are any longer a luxury. The Committee will know that there are two types of sets, the one which is stimulated into activity by the electric mains supply, and the other by means of batteries or accumulators. The purpose of this Amendment is to exempt batteries and accumulators for the second type of wireless set from increased Purchase Tax. There is, of course, no Purchase Tax on the mains supply of electricity. Battery sets are in use today largely for two reasons. First, the battery set may be an old type of set, owned by people who cannot afford a new set, or cannot be supplied with one of the modern types. Secondly, they are used by those who have no electric mains supply available. It would appear, therefore, that these sets are largely owned by the poorer sections of the community. It seems quite illogical to tax batteries for battery operated sets, whereas the mains electricity supply gets off scot free. The revenue from these batteries must be incredibly small, and I hope, therefore, that the Chancellor of the Exchequer will consider this question very sympathetically.
      Mr. William Teeling: There is very little I can add to what has been said by my hon. Friend the Member for Eastbourne (Mr. C. S. Taylor). This concerns mainly those living in the country who have no electricity supply. Our country is probably one of the worst off from that point of view, and it particularly applies in the case of those living in the countryside. Those who are particularly affected are the people who live in cottages and in the poorer parts of the country. The people in the cities and
      258
      towns are in no way affected, because they have an electric mains supply, but those without a mains supply of electricity find that they are penalised for no apparent reason.
      Colonel Dower: In considering his reply, the Chancellor of the Exchequer should bear in mind that people in the remote parts of the country very often cannot get a daily paper, to say nothing of evening papers, especially now in view of the difficulties of transport and deliveries. It is these people who find the news on the wireless most valuable. I live in a very remote part of the country, and I have to rely on a battery wireless set for my news and entertainment. It is seven or eight miles from the nearest place where I can acquire a newspaper, which means that I do not very often get a paper. People in these remote parts have a greater need for wireless sets than those who live in the towns
      Mr. Collins: I hope that sympathetic consideration will be given to this Amendment. If it should be impossible to accept it, I hope that particular consideration will be given to the 120-volt high tension dry batteries, which are used in almost all ordinary wireless sets in the rural areas. It is not at all funny to suggest that rural areas do not all receive daily newspapers. It is perfectly true. If there is one section of the community that really needs and depends on a wireless, it is the people in the rural areas. I do not think it is generally appreciated what a wide discrepancy there is between the cost of running a wireless set off the mains and the cost of running a battery driven set. This difference is out of all proportion, and I hope that my right hon. Friend will seriously take it into consideration. As I understand it, four 120-volt dry batteries are needed a year for a battery driven set, which costs £2 9s. without tax, and two accumulators costing 31s. It costs 26s. a year to charge the accumulators every week. Together

      259
      with the cost of the wireless licence, this works out at £6 6s. per year, as against 24s. in the case of the all-mains wireless set. To that amount must be added 28s. 2d. Purchase Tax.
      It will be seen, therefore, that it is a real imposition to raise the Purchase Tax. I suggest that this is not a matter which can be left over until next April, which would take us through the winter. Something ought to be done now, because many of my constituents and others living in rural areas will not be able to afford to buy these batteries at the increased cost, with the result that they will have to do without wireless altogether. I hope that the Chancellor can make an exception in regard to these batteries, taking into account the wide discrepancy in running costs between the two types of set. We must give the farmworkers and others living in rural areas a chance to maintain their sets. I would urge not merely that the tax be left at the old rate, but that my right hon. Friend should consider making a clean sweep and removing it altogether.
      6.30 p.m.
      Sir William Darling: As hon. Members know, I am one of those least likely to look for malevolent designs on the part of the Government, but when I observe this tax on wireless sets using batteries, I am inclined to think that there is a desire on the part of the Government to restrict the public from hearing the truth and the news. I am inclined to connect it up with the restrictions which have been imposed on the newspapers and other printed matter. If I am not to persist in that view I can only be returned to that state of native innocence which I enjoy if the right hon. and learned Gentleman will withdraw this impost. Battery sets are of great importance, not only to country dwellers but to town dwellers. There are certain areas in which reception from the B.B.C. is indifferent, and in which the use of battery sets makes it possible for those who would otherwise not get good reception to have this very useful annex to their daily life.
      Mr. Cobb: Would the hon. Gentleman give us some technical details about this interesting discovery?
      Sir W. Darling: I always disappoint the Committee if I speak too briefly, but perhaps on this occasion I may be allowed to persist in my normal habit of speaking briefly and to the point, an example which might be followed by the hon. Gentleman, who has just done me the honour of suggesting that I might give the Committee some further technical details. Such details as I have in mind are addressed to the Chancellor. This is a bad tax, which seeks to tax the obsolete. I would agree that the battery system tends more and more to become an obsolete form of wireless reception. A bad tax is one which tends to diminish further the source from which the taxation comes. The effect of this taxation will be to disgust an increasing number of persons with the battery system they are using. From the Chancellor's point of view there will be a decrease in revenue. I, personally, would not continue to use a battery set with this new impost laid upon it, because it is an inconvenient apparatus and carries with it many disadvantages.
      Mr. Collins: Is not the main point that people have to use battery sets, because they are not on the main electricity supply?
      Sir W. Darling: I am grateful to the hon. Member for pointing that out, but I would like to be excused for thinking that the main point is the one which I am making. The Chancellor should have in mind that those who use battery sets are making no demand on the diminishing resources of his colleague, the Minister of Fuel and Power. Although I believe that the amount of power which is used is an all-electric set is very small, it is only by small mercies that we can hope to get through our present economic crisis. This impost will encourage people who still intend to enjoy B.B.C. broadcasts to abandon battery sets which consume no power.
      I would remind the Chancellor that he has already stumbled into this folly, or at least his predecessor did, and he is his predecesor's inheritor. The Chancellor's predecessor manipulated the Purchase Tax on electric fires, and discovered that the withdrawal of some of that tax increased the consumption of electricity. I may well be that this extraordinary paradox, which was so obscure to the ex-Chancellor, may be repeated by the

      261
      present Chancellor. The right hon. and learned Gentleman's desire to put extra Purchase Tax on these batteries will encourage people to consume more power, an action which his right hon. Friend the Minister of Fuel and Power will not be inclined to encourage.
      Mr. H. Hynd: Is the hon. Gentleman aware that batteries have to be charged by electricity?
      Sir W. Darling: The amount of technical information which I am getting from the Benches opposite must be as interesting to you, Sir Robert, as it is to me. I am aware of that, but the hon. Gentleman will also be aware that the amount of power used to charge batteries is less than the continued use of power for an all-electric set.
      Mr. Cobb: Would the hon. Gentleman tell us more about this interesting discovery?
      Sir W. Darling: I shall not, on this occasion, give way. The attempt to make this Committee a universal brains trust is one that I deprecate, especially as it is obvious that I am carrying off all the honours in the exchanges. I suggest that the Chancellor will get very little from this impost. He will offend the sense of justice which is inherent in our people. He will get even less money than before, because the tendency of this impost will be to discourage people from continuing the somewhat economical, though inconvenient, battery system.
      Sir Ralph Glyn: I, too, hope that the Chancellor will reconsider this matter, because I believe that the Government have made a mistake. While it may sometimes be difficult for them to accept an Amendment without loss of face, I am sure that in this case the matter was not adequately considered. It is important for the Government to keep in touch with everybody in an emergency. All of us who sit for rural areas know that it is impossible for all the people in those areas to get a mains electricity supply, and the White Paper which was issued today will put that further off than ever. It is essential that the country dweller, removed from all opportunity of a supply from the grid, should have an equal chance with those in towns, who pay nothing directly for their supply. Further, from the point of
      262
      view of agriculture it is very important for rural people to take full advantage of weather forecasts. It is impossible for people in scattered districts to get those forecasts unless they have the necessary wireless set with which to hear them. I believe that this extra tax will be an annoyance. It will not bring in much revenue, and I beg the Government to reconsider the matter.
      The Solicitor-General (Sir Frank Soskice): On this matter, I must give the answer which has been given on previous Amendments. If we were to accept the view that a case has been made out in this instance, we might have to go on to consider a number of other suggestions which might have equal cogency. As my right hon. and learned Friend reminded the Committee, the Budget was designed to mop up inflationary pressure. The rates of Purchase Tax were raised en bloc, and the merits of particular article were not distinguished for that purpose. Members on both sides of the Committee have pointed to the undoubted fact that country dwellers, who have no electric light installed in their houses, are at a disadvantage in the reception of B.B.C. broadcasts. I fully appreciate the force of that argument If it were opportune to review the merits and demerits of Amendments to move out of the scope of increase in tax a variety of articles, this Amendment would have to be carefully considered.
      It is, unfortunately, the fact that when the Government increase taxes, someone has to suffer a certain amount of hardship. For these reasons, while I entirely appreciate the force of the case put forward on behalf of the country dwellers, I feel that I must ask the Committee to accept the view that, at the moment, we cannot accept the Amendment. In point of fact, the amount of money involved is about £1 million; to accept this Amendment would thus be to give a not unsubstantial concession, and, to that extent, it would militate against the object of the Budget, and of the Bill which we are now discussing. For those reasons, while I entirely appreciate the force of the arguments to which I have listened very sympathetically, I regret that I cannot accept the Amendment.
      Mr. Stanley: I confess that I am extremely disappointed at the reply of the hon. and learned Gentleman. I did not

      263
      have the opportunity of witnessing personally, but I read with interest this morning of the hon. and learned Gentleman's appearance yesterday in the role of "Farmer Jarge." I gather that he made a great success in answering agricultural questions. It was remarked on all sides that he knew much more about agriculture after ten minutes' study of the Departmental answers, than the Minister of Agriculture after two years in office. He has replied to a case put in the interests of the country-dweller, and I thought that we would get a sympathetic answer. Instead, we got a dusty answer—and, by now, it is the very dusty answer which we have received on every one of these Amendments. All of us, facing the seriousness of the position, and realising that superfluous purchasing power would have to be mopped up by increases in Purchase Tax, have adopted a self-denying ordinance, as is borne out from the Order Paper today.
      When we compare it with the Order Paper on the ordinary Budget, when Members on all sides of the House put down the particular articles in which they are interested, I am sure that the Government will pay tribute to the fact that, with the exception of four articles, hon. Members have refrained from doing anything which might substantially reduce the effort which they are all agreed will be necessary. There are, therefore, only four articles to be considered. Even if all four were accepted, it would not make very much of an impact on the main purpose of the Bill. I go so far as to say that of these four, there are only two which I personally consider to be of very great importance. With all respect to the hon. Gentleman opposite, I may change my mind when he moves his Amendment and I have heard from him an explanation as to what is mutton-cleaning material. I do not know whether it is used to clean mutton, or whether it is made out of mutton, but it does not seem to me quite on the same level of importance as the other things which we are discussing.
      Equally, toilet preparations would appear to be a little more in the luxury class. There are, therefore, only two things which hon. Members thought sufficiently important to make any impact upon the general principle. One was the question of essential drugs. That was
      264
      disposed of by the vote of the Committee. The other is this question of batteries, which, I think, Members for agricultural constituencies realise, imposes not only a big financial burden, but may, during the coming winter, have a considerable effect on the morale of the agricultural population.
      6.45 p.m.
      The right hon. Gentleman need not fear that by giving some concession in this case, he is opening the flood-gates to more. There is no possibility of that. There are only two more Amendments to be taken, and it is unlikely that, at another stage of the Bill, any new Amendment will be called. He can be absolutely certain, therefore, that if he gives this concession, no other is likely to be pressed, and, so far as I am concerned, no other will be asked for. The right hon. Gentleman is now fortified by the return of the Chancellor of the Exchequer, and I am sure that one of my hon. Friends will be glad to keep up the Debate for a minute, or perhaps an hon. Member opposite will discuss the technical details and carry on the Debate, in order to give the brief space of time which the Financial Secretary will require to get from the Chancellor, what I am sure he will give—the authority to make this concession.
      Colonel Gomme-Duncan: Taking advantage of the suggestion of my right hon. Friend the Member for West Bristol (Mr. Stanley), I will, for one second, if I may, put to the House a very earnest plea for the users of these batteries in Scotland, and, particularly, in the Highlands of Scotland. The distance there from electricity, in spite of the promises and plans made for electricity, means that there are vast areas where no one can possibly hope to get electricity for many years to come. I think that in these days of crisis—because we all admit a crisis is on its way—it is essential that the people of these areas should have facilities for hearing what is going on every day, because they are as much affected as those in more populous areas. These batteries are, I think, a necessity. I do not think that the financial effect is such that the Chancellor need have any fear if this little concession is granted. I hope that he will see his way to look at this matter once again.
      Mr. Cobb: Before my right hon. Friend listens to the appeals of the charmers on the other side, I hope that he will get the facts right. We have had a complete mine of information from hon. Members opposite, both Gaelic and Sassenach. These batteries are divided into two—high-tension and low-tension. Do not let hon. Members on the other side think that wireless users are continually buying low-tension accumulators, because they are not. A great majority of these are rented. They are bought by radio dealers and rented to the user who, generally, has two of them. They last for several years, and, therefore, the Purchase Tax will not affect people immediately.
      Sir W. Darling: To what extent does the rental system of batteries go on in the Highlands of Scotland or the depths of Wales?
      Mr. Cobb: If the hon. Gentleman will go and look, he will find that it goes on to a very considerable extent. That is why I say that my right hon. Friend should get the facts right. The second fact is that the use of battery sets is by no means confined to rural areas. A very great number of the users of these are people who live in leasehold premises which have only got for 20 or 30 years to run and where the landlord would not put in electric light.
      Sir W. Darling: He would not be allowed to do it.
      Mr. Cobb: He would not do it before the war. Therefore, I suggest to hon. Members opposite that if they want to counteract the effect of this tax let them do something about the obsolete method of property.
      Mr. C. Williams: Will the hon. Member for Elland (Mr. Cobb) develop more fully what he called the obsolete method of property owning
      Mr. Cobb: I would not be allowed to do so, but I put it to hon. Members opposite that they should think about it. I have just put these two points, and I plead with the Chancellor of the Exchequer before he gives way on this or even considers it to get the facts of the position, and I think he will find that the situation is not so difficult for the users of this type of set as has been made out.
      Lieut.-Colonel Sir Walter Smiles: There is just one point which I wish to put before the Committee and it is in regard to the flight from the country to the towns. Every amenity that we can give to the country people is a great advantage in this connection. On the Copeland Islands exactly opposite my home, only one and a half miles from the mainland, there used to live 150 people with a church and a school. Two years ago the last of those people left those islands. People nowadays look for something more in their lives than just working on the land from daylight to dark. Another island I might mention is Rathlin Island, where Robert Bruce once took refuge. On that island there are about 200 people and each night these people gather in neighbours' houses to listen to the news on the wireless. Anything which can make their lives happier and enable them to enjoy things is for the benefit of the whole community. Sometimes in the winter they are cut off from the mainland for as much as three weeks through storms, and in the past aeroplanes have had to drop food for these people or they would have starved. As for newspapers, of course, in stormy weather it is impossible to get them over. There are a number of other islands round the coast of Scotland which are in exactly the same position. I hope when the Chancellor is making up his mind he will consider these people who live and earn their living in these isolated islands round our coasts.
      Mr. Vane: I am delighted to support the plea of the hon. and gallant Member for Penrith and Cockermouth (Colonel Dower) as one of his constituents who lives in a remote district, has no kind of electric light and uses a battery wireless set. In his turn one of my constituents, whom I see on the benches opposite will, I hope, rise and support me because, this is no party issue. It is too important an issue to be that. I sincerely hope before we divide on this Amendment that we may hear something a little less technical and more practicable than the one contribution which so far we have heard from the benches opposite.
      I have had considerable correspondence from my constituents on this matter and they are worried about the rise of price. I would quote a recent letter which I had

      267
      from the Minister of Supply who admitted that a 120-volt H.T. battery had risen from 7s. 6d. to 15s. 2d. since 1939. That is a 100 per cent. rise, but what the Minister forgot to say was that the life of these batteries now is very much less than it was owing to the reduction in quality. Most users of high tension batteries now reckon the life in terms of weeks, where previously they reckoned it in terms of months. In consequence it is no exaggeration to say that the running of a battery set now is an expensive luxury. Perhaps we will be able to charm the Chancellor into exuding a little sympathy.
      I was not at all impressed by the argument of the Solicitor-General, who said that he thought it was impossible to consider any of these Amendments; and that he could not accept any exceptions because bicycles have already been excepted. It is quite unreasonable to offer something to the few persons who may be in need of new bicycles, and they are a very small number, and nothing to the people in country districts who use battery sets and who are far more numerous than those who would buy a new bicycle. I suggest that the Chancellor should change his view and accept this most important Amendment.
      Mr. Austin: I was very glad to hear that the Solicitor-General, though quite sympathetic to the objects of the Amendment, was not prepared to accept it at the present moment. There is one consideration which I want to put to the Committee, which I feel might convert even the Opposition to the view that this Amendment cannot be accepted. The Amendment refers to a wireless set which cannot be operated by electric main supplies. Wireless sets used in motor cars cannot possibly be operated by electric main supplies, and I am certain it never was the intention of those who put down this Amendment to extend this concession to those who use wireless sets in their motor cars. If at a later date the Government see their way to accept this Amendment they should not include those who are fortunate enough to have wireless sets in their motor cars. Therefore, if only on technical grounds, which generally are so dear to the hon. Member for South Edinburgh (Sir W. Darling), I support
      268
      the Government and resist this Amendment.
      Mr. Douglas Marshall: When the main Budget at the beginning of the year was introduced I raised this question at a very late hour with the then Chancellor of the Exchequer. He was very sympathetic towards my point of view, but he asked me, if my memory serves me right, not to press him at that stage. That was at a time when this tax was not doubled as it is now. I trust that the Chancellor of the Exchequer will listen to the arguments that have been advanced tonight, and I feel sure that he will realise the full and vital necessity of giving what we possibly can to agriculture at the moment.
      The question of the production of food is of vital importance, and it is physically impossible to get the different amenities to the country which we would wish owing to the crisis that has developed, but if we can possibly help in a small way with something which is necessary and helpful to the amenities and which is not over great in cost, we should gain a lot by doing so. I sincerely trust that the Chancellor will take all these matters into account, and realise that my hon. Friends from Scotland, Northern Ireland, England and myself from Cornwall have put in front of him different telling points with regard to this matter and that he will reconsider this case in the interests of agriculture and with that graciousness which we know he can show, go to the Box and say "This is proof that I can alter my decision as a result of the Debate that has taken place tonight."
      7 p.m.
      Sir S. Cripps: I am sure that hon. and right hon. Gentlemen will believe me when I say that if I am convinced I shall not have the slightest hesitation in altering my views. I do not believe that my views are so much better than those of anybody else that one can always absolutely rely upon them. I am very much influenced, as a countryman myself, by the arguments put forward on behalf of the rural population. There is no doubt that many people with the present rather low standard of transport facilities are thrown back on their own resources for entertainment. I would be quite prepared to consider this matter before the Report stage and to see whether I can do anything. I give no promise and make no

      269
      undertaking, but I will look into this whole matter before the Report stage to see whether anything can be done.
      Mr. Stanley: I am sure that all my hon. Friends would like me to say on their behalf how grateful we are to the Chancellor of the Exchequer for what he has said. We quite realise that he has made no pledge of any kind, but we know also that when he says that he will look into this matter he will do so with a desire to meet, if that is any way possible, the arguments that have been advanced to him from both sides of the House, with one exception. In view of the Chancellor's action I am sure that my hon. Friend will feel that the moving of the Amendment has served an extremely useful purpose, and will be prepared to withdraw it.
      Mr. C. S. Taylor: I also would like to thank the Chancellor of the Exchequer for the attitude that he has taken up. In view of the assurance that he has given that he will consider this matter before the Report stage, I beg to ask leave to withdraw the Amendment.
      Amendment, by leave, withdrawn.
      Mr. John Lewis: I beg to move, in page 3, line 13, at the end, to insert:
      "or knitted stockinette (mutton) cleaning cloth.
      It is with a song in my heart that I move this Amendment, in view of the statement which the Chancellor made in regard to the last Amendment before the Committee. I felt very glad when I heard the Solicitor-General say that individual objects would be considered on their merits. I feel that it is necessary at this stage, in the light of what I have to say, to put it on record that these omnibus increases in the basic rates are generally conflicting and confusing, and are unsound. Several Amendments are to be introduced today in cases where the increase in the basic rates of Purchase Tax will inflict hardships upon the lower income groups. I want to make it perfectly clear that I did not vote on this matter because I felt that it was not my duty to do so.
      The Amendment deals with one example, among others, of ill-advised action which is inflicting great hardship upon a large number of people. I believe
      270
      this feeling is shared by many hon. Members on this side of the Committee. The material referred to in the Amendment is specified as:
      "plain, unbleached all-cotton fabric of louse texture, of a type normally used for covering food or cleaning machinery, being fabric made on a circular machine and from a single yarn."
      In order to extricate the right hon. Member for West Bristol (Mr. Stanley) from his intellectual difficulties, I would explain that this is fabric used only for covering food and for cleaning. It cannot be used for the manufacture of apparel of any kind. Unfortunately, this fabric comes under Class 2, which is defined as:
      "tissues and fabrics of whatever width (other than jute fabric) whether in the piece, shaped, or partly made up."
      I suggest to my hon. and learned Friend the Solicitor-General that it is very unfair that this material, which is used in cleaning and for industrial uses——
      Mr. Stanley: I hope the hon. Member will forgive me for interrupting, but I would like to clear up one point. He has read out a description of articles which he wants removed from the Schedule, but the description does not seem to correspond with the definition that he uses in his Amendment. I did not hear anything about nets, stockinette, or mutton—or indeed any—cleaning cloth.
      Mr. Lewis: I sought to explain that the fabric referred to, which is "knitted stockinette (mutton) cleaning cloth," was included in the Schedule under Class 2, comprising tissues and fabrics, among the net or lace curtains. I seek to discriminate among the materials which are included in the Schedule referring to "fancy net or lace curtains." This type of material, which is used for industrial priority purposes for cleaning machinery and for covering food, is a purely utility product. It is not a luxury commodity. It is wrong that it should be subject to this increase in taxation, and I hope that the Solicitor-General will emulate the Chancellor of the Exchequer by not merely showing sympathy for the Amendment but making the statement that he intends, in the period before the Report stage, to give further consideration to the matter.
      The Solicitor-General: I am sorry that I cannot accede to my hon. Friend's

      271
      request. I listened carefully for an argument which would distinguish this cloth from other sorts of cloth which could be used for similar purposes. A case can be made out for excluding all sorts of cloths, and before it would be right to accept an Amendment there would have to be something to distinguish this cloth from others. It would be necessary to make out for this cloth a stronger case than can be made out for all the wide range of similar materials. I am not even quite certain as to the exact effect of the Amendment. I am not quite certain whether the definition:
      "knitted, stockinette (mutton) cleaning cloth "—
      could be limited to the purposes which were indicated by my hon. Friend. It is a general description of a particular type of cloth, with "cleaning" appended as an adjective. It is not an adjective which I should have thought would include a very precise definition of the purposes for which it is used.
      Mr. Lewis: It is in the Commissioner's Notice No. 78J.
      The Solicitor-General: I am trying to concentrate upon the actual words that my hon. Friend uses in his Amendment, because it is by those words, if they become part of the Bill, that those who will have to administer the Measure will be governed. For those reasons, although I listened very carefully to the arguments of my hon. Friend, I much regret to say that I found nothing in his arguments which makes a case for this sort of cloth in contradistinction to other cloths which serve equally useful purposes but are nevertheless included within the scope of the taxation.
      Mr. Stanley: On this Amendment I do not feel I can give to my hon. Friends any useful guidance. I must confess that so far I have not understood one word of the discussion. I have neither understood the reasons why the hon. Gentleman wants a kind of cloth which seems to appear under a good many different names at different times excluded from the Schedule, or any idea why the Solicitor-General wants to retain it. In those circumstances I can only suggest to my hon. Friends an attitude of neutrality.
      Mr. Lewis: I am sorry that I did not manage to clear the mind of the right hon. Member for West Bristol. In point of fact, this is a very simple matter. There are certain types of cloth which certain people, such as engineers, use for cleaning their machinery and other people for covering their food. They have to buy this cloth. There are two purposes for mutton cloth. The first is for covering food and the other is for the cleaning of machinery. Engineers use it, I think they say, as their rags. It is a utility product. The important point is that it is being included in the same category as lace and net curtains, and that seems very unfair. I must apologise to the Committee if I did not make the position quite clear originally. However, that is the purpose of the Amendment, which I suppose in the circumstances I must beg to ask leave to withdraw.
      Amendment, by leave, withdrawn.
      Sir T. Moore: I beg to move, in page 3, line 13, at end, to insert, "or toilet preparations."
      We now come to something more colourful than the mutton cloth we have been discussing. The object of the Amendment is to persuade the Government to be more generous to toilet preparations and those who use them. I am grateful to the Chair for calling this Amendment, because I approach it with a certain amount of diffidence. In fact I am more than surprised that it was left to a male Member of this Committee to introduce, and I can only assume that the Lady Members are unwilling to reveal the source of their charms. As will be seen, the fate of this Amendment largely depends upon how the Government have decided to treat our women. Are they to be treated as butterflies, as an impertinent lot of hussies, as irresponsibles, or as the Lord President would have them now that he is seeking their assistance, as responsible members of the community who may be pampered and coddled. That is, no doubt, due to the possibility of empty ballot boxes at the next General Election.
      I have one friend, anyhow, in addition to the Lord President. I have here a statement made by the late Chancellor in his first broadcast—those happy halycon days—after his first Budget in which he said that it was his urgent wish to give women an opportunity to make

      273
      themselves more beautiful. He said in reference to the tax reduction:
      "I think this will interest the ladies. I want you to look your best these days."
      I have the late Chancellor on my side and, from the point of view of pure sympathy and fraternal desire to be of assistance, I should have thought that the present Chancellor would hold similarly friendly views.
      The purpose of the Amendment is to exclude toilet preparations from the scope of the Clause and I have three not frivolous but solid justifications and arguments to prove what might otherwise seem to be a rather carefree Amendment in these austere days. There is something far greater about this Amendment than the mere reading of it on the Order Paper. The first argument is that to a very large number of professional women, cosmetics are what is well known in the Treasury as the tools of their trade. I am speaking of stage actresses, cinema performers, television performers and stage entertainers of every kind. They must have cosmetics if they are to perform their job efficiently and earn their living, so why impose this extra burden on them in their efforts?
      My second argument is that these toilet preparations or cosmetics are the greatest single factor in the morale of women, with very few exceptions. It is the same with tooth paste and a tooth brush which give good morale and a sense of friendliness and self-respect to men and women alike. Just as a razor and shaving soap give morale and self-respect to men, so with women a touch of powder possibly, a touch of rouge—I do not know—and a touch of lipstick give them that nervous courage which has been so essential to them in their very arduous work during the past seven years. I believe that to e true; they have told me so themselves. In factories and in queues it makes them far more able to carry out their soul-searing jobs if they feel that they are adequately protected in regard to their face and general appearance. Any man can prove that at any time by looking carefully at a woman who has come to look for a job. She will have done her best to make herself look neat and well groomed and her face as pretty as nature will allow. These facts are recognised throughout the civilised world and in parts of the world about which some of us have doubts. Even in Soviet Russia
      274
      very special concessions are given to beauty parlours.
      7.15 p.m.
      The Chancellor should also pay particular attention to the position of the industry and the manufacturers. During the five years of actual war the Americans got a tremendous jump forward in capturing the world market for beauty preparations. They have a five years start of us. Although we now have the science, the skill, the technicians and the craftsmen, we have not got the Government support for the industry to enable us to race after and race ahead of the American developments. How can our manufacturers compete with the Americans abroad unless their domestic market is secure, and how can it be secure if we are to wipe it almost out of existence by this fantastically high tax? Therefore in the interests not alone of the women—I do plead for them—but in the interests of a very great and growing industry, I ask the Financial Secretary to give sympathetic consideration to the points I have made and the arguments I have used, which I believe would fully justify his consideration.
      Colonel Gomme-Duncan: I feel sure somehow that the Financial Secretary will refuse this Amendment. I support it in order to ascertain the actual situation in regard to the trade. Can the Financial Secretary give us some figures? Can he give us some idea what a tax of this kind means in money? That will make it a great deal easier for people to form their own opinion. The Amendment is a very sound one. I cannot put it in the very happy language of my hon. and gallant Friend the Member for Ayr Burghs (Sir T. Moore), but there is a great deal in it, particularly from the point of view of the trade.
      Mr. Glenvil Hall: The hon. and gallant Member for Perth (Colonel Gomme-Duncan) is quite right: I am about to ask the Committee to resist this Amendment. I was surprised at the two hon. and gallant Gentlemen who spoke to this Amendment which deals with toilet preparations, that is, aids to beauty. They both sit for Scottish Divisions and, therefore, I assume that they are speaking largely for those who live in those areas.
      Sir T. Moore: We have the best raw material on which to work.
      Mr. Glenvil Hall: I was going to say that from my experience I should imagine that the lassies in Scotland needed toilet preparations to assist them in being beautiful less than almost anyone. They are almost universally lovely because of the air in Scotland and the surroundings of their native hills. Therefore I do not think the fact that we cannot accede to this request will lose those of us who vote against this Amendment any votes from Scotland. The reason why I cannot accept this proposal on behalf of my right hon. and learned Friend is twofold. First, it would cost a great deal too much—and this is the reply to the Question raised by the hon. and gallant Member for Perth. It would cost no less than £2,500,000 in a full year, and we think we should not forgo this sum in this direction. If my right hon. and learned Friend has money to spare, I think that the Committee would agree on reflection that there are other directions in which it could be much more usefully remitted. I can remember discussions we have had here, often in the middle of the night, on this or that item in this or that schedule under the Purchase Tax. There is, for example, the question of toothbrushes. I remember that we had a most interesting discussion on this question one night, and I am positive that most hon. Members would prefer to see toothbrushes relieved of Purchase Tax rather than toilet preparations for which the hon. and gallant Member for Ayr Burghs (Sir T. Moore) has pleaded so eloquently tonight.
      Therefore I ask the Committee to realise what it would cost, and to realise that we are nor in this supplementary Budget overhauling the various categories subject to the Purchase Tax. The time for such an overhaul as my right hon. Friend the Member for Bishop Auckland (Mr. Dalton) said when he opened his Budget some weeks ago, is when we are considering the proper Budget in the spring of the year. For those reasons I must ask the Committee to reject this Amendment.
      Sir T. Moore: While I think the right hon. Gentleman has totally evaded my last and strongest argument with regard to foreign trade and dollars coming to this country, I would be the last to suggest that we should lose £2,500,000 at the present time. However, while I am
      276
      asking leave to withdraw my Amendment, I will ask leave to reproduce it next Budget to see if it will get a better response.
      Amendment, by leave, withdrawn.
      Motion made, and Question proposed, "That the Clause stand part of the Bill."
      Mr. Spearman: Before we lose this Clause, may I make one point briefly? First, however, may I say that I am not criticising increased Purchase Tax which I believe at the present time, unpleasant as it may be, is absolutely necessary. However, it is inequitable in its application to postal charges. I have here a bill from Messrs. Parke Davies to one of my constituents for Effia Citrate Tabs. What these tabs are, I am not sure, but they cost 4s. 4d. each, the Purchase Tax, quite properly in my opinion, is 2s. 11d and then there is a Purchase Tax, on the postage of 2d. That adds up to rather a lot. Also it puts the country retailer at a rather unfair disadvantage compared with his brother in the town who does not need to send these things by post. He, therefore, is in the position of having to charge his consumer more than would be charged elsewhere. Secondly, it is only urgent things such as medicine which go by post, and so bear this charge. I would ask the right hon. and learned Gentleman, therefore, before Report stage to look at the matter to see whether it would not be possible to take away this small charge which mounts up against certain people. There may be some good reason for it, but I would ask for some explanation or an assurance that it will be looked into in the hope that it may be removed at a later date.
      Major Peter Roberts: I wish at this stage to issue a warning to the Government against treating this form of tax collection in this way. I appreciate the objects of the Government in bringing in this Clause, but it increases the percentage on the various schedules. If this form of taxation is to be a precedent, we shall get into a great deal of trouble in the future. I do not like this Clause, for the following reasons. The Purchase Tax has been put on either to raise money, to reduce unnecessary spending, or to cut out luxuries in this austere life. Three different reasons have been put forward by various Chancellors for putting on the

      277
      Purchase Tax. In this case the reason for increasing it is to keep money away from the inflation spiral. If the method of doing this is merely to increase the percentage on all sections of the various schedules, by one amount or another, we are bound to have anomalies and difficulties. Tonight certain exceptions have been put forward from both sides of the Committee, and the reasons underlying all of them have been the same, that we are now increasing the Purchase Tax by a general percentage in order to take money off the market, when the reason for various things being included in the schedule was quite different.
      All I wish to point out at this stage of the proceedings is that it should not be a precedent for Chancellors to raise money merely by using these percentages as a sliding scale. It is the easiest thing in the world for Treasury officials to say, "If you increase the percentage by so much, you will get so much more money." It is an easy way out for the Chancellor not to have to go into all the details raised on each particular item, but I am certain that, on the general principle, mistakes are being made. The only proper way is for each schedule to come up for review if the Purchase Tax is to be altered. In that way we shall be able to see the reasons for these various items being included in the schedule. We know that times are changing, products are changing, demands are changing, and it is quite improper that various items which have been on a schedule since 1940 should remain there without review. If we accept this method of taxation, using a sliding scale of percentages, there will be a great deal of confusion in the future, and purely from that point of view I wish to enter a caveat against this form of legislation.
      Mr. Pitman: In no way have we been chiselling at any of these Purchase Tax items, and so one has not put down Amendments which might be regarded as attempts to chisel away the tax coming in from this Clause. However, since the Chancellor has said that he will be reviewing the whole classification of Purchase Tax, I wish to call attention to the peculiar position in regard to stationery. Some 94 per cent. of taxed stationery goes to companies or to the Government, which is, in effect, increasing the tax on itself or increasing the deduction from profits which are taxed. If it is desired to tax companies in that way, the right
      278
      way to tax them is on their profits, and not on the amount of stationery they consume, which they wish to keep down in any case. The marginal use of stationery for the ether 6 per cent. falls on a form of personal communication which is very dear to everybody in this Committee and is the beginning of civilisation. Books are tax free, and they are likened to the Old Testament; letters are taxed, and I would liken them to the Epistles of the New Testament. There is a very good case in any reconsideration of the Purchase Tax to consider this point of the 94 per cent. of stationery tax, which is either taxation by the Government of itself, or taxation by the Government of business already paying half of that taxation in another form.
      7.30 p.m.
      Mr. John Foster: Increased Purchase Tax is due when an article is delivered. This has caused hardship in the case of a working man who, unable to fetch goods on the Thursday, which was 13th November, when they were ready, could only collect them on the Friday or the Saturday. He was told that as he was notified before 13th November that the goods were ready and he could not get there to pay for them, he would have to pay the increased Purchase Tax. I am sure the right hon. Gentleman would feel sympathetic on a point like that. He could deal with it by giving an instruction that delivery should include notification that the goods were ready before the increased Purchase Tax came into effect. I add my plea to the Government that when they come to reconsider the Purchase Tax they should deal with it in categories, and on principles. Many articles subject to increased Purchase Tax relate to cleanliness and health. I need only mention dishcloths and floorcloths on which enormously increased Purchase Tax has to be paid, although they are necessary all over the country for the purpose of cleaning. No one can say that they are luxuries or that their purchase is an illegitimate use of purchasing power which calls for mopping up. When the Government come to study articles liable to Purchase Tax in the next Budget, I hope they will bear that point in mind.
      Major Legge-Bourke: The general principle of the increased Purchase Tax has been sufficiently discussed, but I wish to bring to the attention of

      279
      the Committee the effect which it may have on agriculture. I believe the Government are quite sincere in their drive—if not quite explicit as to the actual methods by which they propose to achieve it—to increase production by British agriculture. In this year's Lord Mayor's Show there was a very fine team of Suffolks, which came from my constituency. Part of the equipment of those Suffolks was their collars. I have only been informed this morning, and so have not had an opportunity of putting down an Amendment on the subject, that the lining of the collar, which is subject to Purchase Tax, has increased from 33⅓ per cent. to 50 per cent. In the various Schedules of the many Finance Acts referred to in this Finance Bill I have been trying to find where a "collar check"—which is the saddler's technical name for it—appears. Saddlers are definitely under the impression that the collar check will be subject to increased Purchase Tax, and I believe there may be other materials and goods which are absolutely essential to agriculture which may suffer increased tax as a result of this Bill. I hope that when the Financial Secretary discusses this matter of Purchase Tax he will see to it that we are given a complete and up to date list of the various items which come under it, because it is a feat beyond the average hon. Member to sort out all the items subject to the Tax, which refers back to the first Finance Act of 1940. It is extremely difficult to find exactly what is the situation.
      I wish to add an extra plea to the Chancellor and the Financial Secretary about the incidence of Purchase Tax on medicine, particularly in regard to old people. The Assistance Board have been provided with a list of the average weekly expenditure of old age pensioners, and on that list there is the item of 1s. a week which old age pensioners who are relying on the Assistance Board have to devote to medicine. No one class of people in this country are having a more difficult time than old age pensioners, particularly the non-contributory old age pensioners, and for that reason I hope that the right hon. Gentleman will see that before the next full Budget is introduced this matter is looked into. I also hope that the whole matter will be segregated into proper
      280
      categories, as my hon. Friend the Member for Northwich (Mr. J. Foster) suggested, so that we shall not have this very muddled and, I think, unfair basis on which the Tax is levied.
      Mr. Hollis: In support of the plea made by my hon. Friend the Member for Bath (Mr. Pitman), when the whole principle of the Purchase Tax comes to be considered, as I hope it will be, I hope consideration will be given to the fact that it is a pure waste of time for the Government to pay Purchase Tax to themselves. There is a large amount of unnecessary complication in the charging of Purchase Tax on articles predominantly bought by the Government, which means taking money from one pocket and transferring it to another. There is delay in book-keeping, and the receipts the Government profess to get under the Purchase Tax are to that extent loaded, because to that extent some of them are increased Government expenditure.
      Mr. Glenvil Hall: As some of the points have been put by different Members, I will not deal with them separately, but in groups, The hon. Member for Scarborough and Whitby (Mr. Spearman) drew attention to a chemist's bill, which he has been good enough to give me, so that I could understand his point. He said that someone had made a purchase of certain drugs to which Purchase Tax at 33⅓ per cent. had first been added and that after this, still more Purchase Tax had been charged on the postage. The reason for this is that when Purchase Tax was first instituted in 1940, it was, by general agreement levied at the wholesale stage. It followed that the goods which were to be subject to Purchase Tax had not at that time reached the retailer and certainly not the ultimate purchaser. To get the goods physically from wholesaler to retailer, transport charges must he paid either to the Post Office, or to a railway, or to someone who owns a lorry and these charges must be included in the price on which tax is charged. Where, because of the physical circumstances, a transport charge does not enter into the cost of the article in question, it is part of the law of the country that it must be added back in assessing Purchase Tax.
      I can only say that although it may seem a curious way of doing it, it has

      281
      been done consistently since 1940. It has been done in association with, and as a result of consultations with, the various trades and industries concerned, and I understand that it has been done largely at their request. I have not dealt with this point for some time, but I believe that what I am saying is true. In order that all should be treated alike, this charge for transport from the wholesaler to the retailer, which is sometimes notional, is added hack and included.
      Mr. Spearman: I am not sure it I quite understand the right hon. Gentleman's explanation. If I understand him aright, it still remains the fact that there is an anomaly between the man in the town who perhaps does not get his goods by post and, therefore, does not pay this charge, and the man in the country who does. It so happens that urgent things like medicine which are chargeable do go by post and not by other cheaper methods.
      Mr. Glenvil Hall: It is added back for that very reason. Sometimes it is notional and no charge arises because of the physical proximity of the wholesaler and the retailer who may indeed be the same. In another case the charge is added to the price of the article. When this matter was under discussion in the early days, it was considered that in order to treat all alike, this charge, whether notional or real, ought to be added in. I would emphasise that this was done with the consent of industry generally because it was considered the reasonable, necessary, and proper thing to do.
      Mr. J. Foster: On what basis is the notional amount calculated?
      Mr. Glenvil Hall: In this case it is based on what it cost to post the article.
      Mr. Foster: I asked on what basis is the notional amount calculated?
      Mr. Glenvil Hall: I have not the exact percentage, but it is worked out from industry to industry. It must obviously vary according to the type of the articles concerned and the normal method of sending them from the wholesaler to the retailer.
      The hon. Member for Bath (Mr. Pitman) pointed out that the Government are great users of stationery, and appear
      282
      to be paying Purchase Tax to themselves because the Tax is levied on the wholesaler, as it is in the case of other articles. The hon. Member thought that was absurd and that something should be done about it. I know what the hon. Gentleman desires; he wants stationery to be relieved of Purchase Tax altogether. We have had many discussions on this matter, and the hon. Member has made some inroads into the tax on this class of consumer goods. For example, typewriters are now costing less than they otherwise would. The other day I was asked why certain articles, which seem so essential, are charged a fairly high rate of Purchase Tax, whereas typewriters, which would appear to some people to be not very necessary to the art of living, are exempted altogether. I had to point out that this was due very largely to the insistence of the hon. Member for Bath.
      Mr. Pitman: I appreciate the compliment, but the essence of the matter is that these are productive machines which are capable of adding to the national wealth.
      7.45 P.m.
      Mr. Glenvil Hall: All I would say is that we all have our views as to what we would like to be subject to tax and what we should like to be exempted. The hon. Gentleman has very rightly—I am not complaining—been active in putting the case against the imposition of this tax on stationery. From one point of view it is possibly an anomaly. Nevertheless, it would probably lead to a good deal of chaos if we had two sets of stationery, both identical, one of which was not subject to the Tax because it was designed for Government use, and the other which was subject to Purchase Tax because somebody else was going to use it. The only way to meet the hon. Gentleman is to remove the Tax altogether. As I indicated in reply to an earlier Amendment, this is not the time to make changes in the Purchase Tax. The time for that will be when my right hon. and learned Friend deals with this matter in his Budget next April.
      The hon. Member for Northwich (Mr. J. Foster) raised a point which has been put quite a number of times recently at Question Time. It concerns the man who buys a suit, who does not collect it on 12th November but goes on the 13th or 14th,

      283
      and finds that Purchase Tax has been levied at a higher rate. He naturally feels aggrieved because, according to him, the suit was already ordered; he could have picked it up before and it is pure chance that he did not do so. As my right hon. and learned Friend and I have indicated, this tax is levied at the wholesale stage. When one buys a suit which is bespoke, obviously the registered tailor is acting in a dual capacity; he is both wholesaler and retailer. That suit does not attract tax until it is actually made up and ready for the individual who has bought it and is going to wear it.
      In the case of a suit "off the peg"—that is, a ready-made suit hanging up in the shop—the retailer has no right to charge the purchaser the extra Purchase Tax which came into force on 13th November if this increased Purchase Tax had not been paid at the wholesale stage. I have made some inquiry about this because it is a matter which has interested quite a lot of hon. Members. Both my right hon. and learned Friend and I have had questions addressed to us about the matter, and I have gone into it. Those who make inquiries will find that tailors who still have suits that came into their possession from wholesalers before 12th November are still charging the pre-Budget price.
      The difficulty is that we are bound to have anomalies with this Purchase Tax. May I remind the Committee that it cuts both ways? We are under a great deal of pressure to allow people to pick up suits or other consumer goods which are subject to this tax—it does not relate only to clothes—at the old rate, if they had ordered them before the specified date. There will come a time, I hope, when the Purchase Tax will be reduced, and in some cases it will be drastically reduced. Will hon. Members then be willing that the tax should be levied at the rate in force on the date when the article was ordered and not at the rate in force on the date when it was delivered? Unfortunately for all of us, this tax cuts in one particular direction just now and there is no method of getting round it. We are informed by our experts that if we back dated the increase to a certain time there would be a great deal of wangling. It would be impossible in a large variety of instances to substantiate
      284
      when the commodity was ordered, if the date of ordering and not the date of delivery were the date on which the tax began to operate.
      Mr. J. Foster: The case which I have in mind is a little different and harder. In this case the goods were ready at a certain date. I was not pleading that the tax should be imposed on the date of ordering. If the article is ordered and is not ready until after the date when the Purchase Tax is imposed, the increased Purchase Tax ought to be paid, but I think it is rather unfair when the retailer has notified the person who has ordered the article that it is ready, and because that person is working all day and cannot fetch it, he is penalised. It would be quite easy for the Chancellor to decide that the date when a purchaser is notified that the article is ready should be deemed to be the date of delivery.
      Mr. Glenvil Hall: The hon. Gentleman is a distinguished lawyer, and I need not waste too much time on this point. I need only point out that it would be impossible, if the arguments which I had put before the Committee are valid, to distinguish any more easily between when it is ready and delivered than it would be to distinguish between when it is ordered and when it is delivered. Therefore, we must adhere to the delivery point, because that is the one thing upon which one can fix. Otherwise, a man could say, "I ordered this six months ago. Therefore, I shall not pay the tax." To oblige the customer, the shopkeeper might quite easily say, "It was ready before this tax came into operation." Therefore, we must adhere to the date of delivery, although, as my right hon. and learned Friend said at Question Time, it does, unfortunately, lead occasionally to hardship in individual cases.
      I have covered most of the points which have been made. The hon. and gallant Member for the Isle of Ely (Major Legge-Bourke) said that agriculture might be affected in some directions by Purchase Tax, and he pleaded for an up-to-date list of what goods are charged with tax and into what categories these fall. I am not sure whether he was in the Committee when my right hon. and learned Friend spoke earlier on this subject. He indicated to the Committee that he intends, at an early date, and certainly before next

      285
      April, to have the whole of this area looked at, so that he can, if possible, wipe out any anomalies that may exist, and to clean up the whole field in a proper and systematic way. It seems to be a corollary of that promise that up-to-date lists will be prepared, so that we shall all know what goods are charged, at what rate they are charged, and in which category they fall.
      I think I have answered the hon. Member for Devizes (Mr. Hollis) in what I have said in reply to other hon. Members. Therefore, I hope that, in view of what I and my right hon. and learned Friend the Chancellor and my hon. and learned Friend the Solicitor-General have said, and the fact that we have had a pretty long discussion over the whole field, the Committee will now be ready to let us have this Clause without further debate.
      Captain Crookshank: After the courteous and full reply of the Financial Secretary, I do not think there is need to carry the Debate on this Clause any further. We made clear our views on the increases in the Purchase Tax in the earlier Debates. Today we have only been dealing with some of the details. I hope that in the interval the right hon. Gentleman will look again at the point raised by my hon. Friend the Member for Scarborough and Whitby (Mr. Spearman). It is true that 1940 is a long time ago, and I admit that I was in the right hon. Gentleman's place then and dealt with the original Purchase Tax. I well remember how Lord Simon described this tax as one which was collected when articles and goods leaped over the wall from the wholesale to the retail area.
      Although I should have to look it up again to confirm my memory, I quite accept what the right hon. Gentleman said, because on his argument Purchase Tax is collected, or is assessed, when the goods reach the retailer, and, I understood him to say, there is a notional figure included for charges. I take it that it follows that the actual charge to the retailers for certain classes of goods differs all over the country for the same article because of differences in the carriage of the goods. Supposing they went by rail in one case, or road in another, or up to Scotland, or something like that in another case, all the charges would be different. That, I take it, is the right hon. Gentleman's explanation why, if they are
      286
      sent by post, a charge is specifically made on the postage, whereas in other cases the charge is either notionally fixed over the whole field, so as to be the same to everybody or else is varied according to the cost.
      If that is the explanation, and that is what has always happened, I do not think there is any particular complaint which one can raise, because the structure of the tax has been in being for so long that it would be difficult to alter it from that point of view. It seemed rather strange to my hon. Friend to be asked, for the first time, to pay this charge on a bill made out in that way. It may be that the charge was wrongly raised in that case, and that it should have been notional. It may be that this particular retailer had paid twice, first, on the notional charge, and secondly on the postage. I do not say that it happened in this or other cases, but it looks as if some further clarification ought to be made. Obviously, it cannot be made tonight, and I hope that we can now proceed to the next Clause.
      Clause ordered to stand part of the Bill.

      CLAUSE 6.—(Pool betting duty.)
      Mr. John Lewis: I beg to move, in page 3, line 29, at the end, to insert:
      "Provided that no duty shall be payable on such stake money which is returned by the totalisator without deduction by the promoter of the percentage of the stake money in accordance with paragraph 3 of the First Schedule to the Betting and Lotteries Act, 1934."
      As the Clause now stands, it would appear that on all bets that are made on dog racecourse totalisators there will be deducted a sum equal to 10 per cent., which would be Excise Duty. I understand that it is now the practice, in respect of all sums staked on the totalisator, for the promoters to deduct, in accordance with Paragraph 3 of the First Schedule to the Betting and Lotteries Act, 1934, a sum of 6 per cent., which they are entitled to do. There are cases when no race takes place, due to inclement weather conditions, which may develop rapidly between the time the stakes are invested on the totalisator and the time the race is to be run. In this and other circumstances it is the practice to return all the stake money to the bettors without a deduction of any of the 6 per cent. to

      287
      which the promoters are entitled. The purpose of this Amendment is to ensure that in the event of these circumstances occurring, the money will be returned, not only without the deduction of the 6 per cent. but also without the deduction of the 10 per cent. to which the Revenue would be entitled by way of Excise Duty in accordance with this Clause. I should be obliged if my hon. and learned Friend would clarify the position.
      The Solicitor-General: I think I am in a position wholly to reassure my hon. Friend about the question which he has raised by his Amendment. The tax only impinges upon a bet, and if the circumstances are such that the bet is off owing to inclement weather, or for whatever other reason, a bet does not take place within the meaning of the Clause, and in consequence the Betting Duty would not be imposed. I think that is the question, and I can give my hon. Friend that categorical assurance.
      Mr. Lewis: I thank my hon. and learned Friend, and, in the circumstances, I beg to ask leave to withdraw the Amendment.
      Amendment, by leave, withdrawn.
      Motion made, and Question proposed, "That the Clause stand part of the Bill."
      Mr. H. Hynd: I wish to draw attention to the tax which is proposed by this Clause, particularly on the grounds of equity, which I think should make a special appeal to my right hon. and learned Friend. I must remind him again of the words spoken by his predecessor in introducing the Budget in April last, when he said:
      "… the Labour Party stand for justice; and to tax 'totes' and pools alone, and let the bookmakers go free, would be wrong; it would be unjust; it would be repudiated by all right thinking men and women."—[OFFICIAL REPORT, 15th April, 1947: Vol. 436, c. 78.]
      I am afraid that the whole Committee must agree that this tax, as it is now proposed, is definitely unjust. I think there can be no doubt about that. Look at what it proposes—that in addition to the 6 per cent. now deducted by the greyhound totalisators for management expenses, there shall be this additional to per cent., making a total deduction of 16 per cent.
      288
      8.0 p.m.
      Nobody can object to that as a matter of principle if it is applied fairly, but it does not apply to totalisators on horse tracks, nor does it even apply to the bookmakers on the greyhound tracks. There are other anomalies in addition, but there are those two glaring anomalies in particular as it now stands. I do not propose to deal with the anomaly regarding differentiation between the dogs and horses, because at least one of my hon. Friends knows far more about that than I do. However, in regard to the anomaly between the totalisator and the bookmaker on the greyhound track, I suggest very seriously to my right hon. and learned Friend that here is a discrimination that he can clean up quite easily. I do not think he could dispute that.
      Whilst we may have to accept what he said on 25th November, that this is not an occasion when anybody will expect us to review the whole law of betting and that it would not have been an appropriate subject for an interim Budget, there is no reason why he should impose the tax in the form now proposed, thus leaving these glaring anomalies. It means simply that there is a subsidy of 16 per cent. given to the bookmakers on the greyhound tracks, with the very natural consequence that people will be tempted to put their money with the bookmakers instead of the totalisators. If my appeal for equity should fall on deaf ears, I must appeal to the Chancellor's more sordid instincts. For it is obvious that in doing this he is losing revenue, because he is diverting money from the totalisator, which is taxable, to the bookmaker who is not taxable. That is not very businesslike.
      I may be asked in what way he can apply this tax to the bookmaker. I believe that the Chancellor has had a document from the National Greyhound Racing Society pointing out in great detail how he could apply this without any cost to the Exchequer by way of a licence fee for the bookmaker. A licence fee could be charged to the bookmaker on his arrival at a track. There is every safeguard. There is all the machinery for carrying it out, and I ask him whether he cannot accept this scheme and thus remove the discrimination which is now proposed. A few moments ago, in reference to another Amendment, the Chancellor said—

      289
      and I wrote the words at the time—"If I am convinced, I shall have no hesitation in altering my views." I suggest that on this occasion he cannot be other than convinced by the arguments which have been advanced not only by me but by many others. I do not press him at this stage to deal with the main issue covering the whole field of betting, but on this particular point there is such an easy way out that I shall be very surprised if he does not adopt it.
      Sir Alan Herbert: I do not propose tonight to repeat all the things that I and others said on the Second Reading of the Finance Bill or to elaborate the case so very well made by the hon. Member for Central Hackney (Mr. H. Hynd). I want to try once more to get from my right hon. and learned Friend the Chancellor the assurance which I did not quite get on the Second Reading. I do not think that we need elaborate all the illogicalities and injustices; they are now generally accepted. I am quite sure, now that the Chancellor of the Exchequer has had the opportunity to study this affair rather more closely than was possible on the Second Reading, that his logical and just mind will substantially agree with ours.
      On the Second Reading he used some expressions to which I gave a little cheer of goodwill, but, having read them I must say they do not really satisfy me. He said, for example:
      "This is not an occasion when anybody would expect us to review the whole law of betting."
      I quite agree. Nobody is asking him to do that. What we ask him to say is that, as time and opportunity permits, he will go to the Cabinet and say, "Can I have an instruction to some Minister or Committee to go into the laws of betting and to study the report of the Royal Commission of 1932?" He also said:
      "It may be that one day someone will undertake that task. I think they may have rather a stormy passage when they try it out."
      In the past I agree that that would have been true. At present, such is the general opinion of the House, that I do not think the passage would be stormy at all. Even if it was, is that a reason for this great tiger of a man who fears nothing to hold back? Finally, he said:
      "But we shall certainly watch the bookies.…"
      290
      then followed a genial jest to me—
      "… and if it proves in the event that the tax ought to be extended to them, we shall, no doubt, take our courage in both hands and see what we can do about it."—[OFFICIAL REPORT, 25th November, 5947; Vol. 444, C. 1924.]
      That is something, but really that is not the right sort of language, if I may respectfully say so. He said:
      "… if it proves in the event that the tax ought to be extended."
      We all know now that by all the ordinary rules of justice and logic—
      The Temporary Chairman (Colonel Sir Charles MaeAndrew): I must remind the hon. Member that he should confine his remarks to what is in the Clause.
      Sir A. Herbert: That is all I have to say. I do not want to delay the Committee. All the points have been made. I am really asking the right hon. and learned Gentleman to do what I think must be in his logical and just mind, and to give us some rather stronger assurance than we have had that he proposes to tackle the thing more thoroughly.
      Lieut.-Commander Braithwaite: I say at once that I am in favour of the principle of this Clause, but I feel that, before we part with it, it would be valuable if we could probe a little further into the mental processes of the Government in introducing it. It was only on 15th April last that the right hon. Member for Bishop Auckland (Mr. Dalton), in presenting his Budget, used these resounding words with all the emphasis at his command:
      "… the Labour Party stands for justice; and to tax 'totes' and pools alone, and let the bookmakers go free, would be wrong, it would be unjust, it would be repudiated by all right-thinking men and women."—[OFFICIAL REPORT, 55th April, 1947; Vol. 436, C. 78.]
      Hon. Members say that we have had that before. It is just as well to repeat it from this side of the Committee so that there should be unanimity on these matters. I want to probe the mind of the Government very gently on this matter. I presume that the primary object of this Clause is to stop inflation. It is an anti-inflationary Measure. If that is so, I suggest to the Government that that point of view is not quite logical, because what they are going to do is to penalise the totalisator and to transfer the stakes, probably, to the bookmaker so that the anti-inflationary apparatus is destroyed

      291
      Even if all forms of betting were stopped the inflationary position would not be helped because the money would go somewhere else, presumably in pursuit of goods of one kind or another.
      Is it revenue that the right hon. and learned Gentleman is after? If so, I think we ought to be told. Or is it another motive in clamping down on betting on dog race tracks? I think the Committee is entitled to know. The argument which I want to address to the Committee, however, has particular reference to the machinery of the tax. We had some rather heated Debates in 1933, when proposals were introduced for the taxation of Co-operative societies.
      The Temporary Chairman: The hon. and gallant Gentleman knows perfectly well that he is going outside the rules of Order in discussing that matter.
      Lieut.-Commander Braithwaite: Do I understand your Ruling, Sir Charles, to mean that I must not speak about the Co-operative societies?
      The Temporary Chairman: The hon. and gallant Member knows that, on the Question "That the Clause stand part," he must confine himself to what is contained in the Clause. It is a very narrow field.
      Lieut.-Commander Braithwaite: I understand that I cannot ask the Government about the machinery of this Clause. Perhaps there may be an opportunity in a later stage of the Bill, because there is an extremely interesting parallel here. If you tell me, Sir Charles, that I cannot proceed on this occasion, I will try to make the point at a later stage.
      Mr. Paget: There is only one point which I want to make. It has been suggested that this Clause is making a favourite of horse racing at the expense of dog racing. Really, that is not so. The dog tote and the horse tote are entirely different businesses. I do not want to make very much of this point, but I want to say that the Race-course Betting Control Board, which manages the racecourse tote, is a public corporation, and that none of the profits or dividends go directly to any individual—
      Lieut.-Commander Braithwaite: On a point of Order. In view of the Ruling
      292
      which you have just given, Sir Charles, may I ask you if the hon. and learned Gentleman is in Order in discussing betting on horses on racecourses?
      Mr. J. Lewis: Further to that point of Order. May I point out that Clause 6 states:
      "There shall be charged on all bets made by way of pool betting, other than bets made by means of a totalisator set up on an approved horse racecourse by or under the authority of the Racecourse Betting Control Board, a duty of excise, to be known as the pool betting duty, equal to ten per cent. of the amount of the stake money paid."
      Perhaps, Sir Charles, you will permit discussion of a comparison between the two forms of tote.
      Mr. Paget: I was only trying to make it clear that there are two forms of totalisators, which are entirely different and which are doing different business, and that, if that is so, it is right to treat one in one way and another in another, which is what this Clause does. It is perfectly true that some of the proceeds from the horse tote, which is a public corporation, go to the racecourses and that others go to the Ministry of Agriculture for the maintenance of horse breeding, but that is not the point. The point is that they are two entirely different businesses. The racecourse tote is almost entirely immediately competitive with the bookmakers, and the punter goes from the one to the other to get the best price. On the whole, I think the tote showed the best prices on 51 occasions as against 40 occasions. If we take 10 per cent., or any other percentage, of the tote odds on horse racing, then immediately we make the tote uncompetitive with the bookmakers and put it straight out of business. If we are to take a percentage from the totalisator on horse racing, we cannot do it without a similar tax on the bookmakers. The greyhound tote runs three pools, the first of which is the forecast pool, which is for the purpose of placing the first and second in the race. The forecast pool represents something like 65 per cent. of the greyhound track's tote business. That is not competitive with the bookmaker, because he does not bet on forecasts.
      8.15 p.m.
      The Temporary Chairman: I think we must stick more closely to the Clause.
      Mr. Paget: I am just pointing out the difference between the two. Of the remaining 35 per cent. profit, one part is placed, and the bookmaker does not bet on places. He only bets on wins, so that only about 20 per cent. of the busines of the tote on a dog track, as against horse racing, is going immediately to the bookies. I am not saying that, in the long run, more people will not go to the bookmakers to bet on wins, and fewer people will go to the clipped odds on the forecasts and the place. There will gradually be a movement from the tote to the bookmaker which will injure the revenue of this tax and will be unfair to the tote in relation to the bookmaker. It will not be an immediate process, as it would be on the racecourse; it will be, more or less, a gradual process, although I entirely agree with what was said by my hon. Friend that, if this tax is to go on, a method must be found to tax the greyhound bookmaker. The two things—the racecourse and the racecourse totes—are not comparable businesses at all.
      Mr. George Wigg: I want to follow my hon. and learned Friend the Member for Northampton (Mr. Paget) and point out that there is a further difference between dog tracks and horse racecourses which makes it imperative, in my judgment, that the Chancellor should face the social consequences of this Clause. I have been to a greyhound racetrack on a few occasions, and I am convinced that greyhound racing is absolutely straight. One is reasonably sure that the dog one backs is at least trying.
      The Temporary Chairman: I think we should keep off the morality of betting.
      Mr. Wigg: If you will bear with me just a moment, Sir Charles, I think I can show that I am not discussing the morality of one form of betting as against another; I am making what is a very important point indeed. It is a fact that the majority of the betting which takes place on the dog track is conducted in a completely impersonal way. The totalisator takes its cut of 6 per cent., and does not mind who wins. But, on horse racecourses, the money handled by the tote is comparatively small compared with the volume of money handled by the human element. As a result, the human element takes very good care, on occasion, that it wins. When one goes to a racecourse and
      294
      backs a horse, what one wants to know is whether the horse is trying or not. The percentage of non-tryers among horses is very high because of the volume of money that passes through the hands of the bookmakers.
      Mr. J. Lewis: Will my hon. Friend allow me to interrupt him for a moment?
      Mr. Wigg: Not for the moment. Therefore, if the Chancellor persists in retaining this Clause, and forces an increased volume of money into the hands of the bookmakers on the dog track, he is opening up an avenue of temptation which, before very long, will tend to bring dog track racing, which is a popular pastime, down to the same level of morality as that on horse racecourses. I think that betting is a human frailty. Nevertheless, we must do the best we can to keep it as clean and as straight as possible. The standard of morality in horseracing would be considerably increased if the bookmakers were wiped out altogether. Short of doing that, I hope that some time in the future the Chancellor will set about doing that job—
      The Temporary Chairman: This is quite beyond the Clause.
      Mr. Wigg: At the risk of incurring your wrath again, Sir Charles, I want to plead with the Chancellor to recognise that in this Clause he is going to give a premium to the bookmaker at the dog track. I hope very much that he will have second thoughts on this before the Report stage, and that he will say he is going to institute a method of taxing the bookmaker.
      Captain Marsden: I think the hon. Member for Central Hackney (Mr. H. Hynd) put the case very fairly and very well. My chief objection to this Clause is the absolute unfairness to the person who wants to make a bet on the totalisator at the dogs. That is all such a person goes for. On every £100 the totalisator will take, the first £16 are removed before the unfortunate hacker gets anything at all. That is most unreasonable. I think the Chancellor should estimate the value he will get from the tax in other directions. The position now is very different from what it was many years ago. All these bookmakers have got their places. I see there is a case in the High Court now where a

      295
      bookmaker is claiming his right to his pitch. All these men can be found. They have all got their licences, and it would merely mean that they would pay a little extra for the licences. Where horse races are concerned the bookmakers in Tattersall's ring have a higher standard of commercial morality than anybody else in the country—
      Dr. Morgan: What has Tattersall's ring got to do with this Clause?
      The Temporary Chairman: I was just about to stop the hon. and gallant Gentleman.
      Captain Marsden: I thought as the matter had arisen I should be right in touching on it. The hon. and learned Member for Northampton (Mr. Paget) pointed out that profit from the totalisator at horse races was distributed for the benefit of the country. The National Greyhound Racing Society has just contributed £70,000 for canine research. Why should not dogs get as good a look in as horses? Racing greyhounds have been sold abroad. That is a form of export which brings in dollars, so the money is not being wasted in that respect. The hon. and learned Member for Northampton went on to give a quite wrong idea of how the relationship between the bookmaker and the totalisator would mean that there was no competition between the two. All the bookmakers I know would be there making bets when there was money being paid in and if they did not get it in one form they would get it from another by altering their routine.
      One cannot help feeling so far as the probabilities are concerned that if there is taxation the totalisator people will gravitate to the bookmaker and he will bet place money, first, second, or anything else you like. He may not at the moment, but he will very soon change his tune, and when you get the big advantage of £16 in every £100, look at the start the bookie gets. I have no doubt he will increase his odds just enough to keep ahead of the tote all the time. I do think if the Chancellor expects us to support any way of getting in money from betting, he must think of something better and fairer than this.
      Sir S. Cripps: Perhaps it would assist if I were to intervene at this stage in the
      296
      Debate. I think this is a very difficult subject. I would emphasise again that this is an emergency Budget, in which we cannot expect to go completely into all the details of a new tax such as this one. The object of the tax is to make an immediate collection of money, which does not need a very complicated machinery in order to attain it.
      It is quite true that, in the competition between bookmakers and the totalisator—I speak as a child in these matters, having no experience of them—there may be some extra inducement for people to bet with the bookmaker as a result of this tax. There is, however, one feature which, it seems to me, most hon. Members have forgotten when speaking about that competition, and that is that the bookmaker has to live. He takes something out of the 100 per cent. as well; but when we come to try to find out what it is that he takes out of the 100 per cent., as I have been trying to do over the last few days, we find that it is extremely difficult to ascertain. I understand that the sort of overall figure fairly generally accepted is 15 per cent., which is not very different from the 16 per cent. from the totalisator under this scheme of taxation.
      Nevertheless, I can appreciate that it would be most unfortunate, both from the point of view of the bookmaker and, I think, probably from the point of view of the public, too, if the result of this was to drive people from betting on the totalisator to betting with bookmakers which, judging from the remarks of hon. Members, seems to be, on the whole, the least desirable way of investing one's money. I take the view, therefore, that we must certainly go into the question of whether or not, and if so how, we can equalise this tax over the bookmakers as well as over the "tote." I have made a good many inquiries in the course of the last few days on that matter, and I can assure hon. Members that it is not quite so simple as some people would think. All bookmakers are not equally wealthy, nor do they take an equal amount on every course; all courses are not the same; the people who frequent them are different and the conditions are different. If we make a sort of flat, overall licence fee, I do not think it would have the effect hon. Members

      297
      would wish, nor would it be more equitable than that which they have themselves described as inequitable. It is a matter that requires consideration. If I were sure that this taxation was going to cause a sudden avalanche away from the totalisator, then it might be necessary to do something in order to stop that, even though it were not the best thing to do. Personally, I do not think it is going to cause any such avalanche at all. If it is going to cause a change, it will be a seeping off which will not have gone very far by April next. I hope by that time, as we see how things develop, we shall, if necessary, be able to introduce some measures of taxing the bookmakers which will be practical and also equitable, both compared with the totalisator and as between the bookmakers themselves.
      I hope, therefore, that the Committee will take the view that we had better leave this Clause as it is, as the beginnings of an emergency tax upon this subject matter. We had better think really carefully, and try to get it into a form which will not lead us into the condition that the last betting tax got, after a very short period of time. It is a matter which requires study, and I am sure that, with all the hon. Members on this side of the Committee who are obviously so expert in this matter—and on the other side of the Committee as well—we shall get a lot of assistance as to how We can best apply this taxation. That, I believe, is the wisest thing for the Committee to do in the circumstances. Therefore, I would ask the Committee, in view of what I have been able to say about the matter, to let us have this Clause as the initiation of a new type of taxation for an emergency purpose, and to give us time to work out the sequel in the light of what happens, so that we can get a sound method to apply to the bookmakers.
      8.30 p.m.
      Mr. Stanley: I am afraid I have not heard the whole of this discussion, but what I have heard has convinced me that on this topic there is a greater wealth of practical experience among hon. Members of both sides of the Committee than on almost any other topic I have heard discussed during the Debate. I certainly would not try to follow hon. Members into their moral excursions as between horse racing and dog racing, and as between bookmakers and totalisators.
      298
      The hon. Member for Dudley (Mr. Wigg) paid a great tribute to the morality of dogs, whereas I gather he thought less than nothing of the honesty of horses, but into those respective merits I would not presume to enter.
      I rise to make only two points. The first is that, when we think of the burdens which are today being put upon people—with the assent of all of us—in order to stop the still greater evil of inflation, and when we think of some of the kinds of taxation which we have already discussed this evening, I cannot feel that those who take their pleasures through gambling rather than through drinking beer, or smoking cigarettes, or visiting the cinema, can complain if they are called upon to bear some portion of that taxation. Therefore, I could not oppose a fair attempt to subject them to some of the special burdens which all sections of the community are called upon to bear today.
      On the other hand, I must confess I was a little shocked by the fact that the right hon. Member for Bishop Auckland (Mr. Dalton), when Chancellor of the Exchequer, introduced this tax in November, in view of what he said about it only last April. If in April he had said, "This tax is impracticable," I could quite well understand that within six months he might find that, in fact, there was a way of doing it. Had he said, "This tax is unnecessary," I could understand that in six months the financial situation might so change as to render necessary what had hitherto been unnecessary. But he did not use those arguments. What he said was, "This tax on greyhound totalisators by itself is unjust. It is against the Labour Party's conception of justice." I confess, I was rather shocked that within six months he should introduce a tax which he himself had condemned, quite gratuitously—because he had gone out of his way to explain to us that he had considered and rejected this tax because it was unjust. I shared his first but not his second thought.
      I think there is a considerable element of injustice in the present tax, and I hope that in April we shall be able to take a more general view of the whole subject, and to see that whatever contribution is to be called for from those who indulge in gambling, should be taken in the fairest and most equitable way. I cannot oppose the tax in this interim Budget, because

      299
      we need the money. There is no reason why gamblers should not pay, but those who are called upon now to pay this tax have every right to expect that the general equity of the whole proposal will be looked at as soon as possible, in order to make sure that they are not called upon to bear a burden from which others are excused.
      Mr. Goodrich: I want to refer to the point made by the right hon. Member for West Bristol (Mr. Stanley) concerning the man who bets on the totalisator, as compared with the cinema goer, the beer drinker, or the smoker. In my view, the punter is as good a sportsman as any one. He has no real objection to paying this 10 per cent tax, but he objects to the equity of the tax. He asks why he should pay a 10 per cent. tax on dog racing as a working man, while the rich man who goes to the racecourse is not taxed. It was with great pleasure I heard the Chancellor of the Exchequer say that he was prepared to look into this matter from the equity point of view.
      I should like a further assurance from him that when he taxes bookmakers, he taxes them in the broadest sense, so that the man on the racecourse is dealt with in exactly the same way as anyone else. I hope that he will also take it a stage further, and put a tax on the totalisator on the racecourse. We have been told where this money from the totalisator goes, but that does not matter. What matters is that any tax on betting should be imposed on all betting. I am satisfied that the working man is a good sportsman, and that he will not mind a 10 per cent. tax, provided it is an equitable tax.
      Sir R. Glyn: The whole of this Debate has, so far, concerned betting on the course, and not betting off the course. Perhaps the Committee will forgive me for pointing out that I was responsible for introducing the Racecourse (Betting Control) Act in 1928. We had great trouble in getting that Measure through, but having got it passed, all the fears expressed by the bookmaking fraternity proved not to be justified. That Act is now probably accepted by all honest bookmakers, who use the totalisator to assist them in making up their books. The Chancellor of
      300
      the Exchequer may have overlooked the fact that it was illegal for a bookmaker to be on the racecourse until that Act was passed. One of the provisions of that Act makes it legal for a bookmaker to have a place on the course. During the discussion on that Bill it was suggested that bookmakers should be asked to pay for their places. By having different enclosures that does happen. The most important thing is this: I am sure that nobody in this Committee, or in the country, would resent a tax being levied on something which is, after all, non-essential. I believe that it is only right and proper that this tax should be levied, but it must be fairly levied. I believe that it is possible, because of the attitude of this House, which has changed so much since 1928, for a scheme to be devised which is fair and just.
      One of the things which must be considered is that the tax does not allow for credit betting. Half the damage which has been done to people by gambling has been because they have overstaked their means. The real grounds for the establishment of the tote was cash, and not credit, betting. The Chancellor must remember the damage done by street betting, and the fact that betting offices or outside offices for the tote, are not allowed. It is useless to believe that the tax can be confined either to racecourses or dog tracks. It must have a general application, and be fair. If that is done I believe that, through the medium of the tote, both on racecourse and dog tracks, it will be possible, with the connivance of the bookmaking fraternity, to establish a tax which is fair and just.
      Mr. Ronald Chamberlain: I must say that the Chancellor has left the situation more obscure than it was hitherto. I do not want to repeat the quotation we have heard many times from the ex-Chancellor, but I rather pinned my faith on what he said earlier this year, and I was considerably shaken when my right hon. Friend, for no apparent reason, departed from what he had laid down when he introduced this Budget. What I hoped the present Chancellor would have done, and which he has not done, would be to make it clear why he is introduicng this tax in this very hurried way. I would have thought, especially in view of what he himself said tonight—that he intended to consider the whole question of bookmakers, and that

      301
      this was only a partial proposal—that he would have withdrawn the tax, and introduced something which was fair, equitable, and properly balanced in the April Budget.
      Several hon. Members have indicated the way in which they think the present proposal is unfair and unbalanced. I would like to know from my right hon. and learned Friend what is the purpose of this tax? Is it to raise revenue? I cannot think it is that, because the whole purpose of the Budget was not to raise revenue. It was to combat inflationary tendencies——
      Dr. Morgan: On a point of Order. Is my hon. Friend in Order in going into this matter on this Clause?
      The Chairman: If the Committee will forgive me I think the hon. Gentleman is much more in Order in discussing the purpose of this Clause than some of the discussion we have had up to now. It is not proper to discuss the merits or demerits of some other form of tax on bookmakers or otherwise; the question is whether the Clause as it is set out in the Bill shall be approved or not. It is competent to give reasons for or against that course but not to go into other forms of betting.
      Mr. Chamberlain: I was saying that we ought to know the real purpose of this tax. Is it to raise revenue? I do not think there is any shortage of internal revenue in this country. The purpose of the Budget was clearly stated to be anti-inflationary. Is this tax to curtail betting and betting tendencies? That might well have been the intention of the present Chancellor, but this move originated with his predecessor, and I cannot think that that was his purpose. In any case, thin proposal does not do that. It cannot be to reduce any kind of consumption, which was the purpose of many Budgets and proposals such as, for instance, the raising of the Tobacco Duty. This can only be an anti-inflationary proposal, and I fail to see how a small and only partially restrictive measure of this kind, even in embryo, can be an anti-inflationary measure. I should be glad if the Chancellor would state quite clearly what is the intention. I think that many of us would then, perhaps, appreciate his point of view. I reiterate that I think that the
      302
      proposal is one-sided and out of perspective; and the only proper way would be to withdraw it and have a proper and adequate measure, which I would fully support in April. I cannot see the force of rushing this in, in the one-sided way in which he has done it.
      8.45 p.m.
      Mr. Molson: The right hon. and learned Gentleman has undertaken to go into the matter carefully before the next Budget. I invite his attention to one particular issue which, I think, should be considered before the next Budget is introduced. When the Racecourse Betting Control Board was set up, there was no general tax on betting. Therefore, it was natural that the profits when they arose—which they did not for a number of years—from the totalisators controlled by the Board, should be used for a special purpose. The purpose was to encourage the breeding of horses and matters connected therewith. It was, in a certain sense, like the origin of the Road Fund which was levied on motorists, when something in the nature of a pledge was given to motorists that the Fund would be used for the roads. Similarly, the profits of the Racecourse Betting Control Board were to be used in matters especially connected with horses. Since other forms of betting are now being required to make their contribution to the general revenue of the State, I hope that, before the next Budget, the Chancellor of the Exchequer will give consideration to altering the law under which the Racecourse Betting Control Board is now operating. I think the general purposes were admirable, but they were narrowly restricted to horses, and unless he intends to bring, which would be quite logical, the totalisators under the Racecourse Betting Control Board into the general fund of the Exchequer, I hope that he will consider extending the purpose for which that money may be used to veterinary purposes of all kinds.
      Mr. J. Lewis: I have not the slightest hesitation in saying to the Chancellor of the Exchequer that every Member of this Committee is satisfied about two things. Firstly, that, if it is possible, bookmakers should be taxed, and, secondly, some Measure should be introduced to tax bookmakers at the first possible moment.

      303
      We have a certain amount of sympathy with the Chancellor who has come into this matter at a very late stage, and taken over where the former Chancellor left off. I feel that it is very unsatisfactory for him to tell us that on 4th January this new Measure is to be introduced for taxing dog racing totalisators, but until such time as he introduces his Budget in April, the bookmakers will go scot free. It seems to me that the promoters of racecourse totalisators, who are reputable bodies, are being penalised, and the bookmakers are "getting away with it," because it is said that they cannot be taxed.
      There have been proposals which were referred to by the hon. Member for Central Hackney (Mr. H. Hynd), which have been placed before the Chancellor in the last 24 hours. I agree that he has not had much time to give them consideration. These proposals are, I think, from a body known as the Greyhound Racing Association, who undertake to collect the tax for the Chancellor and return it for revenue in the same way as the deductions of the 10 per cent. Excise Duty on the totalisators. The proposal rests on the assumption that they shall charge bookmakers so much for the pitches they occupy, and the money shall be returned to the Revenue.
      I ask the Chancellor of the Exchequer to give these proposals further consideration, because I have been through them, and, with my limited knowledge, and without that expert knowledge to which he referred, I am quite incapable of deciding whether or not they are operative in their present form. Together with his officials who will be able to advise him, he should be able to decide this matter, and I hope he will give it immediate consideration with a view to seeing if it is possible to introduce some form of taxation on bookmakers on 4th January, the date on which the totalisators are to be taxed by the 10 per cent. duty.
      The other matter to which I wish to refer is this matter concerning horse race totalisators. I am ready to give my right hon. and learned Friend the benefit of the doubt after hearing him speak a little earlier because I thought he was going to propose that there should be some benevolent fund for the starving bookmakers in this country, but what he should realise is that their expenses are
      304
      negligible as compared with the totalisator. The totalisator is a very expensive instrument to run, and bookmakers who have not the same overhead expenses get away with quite a lot and would get away with more if they were not equally penalised by this Measure.
      But the matter to which I wish to draw attention is the Chancellor's assumption which he made apparent in this Chamber during the Second Reading that the horse race totalisators are not run for private profit, the main object being the provision of funds for horse breeding and the provision of amenities for the public to enjoy. Since then I am shocked to find, in point of fact, that that is not the case. For instance, I find that a firm of bookmakers, or shall I call them credit system bookmakers, known as Tote Investors, Ltd. are responsible for one-third of the sums of money which are invested on the tote by virtue of an arrangement which exists between the promoters of the totalisators, the Racecourse Betting Control Board and this company. I find that during the year ending 1946 there was a commission paid by the Betting Control Board to Tote Investors, Ltd., of a sum of no less than £176,274.
      I ask my right hon. and learned Friend, if he claims that this is not run for private profit and is a benevolent organisation whose objects are desirable, if he can justify the assumption that the payment of commission to a private firm of bookmakers should be the object of a nonprofit making organisation. I might add that this private firm of credit bookmakers has amongst its directors two members of the Jockey Club. It is a highly reputable organisation with branches all over the country; and the fact that two stewards of the Jockey Club are members of it adds to its standing. Those people are responsible for the administration of horse racing and I believe they try their best to keep it on proper lines.
      When we look still further into this matter and investigate the claim of my right hon. and learned Friend that these totalisators are not run for individual gain, we find another remarkable thing. The amount paid towards the reduction of travelling costs of horses to meetings totalled £41,000. In other words, £41,000 were taken out of this fund and paid to private owners of racehorses by way of

      305
      subsidy to reduce the travelling cost of bringing their horses to races. It seems to me that there is a very strong case in the present circumstances for bringing in horse race totalisators into the general ambit of taxation having regard to what my right hon. and learned Friend has in his mind.
      I appreciate that this is a matter which could not possibly be considered prior to the April Budget of next year, but I seriously contend that it is very essential in these matters to be very accurate when it is suggested that horse race totalisators do not operate for private gain. It is essential to ensure that that statement is absolutely correct. There is another matter in relation to the manner of expenditure of this money, and it is the fact that quite a large sum is paid for the upkeep of racecourses, which in 1946 amounted to £75,453. Many racecourses are private shareholders' companies and——
      Mr. McKinlay (Dumbartonshire): On a point, of Order. Some of us would like to take part in the Debate. Is not my hon. Friend the Member for Bolton (Mr. J. Lewis) travelling miles away from the point at issue in this Clause?
      The Chairman: I am obliged to the right hon. Member. The hon. Member (Mr. Lewis) was doubtfully in Order, so far as he had gone, but in any event was going into the subject in too much detail. His arguments were in danger of going too wide.
      Mr. Lewis: I appreciate your Ruling, Major Milner. The only way of introducing the matters I have in mind was in the terms of the Amendment as any other Amendment would have had the effect of increasing taxation and would have been out of order. I hope that my right hon. and learned Friend will reconsider the position, and in April will endeavour to bring all bookmakers into a general licensing scheme and will see what he can do about the horse racecourse totalisator at the same time.
      Clause ordered to stand part of the Bill.

      CLAUSE 7.—(Increase in profits tax rates.)
      Mr. Assheton: I beg to move, in page 4, line 34, at the end, to insert:
      "Provided that this Section shall not apply in the case of any trade or business the pro-
      306
      fits of which consist solely of income received by way of fixed dividends, interests or other periodical payments made under an agreement entered into before the first day of January nineteen hundred and forty-seven."
      We now pass from the subject of betting to the subject of the Profits Tax. This is the first Amendment of a series of Amendments, and the smallest of them. The point it embodies, though small, is important, and I hope the Chancellor of the Exchequer will be good enough to give his attention to it. The object is simple. The proposal made by the Government to increase the Profits Tax has been based upon several broad reasons: to encourage the ploughing back of profits into businesses; to check inflation caused by large distributions; and on account of excessive profits being made by companies. I want to call the Chancellor's attention to a case to which these reasons can have no application whatever. It is the example of a company—[Interruption.] Perhaps hon. Members who are not interested in this subject would at least allow those who are interested to hear what is being said. The subject is rather complicated and is nothing like so interesting as betting, but I want the Government to hear what we have to say.
      The illustration is of a company whose sole business is the receipt of a fixed annual rental, somewhere between £2,000 and £3,000, through another company to whom it leased all its assets in 1911 for 99 years. The rental was fixed to provide a return of 3¾ per cent. on the capital. There is no question of a possibility of profits being ploughed back because there is no business into which to plough them. The fixed return to the shareholders is very moderate and cannot be increased, on account of the nature of the business.
      This kind of company cannot have been in the minds of those who designed the Profits Tax. If we want to place a tax upon concerns of this sort, we can place the tax upon them in the ordinary way. If we want to encourage ploughing back, we cannot do it because this company has nothing to plough back. All I ask the Chancellor to do is to look at the case and see whether he thinks the Amendment is a reasonable one. I daresay that he has not had the opportunity of considering this class of company very closely. If that is the case, perhaps he will be good enough to do that between now and the

      307
      Report stage and see what can be done. The illustration I have given is only one and there must be others in exactly the same position, but in every case the same arguments apply.
      9.0 p.m.
      Mr. Erroll: In drawing attention to the anomaly which is created by the imposition of the Profits Tax on this type of company I would like to reassure the Committee that the type of arrangement of a lessor and a lessee company was not originaly designed, nor indeed is it used at the present time, as some form of profiteering mechanism. It was a system very widely and rationally adopted for the handling and management of property, industrial, commercial and private. The arrangement was largely that the lessor company owning the property would lease a property to a lessee company and leave the lessee company free to manage the company and so derive such profit as it could. The lessor received a fixed annual sum rather in the nature of debenture interest. That was a common enough type of transaction which was entered into frequently before the incidence of Profits Tax and was held to be a perfectly normal and respectable way of arranging affairs.
      Now as the result of the incidence of Profits Tax the lessee company pays Profits Tax on its profits but the lessor company does not have to pay Profits Tax on what it receives because it receives them, if one may coin a phrase, free of Profits Tax. In other words, the Profits Tax which the lessor company should pay has in fact to be paid by the lessee company in addition to the lessee company paying its own Profits Tax on the profits which it, the lessee company itself, earns. This is manifestly unfair not only from the point of view of the obvious reason, but from the point of view of hon. Members opposite.
      By some strange idea in their own minds they have decided to place a tax on profits only on the profitable part of an enterprise, on the equity profit, but not on the preference or debenture stock. The lessor company is in effect the debenture holder of the stock on which the lessee company operates. The tax is, therefore, particularly unfair in its present form to the lessee company in that that company has no control over whether or not the
      308
      lessor company's profits shall be distributed. If these are not distributed, then the lessee company has to pay out less, but if the lessor company decides to distribute those profits, the lessee company has to pay the 25 per cent. rate of Profits Tax, so that the lessee company is the victim of the whim of the lessor company.
      As my right hon. Friend the Member for the City of London (Mr. Assheton) pointed out, these arrangements when entered into a number of years ago were such as to provide the shareholders of the lessor company with a very small and reasonable rate of interest which was rather equivalent to debenture interest. It was not in the nature of distributed profits. So we have the situation whereby the lessee company is paying the Profits Tax of the lessor company over whom it has no control. The situation would be much altered if Profits Tax could be called an Income Tax. It is in a sense a form of Income Tax because arrangements were made not so long ago whereby Income Tax must be paid by each individual recipient. If Profits Tax could be called Income Tax, the lessor company in the example I have quoted would have to pay its share, instead of being able to insist, as it can at present under the terms of agreements entered into, on being able to transfer its Profits Tax to the lessee company.
      A situation of a similar kind arises in connection with a tax free annuity. Up to 1941, a person who left a sum of money could arrange for a tax free annuity to be paid, for example, to his widow and another legatee could receive residuary income. As Income Tax went up, so the residuary legatee found his income diminishing in order that the full tax-free income could be paid to the original annuitant. That situation was put right in the Finance Act of 1941, in Section 25, which laid it down that increases in taxation subsequent to the original will must be borne by the legatee or annuitant concerned. The situation is analogous when we have a contract entered into before Profits Tax was ever thought of, and the effect of it must be borne by only one party to the contract, instead of being shared equally by the two, or disposed of in some other equitable manner.
      We quite appreciate that this Amendment has not been on the Order Paper

      309
      for long, and that, therefore, the Minister cannot have had much time to study its purpose and the implications of Profits Tax as at present levied on this type of company. We do not propose to press the matter unduly far at present if we receive some satisfactory assurance that it will, as we hope, be considered more favourably between now and the Report stage.
      The Solicitor-General: We have had a case advanced, two sets of circumstances being outlined by the right hon. Member for the City of London (Mr. Assheton) and by the hon. Member for Altrincham and Sale (Mr. Erroll). My answer to both of them is this: it may be that what they have said would have been relevant when the form of the Profits Tax was being considered originally, but it is not relevant when all that is being done is to increase a Profits Tax which exists already. The hon. Member for Altrincham and Sale instanced the case of a lessor and a lessee company who had entered into a certain agreement which produced, in the face of the tax, certain consequences. It is easy to go on multiplying instances, and all those instances no doubt were taken into account, and should have been taken into account, when the original Profits Tax was framed. The original Profits Tax, which we are doing no more than increase—we are only doubling a tax which exists already——
      Captain Crookshank: Only!
      The Solicitor-General: I am sorry—we are doubling a tax which already exists and making no other change than doubling it. I respectfully submit to the Committee that once the principle has been accepted—as it was accepted for the purpose of the 1947 Act and, indeed, for its predecessor the 1937 Act—that all companies, never mind what they were, should be within the scope of the Tax, it is too late, when that existing tax is simply being increased, to ask for a change in the system. I would remind hon. Members of the form of the tax. It is imposed by Section 30 of the Finance Act, 1947, and is expressly made to apply to all companies.
      The National Defence Contribution applied to firms as a whole, but firms were taken out of the 1947 Act, and Section 30 applies to all companies. The 1947 Act proceeds deliberately to exclude certain income from the categories of income
      310
      which are to be taken into account in assessing what are described as net relevant distributions. The only income not to be taken into account for that purpose is what is described in Section 32 of the 1947 Act as franked investment income. All profits and investment income have to come in, with the sole exception of franked investment income which is already subject to Profits Tax in the hands of another body corporate. It covers all forms of income, with the exception of incomes which have already been subjected to tax.
      Supposing these arguments which have been put forward tonight had been advanced at the time, it may be that the tax would have been differently framed, but the arguments were not advanced then. Even if that had been done, it would not have been sufficient for the purposes of creating an exception to the general rule that all companies are covered. Hon. Members have taken a very special sort of company. I suppose if one looks at various sorts of companies which operate, various other companies might seem to deserve to be taken out of the general category. But it would be most unfair to give this particular advantage to this particular sort of cornpany. It would be very unfair to all the other sorts of companies, which have to bear the increased tax. Why should other companies be subjected to the increased tax, and not these companies?
      The hon. Member says that their inclusion does not effectuate any of the purposes enunciated by the Budget. It certainly does effectuate the most important purpose, which is to mop up surplus purchasing power, and, by increasing the tax on the net relevant distributions, it does assist, as do all the other measures outlined in the Budget, the mopping up of inflationary pressure and extra purchasing power. So it is directly conducive to the end the former Chancellor of the Exchequer had in mind, and there is no case for singling out this particular kind of rare company to give it an advantage in preference to all other companies. If there was a case, which certainly does not arise now, and if it should have been taken into account, it should have been given effect to when the original Profits Tax scheme was worked out. For those reasons I ask the Committee not to accept the Amendment.
      Colonel Crosthwaite-Eyre: Earlier this evening we listened to various arguments from the Treasury Bench, of which I think the most perfect was that advanced by the Financial Secretary. He certainly had a very good argument, but could not develop it. We have now heard an even better, which is to the effect that if an argument had been advanced earlier it might have been reasonable, but to advance it now is unreasonable. The hon. and learned Gentleman went on to say why, but in everything he has said he has destroyed his own case. If we look back on what the Chancellor of the Exchequer at that time said, on the introduction of this tax, we see that it was to mop up extra purchasing power. The hon. and learned Gentleman said that tonight, but these companies are perhaps the only companies to which that argument does not apply. Of course, there is no extra purchasing power to mop up; as my right hon. Friend the Member for the City of London (Mr. Assheton) said so clearly, they are not the cases where there is any extra purchasing power which can be mopped up.
      The Solicitor-General: The increase of the tax on the net relevant distributions has the effect that smaller dividends are payable, and that does what the Chancellor had in mind.
      9.15 p.m.
      Colonel Crosthwaite-Eyre: That is quite untrue of a lessor company. What is more to the point, if the hon. and learned Gentleman will only look back, he will see that the Chancellor made the point that he had doubled this tax simply because companies were paying increased dividends, and he saw no reason why one particular section of the community, to use his own words, should enjoy greater revenue than any other. Here the Chancellor is faced with a small section of companies which cannot possibly be accused of what the Chancellor advanced when promulgating the doubling of this Profits Tax. Yet the hon. and learned Gentleman tries to use the argument which we have just heard. I have seldom heard two absolutely divergent arguments in so short a time from the benches opposite, and it makes nonsense of the principles which Members on the other side of the Committee advocate.
      312
      Here is a very small section of companies, which long before the present Government were ever thought of, entered into specific contracts. What the Government are doing at the moment is to make those contracts, entered into in good faith, untenable at this time. That is an injustice which Members opposite ought to be the first to refute. They are always saying that their object is to try to mop up purchasing power. They are using that argument in respect of the one class of case in which it does not apply. My right hon. Friend the Member for West Bristol (Mr. Stanley), earlier this evening, in mentioning the Bill which is to be taken tomorrow, talked of the happy event which is to happen on the Treasury Bench. All I can assume is that that happy event has made the Financial Secretary and the right hon. and learned Gentleman such flustered parents that they have forgotten their briefs.
      Mr. Harold Roberts: I wish to say a word about the new constitutional theory which we have heard from the Solicitor-General. I enjoyed hearing him lay down a rather new and interesting constitutional view that there is a sort of estoppel governing this Committee and the House so that if once a tax or enactment is passed, it is too late, if the burden is made greater and the grievances made acute, for hon. Members to put forward suggestions to alleviate it. For example, what was done in 1941 when Income Tax was only doubled—raised from 5s. to 10s.— an extremely trifling matter? Parliament intervened and rectified the grievance referred to by the hon. Member for Altrincham and Sale (Mr. Erroll) by a Section in the Act of 1941. I regret that I cannot in the least follow the hon. and learned Gentleman in trying to escape from a discussion of the merits by saying that what would have been very well in the summer of 1947 is quite wrong and inappropriate in the autumn. The whole of our legislation is based on the principle of trial and error. Grievances which initially may be small become more apparent when magnified. I hope I am in Order in saying a word, not on the Amendment, but on Clause 7.
      The Chairman: I am sorry, but the hon. Gentleman is only entitled to speak on the Amendment which is before the Committee.
      Mr. Roberts: Would it be possible, at this stage, to speak on the Clause?
      The Chairman: Not at this stage, and not necessarily at any stage.
      Mr. Assheton: I do not want to take up much more time, but I must say that the Solicitor-General had the very greatest difficulty in presenting any argument at all to the Committee. His brief must have been very inadequate, and I am sure that he did his best. His only arguments were that there was some mopping up being done by this process. Of course, there would be some mopping up if the Government were to charge a Profits Tax on gilt-edged securities, but it would be unfair to suggest that that would be any more appropriate. His second point was that we ought to have called his attention to the matter sooner than in 1947 when this was first introduced. Of course, we had not thought about this at that time—nor had he or the Inland Revenue. It is no good saying that we ought to have thought of everything. When a new tax is introduced one does not know all the consequences immediately. When consequences are found which result in gross inequity, the matter ought to be corrected.
      The Solicitor-General: This tax was introduced in 1937. This is the National Defence Contribution.
      Mr. Assheton: At the time it was introduced, obviously this point had not been discovered. The hon. and learned Gentleman's third point was that all the Government were doing now was to double the tax. If it was inequitable before, it is more inequitable now. Therefore, all three of his arguments were unsound. I ask the hon. and learned Gentleman for something like justice for the unfortunate small number of holders of this kind of investment.
      Amendment negatived.
      Mr. David Eccles: I beg to move, in page 4, line 45, to leave out "fifteen," and to insert "twenty."
      This Amendment is one to which we attach great importance. When we discussed the Profits Tax last April we made it clear that on this side of the Committee we thought that it was a bad tax but that by far the worst feature of it was the levy on undistributed profits. This Amend-
      314
      ment would have the effect of leaving the rate of tax upon undistributed profits at 1s. in the £, where it was placed by Parliament last April. If the Clause is approved without Amendment, the rate of tax on undistributed profits will be 2s. in the £.
      I ask hon. Members opposite to lock at this Amendment from the point of view—and only from the point of view—of our economic situation which, in all conscience, is bad enough. Will this Amendment help or hinder production? That is the test which I believe we should apply to this proposal. It is obvious enough that politics and production today are pulling in opposite directions. It never has been possible and it never will be possible, to wage war upon profits and at the same time to get the maximum output from industry which is left in private hand. [Interruption.] Hon. Members must choose whether they prefer the class war or the battle of production. Here is a test case of whether the efficiency of production or old prejudices should be the first to go.
      Mr. Cobb: Is not the hon. Gentleman being unjust to the managers in industry? If we could segregate and get rid of some of the unwanted financial interests on the boards of companies, I am sure that we could leave the managers alone to get on with the job.
      Mr. Eccles: The hon. Member's irrelevant interruption makes no sense whatever. To what purposes are undistributed profits put? They are the main fund out of which repairs, renewals and extension, are made, and out of which scientific processes and inventions are brought to a stage where they are of service to mankind. The Chancellor boasts about his connection with science, but he will find that most of the scientific inventions come to the commercial stage because of the investment of profits which has been retained in some business or other. It is necessary nowadays, when we levy upon the incomes of individuals very high rates of taxation, to rely upon corporate savings more than we used to do. It is becoming increasingly impossible for individuals to save enough equity capital—what the Americans call "venture money"—to finance the expansion of a risky business, and we have to look to the corporate savings to take its place. Therefore, in the interests of efficiency and

      315
      employment, these savings ought to be encouraged.
      Two arguments have been brought forward in defence of taxing, and raising taxation upon, undistributed profits. One is that the total profits of businesses are running at an excessive rate at the present time, and the other is that the reserves in cash which businesses now have cannot be turned into physical assets because of the material shortages from which we are suffering, and, therefore, it does not matter if they are taxed. Those two arguments are related, because it is not possible to say whether the total profits retained in businesses are excessive unless we look at the cost of repairs, renewals and extensions, and, still more, at financing raw materials and stock-in-trade today compared with prewar. It is true that the volume of profits retained by private companies today is greater than it was before the war. I will not enter into the dispute between the Chancellor of the Exchequer and the economist as to which is the greater. The index figure of the latest issue of the "Monthly Digest" shows that basic materials prices are now 259 against 100 in 1938. [An HON. MEMBER: "What has that to do with it?"] The hon. Gentleman asks what has that to do with it? He must surely know that every manufacturing business must hold so much raw material, which has to be financed out of money in hand. It is only because of the shortages today, and because British business is living on a hand-to-mouth basis with raw materials, that hundreds of firms have not already had to go to the banks or to the public to raise fresh money to bring their working capital up to the level at which it should be to finance their proper stock-in-trade at postwar levels. If the hon. Member does not believe that, will he please look at the United States, where it is possible to buy as much raw materials as managers think it is sensible to hold for the benefit of their businesses? He will find that practically all firms in the United States have had to increase their capital since the war, owing to the rise in the prices of raw materials.
      Now let me turn to the question of how much profit it is desirable, in the interests of the general community, that a business should retain for the purpose of replacing machinery and making extensions. Last April, the hon. Member
      316
      for North Battersea (Mr. Jay)—I am sorry he is not in his place now—made some very injudicious remarks on this point, and I had hoped that he would be here tonight to take them back. He said that, because at the present time it is not possible to buy all the machines that industry want or to carry out all the extensions they would like, therefore, they did not need so much reserve. That is entirely wrong. It is true that, for the time being, industry cannot extend itself, and cannot carry out the renewals it would like to carry out. But that does not mean that it ought not to do so at the earliest possible moment.
      9.30 p.m.
      When we look at the price level of making these replacements, it is, roughly speaking, 100 per cent. above prewar. That is the price level of the increase in building materials, and machinery is much the same. The Committee will remember that the Income Tax allowances for obsolescence and the replacement of plant and machinery are based upon the original cost of the asset. Therefore, when the price of replacing that piece of machinery goes up, the business cannot charge the new price against the cost of the old machine. It must retain some profits merely in order to replace something that has become obsolete. I suggest that this tax weakens every business in the country which has financial responsibilities of this kind. If businesses are weakened in that way, our production must suffer, and also our ability to stand any recessions and to maintain our exports.
      The Chancellor claimed that this tax on undistributed profits will be disinflationary. I very much doubt if he is right. In many instances, as hon. Members will know, the effect of a tax of this kind is to make a business put in hand some piece of expenditure rather earlier than it otherwise would. For example, supposing it cost £50 to paint an office, that is an expense which can be charged against the profit and loss account. After this tax is increased, it will appear to the business that the Chancellor is going to pay rather more towards painting that office, and they are quite likely to put the work in hand earlier than they otherwise would. It is only in very few cases that this doubling of the tax will prevent a business from using labour and materials which it

      317
      otherwise would have used. In the majority of cases, the profits that will be taken away by this increase in tax would have been retained in the business. Although they could be used for the good purposes of the business, they would have been held in cash or Government securities, neither of which is inflationary.
      If we are to know whether this is a disinflationary tax or not, we must know what the Chancellor is going to do with the money when he collects it. If he is going to collect the money and use it to pay for the under the line capital items in the Budget, then it is going to be just as inflationary as it was before. The Committee will realise that the Treasury are in some difficulty because they are not going to get the enormous sum every month out of the pockets of the people which was previously forthcoming from the sale of American goods. If all that money was used to finance the Socialist Government's expenditure programme, they must get more money if they are to carry on with those items. We must know what is going to be done with this money, because, if the Chancellor is not going to reduce the public debt with it, he cannot say that this is a deflationary tax.
      There is another point of some importance. In this Bill, all the rates of tax are doubled. That means that the tax on undistributed profits, now at the rate of 10 per cent., will he levied upon the profits of companies controlled by foreigners. They are subject only to the undistributed profits tax. Is it really wise, in our present economic circumstances, to discourage foreign capital from coming here or assisting us in, let us say, the development of raw material resources in the Colonies? I know already of several businesses which are in contact with foreign capital where the foreigners have said they will not come in to help us because of the increasing rate of tax upon the profits gained. That is not in the interests of the United Kingdom. I know it will be said that this tax is not a bad tax because the Stock Exchange quotations of shares did not go down when it was announced. I want to say once more to the hon. Members opposite that they must realise that the present prices of ordinary shares on the Stock Exchange are affected by two powerful forces other than the rate of tax; the first is that the
      318
      quantity of shares on offer has been greatly decreased on nationalisation.
      The Chairman: The hon. Member for some time appears to have been attacking the Profits Tax as a whole. The subject matter of the Amendment is the extent of relief which can be granted, and he desires to increase it from 15 to 20 per cent. It is not necessary to go into all the details of the Profits Tax as a whole.
      Mr. Eccles: With great respect this is a very serious matter this levy of 5 per cent. upon all profits of business. Surely, considering the immense amount of business, one is entitled to employ the argument. I will end by saying that the hon. Members opposite must make up their minds whether they are able to Socialise the whole of our industry in a short time. If they are not, then 80 per cent. of our production remains in private hands to which this tax is very relevant. If they are not prepared to take steps to see that that 80 per cent. of our production shall be enabled to operate robustly they must expect the result of their action to be lower output. I would say our situation is so bad that, whatever else we all do, we ought to try and see that the nationalised sector and the private sector work efficiently from now on. If my hon. Friends and I were——
      The Chairman: I have given the hon. Gentleman a great deal of latitude. He may or may not be in Order to employ his argument on the question that the Clause stand part, but the matter to which he must now direct his remarks is the increase of the relief from 15 to 20 per cent.
      Mr. Eccles: I am sorry. I am just finishing. I wish to say that this increase in the rate of tax upon undistributed profits is likely to injure the productive capacity of the private sector of industry and I appeal to hon. Members opposite to join with us and support this Amendment. If they care about the standard of life of the people they would care about the volume of production, and it is not possible to argue that the rate of accumulation of profits by companies today is sufficient to measure up to the increase in the prices that have come about.
      Sir Arthur Salter: I wish to support the Amendment. What

      319
      precisely is the purpose of the Government's proposal to double this tax in relation to their avowed policy of reducing the inflationary position? First of all, to put this in its proper perspective, we must remember, as my hon. Friend the Member for Chippenham (Mr. Eccles) has pointed out, that it is a mistake to think that the general profits of business have risen to the extent the Government seem to think, when compared with the costs of the proper working and development of business enterprises, and if we relate them to the realities of the prices of the things that they have to buy. What is the purpose that the Government have in this increase of tax? It is not, of course, to reduce the purchasing power in the hands of the shareholders, because this relates only to the undistributed profits.
      Mr. Gallather: It is not what we are discussing at all.
      The Chairman: Order.
      Sir A. Salter: What is it the Government desire to do with regard to these undistributed profits? What will companies do with these profits, which will be reduced if the Government's proposal is agreed to? They might—and this is the only purpose which might be harmful from the point of view of the Government—they might wish to invest them in such a way as to draw unduly on short labour or short materials. But they have to operate anyhow within the framework of the orders, directions and controls which the Government have, both as regards materials and as regards labour. In this respect the Government's controls would be more effective than the tax.
      Secondly—a firm might desire to extend a venture or to enter upon a venture which would clearly be desirable in the national interest as creating much more benefit than the amount of labour and raw materials that would be required would create expense. This tax, to that extent, would obviously be against the national interest, as reducing their ability to operate in that way. Thirdly, they might—and very probably would in present circumstances being restricted by the difficulty of obtaining labour and raw materials—keep these profits as a financial reserve. In that case no harm whatever is done, because no inflationary use of the money is made at all.
      320
      When the particular situation is passed, and labour and materials are available, then they would be able to go on with the repairs and extensions of business that, in the general national interest, at any time except the momentary present, is clearly needed. As I say, no harm whatever could have been done in the meantime. There are many branch businesses which will be cut off completely. For example, they cannot get timber. They might have been engaged in a business which was very desirable in any circumstances except those of the period in which there is a world shortage of timber. It is obviously desirable that they should have reserves in order to resume their business as soon as this situation is passed.
      Then, as my hon. Friend has pointed out, not only is this tax practically of no use from the point of view of being anti-inflationary, but, in many respects, it very likely will, for the reasons he mentioned, be actually inflationary.
      Mr. Scollan: On a point of Order. I want to know, since the Committee is discussing this Amendment which proposes to grant a relief of 20 per cent. instead of 15 per cent., if the hon. Member is allowed to ramble all over the Bill.
      The Temporary Chairman (Sir Robert Young): When came in I found a rather wide discussion taking place on this Amendment; but the fact is that there is a simple Amendment before the Committee, and the right hon. Gentleman is wandering far away from it.
      Sir A. Salter: With great respect, I should have thought that I was clearly in Order in arguing that such an increase in tax as is proposed on undistributed profits is not in the national interest. As the Rulings are rather strict tonight I will only just mention an argument, which I should like to develop rather more fully when we come to the Question that the Clause stand part. It is that I do not think we can properly consider this increase from 5 to 10 per cent. on undistributed profits without taking into account that it is the last, but by no means the least, of the handicaps being imposed upon free enterprise within the sphere that is being deliberately left to free enterprise by the Government's general policy. I notice your warning glance, Sir Robert, so I will not develop that argument at this moment. However,

      321
      when we come to the Question that the Clause stand part, we should consider the very important effect of this extra handicap on the incentives to production and enterprise.
      9.45 P.m.
      Mr. Glenvil Hall: It can be said, with truth, that this is a very simple Amendment. At the same time, the argument has roamed over a wider field than one would have at first imagined it should have done. Many of the arguments which have been put forward, would have been more useful—and, in fact, some of them were put forward—when the Budget of April last was introduced and this change was made by my right hon. Friend the Member for Bishop Auckland (Mr. Dalton). The principle was then laid down that we should distinguish between distributed and undistributed profits. Tonight, we are not setting up any new principle, but merely altering the rates. We are altering them because, as the Chancellor said, experience over the last six months has shown that, high though the tax on distributed profits was—running to 12½ per cent.—it was not enough to deter many companies from paying considerable dividends. This Budget is designed to mop up excess purchasing power and it was thought that, whilst we are imposing very heavy taxes in other directions—for example, increasing the Purchase Tax at all stages—it was not unfair to take something more from those who receive profits from companies.
      Mr. Drayson: But they are undistributed.
      Mr. Pitman: On a point of Order. Are we not discussing the undistributed profits? Surely, the Amendment is quite clear?
      Mr. Glenvil Hall: I. was about to say, when the hon. Member for Bath (Mr. Pitman) interrupted me, that, if in those circumstances, we thought it proper to increase the Profits Tax on distributed profits, then the gap between distributed profits of 25 per cent, and undistributed profits of 5 per cent. was too big to leave as it was. [HON. MEMBERS: "Why?"] I will come to that. It would have left a very big gap between distributed and undistributed profits. The proposal in this Amendment is that we should have left that gap; that the rate on undistributed profits should remain at 5 per cent.,
      322
      whereas we have doubled it to 10 per cent. We have done so for two reasons, as has been said before, very lucidly, by my right hon. Friend. We did so because it seemed to us fair that, if the tax at one stage and in one direction, on distributed profits, is doubled, then something ought to be done on undistributed profits, and we thought we should double it. [HON. MEMBERS: "Why?"] I am coming to that. The first reason was that much of this money, although in theory it was "ploughed back," was in fact spent in directions which were for the moment anti-social. If building permits could be got, it was sometimes spent on improving offices, in extending buildings, and in launching out in directions which perhaps should have been left, and could have been left, for another day.
      Mr. Drayson: Will the right hon. Gentleman give an example?
      Mr. Glenvil Hall: I could, but it would be invidious to do so. It would be unfair, and in any case it is irrelevant to the argument I am trying to make, which is a serious one. There was this temptation; they had this money left in the firm, they did not distribute it, and they naturally desired to make improvements, and did so. By taking some of that money away, we are robbing them of a temptation. Therefore, we should be credited with righteousness.
      The second reason is that the money can fructify in the Treasury to a much greater extent than it could if left in the coffers of private firms. I was asked by the hon. Member for Chippenham (Mr. Eccles) what the Government intended to do with this money. It is, of course, impossible, ranging over the whole field of revenue, to indicate the particular destination of any given sum of money. I agree with him that, since we want to prevent private or public companies using this money for capital investment, it would be wrong if the Government began launching out in capital investment expenditure. As the Committee know, we are to have a Debate quite shortly on the Government's announced decison to cut capital expenditure by no less a sum than £180 million—it was originally £200 million. My right hon. and learned Friend is quite alive to this. If we are saving this money in this direction under this Budget, by this and other means, we realise it must be

      323
      saved and not used in any inflationary way.
      Sir Hugh Lucas-Tooth: Will the right hon. Gentleman explain how it is to fructify?
      Mr. Glenvil Hall: I think it is self-evident. If the money is saved and is used to a good end, as it would be by this Government, it seems to me that the word "fructify" is the right word to use. Apart from the argument I have used up to now, which may or may not commend itself to hon. Members opposite, the cost makes it essential that the Committee should reject this Amendment. If this Amendment were accepted, it would reduce the yield of the Profits Tax by no less than £23 million a year gross, and if Income Tax is taken into account, the net reduction would be something like £13 million or more. My right hon. and learned Friend cannot, in this Supplementary Budget, afford to lose a sum of that kind. Therefore, for that reason alone I must ask the Committee to reject this Amendment.
      Sir Ian Fraser: The Financial Secretary, who said that he could not conceive how this money is to be used, ought to know that it is impossible to fructify if contraceptives are applied. I ask the right hon. Gentleman, however, to apply his mind to the special circumstances of a company which I know very well, because it is one in which my family is interested. I make no apology for mentioning this, because I am not concerned about my interest, or my family's interest, but about the principle. This is a company which uses an extremely expensive material, namely tin. Tin is now many hundreds of pounds a ton, and its price is now two and a half times above the prewar level. If a profit is made in smelting or refining a metal like tin so much the better. That is what a smelter and refiner hopes to do. Our company has made a profit for each of the last 150 years except three. Within recent years we have made bigger profits, because of the extremely steep rise in the price of this metal.
      I want Members who have had no experience of sitting on boards, and considering these matters—and I say this with all respect—to follow what happens when a company like this makes an excep-
      324
      tional profit. It does not benefit the shareholders, or the managers. It puts the company into an extraordinarily difficult position. We have to expect that the price of tin will fall again when the world market comes back. Inevitably, that will be the case one day. We cannot, at the moment, hedge on our purchases of tin. Members will appreciate that the common practice is to sell a ton of tin on the London market while buying a ton of tin in Bolivia, or from the United States. We cannot do that, because there is no London market. We therefore find ourselves, for the first time in our history, carrying two or three times the nominal capital of our company, with overdrafts from the bank, not because we want to, but because we have to. Here is a point which is relevant to this Amendment. The only way we can safeguard ourselves against a phenomenal fall in the value of tin, which would probably put us out of business—and I would remind the Committee that we have been in business for 150 years—is to carry a great amount of our profit to reserve. When we do that we pay ordinary tax on it, and now we are to be called upon to pay double tax.
      It is nonsense to say that we shall be stopped from making any expenditure which would be inflationary. We do not want to spend money; we want to try and keep it in order to stand a fall in the price of the commodity we are handling. We are not gamblers in tin; we are smelters. We want to make a few pounds per ton on refinement. We cannot hope to save the business from disaster when the price of metal falls unless we can put money to reserve. It is not that we want to pay bigger dividends. Members opposite may take some pride in the fact that there are directors, managers, and workmen of the fourth generation in this business. There are 400 to 500 people employed, and this is the hazard we are up against. We do not mind paying 25 per cent. on our profits which are distributed—we can stand that—but we mind terribly having the amount doubled on the profits which we are setting up against a rainy day. We do not believe that all is going so swimmingly under this Government or perhaps any other Government. We believe that there are troubles around the corner, that great drops in prices are to be feared against which wise businessmen create reserves to safeguard themselves.

      325
      10.0 p.m.
      The right hon. Gentleman said that because they have doubled the tax on distributed profits—he says this in an airy way which demonstrates that he does not know his subject—it would not be fair if they did not do so on undistributed profits. This is not a question of fairness. It is a question of bad policy for the businesses on which all the wealth of this country depends, and on which all the hopes of the Socialist Party depend for their schemes. They do not realise that the only wealth in this land comes out of the work of the workers. [Interruption.] I am glad then that they do realise it; and that 80 per cent. of the workers are employed in private business. Great unemployment and dislocation will fall on them and upon the workers, if the Government do not leave it in the hands of these businesses to create reserves against the bad times that may be coming. There is a great difference between taxing distributed profits, which takes money out of people's pockets, and taxing undistributed profits which are our bulwarks against bad times. For these reasons, I ask whether there are not any hon. Members opposite—who understand what I am saying and who think that I am sincere—who will bring some pressure on the Financial Secretary, who clearly does not understand this matter, to alter his view about it.
      Mr. Diamond: May I answer the invitation of the hon. Member for Lonsdale (Sir I. Fraser)), not only for myself, but for all hon. Members on this side. We appreciate the sincerity with which he speaks, and I followed every word that he said. Because of his speech, I appeal to the Financial Secretary and to the Chancellor of the Exchequer in no circumstances to accept the Amendment. It is nonsense to suggest that there are any companies which are likely to be seriously embarrassed, as a result of this small addition to the Profits Tax, in keeping adequate reserves to enable them to go through any difficult times with which they may be faced. The arguments put forward more or less cancel one another out.
      It is nonsense for the hon. Member for Chippenham (Mr. Eccles), whose knowledge of the philosophy of Socialism is only equalled by his knowledge of what goes on in business circles, to say that
      326
      we are fighting against profits. I do not want to develop that unduly, because I shall be out of Order. I merely want to point out that the great interest that the present Government have taken in the field of industry has been to make it more competent and efficient, and to enable it to earn more profits. Once these profits have been earned, the Chancellor has pointed out ways in which they can be well used. Pressure has been all the time on trying to make businesses more and more efficient, so that they can earn more and more profits. That is what Socialism stands for—[Laughter.] I appreciate the laughter, and I shall listen with very great interest to the reasons given against what I am saying. The hon. Member for Chippenham went on to say that all these funds would be needed because of the repairs, renewals, and replacements which companies had to undergo. Of course, he is quite wrong. By their definition, repairs, replacements and renewals are things which do not come out of reserve. They are by definition ordinary current expenditure, and they are not at all considered in arriving at an assessment for profits tax. Perhaps the hon. Gentleman would like to intervene.
      Mr. Eccles: I would. It is perfectly true that a company can charge the whole of the original cost of a piece of plant, but if, when it comes to buying a new machine that costs more, it will not be able to get back against profits which were earned on the old machine, enough money to buy another machine, it will have to get the money from somewhere else and it will go to cash reserve. If there are no cash reserves it will have to borrow.
      Mr. Diamond: May I refresh the hon. Member's memory of what he said? I noted what he said and I do not wish to do him an injustice so I will read it. He said, "Repairs, replacements and renewals." There is no use answering one argument by bringing in something else. These are things for which reserves are not used. He is now making an entirely different point, and the point he is making now is that these reserves are needed for expansion. [HON. MEMBERS: "For replacement."] For replacement? I do not wish to be technical, but replacement is the very reverse of expansion.
      Mr. Jennings: At a higher cost.
      Mr. Diamond: No.
      Mr. Jennings: If an item is replaced by a more efficient item, would it not be increasing the cost of production in that factory?
      Mr. Diamond: If a company replaces an item by a more efficient item—the hon. Member speaks rather vaguely for one from his distinguished profession—it is doing two things—it is partly replacing and partly improving. The second one is expansion, and hon. Members on the other side of the Committee know these things very well. This tax is aimed at reducing the inflationary pressure on capital costs, the very thing for which hon. Members opposite were clamouring long before this Budget was introduced. Now when it is introduced and this tax is affecting their pockets as well as other people's—I speak with no disrespect, and when I say their pockets are affected, I mean it is affecting interests in which they are primarily concerned as opposed to interests with which hon. Members on this side are concerned—there is considerable criticism. Hon. Members opposite always claim—and I am sure they are right—to be associated with companies and companies' profits. The last speaker added point to that when he said how well he understood these matters and how sorry he was that so few of us on this side of the Committee understood these things.
      Sir I. Fraser: Since the hon. Member for Blackley (Mr. Diamond) has referred to me, may I make it quite clear that my own company has been in existence for 150 years, and we are concerned with 500 people who are working for us as well as for our own business? It is perfectly legitimate to be concerned after one's own interests, but that does not mean we are not concerned with the men who are working for us and have worked for us, as their fathers have done before them, for many years.
      Mr. Diamond: We on this side, too, could give such instances. The hon. Gentleman the Member for Lonsdale referred to his firm which employs 500. I could refer to a firm in which I happen to be interested where there are 1,000 employees. My point of view, however, is a little larger than hon. Members
      328
      opposite. We on this side are concerned with the welfare of all people and we say that inflation has got to be controlled in their interests. The way to control it is at the particular point where it is very difficult indeed to control it, namely, on the savings of incorporated companies and we think that we can assist in that way by reducing the amount of it, which is going to be done by this tax. Therefore, I hope that the Financial Secretary will not yield to this pressure, and that on any future occasion when he wants a little more revenue he will again look in this very direction.
      Sir Peter Bennett: I was very disappointed at the reply of the Financial Secretary. He wound up by saying that the Chancellor could not afford this concession, apart from anything else. We have been told repeatedly that the Budget was not introduced for the purpose of raising additional revenue but for another purpose altogether. Nevertheless the Financial Secretary wound up with those words, after he had lectured us for being anti-social and saying that he wanted to remove temptation from us. For years, the story from the Front Bench opposite, both in this Government and in the Government that preceded it, has been, "For Heaven's sake do all you can to plough profits back, because they are needed in the business." It is rather jumping from one side of the fence to the other. We have an Amendment which is striving to put right the suggestion on the part of the Government that they should increase from one shilling in the £ to two shillings the tax upon reserves which have been reinvested in the businesses concerned. We have been told for years that that should be our aim.
      There seems to be a common idea that such reserves are cash in the bank. That error is not confined to Members in this Committee. I find it everywhere. The error is in thinking that profits are always in money form, but nothing could be further from the truth. These reserves are needed for increased production, which we have been urged is very necessary if we are to survive as a nation. We need this money and these reserves, which are not in the form of money but are in the form of working capital. [HON. MEMBERS: "Oh."] It might surprise some

      329
      hon. Gentlemen who have spoken today to learn that some of the biggest companies at the moment are looking ahead and are considering that in the next year or so they will have to sell Government securities which they purchased during the Government's war drive and have held ever since. They will have to sell them in order to provide working capital for the businesses, as they are today. Now we are being told that all that forward thinking is to be ignored and that people who have striven and are striving to reinvest in their businesses money that they have earned, are to have double the amount taken in taxation.
      It is not only a question of replacing or expanding. We have been asked to cut down as much as possible. If we study balance sheets we shall see how difficult firms are finding it to maintain stocks at present rates because of difficulties connected with raw materials. We have to carry a great deal more stock because things are so very much out of balance. A large amount of material which would normally have been fabricated and sent out is held, sometimes because the firm is held up for some small part such as a spring. Such metal parts are difficult to obtain in existing circumstances. Firms who would make them are piled up with work and do not want to make small parcels of steel and convert them into tiny springs. It is one long struggle today to keep a factory going. The result is that raw materials accumulate and the working process is very much slower. At every turn, something is going wrong.
      The reserves which we have been urged all these years to create are more needed now than ever before. Unless profits are made—the hope of our existing as a nation will disappear if we do not make them—we cannot reinvest them in the business. If we do not reinvest them in the business, what is in front of us? We have to go to the bank. The bank does not let us have money permanently for investing in our business. The bank lends us money temporarily, and we must make arrangements to get additional capital outside. At a time when the Capital Issues Committee have the brake on and we do not want to have to raise additional capital, when Government securities are being sold and every effort is being made to save working capital, the Government have chosen this moment to make it more
      330
      difficult for us to carry on. I always maintained that taxing undistributed profit was a vicious principle, and I end by saying that it does not make it any better for the Financial Secretary to say "all we have done is to double it."
      10.15 p.m.
      Mr. Scollan: I would not have intervened in this Debate had it not been for what was said by the hon. Member for Chippenham (Mr. Eccles). This Amendment has a tendency, which we all deplore, to stop the distribution of profits while maintaining a high profit level. Companies are distributing at a low profit level and building up towards reserves that ultimately, when the time is favourable will be distributable in bonus shares. [HON. MEMBERS: "Oh."] That has been done before, and it is no use hon. Members saying "Oh." One of the tenets of the ordinary investor is that he has a legitimate right to a fair return on his investment. I have heard that from the Opposition in almost every Debate, but nobody has yet defined what a legitimate return is, how much it should be, for how long it should be paid and whether the capital should be in perpetuity.
      At the moment we have depreciation funds, reserve funds and the distributed dividend. In the case of the depreciation fund, one is supposed to replace any machinery that goes out of production. The reserve fund is for emergencies and an emergency may mean fluctuations in the market or something going wrong, in which case the reserve would be called upon. But the position today is as different from the prewar position as night is from day, for the reason that the whole of the productive process in any industry in this country today is almost guaranteed, a thing industry never had before. The old speculative capital of the past had something to be said for it with regard to risks, but the present day capital has not. [HON. MEMBERS: "Nonsense."] There is no risk. It is perfectly obvious from statements made in the Debate that while hon. Members opposite work in the machine and operate it, they do not understand it. The risks of the pioneers in any industry meant that at that period not knowing exactly where they were, too many went into it, and the result was that some failed. That was the risk, but that is not the case today.

      331
      That is the reason why there should not be this abatement on the maintained profits that are to be distributed. Is it not obvious that if that concession were given any far-seeing company would do what the hon. Member for Lonsdale (Sir I. Fraser) described in his perfectly sincere and honest manner? He did not see anything wrong with it. The profits made today were being ploughed back into raw materials for the next five or six years. [HON. MEMBERS: "That is business."] Of course, but do hon. Members not know that business is generally roguery? Those who have undistributed profits today, obviously hope to do something with them, and one of the sensible things to do is to buy raw materials ahead, if there is no other method of hiding them. If, however, there is a tax upon them, it will relieve the pressure on those raw materials which are being bought ahead are buying.
      One thing that amazes me is that not a single word was said by the mover of the Amendment or any of his supporters as to why we should, instead of having 15, allow 20. Nothing was said about that, there was just the old cry about the difficulties we are having in running industry at present, yet the fact remains that you are showing higher profits than before the war. [HON. MEMBERS: "No."] Yes, higher profits than have been shown before, and the difficulty about the higher profits is that you are afraid to distribute them because of the higher taxation on them. You want to hold them, and you do not want to be taxed on them, until there is a favourable opportunity for reinvesting them as new capital for the extension of business. We on this side sincerely hope that every industry in this country will expand, make no mistake about it, but we hope that for capital investment you will dig your hand down for the capital and not have watered stock by distributing bonus shares on hidden profits made during the war and postwar period. For that reason, I hope the Chancellor will not alter this part of the Clause.
      Sir W. Smiles: The hon. Member for West Renfrew (Mr. Scollan) said that all the industries in this country were making large profits. I hope he has noticed that Miles Aircraft Company went into liquida-
      332
      tion only last week, and that the Cunliffe Owen Aircraft Company have stopped manufacturing a plane. That was mentioned only 10 days ago.
      However, I will speak about other companies which operate outside this country but are registered here. I believe that raising this tax on the undistributed profits will have the effect of frightening away capital from this country. It is no use our living in a dream and imagining that this is the only country in the world where people want to register a company. After all, we had a shock on 15th July last when we saw that many foreign countries which had money invested in sterling in this country wanted it changed into dollars. The argument of the learned Solicitor-General was that because the Coalition Government in 1937 imposed a National Defence Contribution to rearm for the war which people thought might come with Germany, that because this tax was right then at a level of 2½ per cent., and went up to 5 per cent., it must be right at a higher figure today. I suppose he would say that a tax which was right at 1 per cent. might still be right at 99 per cent. I call that an absurd argument for an hon. and learned Gentleman to use.
      It is no use pretending that everybody is falling over himself to invest money and register companies in this country. There are great companies registered outside like the International Nickel Company and the Brazilian Traction which is registered in Canada and the Anglo-American Corporation in South America. There are still chances in the British Empire for companies to be registered outside this country at much more favourable terms in regard to taxation. For instance, there is the United Asbestos Company with one of its largest mines in Southern Rhodesia still registered in this country, but one wonders how long that will go on. There is the great Roan Antelope and other copper companies which are registered here which still operate in Northern Rhodesia but we do not find Mr. Williamson, who found that great pipe of diamonds in Tanganyika during the last five years by his own efforts, registering here. He has registered his own company in Tanganyika where it will be much better off. As regards taxation, the great Burma Corporation which has the largest lead producing mine

      333
      in the world is registered in Burma. We cannot expect that every company will wish to register in London.
      Some hon. Members have mentioned how machinery and commodity costs have gone up recently. I know a company which ordered an engine from Manchester immediately the war ended. The cost which was quoted was £4,000 subject to the usual clauses that if engineers wages went up or costs increased the price would also be increased. That engine is to be delivered in a month's time, but instead of £4,000 the cost will be £6,000. There are companies which have to buy nitrogen in whatever form they can buy it whether as nitrate of soda or sulphate of ammonia, and nitrogen has gone up at least six times and in some cases nine times on what it was prewar. In all these cases every commodity that is used has doubled or quadrupled and for that reason it would be a very serious blow to the industry of this country if the tax on undivided profits were doubled in the way which has been proposed.
      Colonel Crosthwaite-Eyre: A great many things have been introduced in this discussion. The hon. Member for West Renfrew (Mr. Scollan) said that the only reason we were proposing this Amendment was in order to safeguard bonus shares. He surely knows that, irrespective of this tax, company procedure will still be followed in relation to bonus shares, and the merits of bonus share procedure has nothing whatever to do with the tax under consideration. Later in his speech he made the only honest statement which has come from the other side of the Committee. This Amendment is opposed because of the hatred of hon. Members opposite of anything to do with companies. The hon. Member waved his Order Paper with great effect, and made this honest contribution—
      Mr. Scollan: I do not want the hon. and gallant Member to misunderstand or misquote me. I did not say anything which would indicate hatred of a company at all. I said that the practice which was being observed by many companies was that of hiding profit on which they should pay taxes, and handing it out on shares.
      Colonel Crosthwaite-Eyre: I tried to indicate that, and the very points which the hon. Member mentioned are the ones which cannot be hidden, and can only
      334
      show what I said, that members opposite were trying to make political prejudice out of a perfectly clear issue.
      The hon. Member for Blackley (Mr. Diamond) made a very interesting statement in which he said Socialism wished industry to be more competent and more efficient and that was what Socialism stood for. I hope he will have a talk with the hon. Member for West Renfrew (Mr. Scollan) in a quiet place. It he is serious about that, when this question comes to a Division, as it will, we will find him in the Lobby with Members on this side. Unless he is prepared to support a simple issue like this to promote the recovery of industry not only for the moment but for the future, then indeed his words are a hollow mockery.
      The hon. Member said, as did the Financial Secretary—I am glad to find two Members, one on the back benches and one on the Front Bench in agreement—that the main issue was, if profits were ploughed back, that those profits would in fact create an inflationary pressure and try to escape in some form of capital investment. If the Financial Secretary and the hon. Member for Blackley are correct, it simply means that the Government have no confidence in the line they are pursuing. They are saying that capital expenditure is a matter which in fact they cannot control and, therefore, saying, that all those controls they are constantly telling us are so essential are bluff. That is the only conclusion we must come to.
      Mr. Diamond: I did not use the word "escape." I only tried to make the point that this tax would reduce inflationary pressure. If the hon. Member's Amendment were accepted, it would mean more money chasing less goods.
      Colonel Crosthwaite-Eyre: The hon. Member has taken up the point, but I actually quoted the Financial Secretary, and he has not risen. Secondly, the Financial Secretary said these would fructify in the pockets of the Treasury and would not result in capital expenditure. Are we then to assume that this tax is being taken from the reserves of capital used in company investment to meet current needs of the Treasury, because if this is so, far from fructifying in the pockets of the Treasury, they are merely being used to pay current taxes and have nothing whatsoever to do with

      335
      the deflation he requires. The third, and possibly the most logical of all his arguments, was that the Treasury could not afford it. Hon. Members on this side have already said that this Budget has nothing to do with what we can or cannot afford.
      Mr. Glenvil Hall: I am sorry to interrupt, but this point has been made against me twice. Perhaps I may explain what I meant when I spoke about my right hon. and learned Friend not being able to afford it. In a sense the revenue is not needed. It is clear in all quarters of the Committee we are going to have something over £300 million of surplus in this financial year, and in this sense the revenue is not needed, but my right hon. and learned Friend could not afford to let this £23 million gross go because it was needed as part of the money he has to raise in order to help to mop up this purchasing power which is moving around.
      Colonel Crosthwaite-Eyre: The right hon. Gentleman's interruption leads me to his last argument, whether this tax is deflationary or not. This is that in the view of hon. Members opposite, a company putting money to reserve in some way hopes to screw some benefit out of it. Is it going to put its money away at the moment and suffer a 10 per cent. depreciation on what it so reserves or spend it when it can get a hundred pounds for every hundred pounds it spends? If they take this view, what is the action the company is going to pursue? I put that to those who are so constant in their deprecation of commercial honesty as practised in this country.
      Is not the fact one very simple thing? We know that through the war and through present circumstances in practically every industry we are not meeting the replacements we need. We know, further, that the cost of replacement has risen. I am concerned with a company—a merchandising concern—where we have found it is practically impossible ever to replace an item we need at the original cost plus our added profit. We are constantly, as indeed are all companies, finding that our cash resources are quite inadequate to meet immediate needs.
      This tax as it stands now is a tax on the future of this country; a tax on the improvement of our industries and a tax on
      336
      the future effort of the nation. We see the hoardings about the country covered with posters stressing the need for endeavour and enterprise in one form or another. They are posters issued by the Government, but this tax which is proposed by the Government is a complete violation of the spirit to which their propaganda is addressed. In one voice the Government says "strive for better living," and in the other the Government is denying those who are responsible for production one of the most important tools for the job. For every pound they gather in under this tax, the Government is depriving the future producers of this country the tools by which we should be able to win the benefits of the peace which we have earned by the winning of the war.
      Mr. Pitman: In dealing with this question of inflationary or deflationary effect one cannot generalise. Company "A" may be intending to keep this money in cash, and that can be said to be deflationary. Company "B," as has been pointed out, may be said to be inflationary in its practice if it does any expansion or goes in for investment of any kind. Instances of that sort can be continually put and we shall go backwards and forwards throwing examples at each other because there can be such clear instances which do not lend themselves to generalisation. But it is obvious to me that the view of the hon. Member for Blackley (Mr. Diamond) is the more probable, that on balance firms will tend to go in for expansion and development if they have got the cash there; but it is by no means universal and it is quite impossible to generalise.
      But there is an aspect of this on which one can generalise, and it is the reason why I support the Amendment. That is that if one has a very big tax on retained profits one encourages people to go in for expansion on revenue account and not on capital account. That is to say, reductio ad absurdum, that if the tax on undistributed profits went as high as 17s. 6d. in the pound, then anything which a company did to reduce its profits by revenue account expansion and development would mean they would get a pound's worth of expansion for only 2s. 6d. in cost. I think that is an aspect of this tax which has not been sufficiently appreciated by the Chancellor of the Exchequer, and indeed, by those

      337
      on the benches opposite. That is a very strong reason why the tax on profits which are not distributed should be kept down. Let them, on the other hand, keep a tax discriminating on those profits which are distributed. If a company distributes, it will not spend that money on frivolous things; but if the tax is excessively high on profits which are not distributed, there is this temptation to expand the revenue account. I leave that as a contribution to the Committee, in the hope that it will, if not now, in the future, keep down the tax on undistributed profits.
      Mr. Assheton: I would like to intervene for just a few minutes in the Debate to comment on one or two speeches which have been made by hon. Members on the other side of the Committee. We started off with a clear and lucid speech from the hon. Member for Chippenham (Mr. Eccles) in which he made what I thought was a quite unanswerable case. I listened with the greatest care to hon. Members opposite, and only in the argument of the hon. Member for Blackley (Mr. Diamond) did I detect anything worth answering. If I may be allowed to say so, the hon. Member for Bath (Mr. Pitman) has already answered that argument.
      The hon. Member for Blackley suggested that this increase in the tax on undistributed profits has to some extent reduced pressure on capital goods. I can see that there is something in that argument. But the point which the hon. Member for Bath makes is much stronger and has a more powerful influence. This is driving those in charge of companies all the time to spend more and more from revenue account, because the temptation to make profits is getting less and less. So, I think the inference on that side outweighs the inference which the hon. Member for Blackley suggested. But it is a matter of opinion; I concede that to him. I am sure that hon. Members on this side of the Committee share my opinion and that of the hon. Member for Bath—rather than the opinion of the hon. Member for Blackley.
      Mr. Diamond: May I tell the right hon. Gentleman that he will give my constituency immense pleasure if he can give the name of my constituency its proper pronunciation.
      Mr. Assheton: I sometimes suffer from having my name mis-pronounced, so I
      338
      have every sympathy with the hon. Member. If I may proceed to the speech of the hon. Member for West Renfrew (Mr. Scollan)—I think he has withdrawn for a short time, which is quite reasonable—I would say that he did not seem to understand that capital is generally found out of savings. He did not seem to be at all against capital development. In fact, he told the Committee that he was very keen on it. But he did not want money to be accumulated with a view to forming capital. The hon. Member did not say how else that capital should be formed. So I must leave this point as the hon. Member is not here to answer the question.
      Of course, the Financial Secretary to the Treasury, when he came to reply, made a very long speech, but I think there were only two points in that speech. If I am doing the hon. Gentleman an injustice, perhaps he will tell me. The first point was that the gap between 5 per cent. and 25 per cent., which would be a consequence of this Amendment being adopted, was too great. For the life of me, I cannot see the force of that argument. I have thought about it ever since the right hon. Gentleman said it, and I have no idea what his object is. If the right hon. Gentleman will be good enough to tell us, I shall be very grateful. It was as I feared; the argument is entirely without substance. There is nothing in it. It was just a collection of words strung together, to which no meaning is to be attached.
      The next argument he used—and I hope he will tell me whether I am wrong in this criticism—was to suggest that if you took this money from the companies, where it would form a reserve, and put it into the Exchequer that money would somehow fructify, but all the time that I was at the Treasury I never saw money fructify there. That is one thing which does not happen to money when it gets into the Treasury. Never, never did I see any money fructify. That is the very last thing that happens to money in the Exchequer. It comes pouring in on one side and it pours out as fast on the other side. This money taken away from the reserves of companies will just be spent by the Chancellor of the Exchequer.
      Our Amendment, therefore, suggests that more money should be put to reserve. What is it to be used for? There are all

      339
      sorts of reasons. The first I would suggest is that put forward by the hon. Member for Edgbaston (Sir P. Bennett)—to take care of finance of stock-intrade because the value of all stock-intrade has gone up tremendously and the capital has not increased proportionately. Indeed many companies are very Much under-capitalised and must make capital out of savings. The best thing to do is to pile up reserves in their own companies. That is a most important thing.
      Another thing for which money is wanted is obsolescence. The hon. Member for Wackley has explained with great care the difference between renewals and replacements, and so on, but he did not tell us about obsolescence. Take the case of a big property company. They put aside money to reserve, but they are not in a position to renew their properties when they come to need it. Many of those old buildings ought to have been pulled down years ago. The reason they were not is that they have had no Inland Revenue allowance for obsolescence. I agree with the point made by the hon. Member for Chippenham about money
      put into savings or ploughed back into companies, and I suggest to the Committee that they will be very wise indeed to accept this Amendment. The Financial Secretary rejects the proposals we have made on this side. We want to express very fair criticisms and we will divide the Committee on the subject.
      Mr. Eccles: May I reply to what the Government have said? We have been discussing the way the £23 million ought to be left to the companies of this country, or in the national interest be taken into the Exchequer. I want to point out that no serious arguments at all have been adduced to show us whether the sum of £23 million additional working capital to the private businesses of this country is in the interest of production or not. We have had no serious arguments at all and I hope my hon. Friends will press this Amendment to the Division.
      Question put, "That 'fifteen' stand part of the Clause."
      The Committee divided: Ayes, 247; Noes, 96.

      Division No. 37.]

      AYES.

      [10.49 p.m.

      Adams, Richard (Balham)

      Colman, Miss G. M.

      Gibbins, J.

      Alexander, Rt. Hon. A. V

      Comyns, Dr. L.

      Gibson, C. W.

      Allen, A. C. (Bosworth)

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

      Gilzean, A.

      Allen, Scholefield (Crewe)

      Corlett, Dr. J.

      Glanville, J. E. (Consett)

      Anderson, A. (Motherwell)

      Corvedale, Viscount

      Goodrich, H. E.

      Anderson, F (Whitehaven)

      Crawley, A.

      Granville, E. (Eye)

      Attewell, H. C.

      Daggar, G.

      Grenfell, D. R.

      Austin, H. Lewis

      Daines, P.

      Grey, C. F.

      Awbery, S. S.

      Davies, Edward (Burslem)

      Grierson, E.

      Ayrton Gould, Mrs. B.

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

      Griffiths, D. (Rother Valley)

      Bacon, Miss A.

      Davies, R. J. (Westhoughton)

      Gunter, R. J

      Balfour, A.

      Davies, S. O. (Merthyr)

      Guy, W. H.

      Barstow, P. G.

      Deer, G.

      Haire, John E. (Wycombe)

      Barton, C.

      de Freitas, Geoffrey

      Hale, Leslie

      Bechervaise, A. E.

      Delargy, H. J.

      Hall, Rt. Hon. Glenvil

      Bellenger, Rt. Hon. F. J.

      Diamond, J.

      Hannan, W. (Maryhill)

      Benson, G.

      Dobbie, W

      Hardy, E. A.

      Berry, H.

      Dodds, N. N

      Hastings, Dr. Somerville

      Beswick, F.

      Donovan, T.

      Henderson, A. (Kingswinford)

      Bing, G. H. C.

      Driberg, T. E. N.

      Henderson, Joseph (Ardwick)

      Binns, J.

      Dugdale, J (W. Bromwich)

      Herbison, Miss M.

      Blackburn, A. R.

      Ede, Rt. Hon. J. C.

      Hewitson, Capt. M.

      Blenkinsop, A.

      Edwards, John (Blackburn)

      Hobson, C. R.

      Soardman, H

      Edwards, N. (Caerphilly)

      Hoiman, P.

      Bowden, Fig.-Offr. H. W.

      Edwards, W J. (Whitechapel)

      House, G.

      Bowles, F G. (Nuneaton)

      Evans, Albert (Islington, W.)

      Hoy, J.

      Braddock, Mrs. E. M. (L'pl, Exch'ge)

      Evans, John (Ogmore)

      Hubbard, T.

      Braddock, T. (Mitcham)

      Evans, S. N. (Wednesbury)

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

      Bramall, E. A.

      Ewart, R.

      Hughes, Emrys (S. Ayr)

      Brook, D. (Halifax)

      Fairhurst, F.

      Hughes, Hector (Aberdeen, N.)

      Brooks, T. J. (Rothwell)

      Farthing, W. J.

      Hughes, H. D. (W'Iverh'pton, W.)

      Brown, George (Belper)

      Fernyhough, E.

      Hutchinson, H. L. (Rusholme)

      Burden, T. W.

      Field, Capt. W. J.

      Hynd, J. B. (Attercliffe)

      Butler, H. W (Hackney, S.)

      Fletcher, E. G. M. (Islington, E.)

      Isaacs, Rt. Hon. G. A.

      Champion A J.

      Foot, M. M.

      Janner, B.

      Chetwynd, G. R.

      Forman, J. C.

      Jay, D. P. T.

      Cobb, F. A.

      Fraser, T. (Hamilton)

      Jeger, G. (Winchester)

      Cocks, F. S.

      Freeman, Peter (Newport)

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

      Coldrick, W.

      Gallacher, W.

      Jones, D. T. (Hartlepool)

      Collindridge, F.

      Ganley, Mrs. C. S.

      Jones, Elwyn (Plaistow)

      Collins, V. J.

      George, Lady M. Lloyd (Anglesey)

      Keenan, W

      Kendall, W D.

      O'Brien, T.

      Soskice, Maj. Sir F

      Kenyon, C

      Oldfield, W. H.

      Steele, T.

      King, E. M.

      Oliver, G. H.

      Stewart, Michael (Fulham, E.)

      Kinghorn, Sqn.-Ldr. E.

      Paget, R. T.

      Stokes, R. R.

      Kinley, J.

      Parker, J.

      Stress, Dr. B.

      Lang, G.

      Pearson, A.

      Sylvester, G. O.

      Lee, F. (Hulme)

      Peart, T. F.

      Taylor, H. B. (Mansfield)

      Leonard, W.

      Plaits-Mills, J. F. F.

      Taylor, R. J. (Morpeth)

      Levy, B. W.

      Poole, Cecil (Lichfield)

      Thomas, D. E. (Aberdare)

      Lewis, T. (Southampton)

      Porter, E. (Warrington)

      Thomas, I. O. (Wrekin)

      Lindgren, G. S.

      Porter, G. (Leeds)

      Thomas, John R. (Dover)

      Lipton, Lt.-Col. M.

      Price, M Philips

      Thorneycroft, Harry (Clayton)

      Longden, F.

      Proctor, W. T.

      Tiffany, S.

      Lyne, A. W.

      Pryde, D. J

      Usborne, Henry

      McAdam, W.

      Pursey, Cmdr. H.

      Wallace, G. D. (Chislehurst)

      McAllister, G.

      Randall, H. E.

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

      McGhee, H. G.

      Ranger, J

      Warbey, W. N.

      Mack, J. D.

      Reeves, J.

      Watkins, T. E.

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

      Rhodes, H.

      Watson, W. M.

      McKinlay, A. S.

      Ridealgh, Mrs. M.

      Webb, M. (Bradford, C.)

      Maclean, N. (Govan)

      Robens, A.

      Wells, P. L (Faversham)

      McLeavy, F.

      Roberts, Emrys (Merioneth)

      West, D. G.

      MacMillan, M. K. (Western Isles)

      Roberts, Goronwy (Caernarvonshire)

      Wheatley, J. T. (Edinburgh, E.)

      Macpherson, T. (Romford)

      Roberts, W. (Cumberland, N.)

      White, C. F. (Derbyshire, W.)

      Mallalieu, J. P. W.

      Robertson, J. J. (Berwick)

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

      Manning, C. (Camberwell, N.)

      Ross, William (Kilmarnock)

      Whiteley, Rt. Hon. W.

      Marquand, H. A.

      Royle, C.

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

      Mathers, Rt. Hon. George

      Sargood, R.

      Willey, O. G. (Cleveland)

      Medland, H. M.

      Scollan, T.

      Williams, D. J (Neath)

      Millington, Wing-Comdr. E. R.

      Scott-Elliot, W.

      Williams. J. L. (Kelvingrove)

      Monslow, W.

      Shackleton, E. A. A.

      Williams, W. R. (Heston)

      Moody, A. S.

      Sharp, Granville

      Willis, E.

      Morley, R.

      Shawcross, C. N. (Widnes)

      Wills, Mrs. E. A.

      Morgan, Dr. H. B.

      Shurmer, P.

      Wilson, Rt. Hon. J. H.

      Morris, Lt.-Col. H. (Sheffield, C.)

      Silverman, J. (Erdington)

      Wise, Major F. J.

      Morris, P. (Swansea, W.)

      Silverman, S. S. (Nelson)

      Woodburn, A.

      Moyle, A

      Simmons, C. J.

      Woods, G. S.

      Murray, J. D.

      Skeffington-Lodge, T. C.

      Wyatt, W.

      Meal, H. (Claycross)

      Smith, C. (Colchester)

      Yates, V. F.

      Nicholls. H. R. (Stratford)

      Smith, Ellis (Stoke)

      Younger, Hon. Kenneth

      Noel-Baker, Rt. Hon. P. J. (Derby)

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

      Noel-Buxton, Lady

      Snow, J. W.

      TELLERS FOR THE AYES:

      Mr Popplewell and Mr. Wilkins.

      NOES.

      Amory, D. Heathcoat

      Glyn, Sir R.

      Noble, Comdr. A. H. P.

      Assheton, Rt. Hon. R.

      Grimston, R. V.

      Nutting, Anthony

      Baldwin, A. E.

      Hare, Hon. J. H. (Woodbridge)

      O'Neill, Rt. Hon. Sir H.

      Barlow, Sir J.

      Harvey, Air-Comdre. A. V.

      Osborne, C.

      Beechman, N. A.

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

      Peto, Brig. C. H. M

      Bennett, Sir P.

      Henderson, John (Cathcart)

      Pitman, I. J.

      Birch, Nigel

      Hollis, M. C

      Prior-Palmer, Brig. O.

      Boles, Lt.-Col. D. C. (Wells)

      Holmes, Sir J. Stanley (Harwich)

      Raikes, H. V.

      Bowen, R.

      Howard, Hon. A.

      Rayner, Brig. R.

      Bower, N.

      Hulbert, Wing-Cdr. N. J.

      Roberts, H. (Handsworth)

      Boyd-Carpenter, J. A.

      Joynson-Hicks, Hon. L. W.

      Ropner, Col. L.

      Braithwaite, Lt.-Comdr. J. G.

      Keeling. E. H.

      Ross, Sir R. D. (Londonderry)

      Buchan-Hepburn, P. G. T.

      Lambert, Hon, G.

      Salter, Rt. Hon. Sir J. A.

      Butcher, H. W.

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

      Sanderson, Sir F.

      Challen, C.

      Lindsay, M (Solihull)

      Shepherd, W. S. (Bucklow)

      Channon, H.

      Lloyd, Selwyn (Wirral)

      Smiles, Lt.-Col. Sir W

      Clarke, Col. R. S.

      Low, A. R. W.

      Spearman, A. C. M.

      Corbett, Lieut-Col. U. (Ludlow)

      Lucas-Tooth, Sir H.

      Stanley, Rt. Hon. O.

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

      Macdonald, Sir P. (I. of Wight)

      Strauss, H. G. (English Universities)

      Crosthwaite-Eyre Col. O. E.

      Mackeson, Brig. H. R.

      Studholme, H. G.

      Crowder, Capt. John E.

      McKie, J. H. (Galloway)

      Thorneycroft, G. E. P. (Monmouth)

      Darling, Sir W. Y.

      Maclay, Hon. J. S.

      Thorp, Lt.-Col. R. A. F

      Davidson, Viscountess

      Macpherson, N. (Dumfries)

      Turton, R H

      De la Bère, R.

      Marples, A. E.

      Wakefield, Sir W. W.

      Digby, S. W.

      Marsden, Capt. A.

      Ward, Hon. G. R.

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

      Marshall, D (Bodmin)

      Wheatley, Col. M. J. (Dorset, E.)

      Drayson, G. B.

      Medlicott, F.

      White, Sir D. (Fareham)

      Dugdale, Maj. Sir T. (Richmond)

      Mellor, Sir J.

      Williams, C. (Torquay)

      Eccles, D. M.

      Molson, A. H. E.

      Willoughby de Eresby, Lord

      Erroll, F. J.

      Moore, Lt.-Col. Sir T.

      Winterton, Rt. Hon Earl

      Fox, Sir G.

      Morrison, Maj. J. G. (Salisbury)

      Fraser, Sir I. (Lonsdale)

      Neven-Spence, Sir B.

      TELLERS FOR THE NOES:

      Gage, C.

      Nicholson, G.

      Mr. Drewe and Major Conant.

      Question put, and agreed to.

      To report Progress and ask leave to sit again.—[Mr. R. J. Taylor.]
      Committee report Progress; to sit again Tomorrow.

  NATIONAL ASSISTANCE [MONEY]
  Resolution reported:
  "That, for the purposes of any Act of the present Session to terminate the existing poor law and to provide in lieu thereof for the assistance of persons in need by the National Assistance Board and by local authorities, and to provide for other purposes (hereinafter referred to as "the new Act"), it is expedient to authorise:—
  A. The payment out of moneys provided by Parliament of—

  (i) Expenses (including expenses incidental to the giving of assistance) incurred by the said Board under the new Act—

  (a) in giving assistance to persons over the age of sixteen whose resources (if any) which are taken into account, including any such resources of any dependants of theirs, are insufficient to meet their requirements and those of any dependants of theirs,

  (b) in the provision and management and re-establishment centres and reception centres, and

  (c) in making contributions to organisations maintaining such centres.

  and any administrative expenses of the said Board incurred under or by virtue of the new Act;

  (ii) any increase attributable to the new Act in the sums payable out of moneys provided by Parliament by way of salaries and allowances to the officers and servants of the said Board, and any expenses incurred under the provisions of the new Act relating to advisory committees and appeal tribunals;

  (iii) contributions in respect of accommodation provided by, or by arrangement with, local authorities under the new Act, being contributions payable for not more than sixty years and of the following amounts—

  (a) seven pounds ten shillings, or in Scotland eleven pounds, in respect of a single bedroom,

  (b) in respect of any other bedroom, not more than six pounds ten shillings, or in Scotland nine pounds ten shillings, multiplied by the number of persons for whom the room is intended;

  (iv) any expenses of a Minister incurred in the exercise of default powers conferred by the new Act;

  (v) any increase in the sums payable out of moneys provided by Parliament under the Old Age Pensions Act 1936, which is attributable to amendments effected by the new Act in the said Act of 1936, being amendments providing that assistance grants and the value of accommodation, maintenance and services are to be left out of account in the calculation of means for the purposes of the said Act
  344
  of 1936, and amendments relating to the determination of questions arising there-under, to disqualifications for the receipt of pensions, to the date at which increases of pensions become payable, and to the suspension or resumption of pensions or their increase on a change of circumstances;

  (vi) any increase in the sums payable out of moneys provided by Parliament under the National Health Service Act, 1946, or the National Health Service (Scotland) Act, 1947, being an increase attributable to provisions of the new Act as to services to be rendered by local health authorities, as to ambulance services, and as to payments by Regional Hospital Boards in respect of accommodation and facilities provided in premises formerly being part of a workhouse;

  (vii) compensation payable under the new Act to persons employed for the purposes of pension committees under the said Act of 1936;

  (viii) the administrative expenses of any Government department incurred under the new Act.

  B. The payment into the Exchequer of the amounts of reductions attributable to the new Act in the liabilities of any fund for arrears of benefits, pensions or allowances, and of the receipts under the new Act of the said Board or any Minister."

CRIMINAL JUSTICE [MONEY]
Resolution reported:
"That, for the purposes of any Act of the present Session to abolish penal servitude, hard labour, prison divisions and sentence of whipping; to amend the law relating to the probation of offenders, and otherwise to reform existing methods and provide new methods for dealing with offenders and persons liable to imprisonment; and for purposes connected therewith, it is expedient to authorise the payment out of moneys provided by Parliament—

(a) of any expenses of the Secretary of State under the said Act, and of any expenses of the Prison Commissioners thereunder, and of any expenses incurred by the Secretary of State in the training of probation officers, and officers or servants serving in approved probation hostels or approved probation homes as defined in the said Act, or in remand homes or approved schools, and in the training of persons for appointment as probation officers or as such officers or servants as aforesaid;

(b) of any expenses incurred by the Minister of Health or by the Board of Control in connection with asylums and places appointed for the purposes of the Criminal Lunatic Asylums Act, 1860;

345

(c) of any sums by which grants payable in pursuance of regulations made under Subsection (1) of Section sixty-seven of the National Health Service Act, 1946, for the purposes of superannuation benefits to officers engaged in health services are increased by reason of any provision of the said Act of the present Session enabling such regulations to be made for the purpose of granting superannuation benefits to officers employed in asylums and places appointed as aforesaid;

(d) of such sums as the Secretary of State may, with the approval of the Treasury, direct to be paid—

(i) towards expenditure incurred by local authorities, as defined in the said Act of the present Session, in meeting the expenses of probation committees in connection with the probation and supervision of offenders and the supervision of children and young persons; and towards the expenditure out of the metropolitan police fund in connection with such probation and supervision as aforesaid;

(ii) towards expenditure incurred by any society or person approved by the Secretary of State in the establishment, enlargement, improvement and carrying on of approved probation hostels or approved probation homes;

(iii) towards expenditure incurred by any body approved by the Secretary of State in the training of probation officers and of persons for appointment as probation officers;

(iv) towards expenditure incurred by any body approved by the Secretary of State in the training of officers or servants serving in any place in which offenders or persons awaiting trial may be detained or serving in approved probation hostels or homes, and of persons for appointment as such officers or servants;

(v) towards the expenditure incurred by any society engaged in supervising or assisting persons released from a prison or Borstal institution or a detention centre as defined in the said Act;

not exceeding, in the case of any such expenditure as is mentioned in sub-paragraph (i) of this paragraph, 50 per cent. of that expenditure; and

(e) of any sums by which grants under Section one hundred and four of the Children and Young Persons Act, 1933, towards the expenses of county councils and county borough councils, or by which grants under Section one hundred of the Education Act, 1944, towards the expenses of local education authorities, are increased by reason of any provision of the said Act of the present Session;

and the payment info the Exchequer of any sums received by the Secretary of State under the said Act of the present Session."

SOLDIERS' FAMILIES (ACCOMMODATION)
Motion made, and Question proposed, "That this House do now adjourn."—[Mr. R. J. Taylor.]
11.2 p.m.
Mr. Charles Smith: I wish to raise this evening the question of certain aspects of War Office provision of accommodation for soldiers' families. I do this, naturally, without prejudice to any question of what sized forces we ought to have, and merely on the simple principle that Armed Forces of a certain size presuppose a certain cadre of Regular soldiers, and that such a cadre presupposes adequate accommodation for their families in those areas where the soldiers are required to serve. I have been convinced of the need to raise this matter by a number of tragic cases which have come to my notice in my own constituency—cases of the separation of families of Regulaf soldiers because of the exigencies of war and continued by the exigencies of postwar service.
Let me quote one example. It is not, as I will be able to show, by any means isolated, but it is a good example of the kind of thing which is happening. A soldier in my constituency proposed to get married originally in 1935. He and his prospective wife postponed marriage because the soldier was at that time under orders to proceed to China. He returned in 1939, and the postponed marriage then took place. Within five months he was posted to the B.E.F. in France. He returned from France in the middle of 1940, and three months later was posted—as so many soldiers were—from place to place in the United Kingdom. It was not possible for his wife to spend more than a week or two with him, apart from leaves during the whole of that period. In 1943, he went to North Africa, served in Egypt, Italy and Greece, and was finally posted back to this country in 1946.
At that time he had served seven of the previous ten years of his life abroad, and in a married life of seven years had actually been able to live with his wife for a period of six months. When he returned to this country he found himself immediately posted to a station which had no married quarters, and where it was impossible because of the geographical location, to live out of barracks and live with his wife.

347
I put this case to the War Office. The man was at that time a warrant officer, who had given many years of excellent service to the Army. I asked whether consideration might not be given to his posting to some centre, after this long period of separation, where he might be able to live with his wife again. The answer from the War Office was as follows:
"You will appreciate that there is a great shortage of accommodation, and waiting lists at all stations are very long. Many of those who receive quarters have as good or even better grounds for getting them than your constituent."
So the case I have quoted, which is serious enough to merit the attention of the War Office, is by no means exceptional and is, in fact, surpassed by many with which they have to deal.
I could quote other cases of a similar character, but will confine myself to one of a woman evacuated from a Mediterranean station in 1940, where she had been living with her husband, a warrant officer. Since then she has been able to live with her husband for a period of only 10 days. When marriages are subjected to a strain of that kind, it is small wonder that some of them break up. Many of the individuals affected are Regular soldiers of many years' service, many of them warrant officers, and although we have all in the past made jokes about warrant officers, sergeant-majors and quarter-masters, anyone with any experience in the Army knows that they are the backbone of it. Their morale and the treatment they receive, together with other Regular soldiers, are matters to which the War Office should give serious consideration.
The first thing I wish to ask from the Under-Secretary is an assurance that the War Office does attach a great deal of importance to providing opportunities for the uniting of families whenever possible. There are two aspects on this matter: first, where a soldier is serving overseas, and, second, where he is serving in the United Kingdom. Taking the overseas aspect first, we all realise the manifold difficulties involved in the provision of adequate marriage quarters in overseas commands. There should be a concentration by the War Office on this problem in those stations where British troops are to remain for a long period. No one
348
would expect or ask for an extravagant or unreasonable scale of accommodation. I suggest that the War Office should make an immediate review of the position in overseas commands, because a written answer from the Secretary of State given to me yesterday indicates that the War Office does not have information of the number of applications in each command. I presume, therefore, that it does not have information about accommodation in overseas commands. They do know, however, as stated in the first sentence of the reply, that the demand for soldiers families at present exceeds the supply in all overseas commands except Bermuda. I suggest that a better control needs to be exercised in the overseas commands.
As far as I can understand from some cases I have had to deal with, the responsibility may rest in certain instances on the individual soldier to find his own accommodation and get it approved by the commander-in-chief. That is obviously unsatisfactory, especially where soldiers desire their families to accompany them when they are posted overseas. If a unit is under orders for Hong Kong for example—and this was a recent case in relation to constituents of mine—the soldier serving in that unit has no means of knowing what prospects there are of getting accommodation for his family. Can the War Office give information on points like that? The reply which my right hon. Friend gave yesterday rather suggests that not even the War Office is able to inform a unit ordered to an overseas station whether there are any facilities for families to accompany the soldiers concerned, or what the position is at all.
Let me turn to the United Kingdom aspect of this problem. Here again there are obviously many difficulties in the way. The White Paper on Capital Investment published yesterday tells us, on page 23, that there are in the possession of the War Office at present 15,000 married quarters. On 7th November the Secretary of State told me that about 10,000 soldiers' families are accommodated in quarters and that eventually some 30,000 families will require quarters. We do not ask for any privileged position for the serving soldier, but at the same time he is entitled to be in no worse position than the civilian in regard to housing accommodation. In fact, in some

349
respects, the serving soldier is disadvantaged. He is moved about from station to station, and consequently his family cannot acquire that residence qualification which it is necessary to have to get on to the housing list of most local authorities. This disadvantage may follow him into civilian life. There are men whose homes are in my constituency and who have been stationed in other parts of the country. Their families have been able to accompany them. But on discharge, the men find they cannot easily return to their home towns because they are classed on the housing list as out-of-town applicants.
Clearly, in present circumstances, the War Office cannot embark on a large-scale building programme. Very often when it does construct new married quarters the project is not looked on with much favour by the local authority or by local opinion, because it draws materials and labour from the local pool. May I put to the Under-Secretary two points which, if the War Office will attend to them, will, I think, be helpful in establishing a better relationship between the War Office and local authorities. First, I suggest that the War Office should co-operate with the local authority in phasing any construction programme. Secondly, it should co-operate in dealing with any of those irregular occupants to whom reference is sometimes made, and I would suggest that it should not in any circumstances evict people from married quarters without careful consultation with the local housing authority.
The War Office must first make sure that all its married quarters are fully utilised. The White Paper on capital expenditure says there are 15,000 married quarters. The Secretary of State quotes a figure of 10,000 soldiers' families accommodated. Can we be told who is occupying or how they are occupying the 5,000 which are not accounted for? The eviction of families of soldiers serving overseas has been the subject of a number of Questions, and was the subject of a long statement by the Secretary of State on 11th November. He made clear the reasons why such steps had been taken, but I have in my hand the copy of an eviction notice issued to the wife of a Regular soldier serving overseas. She, with two children, was occupying married quarters
350
and received a very blunt notice ordering her to vacate that married quarter, but pointing out the possibility of alternative accommodation in an unspecified area.
Can rather more tact and imagination be used in approaching this problem, and when people are asked in this way to offer up married quarters, can they be given a much greater indication of the alternative accommodation the War Office is willing to offer them? They are, after all, the wives and children of husbands serving overseas, very often in commands to which it is impossible for a family in present circumstances to go; and I would suggest that the families of Service men who are serving overseas—for example, in Palestine, by which fact they are subjected to a great deal of anxiety—are entitled to rather more individual consideration and sympathetic treatment than they have received from the War Office. I hope the Under-Secretary will be able to reassure the House on some of the points I have raised.
11.17 p.m.
Mr. John Morrison: Because I represent a large area of Salisbury Plain, I am grateful to the hon. Member for Colchester (Mr. Charles Smith) for raising this subject. It does affect a great number of families of long-serving soldiers in Salisbury Plain area, many of whom are under notice to quit. I hope that the Under-Secretary will appreciate the real hardship caused to many of these families. They are in great distress at the present time. We understand, as has been said by the hon. Member for Colchester, there are some 15,000 married quarters, of which only 10,000 are occupied. If the Secretary of State examines the situation in the Salisbury Plain area, he will find a great amount of its barrack space is empty. It could be made available for soldiers' families if money is secured for the expenditure. In the nation's interest, it seems to me much more sensible, when labour and building materials are in short supply, that this should be done rather than we should wait for a long-term building programme. I do hope the Secretary of State will investigate this point, and I would ask the Minister to answer the letters about many families who are in great distress which have not been answered up till now.
11.19 p.m.
The Under-Secretary of State for War (Mr. Michael Stewart): I, too, am most grateful to the hon. Member for Colchester (Mr. Charles Smith) for raising this matter. I should like at the outset to give him the assurance for which he asks, that the War Office do attach the very greatest importance to providing family accommodation for the Regular soldier and to enabling the Regular soldier and his family to live together. It is indeed because we have sought that objective that we have sometimes been subject to criticism when we have been obliged to suggest to people who, in one way or another, are "irregular" occupants of our accommodation, that they must make way for the persons for whom the accommodation is properly intended. Our aim has been to see that the accommodation we have is so used as to unite the serving soldier with his family. That was the policy to which expression was given by my right hon. Friend on 11th November.
My hon. Friend the Member for Colchester quoted more than one moving example of the difficulties with which we are faced, and it is true, unfortunately, that examples of that kind are by no means exceptional. We have at present some 15,000 married quarters, and we are faced with the fact that some of them are being used by people who are "irregular" occupants—civilians who nave no proper claim on War Office accommodation at all. There are, of course, the "key" civilians as they are known, and who have a right to War Office accommodation, occupying these buildings, and there are families of serving soldiers who are occupying many, but who are in the position referred to by my hon. Friend and by the hon. Member for Salisbury (Mr. J. Morrison) where the serving soldier is overseas and the married quarters are not serving the purpose of uniting the soldier with his family.
In all these ways the amount of accommodation used for its proper purpose is cut down. It is true we need to increase the total accommodation, and if we look at the numbers now being built and the numbers which have reached the Command planning stage, it is idle to promise that there can be an early or, an easy solution of this matter. My hon. Friend may be assured, however, that we realise very fully that the serving soldier has in
352
every way as much right to consideration as any civilian has for proper accommodation and as much right to the opportunity to live a united family life. We have represented, and we shall continue to represent, that point of view with every possible emphasis.
May I refer to the position overseas? There again, in all the overseas stations, with one comparatively minor exception, there is a demand for married quarters which exceeds the supply. I will certainly bear in mind the suggestions for further inquiry made by my hon. Friend. With regard to his suggestion that the soldier overseas is made responsible for finding accommodation on his own, I do not think the phrase "made responsible" represents the position. Unfortunately we are not at present able to provide the accommodation overseas which is needed in all cases, but where a serving soldier himself finds accommodation and where we are satisfied that it is suitable accommodation, we arrange for his family to join him there. I must add that it is necessary in some overseas stations for us to go to considerable pains to satisfy ourselves that the accommodation is satisfactory.
The position at home has been dealt with by my hon. Friend who made suggestions about collaboration with the local authorities. We have borne the importance of that in mind. For example, when the siting of married quarters is being considered, it is done in collaboration with the local authority and with the Ministry of Town and Country Planning. The construction is done by the work being let out to contract, either by the Royal Engineers or through the Ministry of Works, and it is through the instrumentality of the Ministry of Works that we have, I think, in most instances avoided any conflict or waste of effort as between ourselves and the local authorities. There are, indeed, a number of examples of fruitful collaboration between ourselves and the local authorities as to the siting and construction of married quarters.
On the vexed question of eviction, we can claim emphatically that we have gone to considerable pains to collaborate with the local authorities, and we have proceeded with patience and humanity. In the first place, when it is clear to us that we require married quarters to put them to their proper use by uniting a serving soldier and his family, we give those who

353
are in occupation notice urging them to seek alternative accommodation. We make sure that the local authority is informed and that the persons concerned take steps to get their names on to the waiting list of the local authority.
Mr. J. Morrison: Long-term families who have followed men around for years have no local authority to which they can apply. So the local authority cannot provide for them.
Mr. Stewart: I will come to that question in a moment when I deal with longterm evictions. If we have anywhere any surplus accommodation, we make it available to the local authority sometimes on condition that it is used for the housing of these irregular occupants when we have to require them to leave our premises. As a last extremity, we may proceed to eviction, but only after the case has come under the review of my right hon. friend the Secretary of State for War. Where we have to say to the family of a serving soldier that we must ask them to leave married quarters so that those quarters can be occupied by a serving soldier and his family who will thus be united, we invariably offer alternative accommodation. I would be willing to accept the suggestion—though my hon. friend did not give me details by which I could identify the example he gave—that in some cases we may have proceeded unreasonably, or the formal notice to remove may not have been worded with tact. I would be very glad to look into any case of that kind and we shall do all we can to avoid such cases in the future.
When we have to proceed in regard to families of that description we do provide alternative accommodation, and by this policy of securing that accommodation is used to unite the families of serving soldiers, we are at any rate steadily increasing the chances that these families will one day be united in married quarters. But hon. Members cannot have it all ways. On the one hand, we cannot say we will not evict and that we will not require the shifting to a hostel of a service man's family which is already disunited. If we are to do that, we can-
354
not at the same time say we give priority to uniting service men's families.
Mr. Charles Smith: Will the hon. Gentleman comment on the figures which I gave of 15,000 married quarters in which only 10,000, according to the reply of the Secretary of State for War, are occupied by soldier's families?
Mr. Stewart: I think that these figures can be accounted for by the fact, as I mentioned earlier, that the persons who are regular occupants of a certain number of these quarters are not serving soldiers but are none the less entitled to the accommodation. I am certainly prepared to look again into this matter to see if there is anything further that can be done.
In conclusion I would say that we are faced, as every housing authority in this country is faced, with an acute problem springing from shortage of labour and materials; but we can claim, I think, that we are endeavouring to press ahead with the provision of new accommodation as speedily as may be. In the meantime, we are dealing with common sense and humanity with the painful and difficult personal problems that spring from the shortage.
Colonel Clarke: Will the hon. Gentleman tell us something about hostels. He referred to "alternative accommodation" just now. Did he mean hostels, because there is a feeling that they are not at all popular and I wonder if he can dispel that feeling?
Mr. Stewart: I would only say this—living in a hostel for a family who have hoped to live in a real home of their own can never be a really popular move. Apart from that general and inevitable unpopularity, there would be no proper grounds or reason why this accommodation should be disliked or should be unpopular. It is in my judgment good accommodation, but it cannot be, of course, a substitute for the permanent home that any family naturally want to set up.
Adjourned accordingly at Twenty-eight Minutes to Twelve o'Clock.