§ I pass to another topic. Since my Budget speech last April I have had second thoughts about betting. I then gave reasons, which still seem to me convincing, against any attempt to impose an all-round tax on betting. But I made it 406 clear that I had reached this conclusion regretfully, and, since then, the need to fortify the revenue and to prevent misuse of our resources has become more urgent. Since 1926 when the present Leader of the Opposition experimented, unsuccessfully, as he himself admitted, with a general betting tax, there has been a great increase in the turnover of the totes, particularly the dog totes. The amount staked in this way now represents a large proportion of the total expenditure on betting; and, fortunately, the difficulties which, as I explained last April, stand in the way of an attempt to tax all forms of betting, do not apply here. I, therefore, propose to levy a tax, at the rate of 10 per cent., on all money wagered with the dog totes. The proprietors will be required to deduct this 10 per cent. from the total sum staked, and to hand it over to the Customs and Excise.
§ Mr. Piratin (Mile End)What about the Stock Exchange?
§ Mr. DaltonPerhaps I may take the thing in my own order. I do not propose to levy a duty of this kind on the horse totes—[HON. MEMBERS: "Why?"] Wait, and I will tell you—which operate on quite a different basis. They are owned by the Racecourse Betting Control Board and are not run as the dog totes are, for private profit—a very important distinction. The amount, about 10 per cent., which they already deduct from the sums staked, is devoted, after payment of expenses, to the improvement of horse breeding; and I am advised by my right hon. Friend the Minister of Agriculture that good horses are good exports.
Nor am I going after the bookies on this occasion. It was, I think, the bookies that the present Leader of the Opposition had in mind when, in repealing the 1926 Betting Duty in 1929, he spoke, in words that have often been quoted before, of:
The volatile and elusive character of the betting population, and the precarious conditions in which they disport themselves."—[OFFICIAL REPORT, 15th April, 1929; Vol. 227, C. 49.]As I said last April, if we now tried to collect a tax on bets placed with bookmakers, it would be necessary to divert a number of Excise officers from the collection of other taxes, and the ordinary Customs and Excise revenue, which is relatively easy to collect and to control, 407 would suffer. Alternatively, it would be necessary to recruit and train new staff, and to take on more civil servants in order to collect a small sum from the bookies would not be worth while. Too few tax collectors chasing too many bookmakers would only be, I think, a new version of the inflationary merry-go-round, and I am not going to start it up.On the other hand, the football pools which have also grown since 1926 to the most formidable dimensions, are now absorbing far too much labour, paper and postage. I have decided, therefore, to bring them also within the field of the new betting duty. The amounts staked with these pools, including pool betting on other events—
§ Air-Commodore Harvey (Macclesfield)And a change of Government.
§ Mr. DaltonYes, that comes in too—will likewise be subject to a tax of 10 per cent. to be deducted and paid over to the Exchequer by the pool proprietors. This new tax on betting will come into operation on the 4th January, 1948, and, though the yield is not easy to forecast, I hope to get from this new source of revenue about £15 million in a full year and £3 million in the remainder of this year.
§ Mr. Marlowe (Brighton)Why not tomorrow?
§ Mr. DaltonI am glad to explain to the hon. and learned Member. The Provisional Collection of Taxes Act—the only authority on which taxes can be collected from the day after the Budget—cannot be made to apply to entirely new taxes. The Betting Tax will come into operation on the date I have indicated because it cannot come into operation until after the Finance Bill has become law. That is the only reason for the delay.
In the total these changes in taxation will bring in £208 million in a full year and £48 million in what remains of this financial year. Not only will they bring in this substantial revenue, and so diminish, to this extent, the inflationary pressure, but they will discourage various forms of expenditure which, on their present scale, we cannot afford in this time of emergency. They will, I believe, impose no serious hardship upon any citizen, and they will be accepted, I hope, by all those who have to pay, as a contribution, which 408 they will not grudge, towards seeing this old country through its present troubles.
§ 4.30 p.m.
§ The Chairman (Major Milner)In accordance with the Standing Order, it is now my duty to put to the Committee all the Budget Resolutions with the exception of the last. I will pause for a moment to enable copies of the Resolutions to be passed round the Committee. I assume it will be for the general convenience that I should just read the number and the heading of each Resolution.
§ I. Beer (Excise).
§
Resolved:
That, as from the thirteenth day of November, nineteen hundred and forty-seven, the rates of the duty of excise charged in respect of beer under Section one of the Finance (No. 2) Act, 1939, shall be increased by adding—
and, in the case of beer in respect of which it is shown to the satisfaction of the Commissioners of Customs and Excise that duty at the rates increased as aforesaid has been paid, the excise drawback allowed under the said Section one shall be allowed at rates increased by adding—
And it is hereby specified that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913
§ 2. Beer (Customs).
§
Resolved:
That, as from the thirteenth day of November, nineteen hundred and forty-seven, the rates of the duty of customs charged in respect of beer under Section one of the Finance (No. 2) Act, 1939, shall be increased by adding—
and in the case of beer in respect of which it is shown to the satisfaction of the Commissioners of Customs and Excise that duty at
409
the rates increased as aforesaid has been paid, the customs drawback allowed under the said Section one shall be allowed at rates increased by adding—
And it is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913.
§ 3. Spirits (Excise)
§
Resolved:
That, as from the thirteenth day of November, nineteen hundred and forty-seven, the rate of the duty of excise charged on spirits by Section three of the Finance Act, 1920, in addition to the duties specified in Part III of
| TABLE | ||||||||||||
| Description of Spirits. | Preferential rates. | Full rates. | ||||||||||
| In cask. | In bottle. | In cask. | In bottle. | |||||||||
| £ | s. | d. | £ | s. | d. | £ | s. | d. | £ | s | d. | |
| For every gallon computed at proof of— | ||||||||||||
| Brandy or rum | 9 | 11 | 2 | 9 | 12 | 2 | 9 | 13 | 8 | 9 | 14 | 8 |
| Imitation rum or geneva | 9 | 11 | 3 | 9 | 12 | 3 | 9 | 13 | 9 | 9 | 14 | 9 |
| Unsweetened spirits other than those already enumerated | 9 | 11 | 3 | 9 | 11 | 3 | 9 | 13 | 9 | 9 | 13 | 9 |
| For every gallon of perfumed spirits | 12 | 12 | 0 | 12 | 13 | 0 | 12 | l6 | 0 | 12 | 17 | 0 |
| For every gallon of liqueurs cordials mixtures and other preparations in bottle entered in such manner as to indicate that the strength is not to be tested | — | 12 | 18 | 10 | — | 13 | 2 | 2 | ||||
| For every gallon computed at proof of spirits of any description not heretofore mentioned, including naphtha and methylic alcohol purified so as to be potable, and mixtures and preparations containing spirits | 9 | 11 | 3 | 9 | 12 | 3 | 9 | 13 | 9 | 9 | 14 | 9 |
§ And it is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913"
§ 5. Wines (Customs)
§
Resolved:
That, as from the thirteenth day of November, nineteen hundred and forty-seven, the duties of customs charged on wines under paragraph (a) and paragraph (e) of Subsection (1) of Section three of the Finance (No. 2) Act, 1939, shall respectively be charged at the rates set out in Part I and Part II of the following Table, and the duty charged under paragraph (b) of that subsection -on wine not exceeding twenty-seven degrees of proof spirit and being an Empire product shall be calculated accordingly.
§ the First Schedule to that Act, shall be increased to nine pounds ten shillings and ten-pence per gallon computed at proof.
§ And it is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act. 1913."
§ 4. Spirits (Customs)
§
Resolved:
That, as from the thirteenth day of November, nineteen hundred and forty-seven, the duties of customs charged on spirits of the descriptions set out in the first column of the following Table by Section three of the Finance Act, 1920, in addition to the duties specified in Part II of the First Schedule to that Act, shall—
| TABLE | |||
| PART 1 | |||
| Wines not being Empire Products | |||
| Description of Wine | Rate of duty per gallon. | ||
| £ | s | d | |
| Not exceeding 25 degrees proof spirit | 1 | 2 | 0 |
| Exceeding 25 degrees proof spirit and not exceeding 42 degrees proof spirit | 2 | 4 | 0 |
| For every degree or fraction of a degree above 42 degrees proof spirit, an additional duty | 0 | 3 | 8 |
| Sparkling, an additional duty | 1 | 2 | 0 |
| Still, in bottle, an additional duty | 0 | 3 | 6 |
| PART II | |||
| Wines being Empire Products | |||
| Description of Wine. | Rate of duty per gallon. | ||
| £ | s. | d. | |
| Exceeding 27 degrees proof spirit and not exceeding 42 degrees proof spirit. | 2 | 0 | 0 |
| For every degree or fraction of a degree above 42 degrees proof spirit, an additional duty. | 0 | 3 | 4 |
| Sparkling, an additional duty | 0 | 15 | 9 |
| Still, in bottle, an additional duty | 0 | 2 | 6 |
§ And it is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913"
§ 6. Sweets (Excise)
§
Resolved:
That, as from the thirteenth day of November, nineteen hundred and forty-seven, the duty of excise on sweets shall be charged at the rates set out in the following Table.
| TABLE | |||
| Description of Sweets. | Rate of duty per gallon. | ||
| £ | s. | d. | |
| Not exceeding 27 degrees proof spirit | 0 | 19 | 6 |
| Exceeding 27 degrees proof spirit | 1 | 4 | 6 |
| Sparkling, an additional duty | 0 | 15 | 6 |
§ And it is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."
§ 7. Purchase Tax
§
Resolved:
That, in the case of purchase tax becoming due on or after the thirteenth day of November, nineteen hundred and forty-seven In respect of any goods other than mechanically propelled road vehicles and mechanically propelled cycles, the higher, intermediate, basic and reduced rates shall be respectively five-fourths, three-fourths, one-half and one-third of the wholesale value of the goods.
§ 8. Pool Betting Duty
§
Resolved:
That an excise duty of ten per cent. of the stake money paid shall be charged on pool betting (including coupon and other similar betting and totalistator betting), except betting by means of a totalisator set up on an approved horse racecourse by or under the authority of the Racecourse Betting Control Board, and any Act of the present Session
412
giving effect to this Resolution may contain provisions consequential on or incidental to the preceding provisions of this Resolution.
§ 9. Pro-fits Tax
§
Resolved:
That—
§ 10. Income Tax (Interest on Unpaid Tax)
§
Resolved:
That—
§ 11, Income Tax (Advertising Expenses)
§
Resolved:
That half only of the advertising expenses which would otherwise be allowable shall be
413
allowed to be deducted in computing the profits or gains, or the losses, of a trade, profession or vocation for any of the purposes of the Income Tax Acts, for the year 1947–48 or any subsequent year of assessment.
§ 12. Excess Profits Tax
§
Motion made, and Question proposed:
That—
§ 4.34 p.m.
§ Mr. Eden (Warwick and Leamington)The right hon. Gentleman's most severe critics will never attempt, I think, to deny either his gifts of exposition or, indeed, his gifts of extrication. He has displayed those gifts, particularly the latter, once more on this occasion; but I am not sure that those particular gifts have not added to our troubles and to his. For far too long the Chancellor has failed to make plain to the country the true trend of events, and I cannot feel that even this afternoon he has done so. He has given us a long list of most severe new taxes which will be examined and commented upon, no doubt, in the days to come; but he has been far from giving us a clear picture of how far this heavy new taxation—disagreeable as it is going to be to a great many people—is going to meet the essential problem of inflation with which we are confronted.
At the beginning of his statement, the right hon. Gentleman spoke as though what he had to deal with was a problem created entirely by the new export proposals of his right hon. and learned Friend, the Minister for Economic Affairs. That is certainly part of his problem, but equally certainly it is not the whole of the problem. Even if the right hon. and learned Gentleman had not, rightly, as I consider, made this new export drive, the Chancellor would still in a measure have had this inflationary problem with which to cope. My criticism of him is that, in all his speeches—and he did it again today—he is inclined to separate our internal financial problem from our international balance of payments, whereas really they cannot be separated, but are part of the 414 same problem, and are interlocked. It is no use saying to the British people, "Look what a brilliant Chancellor of the Exchequer I am; look at the domestic account," and then have to put on enormous imposts to meet the balance of payments. In his broadcast last April the Chancellor told the people, when the song was evidently strong in his heart:
I am glad to be able to show a large surplus, and this I am sure you will be able to feel is a sign that we have been managing our financial affairs very well. It is one up to the Labour Government, do you not think?Do hon. Members really think that his performance today is one up to the Labour Government? If this is the best the Socialist Government can do, the people would like some other administration of the national finances—[Interruption.] I did not say a word about abolishing the food subsidies. I do not suppose the hon. Member for Nelson and Colne (Mr. S. Silverman) noticed the proceedings of the Brighton conference, but, if he had done so, he would have seen the resolution which was endorsed there. For the moment I am not dealing with the Brighton conference, but with the Budget; however, since the question of food subsidies has been raised, can the right hon. Gentleman tell us tomorrow, or whenever it is possible, exactly where we are on this matter, because after his exordium I do not know. The right hon. Gentleman spent a good deal of time in accusing this party of what he supposed it stood for, but, I am not clear what he proposes, and if I understood him aright, he has not come to any decision, except that the sum of money cannot be any greater than at present. Is that the position?
§ Mr. DaltonBroadly, yes. I will answer in detail tomorrow.
§ Mr. EdenNo doubt the right hon. Gentleman will expound that later. It is very important that we should be clear about it. It is not much use saying, "How wonderful they are, and how useful, but all the same I shall have to cut them." That does not carry much weight with the people who have to suffer.
I come back to the subject of inflation. The truth is that for a long time this inflation, and the effects of it, have been cushioned to some extent by the American and Canadian Loans. Those loans provided large quantities of goods 415 which were disinflationary in their effect, but now that is over, there is still a more certain inflation resulting. My criticism of the Chancellor of the Exchequer is that all this time he and the Government ought to have been marking this fact to the nation, marking that sooner or later this inflation would take place. On the contrary, they have been preening themselves on these illusory Budget surpluses—they are really illusory—and congratulating themselves, whereas they should have been warning the nation. Then we come down with a bump to reality; in other words, what should be the song in the heart of the Chancellor, has become a dirge in his diaphragm.
I wish to make one or two brief comments on the taxation proposals themselves. As regards advertisement, at first sight we on this side of the Committee see no objection to the right hon. Gentleman's proposals; but I am bound to say that if, as a result, there is to be less private advertising, I hope that does not mean we are going to have more Government advertising, because it is the gloomiest and the worst advertising in the world. I think that the worst of the advertisements perhaps is "Work or Want." I do not know whether "Keep Death off the Road" had any effect on the right hon. Gentleman's driving, but it nearly caused me to have more than one accident glancing at the lady and her gloomy face. As to the Betting Duty—[Interruption.] If the hon. Gentleman wishes to interrupt, will he please get up and make his point. I have always been willing to give way to hon. Gentlemen. If the hon. Gentleman wishes to interrupt, I think he should have the courage to get up.
§ Mr. Medland (Plymouth, Drake)I am only trying to point out that what is happening on this side of the Committee is exactly following the example of hon. Members on the other side of the Committee.
§ Mr. EdenOn the Betting Duty, I say to the Chancellor that, here again, we shall need to examine, the details of the proposal. There is one thing I should have thought would strike Members in all parts of the Committee. It is that, by his levy on the greyhound tote, that he is really selecting one particular aspect of that type of betting, and he is doing 416 it because obviously it is the easiest to collect. I think we should be very careful of that sort of proposition. I do not think we ought merely to levy taxes because they are easy to collect. We have to take account of justice between one and another, and, therefore, on that issue I must say that we very definitely reserve our position. As to the duties proposed in respect of arrears of taxation, we certainly see no objection at all to that course, despite the derisive laughter which came from the benches opposite at our expense.
There is another thing I want to say on this issue, and that is that an additional contributory factor in our troubles has been the relative failure of the National Savings campaign. I entirely agree with the right hon. Gentleman that had that campaign been more successful, we might have been saved some of these very distasteful duties which have been imposed today. I cannot entirely acquit the right hon. Gentleman, because while there have been going on these inflationary processes, in which the right hon. Gentleman has played his part, as I have told him before, by his excessive pursuit of a cheap money policy, he has ignored them. He has not taken any steps or even warned the nation of what was happening. On the contrary, he has with increasing cheerfulness told us how good was the state of our national finances.
I am afraid that I cannot judge, from the figures so far given, how far these duties, unpalatable and harsh as they are to be in respect of Purchase Tax, will go to meet the peril we have to face. I do not know whether any hon. Member of this House is able to pass that judgment. That will require careful and thorough investigation. What I am saying is that if you are going to meet this problem of inflation, you have got to do it effectively, and see that the Purchase Tax is not merely transferred from one set of articles to another. We will examine these proposals to see how far they are adequate to meet the problem, and we shall do it purely from a national point of view.
So far we are disappointed, because we had thought that, instead of merely having a catalogue of new taxes, we might also have had some real investigation of the problems we have to face, and some constructive explanation of how the Chancellor proposes to meet them. I hope 417 that before the Debates are concluded we may have a fuller and more adequate explanation than we have been given today.
§ 4.46 p.m.
§ Sir Stanley Holmes (Harwich)The object of this Budget is to assist the economic plans of the Minister for Economic Affairs for getting this nation out of the very difficult situation in which it now stands. We all hope that the Ministers sec eye to eye, but the fact remains that the plan of the Minister and the Budget of the Chancellor are both two years too late. The economic position of this country was exactly the same in November, 1945, or even in June, 1945, as it is at the present time in November, 1947. When the war ended we had got rid of all, or nearly all, of our overseas investments—nearly all our dollar investments at any rate and our export trade had dropped. We were no longer in a position to find dollars any more than we are today to buy food or raw materials and other things.
Immediately after the war we should have had speeches from the Government similar to those that we have been listening to from the Minister for Economic Affairs during the last month or so. I can quite imagine that when the Socialist Party got into power after the General Election in the summer of 1945, they wanted to give the nation a "break." Everybody had worked wonderfully hard, everybody was tired, and it was quite reasonable to give them an opportunity of recovering for two or three months, but I venture to suggest that when the American Loan was agreed to in this House in December, 1945, that was the time for the recent speeches of the Minister of Economic Affairs and for a supporting Budget from the Chancellor of the Exchequer.
I was one of those Members who voted against the American Loan for several reasons, one of which was that I was sure it would be misused, and it has been misused. It has been spent unnecessarily on food, films, tobacco, and petrol for the purpose of bluffing our people that all was well, in the faint hope that before the loan was exhausted something would turn up to save the Socialist Government. Instead of pursuing this suicidal policy, the Minister for Economic Affairs should 418 have made—as I have just said—his recent speeches at the beginning of 1946, and the Chancellor in his Budget of April, 1946, should have given him his aid.
If at that time such a policy had been adopted, the American loan would not have been frittered away. If at the beginning of 1946, we had adopted the austerity conditions now imposed upon us—[Laughter.]—it is all very well to laugh, but that is what we ought to have done—if we had adopted the austerity conditions now imposed, we should have used the American Loan to re-equip our industries with the necessary machinery to enable our factories to change from war production to their prewar work. We should have been able to restore our worn-out railways and make them efficient.
If I may digress for a moment, I want to say that I think there is no set of people in the country who did finer work during the war than everybody connected with the railways. One regrets very much that today accidents on the railways are occurring which are of a nature somewhat without precedent. Many of them must be due to jumping off points, and similar mishaps, because the railways are worn out. If part of the American Loan had been used to restore our railways, we should not only be riding in greater safety today but also we would be able to contribute far more to the export drive by being able to transport our goods and turn round our wagons more quickly.
If these austerity conditions had been adopted at the beginning of 1946, the American Loan would have been used properly and it would not be exhausted today. It would still have been contributing to the re-establishment of our national economy and to a gradually increasing standard of living for everyone. The Socialist Government have wasted nearly two years. If the new policy propounded by the Minister for Economic Affairs had been adopted early in 1946, and if the Chancellor of the Exchequer had supported it in his Budget in April, 1946, we should be well on the road to recovery today, whereas instead we have sunk lower than ever in our history, and we are likely to sink still lower.
It should be observed that Socialist supporters always allege that while everything that went wrong between 1918 and 1939 was due to the policy of Tory 419 Governments, everything that has gone wrong since 1945 is due to an act of God. Of course, this is quite ridiculous. It is the policy followed by the Socialist Government in the last two years which has put us in our present position, and which is causing the Government to turn to the people who supported them at the General Election and say, "Your standard of living is going to get worse and worse; you must pay more and more taxes, and we see no hope whatever of any recovery in the near future."
It was said that this Budget was to support the plans of the Minister for Economic Affairs. The Chancellor of the Exchequer used the well-known argument that what he had to do was to prevent too much money going after too few goods. What can we find in these Budget proposals that will deal with that problem? I thought we should hear of a considerable increase in Purchase Tax on very many articles. I thought that the increase would be far greater than has been suggested. Also, I thought, in regard to Profits Tax, that the Chancellor would put an extra tax on any additional rate of dividend above the rate of previous dividends. That would properly reduce the likelihood of money being put into circulation to chase the goods which are in short supply.
Is the Chancellor, in his Budget, keeping enough money away from the pockets of the people so that they cannot spend it? Let me take the proposed tax on the dog tote. Will that keep any money out of the pockets of the people? What is likely is that some people will say, "We will not go to the dogs, but we will spend our money on something else." I am very disappointed with this Budget. It does various things in the way of increased taxation, but it does not face the problem of preventing too much money going after too few goods. I join with my right hon. Friend the Member for Warwick and Leamington (Mr. Eden) in what he said. We shall have another opportunity of discussing these matters further when we deal with the Finance Bill.
§ 4.57 p.m.
§ Mr. Tiffany (Peterborough)I am afraid that I cannot go very far in answering the points made by the hon. Member for Harwich (Sir S. Holmes), because many of them obviously are so far from reality that it would be a waste of time 420 to deal with them at great length. However, his suggestion that 25 per cent. of the American Loan should not have been spent on food is one that will sound very harsh indeed in the ears of the housewives in the hon. Gentleman's constituency. I think that the hon. Gentleman, in saying that this was foolish spending of the American Loan, was going a little bit too far. His statement that we would have been in a far better position without the loan is also a suggestion that I must refute, particularly in view of the fact that the position in the country now is indicative that we are getting back on our feet. We were able to purchase machinery and raw materials with the loan. Without dollars we should not have been able to get them.
I do not want to pursue past history; but rather to deal with the Budget statement made by the Chancellor. I fully agreed with many parts of his statement, though I think he played a little game with us in regard to the Tobacco Duty Like many other hon. Members, I was expecting an increase in the duty as a result of the Chancellor's preamble and overture before he made his announcement. I confess that my heart dropped into my boots. Certainly, it was a relief to all of us to find that there was to be no increase.
§ Mr. James Hudson (Ealing, West)Not to all of us.
§ Mr. TiffanyWhile I am in agreement with much of what the Chancellor has said, and while he has not impinged upon us to the extent which many of us had been led to expect, nevertheless there is one point that I wish to discuss. The point on which I am not in agreement with the Chancellor is the question of the food subsidies. I am reminded of a statement which the Chancellor made, speaking in this House, on 15th April this year, when he made reference to the cost of living and the subsidies. He said:
I have no doubt at all that, up to this point, the policy of stabilising the old cost-of-living index, as we have hitherto known it, has been wise and has been abundantly justified. It has helped to stop inflationary pres sure from becoming an inflationary breakthrough."—[OFFICIAL REPORT, 15th April. 1947; Vol. 436, c. 44.]I think the statement which he made then applies with equal force at the present time, that control of the cost of living will still, according to the statement made 421 then, be wise and abundantly justified, and that it will still continue to stop inflationary pressure from becoming an inflationary break-through. I think the argument which the Chancellor laid down on that particular matter applies with equal emphasis at the present time. Consequently, I was disturbed when I heard him make the statement that we were blocking the total amount at its present level. I understand that the present level for all subsidies is a figure of £425 million, £33 million of which is for utility clothes. I understand from the Chancellor's statement that the £33 million for utility clothing is going to be swept away altogether.Let us have a look at this situation. I have here a list of food import prices showing the percentage increases which have operated. The Chancellor made some reference to this factor in his speech. In 1941, the percentage increase on the 1939 prices was from 23 to 24 per cent., and this has increased year by year until, in 1946, the percentage increase was from 78 to 79 per cent., and, in 1947, according to the information available, this increase in food import prices has been shown each month up to August of this year. Consequently, there has been no indication whatever that there is going to be any cessation of this increase of food prices, and the Chancellor himself has given no indication. Therefore, all the trends show that import food prices will still continue to rise. It has been pointed out that the subsidies we have been receiving up to the present time amount approximately to 3s. 5d. per head; that is, for the total subsidies. Actually, it is the poorer section of the community which gets the benefit of the subsidies—seven millions of them who are not paying Income Tax at the present time, and that section of the community who are in the lower Income Tax groups. It is the old age pensioners who receive a benefit as a result of this particular subsidy, and it is the person who is the single wage-earner with a large family, again, who receives a benefit.
The Chancellor has stated quite definitely today that so far and no further will he go in relation to these particular subsidies. In spite of the taunts which he hurled at hon. Members on the other side, when asking the Tories for their feelings in relation to subsidies, and whether they were or were not in favour 422 of food subsidies, I want to say that the standstill position which the Chancellor has taken up at present is actually an abandonment of the principle that we have accepted—the principle that increased world prices should not be borne by the individual consumer, but should be borne by the community as a whole, and that any increased prices should be distributed amongst the community according to their ability to pay. We have always argued that the basic foods of our people should be available to all, whether rich or poor, whether they be the rich drawing profits, or the poor or old age pensioners, and it was admitted, surely, by the Chancellor when he granted the tobacco concession to the old pensioners that they could not afford any further price increases being placed upon their pension position. Therefore, he should, in view of that position, have continued to safeguard our people against any increase in the prices of food.
The Chancellor has stated quite definitely that he is absolutely going to do away with the £33 million subsidy for utility clothing. Let us see what this will mean to our people. I understand that the Board of Trade have recently been in communication with the Federation of Curriers, suggesting that the subsidy on tanned skins should cease on 30th November. It has been estimated that, if this subsidy were taken off tanned skins, and if the application of the boot and shoe operatives were met, this would, in effect, mean an increase of 10s. per pair on adult medium grade footwear, and of 15s. per pair on the higher class footwear. This has been indicated by responsible authorities. Obviously, even if this estimate may be a little wide of the mark, it is still a clear indication of what is going to happen to the price of utility clothing and footwear which will have to be bought by our people. I have already stated, but I want to repeat, that this blocking of the subsidies indicated by the Chancellor this afternoon is, in essence, a departure from the principle which we on this side of the Committee have for so long accepted. What the Chancellor is doing, in effect, is placing the whole of our social insurance schemes to some extent in jeopardy, because they will be entirely dependent on what appears to be a continuing rise in food prices.
In taking this step, the Chancellor, in my opinion, has fallen between two 423 stools. He has listened to appeals from the other side of the Committee that the subsidies should be abolished, and has borne in mind the attitude likely to be expressed on this side of the Committee, and has attempted a compromise. In my opinion, there is no compromise on a matter of this description, and no compromise is possible when dealing with people drawing only 26s. a week in old age pensions. There is no compromise with those people on the lower wage levels, and I seriously suggest to the Chancellor that he should still stick to the principle which we have adopted for so long, namely, that the basic needs of the people should be met, which will not be the case if food prices continue to rise.
§ Mr. Charles Williams (Torquay)This Budget can be fully, properly and truthfully described in a very short sentence— "The Not-Facing-the-Future Budget."
§ 5.9 p.m.
§ Mr. Norman Smith (Nottingham, South)I sympathise very much with my hon. Friend the Member for Peterborough (Mr. Tiffany) in what he said, which was very pertinent from the point of view of his constituents, but in the jam in which this country finds itself now, it was, I am bound to say, largely irrelevant. I think the same may be said of the Chancellor's Budget, which is wholly inadequate to the situation in which we find ourselves, and so completely inadequate that it may be described with that very hackneyed simile—"a piece of sticking plaster on a cancer." I am surprised that the hon. Member for Harwich (Sir S. Holmes), who does enjoy- some importance in the financial world, should have trotted out a number of threadbare clichés which this Committee must have heard over and over again and of which it must be sick and tired. There are other real and substantial criticisms to bring against this Budget without bringing out the stuff mentioned by the hon. Member for Harwich. The right hon. Gentleman the Member for Warwick and Leamington (Mr. Eden) put his finger on one very weak spot in the whole situation, and that was the complete failure of the National Savings campaign. It is worth while looking into this failure because, after all, if one could make a success of the National Savings campaign, one would be bringing very formidable forces 424 to bear against the impending danger of inflation.
The reason the National Savings campaign is a failure is quite simple to understand. I have often been asked to go on the platform in my constituency to support the National Savings campaign. I have always refused because I have always thought that it would be thoroughly dishonest to urge other people to do a thing which I do not do myself. In no circumstances would I dream of putting my savings into any sort of security, so-called, which might let me down very badly. If I have any savings, I put them into equities for the reason that there is some hope that if we get an inflationary situation, equities will rise, and I shall not find myself in the position of having put away savings worth a bucketful of commodities, only to discover later on that if I choose to mobilise them they are only worth half a bucket, due to the process of inflation.
It is not honest to invite people to put their savings into War Bonds or Savings. Certificates unless one can assure them that when the time comes to draw out their savings, those savings will have at least their original value. If my right hon. Friend will give me a little attention, I will make him a suggestion in this connection. The suggestion is that he should recast the whole basis of his savings campaign in such a way as to invite popular subscriptions on the clear understanding that he is going to attach conditions to those subscriptions which will ensure that the lenders will not find that their savings have melted away as the result of an insidious process of inflation. Let him tie up those savings with the cost of living index, provided we have a new cost of living index which is reasonably satisfactory to all. But let the fluctuation be a safeguard only against a rise in cost of living, not against a fall.
After all, if I save over a long period, I have the right to ask that my savings in the future shall buy more than they used to buy. I have the right to assume that the constant process of technological improvement in industry and the advance of science and invention should cheapen production. I have the right to assume, if I put away £100 in 1947, that by 1957 it will buy a lot more than it does today. Let my right hon. Friend apply his considerable intellectual attainments 425 to this end. It is not for me to suggest the details whereby national savings shall henceforth be tied to the cost of living in a way that people will know that they are not going to lose their money if they invest it in the kind of securities in which he wishes them to invest.
That would be the beginning of an honest money system. The fact is that the whole money system today is fraudulent inside and out, and that is why my hon. Friend the Member for Peterborough (Mr. Tiffany) has to make speeches of so impotent a character. That is also why my right hon. Friend, in introducing a Budget to deal with an inflationary position, ignores the most inflationary influence of the whole lot—that is, the existence of a colossal national debt. My right hon. Friend says that the difficulties in which we find ourselves—I forget his exact words—were inherent in the circumstances of two great wars. No such thing. We financed both wars by methods which were indefensible, yet my right hon. Friend takes those methods for granted. He assumes that a Government desiring money should get that money either by borrowing or by taxation. He concedes to private banks the exclusive right to create money. The method by which World War One was financed was completely indefensible.
I mention this because my right hon. Friend represented to the Committee this afternoon that the financial position in which we find ourselves today was an act of God which had to be accepted. No such thing. The late Lord Stamp, formerly Sir Josiah Stamp, wrote a book called "Problems in Finance and Government." On page 242 of that book he wrote, quite casually, that in the first World War people were induced to subscribe to War Loan by raising loans at the bank, either on the security of the loan itself or other collateral. Yes, my father could go to the bank in 1915, having exhausted all his collateral, and say, "I want to buy more War Loan. I have no longer any collateral. You have the deeds of my house." The bank would say, "Very well, Mr. Smith, we will advance you £500 on the security of the War Loan which you are going to buy." The bank would create a credit out of nothing and would lend him the money at one-half of one per cent. less than my father would get from the Government. The late Lord Snowden also gave evidence to that effect. 426 So long as my right hon. Friend concedes to private banks the right to create out of nothing the money they shall lend to the Government at interest, he will be in the jam he is in now.
What are the Government going to do about this immense National Debt? In 1914, it was £650 million. In 1939, £7,100 million. Today, it is £25,660 million. That is a geometrical progression. What are the Government going to do about it? I have a constructive suggestion to offer, whereby they may relieve the nation of a substantial part of this burden without taking anything at all from anybody, and without inflicting any injustice on anybody. It is pertinent to inquire where, in the second World War, when the methods of bank finance were not so glaringly dishonest as in the first World War, the inflated war debt came from. Same £18,000 million of new debt was created. There were £4,000 million small subscriptions and £6,000 million large subscriptions. When an appeal is made to people on patriotic grounds to buy War Loan, one cannot repudiate the War Loan or revoke it; one has to honour it. But that £10,000 million is not all. There were £3,100 million of overseas sterling balances, £1,000 million of other overseas borrowing, and £900 million added to the fiduciary issue.
That leaves £3,000 million unaccounted for. If we look at the bank returns we see where that mysterious £3,000 million came from. It was a pure creation of credit by the Joint Stock Banks, who brought it into being by book entry, and then lent it to the Government at interest. In World War One bank deposits went up from £1,000 million to £2,000 million. In World War Two they went up from £2,800 million to £5,500 million, approximately. As the late Reginald McKenna used to say, "every bank loan creates a deposit"; and every time the bank manager gives a client a loan he brings into existence money which did not exist before.[HON. MEMBERS: "No."] Hon. Members opposite do not seem to be quite clear about this. Supposing I want to borrow £1,000; I could do that through my bank manager by presenting him with the deeds of my house, which is worth a good deal more than that. He will say, "All right, Mr. Smith, you shall have £1,000." He will take the deeds, but it will still be my house. He will then proceed to make an 427 entry in a book crediting me with £1,000, which would be new money brought into existence out of nothing. All that is simple. But that is the cause of our misfortunes. During World War No. 2, the bankers brought into existence about £"3,000 million of new deposits and lent it to the Government. If I lend an hon. Member £1 out of my pocket, I take from my pocket that which I lend him, and I am entitled to expect to receive it back. But the banks do not part with anything in respect of those £3,000 million.
It is not easy to find out the facts of these things. My right hon. Friend can do so, but I cannot. At the end of 1945 the English and Scottish joint stock banks declared that they held £1,500 million of Government securities in one form or another, to the extent that such securities were declared separately. I suspect that if my right hon. Friend would have a downright searching inquiry into the National Debt—all the £25,000 million of it—he would find plenty of prima facie evidence that the joint stock banks have at least £"3,000 million of Government stock. All I am proposing is this: not that it should be confiscated, but that quite simply they should surrender it in return for an equivalent amount of non-interest-bearing certificates redeemable in legal tender. By that means, the taxpayers would be saved from £40 million to £50 million a year, less tax, of interest burden. That would be a substantial beginning towards reducing the National Debt burden. But if we did that, we would have to do one other thing. We would have to deprive the joint stock banks of their right to create and destroy money in the way they do. My right hon. Friend should simply say, "From now on, the banks may not vary their deposits up or down by more than 5 per cent." Once he has done that, he will have got the whole business into' something approaching manageable proportions, and he will have taken a substantial step towards stabilising the monetary system and avoiding future inflation. I beg that he will do that.
I have one other thing to say on this question of the National Debt. My right hon. Friend has proposed piffling little taxes here and there. He has not got to the real cause of the inflationary trend, which is the propensity on the part of people to spend capital holdings. I could 428 quote responsible authorities. The "Manchester Guardian" recently argued that the pressure was coming less from current earnings than from the spending of the capital holdings, and that view was supported by Professor Hicks in the July issue of "Lloyds Bank Review." Consider what is happening in my street, where houses before the war cost £900. They were built in 1938 or 1939. They are changing hands today for as much as £3,400 in Windermere Road, West Wickham. It is common knowledge that if anybody is lucky enough to sell a house he can get three or four times the prewar value for it. That is pecuniary inflation which is contributing substantially to the present position, and my right hon. Friend has done nothing whatever to meet that sort of inflation or the increase in individual fortunes due to the Stock Exchange appreciation over the last few years which as some of us know, is considerable, notwithstanding the fall in recent months.
I suggest that my right hon. Friend should impose a non-recurring levy on individual increments of war fortune—not on companies, corporations or collective bodies, but on individuals. He should ask what they had in 1938, what they have in 1947, and levy the increment on a graduated scale. That would meet this propensity to spend capital holdings on current consumption. The very rich have to do that, because they are taxed so highly on the upper ranges of their incomes. I believe that many hon. Members opposite do, in fact, live on their capital. If my right hon. Friend would follow my suggestions, he would get at the inflationary potential at its source. That sort of thing is the real substance of the whole issue, instead of these miserable little taxes on the consumption of this, that or the other. He would convince his own supporters that he was not only penalising the people whom he expects to turn up and vote Labour and who, so far, have been very loyal to us.
I believe that the inadequacy of my right hon. Friend's proposals is due to the wrong ideology in which he has been brought up, and to the fact that he is surrounded today, not only in the Treasury but also in this House, by yes-men whose views are right away back in the reign of Queen Victoria. It is time that serious attention was given to the social credit proposals associated with the name of Major Douglas. Until that is done, the National 429 Debt will go on increasing in geometrical proportions; we shall go from one inflationary potential to another, and my right hon. Friend, for whom I cherish great personal affection, will have to come to this Committee and confess that his savings campaign is an appalling fiasco.
The present situation will not always endure. Fortunately, in the next few years, finance will recede as the governing factor in our economy. The efforts of my friends the miners, the steelworkers and the other members of the working class, as well as of the managerial and directing classes—for they are just as much a part of industry—with their compelling technological urge, will produce the physical abundance which in the long run will break down this inflationary potential. Then my right hon. Friend will find that his Purchase Tax, which is an improper fraction, will have become a proper fraction—a price discount, which is the very thing he applies so consistently, so well and successfully in his subsidies on food. The thing can be automatic. I beg of him to pay attention to Social Credit proposals, which alone can rescue this country from the fantastic jam into which we have got ourselves.
§ 5.26 p.m.
§ Mr. Osborne (Louth)I intervene in this Debate for two reasons. I am glad the Chancellor of the Exchequer has remained in his place, because I should like to try to answer the question which he raised on food subsidies. He did me the honour of pinning on me the advocacy of their abolition, and I do not run away from it. I want it to be quite clear that I speak entirely for myself and not for my party—I have no authority so to do—but hon. Members on both sides of the House always listen to a Member when he speaks his convictions, whether they please his party or not.
I believe that subsidies of all kinds ought to be abolished and that the nation ought to cease living in blinkers. The Chancellor has told us that he is going to abolish the subsidies on wool, cotton and leather. In answer to a Question of mine yesterday, the President of the Board of Trade, rather ill-advisedly I thought, said that it had already been decided to abolish the leather subsidy, which would represent 2s. 6d. per pair of shoes. I ask the Chancellor if it is fair and wise to abolish subsidies on wool, cotton and leather and 430 on other utility goods, why is it not equally wise to do so on food? That is a perfectly reasonable question which requires a proper answer. I rest my case on the fact that I think the people of this country are courageous and sound enough to face the facts, ugly though they may be. We should say to the people: These are the facts, let us face them and not look at them as St. Paul said, "through a glass darkly," and "kid" ourselves in this foolish atmosphere. Let us stop living in a fool's paradise.
The obvious objection to removing these subsidies is that it would hit most hard the old age pensioners and the poorest people in the country. That is true. Food prices would go up, and there would be great hardship on the poorest classes in the country. The obvious answer is that further help should be given to the old age pensioners and to those people who are on the lowest income level. But why on earth should we subsidise the food of the spivs, millionaires, lounge lizards in May-fair, or hon. Members opposite who are getting £1,000 a year, or the Chancellor himself? Why should we subsidise the food of the Chancellor who is receiving £5,000 a year? There is no justification for it at all. If it is said to me that by removing the food subsidies we should put hardship on the old age pensioners, I shall remind the Chancellor that in an answer last week he said that:
The abolition of the food subsidies would add about 12s. 6d. a week to the household budget of a family of four."—[OFFICIAL REPORT. 4th November, 1947; Vol. 443, c. 1535]To the old age pensioner that represents 3s. 1½d. a week. The Chancellor will take away that hardship from the old age pensioners, if he gave them another 5s. a week extra. By abolishing food subsidies he would cease subsidising men who need no subsidy. I think it is high time that food subsidies were abolished. I will quote to the House the words of the Chancellor himself on this point. In the Budget speech of 9th April, 1946, reviewing the period of 1945, he said:So much for the past; now let us face the future. Prospects for the year 1946, on which we have just entered, are less sombre than some scribes have imagined."—[OFFICIAL REPORT, 9th April, 1946; Vol. 421, c. 1806.]The Chancellor was completely and utterly wrong when he said that. His forecast 431 was so bad that in any normal business it would have got him the sack. He completely misjudged and misinterpreted the position. He said in April, 1946, "Things are going to be very much better. The scribes are wrong," Look at the position today. Can any hon. Member say that the Chancellor's forecast in the opening of his Budget speech in 1946 was a reasonable and a sane one? On the cost-of-living subsidies he said in the same speech, only 18 months ago:I would like at this stage to say a word on the cost-of-living subsidies. With regard to these, we are spending a formidable total. We are providing, this year, no less than £335 million for cost-of-living subsidies."—[OFFICIAL REPORT, 9th April, 1946; Vol. 421, c. 1809.]I remind the House that I believe that today that figure is something like £425 million. The Chancellor went on to say:The Committee must appreciate that this policy of price stability is costing a lot of money. These subsidies were running at the rate of £250 million a year before Lend-Lease ended, and in my Budget statement in October—that was the right hon. Gentleman's first—I estimated that the ending of Lend-Lease would add at least £50 million a year to the cost."—[OFFICIAL REPORT, 9th April, 1946; Vol. 421, c. 1810.]The Chancellor would agree that at that date we were spending on food subsidies £300 million, and we are spending today £425 million.
§ Mr. John Lewis (Bolton)Why?
§ Mr. DaltonI should like to get the figures clear. On food subsidies we are spending £392 million. There are certain other cost-of-living subsidies the hon. Member himself has been talking about which amount to £33 million. The £392 million added to the £33 million makes the £425 million which I cited in my Budget speech in April, which makes the total of so-called cost-of-living subsidies for food and other items.
§ Mr. OsborneI am much obliged. I do not wish to misquote the figures, but according to the statement here the total cost-of-living subsidies would be £425 million. A little later in that same speech the right hon. Gentleman said:
I repeat that to hold the cost of living steady in present circumstances is still, in the judgment of His Majesty's Government, wise. But we cannot go on doing this indefinitely, 432 regardless of cost. We shall have to reconsider this matter next year. We might even have to do so earlier."—[OFFICIAL REPORT. 9th April, 1946; Vol. 421, c. 1811.]I think the Chancellor will agree that that was a promise that these subsidies would be reduced. [HON. MEMBERS: "No,"] Oh, yes. The sense of the whole speech, if hon. Members will re-read it, was that the burden of food subsidies was getting so heavy that we could no longer bear it. However, instead of the amount being reduced it has been increased by another £100 million. Therefore, I cite the Chancellor against himself, and say that the food subsidies one and a half years ago at £300 million were too high, and that, therefore, they ought to have been cut down. I charge the Chancellor with lack of moral courage—[HON. MEMBERS: "Oh."]—Oh, yes—lack of moral courage in not saying the unpopular thing to the country, in not sticking to his guns of 18 months ago, in not saying that we cannot afford to go on paying for food in this manner, in not saying to the people of this country, "You ought to pay a proper price for what you are getting. Do face the facts." I accuse him of lack of moral courage in that respect.There are two questions which the Chancellor would be entitled to ask me, and I should like to deal with them. He would be entitled to ask, "How much would it cost if the food subsidies were taken off?" He said on 4th November:
The subsidies on rationed foods amount to about £8 a year per head of the civil population. This is the same total as the yield of 3s. 3d. in the standard rate of Income Tax. The abolition of food subsidies would add about I2S. 6d. a week to the household budget of a family of four."—[OFFICIAL REPORT, 4th November, 1947: Vol. 443, c. 1535.]We agree about that. We must face the facts, and I do not want to run away from the facts. I do not want hon. Members opposite to run away from them, either.
§ Mr. Daines (East Ham, North)But the hon. Member does not face them.
§ Mr. OsborneI should have thought the Chancellor would not have regarded this as a joking matter, but as a very serious one, and not as one to fool about with. The next question he would be entitled to ask would be, "Can people afford to pay this extra 3s. 1½d. per head for their food?" That is the real question. Let me quote to hon. Members and the Chancellor the figures given by 433 the Ministry of Labour as reported in the "Economist" of 8th November, 1947:
The present level of earnings in April was 103s. 6d., nearly double that of October, 1938, when it was 53s. 3d. The highest groups found in this lot are the printing and engineering groups, with 134s. 8d. and 134s. 6d. respectively for men. Furthermore, the highest paid group of all are the dockers with an average of 152s. 11d. a week in the three months ended 10th April, 1947.
§ Mr. OsborneI have no comment to make, but I ask hon. Members and the Chancellor this question: Can they say that from wages like that, 3s. 1½d. per week would be an impossible burden? I challenge any hon. Member to deny that.
§ Mr. Sargood (Bermondsey, West)Does the hon. Member say every docker is getting 152s. a week?
§ Mr. OsborneI am merely quoting to the Committee the figures given by the Ministry of Labour as reported in the "Economist." If the hon. Member wants to challenge the figures given by the Ministry of Labour, all I can say is he had better get on with it. Therefore, I say that the average family could well afford to pay this 3s. 1½d. per head per week extra for their food. I now wish to deal with the other side.
§ Mr. Lever (Manchester Exchange)What about the lower paid worker?
§ Mr. OsborneI have covered that. I said I would look after the lower paid worker and the old-age pensioner.
§ Mr. Tolley (Kidderminster)How?
§ Mr. OsborneIf they needed increased old age pensions and charity, I would give them old age pensions and charity.
§ Mr. LeverI gather the hon. Member to say he would look after the lower paid worker. Could he assist the Committee by defining to us what he considers a wage which can stand the payment of an extra 3s. or so per person? Would he give us some idea what wage he would fix as the minimum below which a man should not be affected by the taking off of subsidies?
§ Mr. OsborneThe Chancellor and other Ministers are sitting on the Government Front Bench, they have all the advice of the official staff behind them—
§ Mr. J. LewisIt is the hon. Member's proposal.
§ Mr. OsborneIf they were asked, they would say they wanted notice of the Question. Obviously, I cannot give an answer. Perhaps hon. Members opposite would now permit me to finish the point I was making.
I draw the attention of hon. Members opposite to the October issue of the Monthly Digest of Statistics, in which I refer to two important factors. On page 128 it gives the consumption of tobacco and beer, and I wish to draw the attention of the Committee to the amount spent in this country on those two commodities alone. In 1935 the consumption of beer in this country was, on average, 1.9 million bulk barrels per month.
§ Mr. Cecil Poole (Lichfield)Hear, hear.
§ Mr. OsborneThat is all very well, out in the last monthly figure given, August of this year, it has risen to 3.11 million gallons per month. The price of beer per pint has increased, bottled from 7½d. to 1s. 1½d., and draught beer from 5d. to 1s. I ask hon. Members opposite to forget their narrow, bigoted party politics, and to come down to facts. If men are willing to, and can afford to drink nearly twice as much beer at twice the price, surely they can afford to pay an adequate price for the milk their wives and children need?
§ Mr. OsborneThe second lot of figures I wish to give the Chancellor concerns tobacco. Tobacco consumption during 1935—the first year that is given in the Digest—was 13.72 million lbs. per month. Since the heavy Taxes were put on last April the average, even for the last five months, is 17.2 million lbs. tobacco smoked per month. I remind the Chancellor that in 1935, 20 Players cost 11½d.; today, they cost 3s. 4d.; next April they are likely to cost a good deal more. In 1935 Digger Flake cost 8d. an ounce; today it costs 3s. 4d. If the men and women of this country are willing and able to smoke and drink so much more today than they did in 1935, and at such higher prices, does any hon. Member opposite dare to say that those people could not afford to pay a proper price for their food?
§ Mr. OsborneI claim that the Government are not saying to the people of this country what they ought to say, namely, "These are the facts. Let us face them and put first things first." Food is more important than drink and tobacco.
§ Miss Herbison (Lanark, North)Does the hon. Member not know that there are many men who neither smoke nor drink, and who have not sufficient money to buy the milk and vitamins that are given to their women and children at the end of the week?
§ Mr. OsborneI am obliged to the hon. Lady, but I would point out that if she had been present when I commenced my speech she would have heard me try to deal with the case of the lowest paid worker. If she was not in the Committee then, it would, I think, have been more courteous to have kept quiet.
I still stick to my point, and I believe it to be the core of the problem. We have no right to say to our people, "You can have your food at less than its real cost," when at the same time we are saying to them, "You may buy more tobacco and more beer at inflated prices." The nation is not facing this problem. The Chancellor is helping the nation to run away from it, and I condemn him for so doing. The Chancellor has also said that we spend far too much on gambling—on the dogs, on horses, and on pools. Yet when I raised the question of football pools nearly 12 months ago the Parliamentary Secretary to the Ministry of Labour came here and—I repeat the simile I used before—like Pontius Pilate he washed his hands of it. He was frightened of it. The one thing the Government dare not do is something which they feel would be unpopular. He washed his hands of it, and said it was nothing to do with him or the Government.
§ Mr. Percy Wells (Faversham)Will the increased price of beer be popular?
§ Mr. J. LewisWas the abolition of basic petrol popular?
§ Mr. OsborneThe Government have done nothing unpopular voluntarily. They have done things only when compelled 436 to. A nation which can recklessly and wastefully spend so much money on useless amusement—false spending—ought to be prepared to pay a proper price for its food. I ask the Chancellor and the Committee to look at these food subsidies in the way the Chancellor indicated a year and a half ago. I plead that sooner or later—and sooner rather than later—they should be totally abolished.
§ 5.48 p.m.
§ Mr. Pargiter (Spelthorne)I should like to follow the hon. Member for Louth (Mr. Osborne) in one respect. He took up the case of the lowest paid worker, the old-age pensioner receiving 26s. a week, and argued that persons receiving above 26s. a week should not get assistance by way of food subsidies. At least, that is the assumption. All efforts to extract any other figures from him failed completely; therefore, we must assume that that is the minimum figure. It was rather interesting when he came to the higher paid workers, because I think he referred to the engineering group. I wonder if the hon. Member is aware that during the war there were long periods when skilled engineering workers were getting less than dustmen? Will he now say that because they have had a percentage rise they are being unfairly dealt with?
§ Mr. OsborneAnd who was Minister of Labour when such things were allowed? The present Foreign Secretary was Minister of Labour at the time.
§ Mr. PargiterI am speaking of the time when the Tory Party were in power; when they were running their wonderful deflationary scheme of going back on to the gold standard, and so on.
§ Mr. OsborneThe hon. Member said "during the war."
§ Mr. PargiterWhen talking of food subsidies we need to appreciate what was their purpose, and why were they generally agreed to on all sides. It was not the proposal of this Government that there should be food subsidies. Why was it done? Food subsidies were introduced in order that there should be no inflationary spiral during the war period. Inasmuch as conditions are now, in some respects, worse than they were during the war period, at any rate so far as the acquisition of foodstuffs is concerned. 437 surely it is a good thing that anything which will tend to stop that inflationary spiral should be done. Indeed, I am disappointed at the suggestion that it has to stay where it is. I believe that if the principle is good, whatever the cost of it may be, it should be followed.
We have been faced for some time with the situation that costs have been increasing, and there is already a considerable amount of unrest among working people because they are finding considerable difficulty in meeting their commitments. That is due to the fact that prices have increased, and now that they are to continue increasing, I am afraid that we shall almost certainly be faced with increased wage demands. If that happens, the object of the Chancellor of the Exchequer will be defeated. When we have to buy our food overseas in any market where we can get it, at whatever the price, it means that any increases are handed on to the consumers. In certain respects this is justifiable, but in regard to our staple foods, if prices are increased, the subsidies should also be increased. Another point referred to by the Chancellor was the partial failure of the Savings Movement. I was disappointed with the methods he proposes to adopt to deal with that situation. We want to save now to offset the inflationary tendency, and then, in due course, when there is a deflationary tendency, the people will have the necessary purchasing power from their savings to buy more goods.
I was hoping that the Chancellor of the Exchequer would take his courage in both hands and introduce some system of compulsory saving. Such a system could be tied up with Post Office savings, and a definite promise could be given that in two years' time people could spend a certain amount of the savings they had deposited.
§ Air-Commodore HarveyIt was said just now that many of the lowest paid workers are unable to buy food and meet their commitments. How, therefore, could a scheme like that be introduced?
§ Mr. PargiterI am endeavouring to deal with the position as a whole. It is undoubtedly the fact that there are large numbers of Members on the benches opposite who ought to be saving a good deal more than they are.
§ Mr. I. J. Pitman (Bath)How does the hon. Member know that?
§ Mr. PargiterA scheme of compulsory savings, with a definite promise that a certain amount may be drawn at the end of a given period, would have general acceptance. The amount of money which people could draw could be carefully governed according to the volume of goods available. I believe that such a scheme would appeal to the people, but I do not think this Budget contains anything which appeals to the people. I do not think there will be a feeling among the people of the urgency of the situation. I wish that this capital inflationary tendency had been tackled by pretty heavy taxation—by way of Stamp Duties, or something of that kind. I believe that capital appreciation is responsible largely for the inflation which the country is now facing. I hope that the Chancellor will, between now and his next Budget, see if he cannot institute some first-class savings scheme which will ultimately benefit the people.
I should like the Chancellor also to reconsider the further extension of the Betting Duty. I do not often go to racecourses, but I understand that a particular safeguard there is to bet with a bookmaker in the ring. I should have thought that the simplest thing on earth would have been to put a tax on bookmakers going into the ring. It might not bring in street betting, but at least it would be a step in the right direction. If something were done to legalise street betting, then maybe something could also be done in that direction. After all, we must face the fact that street betting does go on, and if we admit betting on racecourses, we might as well admit betting in the streets. I hope that the Chancellor will consider this question between now and the next Budget. We accept with equanimity the fact that our beer will cost a little more. Perhaps we shall drink a little less, or perhaps we shall drink a little more water. I think that it was a former Chancellor of the Exchequer who remarked that he was amazed at the amount of money people were prepared to pay for water.
We have to accept this Budget as an instalment. It may have a temporary effect in regard to the inflationary tendency, but I cannot see that it will have a material effect upon our urgent needs at the moment. I ask, therefore, that between now and the next Budget, the 439 Chancellor should consider some more serious measures which will not hit at people who have to buy goods, such as utility clothing and things of that kind, and bring about some real savings which can be set aside until more goods are available.
§ 5.58 p.m.
§ Mr. Lipson (Cheltenham)I entirely disagree with the view put forward by my hon. Friend the Member for Louth (Mr. Osborne) that the Chancellor of the Exchequer should have abolished the food subsidies. I applaud his courage for saying it, because he was not advocating a popular course. However, he has not hesitated to express the views which he sincerely holds. On the other hand, I applaud the courage which the Chancellor of the Exchequer has shown in resisting the pressure brought to bear upon him to abolish the subsidies, either in whole or in part. The great majority of economists in this country have been advocating some considerable reduction in subsidies.
§ Mr. DaltonFinancial scribes.
§ Mr. LipsonIt has not been easy for the Chancellor to resist that pressure, but I think that he was wise in doing so. The real test of the value of maintaining or reducing the subsidies is whether or not it is likely to reduce the danger of inflation. Is it likely to reduce the danger of inflation if the subsidies are removed? In my view, the danger would be increased. It is all very well for the hon. Member for Louth to say that the average working man can well afford to meet the increase in the cost of living which must be occasioned by abolishing the subsidies. He may think so, but the great majority of working men think differently; they are not in the mood these days, and the Government must recognise it, to have the effective purchasing power of their wages reduced in this way.
The obvious result of any drastic reduction in the subsidies would be a demand for increased wages. That demand would seriously affect our export trade, because the cost of labour is an important factor, and it would also increase the cost of the goods required at home. We have to recognise that even this Budget will call for further expenditure on the part of ordinary men and 440 women. It is not always possible to obtain utility articles, and with the increase in the amount of the Purchase Tax on non-utility articles many people will find that their cost of living will be increased. I was, therefore, very glad, not only that the Chancellor decided not to reduce the subsidies, but to hear him speak so convincingly of the value of the subsidies as a "tranquillising factor," as he called them. If the time comes when this ceiling is passed, and he is proposing not to maintain the subsidies, he must expect some of the arguments which he used today to be brought to his notice once again. If there is any virtue—and I believe there is—in what the right hon. Gentleman said about the value of the subsidies from every point of view, that will apply whether the subsidies amount to the present figure of £425 million, or whether that figure is increased.
I would say to the hon. Member for Louth that, good as are his intentions, it is administratively impossible for the Chancellor to say, "We will relieve the lower paid worker of any burden that will follow from abolition of the subsidies." It is not administratively practicable to carry out such a policy. Not only old age pensioners, but very many people in the country, are finding it extremely difficult, even as things are now, to carry on, and they would suffer very considerable hardship. I would ask the Chancellor to what extent he attributes the withdrawal of money, which has been put into national savings, to the fact that people require this money now to meet their ordinary expenses? People in good financial positions are able to carry on, because they are living on capital. I believe that is true of very large sections of the community. I do not know whether the right hon. Gentleman has made any kind of investigation into what it is that is making people withdraw their money from national savings, but I should not be surprised if such an investigation did not indicate that many withdrawals were thoroughly justified, that they were due to people having to find money for necessities. If that is so, there is a valid explanation.
I am sorry that the hon. Member for South Nottingham (Mr. Norman Smith) expressed his disapproval of the National Savings movement. He said he would rather advise people to put money into 441 equities. Does the hon. Member intend to set up as an authority on what equities are sound, and what are not? Does he intend to guarantee that if he advises his constituents, or anyone else, to buy equities, their capital will always be there when they want to realise? Equities fluctuate as well as gilt-edged securities. Over the years, a man who invests his money in gilt-edged securities is far better off than the man who has gone in for equities, and has tried speculation. The temptation may be to go from what are considered sound equities to something not so sound, because the yield is greater, so that people may lose all their capital. No Chancellor can guarantee retention of the purchasing power of money. That is asking too much, even of the present Chancellor. But anybody who invests his money in the National Savings movement knows that he can get his capital back. If its purchasing power is reduced it is due to a change in the value of money, owing to circumstances over which nobody has any control.
I do not think it is practical politics, at this stage, to introduce a system of compulsory saving. There was a proposal put forward, at the beginning of the war, by the late Lord Keynes, which might have been practicable during the war, but the amount of money raised by voluntary savings was far greater than Lord Keynes anticipated might be raised by a system of compulsory saving. I believe that our people would invest their money in national savings if they had the money to invest. I am a little sceptical about this surplus purchasing power, too much money chasing too few goods. I do not know where that money is, and I doubt very much whether the average household has a surplus of purchasing power.
However, I think it is our duty, as Members of this House, to do all we can to encourage people to put their money into national savings, because it is one of the surest and safest protections against inflation. If, unfortunately, inflation should come to a very large degree all their savings would go; whatever they had saved, over the years, for their retirement would be of very little value. Indeed, in some countries that has proved a very real danger. We must advise the people, not only in their own interest, but in the national interest, to give all the support they can to the National Savings movement, because in that rests the best hope 442 of preserving the financial stability of this country, the purchasing power of money, and the savings of the people for their old age and retirement.
§ 6.8 p.m.
§ Mr. Daines (East Ham, North)It is quite obvious, by the look of the Committee, particularly the Opposition Benches, that the Committee is not particularly desirous of prolonging the Debate tonight, so I intend to be quite brief. I want to return, and draw the attention of the Committee, to the contribution made to the Debate by the hon. Member for Louth (Mr. Osborne). I think all of us admire an hon. Member who while belonging to a party is capable of independent thought, and is fearless in expressing it. At the same time, it seems that the hon. Member has got into the same camp, or category, as the hon. Member for Orpington (Sir W. Smithers). It may be said by Opposition speakers who will follow that they speak for themselves, and not for their party. But I am beginning to develop the very strong conviction that they are saying what their party really thinks, and not what their party says. There are signs that the Conservative Party is a party of many voices, which has inherent contraditions within it.
The hon. Member for Louth, in his advocacy of a cut in food subsidies, sought to safeguard the position by proposing a further subsidy for old age pensioners in order to avoid the opposition that such a cut would be bound to create. I want to call his attention, and that of his party, to the speech made by the right hon. Gentleman the Member for the Scottish Universities (Sir J. Anderson) on the occasion of the last Budget, when he openly declared that the Government were premature in bringing forward their schemes of social insurance and family allowances, and for old age pensioners.
I think that the country is entitled to know who does speak for the Conservative Party. Is it the right hon. Member for Woodford (Mr. Churchill), the right hon. Member for Saffron Walden (Mr. R. A. Butler), the hon. Member for Louth (Mr. Osborne), or the hon. Member for Orpington (Sir W. Smithers)? I do not want to make too much of this point, but there is already beginning to show in this House, and in the country, a form 443 of political warfare which is not dissimilar to that which showed itself in Europe before the war, and which is already showing itself in the Communist Party on the Continent—the policy of saying a variety of things which are mutually contradictory.
The right hon. Member for Woodford made a speech last week in which he made the ballot call, "Free the people." That speech was an appeal to go back to laissez faire economy, and a complete denial of the policy which his party, we presume, accepted at the Brighton Conference, when it was proposed by the right hon. Member for Saffron Walden. I think the House must be on its guard against this totalitarian form of propaganda, of giving the people everything at the same time, which is already showing itself in the propaganda of the Conservative Party. I do not intend to cover tonight what I know will be adequately covered later in the Debate—the question of a capital tax, and the various proposals put forward by the Chancellor in his interim Budget.
If the Chancellor would do me the honour of reading the speech which I made on the Address in reply to the King's Speech, he will find some of my remarks there. I want to deal specifically with that section of his statement today in which he proposed a 10 per cent. cut from the tote on the dog tracks. I welcome his belated conversion; it is a beginning. I would point out to him and to the House that there are certain consequences that must ensue from the operation of this particular form of tax. I admit his main argument, and I do not disagree with his general approach in his Budget speech, that to bring forward in this latter part of the financial year entirely new forms of taxation would require the creation of large organisations and machinery, which would be administratively impossible. But I want to point out certain logical consequences that come from the step that he is proposing. I enjoyed the right hon. Gentleman's speech for its sincerity of tone and its conciseness. It was a speech, I think, that any ordinary layman could understand. Nevertheless, if I were writing for the Press tomorrow I would have as a banner line: "The old firm." "A Bookie's Budget," or "Dalton, the 444 Bookie's Pal." What, in fact, the Chancellor is doing is to give a 10 per cent. subsidy to the bookmaker.
We are taking a 10 per cent. cut from the tote and the tote competes against the bookie, so the bookie makes his book against the tote. Therefore, by virtue of the fact that the bookies can give a 10 per cent. better price than the tote they will attract the bets from the tote. Similarly, it must follow that the street bookmaker is in exactly the same position. There is one thing about the tote. However much the tote may be objected to on ethical grounds, it is a perfectly clean form of bookmaking, which is absolutely fair to the punter and to the people who run the tote. I am not putting my hand on my heart and saying that I have never made a bet and have never been to a racecourse. I have been to racecourses and I have made bets. I do not go now but I went previously, when I first came to this House, because I was very keen that something should be done about it.
To come back to the question of the tote, the effect is to increase the chances of the bookmaker. What the Chancellor could have done at the same time was to have adopted the proposal of a stand tax on the bookmaker as a counter to the flow of bets against the tote. The totes are owned by the people who run the tracks, and to safeguard themselves they will levy a further registration fee on the bookmaker which they will collect. My argument is that that should be collected by the Chancellor. That should be followed by giving him a register of all the bookmakers who operate on the courses. From that, we get to the next step: The bookmaker, in turn, has a ring of satellites around him who never pay any tax at all—the man who lays off his bets, his tick-tack man, and his clerk. Today they are escaping Income Tax almost 100 per cent. I call the attention of the Chancellor to a case reported in the evening Press some seven days ago, when, in cross-examination, a bookmaker openly admitted that he never paid any Income Tax on his business as a bookmaker. That was not an isolated case. That is common right the way through the fraternity. What in fact the Chancellor is doing is to subsidise bookmakers and increase their business.
This new Budget proposal has to be followed up with the proper machinery for 445 levying taxes upon bookmakers, and I accept my hon. Friend's argument that we have also to consider the position of street bookmaking. I believe that what we have to do is to give over this humbugging hangover from Victorian morality, which said that because ethically they did not agree with betting, therefore, it did not exist. We know that it does exist. I say, therefore, that the next step is a register for all bookmakers, with a substantial penalty if they do not register. Generally, I welcome the Budget. In the circumstances in which we operate, and, allowing for the time factor, I think that there is very little else that could be done. On this one point, however, where the Chancellor is introducing a new form of taxation I warn him that he has to follow it through, and, at the time of the next Budget, give us some comprehensive machinery that will really tackle this terrible inflationary pressure and social evil which is doing harm to our people, and produce a scheme which will give us a form of taxation that will be really effective.
§ 6.19 p.m.
§ Mr. E. P. Smith (Ashford)I am sure that the hon. Member for North East Ham (Mr. Daines) will forgive me if I do not follow him in his learned disquisition on betting and racecourses, which I found extremely interesting and highly entertaining. I want to say that, in common with my hon. Friend the Member for Cheltenham (Mr. Lipson) and as one who has been associated for many years in the manufacture of foodstuffs, I thoroughly approve of a continuance of the food subsidies. If these subsidies were not continued what would happen? Immediately would come a demand for higher wages which could not be justly refused; and these demands, which would have to be granted, would automatically leave out of account the old age pensioner, the unemployed and the lowest paid workers.
I will give the House an indication of what it would mean to remove the food subsidies. I happen to be associated with a group of pulse mills which are controlled by the Ministry of Food. The Ministry supply us with our raw materials at fixed prices, they take our costings and lay down the price at which we shall sell our manufactured articles. Not very long ago they informed us that they were no 446 longer going to subsidise these particular articles and so they increased the controlled price by practically 100 per cent. over night. What did that mean? It meant that a packet of processed peas went up at once from 4½d. a pound to 9d. in the shops. That is a very small commodity and perhaps it is not worth thinking very much about, but imagine that taking place in regard to a score or more of articles. At once there would be a reign of absolute chaos, and it would come upon the country overnight. I do not approve of much which the right hon. Gentleman does, but I approve of his retention of the food subsidies and I think there is some justification for his saying that he will fix the subsidies at so much and not allow them to go above that because in my view we are approaching the apex of the curve of postwar food prices. When the next 12 months have passed I believe we shall find that the tendency will be for food prices not to increase, but rather to droop and decline so that the subsidies will in a large measure reduce themselves naturally by the reduction in the prices of the primary commodities.
The other thing which I wish to mention is the question of this 10 per cent. on dog totes. I understand that this is to be a first charge on the totalisator industry. Does the Chancellor think he is going far enough? Will he bear in mind that the living commercial theatre pays an average of 28 per cent. in tax as a first charge on its proceeds, and are not the dog totes getting off rather lightly by comparison? As for the bookies, they are surely in the privileged position of the non-profit-making theatrical companies—they are paying no tax at all! I suggest to the right hon. Gentleman that he might consider in his Budget next spring the possibility of sharply raising the tax on dog totes and, wherever possible, of bringing in the bookies. I suppose I ought to declare my interest in this matter: I never bet.
§ 6.25 p.m.
§ Mr. Carmichael (Glasgow, Bridgeton)In common with most of Members I can welcome this interim Budget as being satisfactory. My only objection is that I doubt if we can regard it as one that will make any serious attack on inflation. It will touch it slightly, but in the main it simply means added revenue to the 447 Exchequer. If I can find any satisfaction in this interim Budget it must be that it will give hon. Members of this House an opportunity of expressing themselves in such a manner as to warn the Chancellor regarding his annual Budget. One or two points have already been made. It is quite clear that the majority of the Members of this Committee are definitely opposed to any interference with the food subsidies.
I am sorry that the hon. Member for Louth (Mr. Osborne) is not here, because I cannot accept this idea of courage which apparently he is reckoned to possess. I do not regard it as courage at all, because if he were left entirely with dictatorial powers, then every person in the land would require to regulate his or her life according to the moral standards he possesses. That would be a very dangerous doctrine to operate in the country, because obviously he is opposed to people who drink, very much down on people who smoke, and opposed to people who engage in betting. With them he would deal very ruthlessly. I can safely say that I am not interested in betting or even in smoking. I was not in the least perturbed today before the Chancellor revealed his plans, but I did see some hon. Members slip out and buy a few packets of cigarettes before the prices went up.
There is a warning which should be given about the food subsidies. There is an impression abroad, fostered by Tory propaganda, that these subsidies are a sop by the Government to the great mass of the people of this country. It is obvious to Members of this House that if there had been no subsidies there would have been much more trouble in the industrial world. People would have been compelled to demand increases in wages up and down the country, and one of the important factors in that is that once wage demands begin in any of the basic industries there is no ending of it. A vicious circle begins as soon as one gets an increase, the price is altered and, of necessity, they are followed by demands from other industries.
I regret one thing in regard to the food subsidies namely, that the Chancellor has given the impression that we have reached the ceiling in regard to them. I do not think we can argue that at all. If the Chancellor has been compelled to increase 448 food subsidies over the last two years, there is nothing that justified anyone stating today that these subsidies have now reached the limit and cannot be increased at some subsequent date. I hope it will be unnecessary to increase them, but that can only take place when there is a relationship between the money that is circulating and the amount of goods obtainable. Until we get that there can be no finality on this question of food subsidies. They may go up slightly or they may go down slightly, but it is not easy for anyone to undertake that they will not move in a certain direction.
May I say a word in regard to the Purchase Tax proposals? I looked at the figure the Chancellor gave in regard to items taxed at 16⅔ per cent. That is to be raised to a little over 30 per cent. I submit that many of these goods affected are goods that go into the great bulk of the homes up and down the country. When we look at the case of goods where the tax is 100 per cent. we find that that has to be increased by only 25 per cent. But what are the goods which have 100 per cent. tax on them? In the main they are the goods like fur coats and such-like that can only be purchased by the very wealthy people. If there is a serious desire to stop spending it is in that quarter that it should be stopped, and, therefore, if there is to be an increase of almost 100 per cent. on the lower commodities which are more generally in use, there should be a bigger increase on the Purchase Tax on these other very expensive goods.
With regard to the Betting Duty, the Chancellor admitted today that the principle of betting was legal. The question arises now, Where do we stop? My interest in betting is nil from the personal point of view, but we must face this matter as a practical proposition and we are compelled to examine it in detail. I agree with another hon. Member that we have done nothing in regard to this matter other than to bring a little more money into the Exchequer by way of the totalisator. The reduction of 10 per cent. may very well mean the reduction of the odds which are paid, and I think it opens the door to the people who own the totalisators to making a profit. They will readjust their betting in accordance with their costs. I suppose they may even resent the idea that the ordinary bookie 449 gets off without taxation, and in order to level things up there may be an increase in the charge for the bookie's stands on the dog-racing tracks. Actually, there may be a profit come out of it. I do not like the idea of extending the principle of betting, but if we examine this matter upon financial grounds I do not see how we can put a tax upon the totalisator and not on betting of every other kind, where it is practicable to do so.
On the moral side of the matter I would like to say something which might be regarded as a little risky in certain parts of the country. It might be better to legalise betting, even the betting known as street betting, than to have the form of betting that exists now, and it might be less dangerous. Everyone from an industrial area knows what happens now. All kinds of people engage in street betting, in the most disreputable places they can find. All manner of people are enticed into taking an interest in betting in ways that are not good for the community as a whole. From my little experience upon the Continent and in Ireland I would suggest that where betting has been legalised there is a far better standard and approach to the matter of gambling than there is in this country, where we are supposed to be upon a higher moral plane. It may be risky in some quarters for me to say this, but that is my candid opinion, as one who is not personally interested in betting and who thinks it is about the most foolish thing that people can engage in. Once we have accepted the principle of taxing betting we must accept it in every direction. If we are to examine the matter upon moral grounds we must do so with a much better spirit.
Compulsory saving is a very dangerous doctrine for anybody to suggest to the Government. If there is a feeling that people have money in the country's hour of dire stress that they do not require, I could suggest a lot of methods alternative to the idea of compulsory saving. If we introduce compulsory saving there will be no end to it. Where should we begin? With people with certain incomes? When we start to examine incomes we must also examine responsibility. Whatever be the attitude of the Chancellor next April in his forthcoming Budget I hope he will not think in terms of introducing compulsory saving of any kind. On the 450 whole, the present Budget will be welcomed. I am satisfied, whatever may be said from the Opposition Benches that it is not the kind of Budget they would like in view of the racketeering going on at this moment.
§ 6.34 p.m.
§ Mr. John R. Thomas (Dover)I would like to deal with one or two points raised by the Chancellor, and first with arrears of taxation, referred to in the Report of the Public Accounts Commutes. I suggest that a good deal of responsibility for the arrears rests in delay on the part of the Revenue in reaching agreed assessments. Some of the arrears could be got in much more quickly if there were a speed-up in that respect.
As regards increase in Profits Tax, I take it that this is the result of the premature cessation of E.P.T. In these times we must welcome, belated though it be, the increase from 12 per cent. to 25 per cent. upon distributed profits. One or two points arise which I think are worth attention. The conditions governing the Profits Tax at the moment bear unduly hard upon working managers and directors. Their salaries are taken into account and are regarded as distributable profits. If the percentage is to be increased to 25, that increase may put a brake upon the production which we need so badly in this particular crisis, and it must have an adverse effect upon production for export if that brake is put on too heavily.
On the subject of preference shares, I would like my right hon. Friend to make a note of one point, upon which I hope we may have some answer at a later stage in the Debate. It has been necessary for many companies to go to the Industrial Finance Corporations to receive financial assistance for the purpose of assisting production from essential industries and for export. It has been the custom for these corporations to advance the money by way of preference shares at certain rates of interest. It may not be generally known to the Committee that the distribution of the interest on preference shares is regarded, from the point of view of Profits Tax. as a distributable profit, without being able to pay the necessary preference share dividends or interest, but the funds must be there in order to get the industries going. The Government in some way are responsible, because one 451 of these corporations is backed by His Majesty's Treasury.
Let us take the case in which there is an issue of preference shares at 5 per cent. If we add to that figure another 7½ per cent. or, as is now proposed, 25 per cent., I say that it is a charge which I do not think industry can bear. Therefore, there is room for some mitigation of that charge, as regards the preference shares which are used in that case, and the funds from which are employed as working capital. The general outline of the Budget does not appeal to me, I have been stressing this question of indirect taxation ever since I came into—
§ Mr. J. LewisIs it not possible to provide the finance by means of debenture stock?
§ Mr. ThomasOf course, it is possible to raise finance by means of debenture stock, but it is quite a different matter. It is comparatively simple if the assets are there to cover the debentures. I was really dealing with the question of working capital. I know of many cases in which the Industrial Finance Corporation made an advance on the basis of preference shares, and, owing to this incidence of the Profits Tax, it was upon my advice that a particular firm went back to the Industrial Finance Corporation and said, "If you do this, we have to pay not only your 5¼ per cent. dividend, but also the 7½ per cent. Profits Tax on distributable profits." That could not have been the intention when the Bill was passed. If that is now added to by the increased percentage, it will make it much more difficult for essential industries to raise preference capital.
I come now to a problem which is very close to me, that of indirect taxation. One hon. Member opposite accused the Chancellor of being weak. I think the Chancellor is very strong and has terrific courage at this stage to impose further taxation on the lower income groups. I am not suggesting that there are at the moment very many definite alternatives. I will suggest one or two later on, but probably not to meet the whole case. Once again the man who drinks the beer, who fills in the football coupons and attends the dogs is paying the piper. If this anti-inflationary measure is required, it suggests that inflation is' really among 452 the lower income groups only. I cannot accept that view. I do not think that the gradual increase in the inflationary tendency is due to the action of the lower income groups. There is much more responsibility for it among the smaller section of the community which very often gets off scot free on realised capital profits. From time to time a capital levy has been suggested. The economists have advocated a capital levy, and the answer has been—
§ Sir Harvie Watt (Richmond)Will the hon. Member give the names of the economists who have advocated a capital levy?
§ Mr. ThomasI will with pleasure. I refer to the present Chancellor of the Exchequer, for one. I hope that will satisfy the hon. Gentleman.
§ Mr. ThomasThere is a suggestion that a capital levy would be impracticable. There are very good reasons in support of that, but I suggest that there should be some sort of tax on realised capital profits, which is not at all a capital levy under a different name. I have in mind cases of company promotions. One has only to read "The Times" any day. One sees the prospectuses of companies, and one finds that the original shareholders or proprietors have been able to sell an investment of £50,000 and probably get something like £250,000 for their holding. To show that I am not exaggerating, I know of a concrete example where the owner of greyhound tracks in the London area was able to dispose of three or four tracks, having an investment of something like £250,000, for £1 million. That is £750,000 capital profit, and I suggest that that is realised capital profit. It has been obtained. The shares may have been sold to an investment syndicate and later put on the market, which is precisely the same thing as an issue. It eventually gets to the public. That is a case of a cool £750,000 to one man. None of that profit is liable to tax of any kind.
§ Mr. J. LewisIs that not the same as the man who buys a house for £500 and sells it for £1,500, making £1,000?
§ Mr. ThomasThe cases are not entirely parallel. Very often a man who sells a house for £1,500, if it is his own house, is probably going to another district where he will buy another house for which he will probably have to pay £2,000. As to the capital profits that have been made since the advent of the Labour Government, it is disgusting—I cannot use any other term—to think that this Government has allowed these capital profits to be accumulated over the years and that people have been able to get off scot free without any taxation at all. The Chancellor could very well have imposed a 10, 15 or 20 per cent. tax on realised capital profits. Perhaps the Financial Secretary will pass this on, because it cannot be said that there is any difficulty in the imposition of such a tax. The contracts are there, the documents are available and the bulk of the cash will be realised cash. I do not see why it should be difficult to collect that sum.
I agree that when we talk about a capital levy and capital profits on certain transactions, it is right for someone to say: What about capital losses; who will bear them? That is no parallel to the argument I am putting forward. Where an individual has been able to realise substantial capital profits, there is no reason at all why that excess of funds should definitely help to swell the surplus of money and the Chancellor should not benefit. I hope that point will be considered. Perhaps we may have some suggestion from the Chancellor as to whether he proposes to deal with it.
There is one other point. The Chancellor made a case for the 10 per cent. duty on the tote. I know something about totalisators, though I have no financial or professional interest in them. My right hon. Friend used the argument that the 10 per cent. charged on the Racecourse Betting Control tote would in some way impede the development and the breeding of racehorses and stock, which are, of course, a very valuable export. As I understand it, the 10 per cent. Betting Duty is on the investment. That means that for every £100 invested on the tote, whether it be dogs or horses, £10 will go to the State. There would then be £90 left, and the tote would take 10 per cent. of that £90, which is equal to £1 in £10. I submit that would not make much 454 difference to the finances of the Racecourse Betting Control Board, and it would tend to avoid the implication that one section of the betting class is being penalised at the expense of another. I think we should decide what section or group is chiefly responsible for any inflationary tendencies. I feel definitely that the least responsible are the lower income groups and yet they are the people who are always there to be shot at; they are the first people to "take the can," and I think they are "taking the can" on this occasion.
I will end on the question of National Savings. Here I shall probably appear to be diametrically opposed to my own argument. I suggest to the Chancellor that a 2½ per cent. rate of interest is not sufficient encouragement for the lower income groups to invest in National Savings and Defence Bonds. I know it will be replied that this is the Chancellor's cheap money policy, but I suggest there is a difference. It is this: where an individual is able to invest substantial money, he can invest it in equities because, if they go down and he makes a loss, he is in a position to stand it and, by being able to take the risk of investing in equities, in the long run—irrespective of what the hon. Member for Cheltenham (Mr. Lipson) said a little while ago—he gets a much bigger return. On the other hand, the man with the smaller income, if he is to have an investment at all, must have an absolutely gilt-edged one because he cannot afford to take risks. Therefore, he is denied any chance of getting a greater return on his capital by investing in equities. Surely, it should be possible for the margin, where the income is below a certain standard, to be wider; surely there could be a special issue of National Savings or Defence Bonds with a higher interest, perhaps 3 per cent., 3½ per cent. or 4 per cent.? When the Government-sponsored Industrial Finance Corporation advances money, the rate of interest is anything between 4 per cent. and 5¼ per cent. If that is right for the Industrial Finance Corporation, why not for the lower income groups with lower income opportunities? It would give them a greater incentive. I hope that may receive consideration from the Treasury.
§ 6.54 p.m.
§ Mr. Sidney Marshall (Sutton and Cheam)I cannot join the hon. Member 455 for Dover (Mr. J. R. Thomas) in his lamentations because the Chancellor of the Exchequer has not seen fit to go in for a further measure of confiscation of capital—
§ Mr. J. R. ThomasI made no reference to confiscation of capital; all I asked for was a percentage on the increased realised capital profits, which is by no means the same thing.
§ Mr. MarshallIt is a similar intention from that side of the House at all times—it is an attack on capital in any shape. Whatever measure is introduced reducing capital appreciation, it is never enough for hon Members opposite because they want to see capital disappear altogether from the hands of the present holders. [An HON. MEMBER: "Nonsense."] However, one must be struck today by the total lack of imagination which the Chancellor has displayed. Obviously, the song in his heart is a very quiet one today because he has only been able to fall back again on the things to tax which have been taxed from immemorial times—beer, spirits, wines, increases in the Purchase Tax. In the tax on the pools and the tote he has exhibited no fresh field of imagination at all; he is merely, for the moment playing with the idea of a former Tory Chancellor who, if he had had in those days the support which now would be forthcoming, would have made a successful, large return on a properly organised tax on betting. It is obviously in the Chancellor's mind next April to introduce some properly organised tax on betting and I shall not be surprised to find that it will be received by the country far differently from the suggestions in the same field made by the Leader of the Opposition when he was Chancellor some years ago.
I am sorry, however, that the Chancellor has seen fit for the first time to make what appears to be an attack on a great profession—the advertising profession. It is an enormous field of endeavour today and it is recognised as a highly-trained profession. The suggestion he has made that only half of the advertising expenditure of firms shall be allowed to count as legitimate expenditure during the year must hit advertising practitioners very hardly. It involves a large amount of money when half the adver- 456 tising expenditure is not to count as ordinary expenditure against profits. I believe it will injure the advertising profession greatly, but I expect someone else m the House will have something to say about this later. However, I hope it will not be the forerunner of a larger measure of taxation on advertising, because the profession employs large numbers of people who are bound to be affected in no small measure. Again, money spent on advertising is well and wisely spent. I could think of many ways in which money is not nearly so wisely spent. Advertising builds up goodwill; advertising means that the manufacturer of goods must at all times be anxious to improve their quality in order that he may get the best return he can from advertising them.
§ Mr. A. Edward Davies (Burslem)May I ask the hon. Member what is the point of advertising commodities today, such as motor cars and other goods, which people have no earthly chance of getting.
§ Mr. MarshallA point very well known. If the hon. Member was in business he would know. I have said already that advertising builds up goodwill—
§ Mr. MarshallAnd it is a fact that only those people can afford to advertise whose goods are first class. It is well known now that advertised goods are of good quality, and that the money spent on advertising them comes back a thousand-fold because the quality of the goods is maintained as a result of the demand through advertising. I think this is a definite attack on a great and growing profession, and I hope the Chancellor will think twice about it. The attempt of the Chancellor to raise money by this Budget is very poor, it exhibits no imagination, and if it is the forerunner of what we may expect next April, we shall find the Chancellor continuing to introduce measures of purely predatory taxation as he has done in the past and has done today.
§ 7.0 p.m.
§ Mr. Keenan (Liverpool, Kirkdale)One or two items in the Budget merit some consideration, and, although they have been mentioned before, and will be mentioned over and over again, too much cannot be said about them. I refer 457 in particular to the Betting Duty which the Chancellor has imposed today. The time has arrived when we should be a little more honest and definitely face up to the problem of betting. Hitherto everyone has tried to avoid it, because of the volume of public opinion against it in different religious bodies. Whether we like it or not, I suppose that about 90 per cent. of the people of this country believe in betting. Now that a start has been made, I hope that the Chancellor will go on, so that when the next Budget is introduced a proper attempt will be made, which will not merely touch the fringe of the problem, but will get down to the question of the regulation of betting. I agree with several hon. Members who have spoken that horseracing totes should not have been left out. I am delighted to see the action taken by the Chancellor in regard to pools. I indulge in the pools, and I do not see anything wrong with that.
§ Mr. Shurmer (Birmingham, Sparkbrook)How does my hon. Friend find the time?
§ Mr. KeenanSome folk spend a long time over small things. I could fill in a pool coupon in a few minutes, but I may not always do so if I am hopeful of getting results. One of the greatest criticisms has been that pools have been considered to be a ramp, and now the Chancellor has an opportunity to deal with the question. I do not doubt that the Chancellor will be able to keep some control over pool betting, but we ought to visualise, and I hope the Treasury will visualise, the desirability of bringing the whole question of gambling under control. Whether we like it or not, the majority of our people take part in it, and if it were regulated properly, they would not be fleeced as they are fleeced today by pools and bookies. I hope the Chancellor will have second thoughts about horse-racing totes, which should be dealt with in the same way as the dog totes.
I would not care if no beer or spirits were ever brewed again, but I think those who drink beer are as much entitled to it as to any other form of amusement or nourishment. [An HON. MEMBER: "Or punishment."] I think those who already indulge in a pint of beer, or glass of spirits, as the case may be, are already paying enough. I do not see why they 458 should have to pay more than they have been paying for water. I do not see the slightest justification for an increase in taxation of beer. That hits the lower Income Tax groups. If we want to provide an incentive to the average worker, particularly in the heavy industries, where it is considered to be important—and is certainly of value—I do not think we should make beer dearer. I hope the Chancellor will have second thoughts on that, and, if there is anything he can alter, that he will alter the increase in the tax on beer.
I am delighted that nothing is to be done about food subsidies. While he recognised the desire to retain these subsidies, I thought I could detect a threat that in April the Chancellor was going to alter his mind. I do not think there is likely to be any improvement in the general industrial situation of the country by that time. I do not think we will have recovered, although we shall have gradually improved. There will not be a fundamental difference in the standard of the workers by April, and I hope the Chancellor will not take heed of the Press campaign and the stupid attempts made by those in the Opposition this afternoon. The only Member of the Opposition whom I have heard denying that he was in favour of removing the food subsidies was the Deputy-Leader of the Opposition. As a party they are pressing for the removal of the food subsidies, and I was sorry that the Chancellor disclosed his intention—or at least seemed to us to disclose his intention—of changing his mind by next April. I warn him that it would be just as disastrous to attempt to do next April what I am glad he has not done today. That is more important than anything else. As one who has spent a lifetime in the trade union movement, I know what would happen if there were an attempt to remove the subsidies. There would be bound to be a demand for increased wages. The larger the family the greater the help rendered by these subsidies. If the Chancellor has any intention of doing anything different in April, I hope he will have another "think," and do as he has done today.
§ 7.8 p.m.
§ Mr. A. Edward Davies (Burslem)I find it very difficult to understand what is the Opposition point of view of some of the problems which arise out of the 459 consideration of a Supplementary Budget, or, indeed, of the whole basis of taxation and revenue in this country. One has heard them speaking with so many conflicting voices, and I thought the Chancellor did well to remind us this afternoon of some of the things that were said in August by the right hon. Gentleman the Member for the Scottish Universities (Sir J. Anderson). In the Debate on the State of the Nation, the right hon. Gentleman made reference to the premature timing of such things as granting some help to the old age pensioners, the introduction of some of the social services—namely, family allowances and other things which help families so much—and the raising of the school-leaving age, all of which we on these benches had long looked forward to, and regarded as sound Socialism. On that occasion, the right hon. Gentleman seemed to be speaking for the Conservative Party, but in subsequent Debates we have heard hon. and right hon. Gentlemen on the Opposition Benches dissociating themselves from that view. For example, the other day we heard the right hon. Member for Saffron Walden (Mr. Butler) dissociating himself from that view.
Here today we have had the Deputy Leader of the Opposition saying that the Conservative Party are in favour of some policy of food subsidies, and he referred us to the Brighton conference. Later on in the Debate, we heard the hon. Member for Louth (Mr. Osborne) who was most concerned about the policy of food subsidies and asked for their abolition. The top and bottom of this is that there is ho considered and agreed view on the part of the Opposition upon this matter, but upon these benches there is an agreed view, as we have heard throughout this Debate. One of our main reasons for the continuance of food subsidies is because as my hon. Friend the Member for Kirk-dale (Mr. Keenan) has said, we know that if they were taken off, there would be a whole spate of demands in the country for wage increases, and instead the problem of inflation being eased, it would get even worse in the course of time. I know that, apart from the old age pensioners, there are many low income groups—for example, railwaymen who have very few pounds a week. Although they have had some further 460 assistance from family allowances, they have a very meagre time indeed in keeping their homes going. After all, the renewal and maintenance of some of the things in the household cause a great deal of spending on articles upon which there is a heavy Purchase Tax. We find that families are confronted with a real problem in balancing their own budgets.
I do not gather the same meaning as my hon. Friend seems to have gathered about the Chancellor's intention next April. What I thought he said was that while he would have to keep track of this spending upon food subsidies, he would direct his mind to a smaller number of commodities, and that, of course, we could not go on indefinitely spending endless millions in underwriting our food charges. I think we would agree with that, but we should hope that by that time there will be some prospect of an improved food position in the world. We should hope that, instead of food prices rising, there will be some decrease, which will have the automatic effect of reducing the food subsidies in the course of time, without detriment to the generality of men and women in this country.
I listened with interest to the remarks of the hon. Member for Harwich (Sir S. Holmes), who, I believe, leads a small group of so-called National Liberals. I am sorry he is not in his place at the moment but if I recollect aright, he said that we had frittered away the American Loan. I dissent from that view completely and absolutely. I do not think it was intended to do some of the things which he said it was intended to do. He said he had expected it would have been used in capital development of all kinds, he even went so far as to say that we could have expected a lower record of accidents upon the railways, or at least we could have expected better performance and greater safety on the railways, if some of the money had been spent upon making the track safer and the service better. Surely, he knows that is rather a fantastic expectation after the railways have been run down and almost worn out by their long war service and prewar service, during which time they had perforce to be neglected; but before the war they were neglected for other reasons, and it is quite unreasonable to associate that with the spending of the American Loan, which was intended to give the people of 461 this country a temporary break, so to speak, until the nation could get upon its feet again.
I should look for economy in other directions—for example, for greater economy in the granting of money which we are spending overseas on the Defence Forces. I do not think that my hon. Friends on these benches are in any way satisfied with the proposed economies in this direction. We see there a clear field in which there can be a much greater economy. We should like to have fewer men in the Defence Forces. We see that there are some prospects of being relieved of the onerous responsibility we have been called upon to face in maintaining our obligations in Germany. For example, I understand there is a prospect that America may relieve us of some of the charges we have borne for some considerable time at great inconvenience. I hope that in this matter of overseas expenditure on the Defence Forces and in Germany we shall see ourselves in a happier position by this time next year.
I hope, also, for a reduction in the cost of food, and that this will put us in a better position. On the other hand, we shall be increasing the production of coal and should be able to export a considerable tonnage by this time next year, and that in itself will have the great effect of reducing the gap of our import/export account. I believe that my faith is not wrongly placed in my miner friends, and that they are going to do their utmost in the days ahead to achieve the target, and to surpass the target. They realise how very much coal is the key commodity, not only in our domestic industry, but in the needs of other countries whose economy is interlocked with our own.
I should like to remind the Committee of some things which the right hon. Gentleman the Member for the Scottish Universities said on a former occasion when we were considering problems arising from the Budget, and how we should raise revenue. He seemed to say that if our taxation was of a crippling nature on the higher income groups, or upon the earnings off capital, there would be some kind of discouragement which would be to the detriment of the nation, and that men and women would not be prepared to use their talents in the interests of the country, and to that extent we should be less efficient. He said that the men would not react 462 to this necessity for putting their best into industry, or indeed in other fields of activity, unless they were handsomely rewarded, and, as it seemed to me, disproportionately rewarded in comparison with some other workers in industry.
I want to say that as a Socialist I do not accept that thesis. I do not believe that the motive which leads a man to give his best service to the community is necessarily the financial motive. I hope that the Socialist Chancellor of the Exchequer will follow a policy which seeks to put the financial burden of this country upon the shoulders of those who can best bear it, and to do away with the disparity of the top people who enjoy, as it seems to me, a position of privilege and security out of proportion compared with many of the aristocratic workers, the lower income groups in this country. I hope that this policy will be shaped in such a way that this disparity will be reduced, and I do not—as I have said before—accept the thesis of the right hon. Gentleman the Member for the Scottish Universities that if this is to be the case, it will have the effect of discouraging men and women from contributing to this country's need, and putting their best into industry.
I believe that there is a new spirit abroad in this country. If we can make the people of all sections of the community understand that our trials and sacrifices are to be shared, and if men are willing to accept a condition in which the frontiers of State interference in the economy of the nation are going to be extended, then men will give their best service to their country because they love their fellows and their country. I think that the right hon. Gentleman the Member for the Scottish Universities was misleading us when he expressed the view that men and women would only give of their best on the basis of disproportionate reward. I hope that his remarks will not be the basis of the policy of Socialist Chancellors in this country. I do not believe that they will be.
In conclusion, I think that the supplementary Budget presented today is fair and reasonable and forms an ingenious approach to the difficulties of our country. I think that the Chancellor of the Exchequer is to be congratulated. I am sure that the working class people will do their best to support him.
§ 7.21 p.m.
§ Mr. Gammans (Hornsey)I was interested and a little amused by what was said by the hon. Member for Burslem (Mr. Edward Davies) when he talked about the volume of agreement which exists, or is supposed to exist, among his hon. Friends, and contrasted it with the lack of agreement that is supposed to exist on this side of the House. Time and again we have had hon. Gentlemen opposite beating their breasts with righteous orthodoxy and then saying the most outrageous things against their own leaders on the Front Bench. He has just said that he thought that the people of the country would be prepared to work, and that more and more were prepared to work, not for any thought of gain, but for love of country. Look where that leads him. That leads him to a fixed wages policy. It leads him to stabilised wages.
§ Mr. Edward DaviesI do not think that it does anything of the kind. I think that the premise in that case would have to be that everybody was satisfied that they were getting a fair deal. But there is a great deal of disparity and dissatisfaction which must be resolved.
§ Mr. GammansLet us go a bit further. If the hon. Gentleman thinks that people are prepared to work for the love of country, why is it that the Government offer these very high salaries for jobs on the Coal Board?
§ Mr. George Wigg (Dudley)Ex-Tories.
§ Mr. GammansWhy is it that one of the first things the Government did when they came to office was to raise the salaries of Members of Parliament, an action for which they had no mandate whatever? However, I do not want to talk about that. I wish to refer to one point which the Chancellor of the Exchequer mentioned this afternoon and which was referred to by one hon. Member opposite just now. It is the savings movement. I thought that the Chancellor rather skimmed over the seriousness of the situation. When he introduced his Budget last April he made it perfectly clear that unless he raised about £1 million a day—I think he wanted £360 million a year—our whole financial stability would be imperilled. He said, quite clearly, that without this sum we 464 would get inflation. We have got inflation, and one of the reasons why is that he has not got the £1 million a day on which he budgeted. I think that up to now the amount he has got is about one half of that sum. What is the reason for that? One hon. Gentleman said, "Let us raise the interest. We would only raise the interest for a certain number of people." It was a sort of inverted means test. If one could prove that one had saved only a little bit of money, one got 4½ per cent., but if one was foolish enough to save a lot more, the rate of interest would be reduced.
If hon. Members opposite, and their Government, do not know already, I will tell them why it is that people are not putting money into the savings campaign. There are four reasons. The first is that there is a growing lack of faith in the value of sterling. It is not only abroad—we have already seen what has happened abroad—but in this country that people are losing faith in the value of the money they put into the movement. If a man puts 20s. into a movement, he wants to get 20s. worth of purchasing power out of it. People who put money into the Government's saving schemes—into the Chancellor's 2½ per cent.—at the beginning of this year, have lost at least 10 per cent. of it already. The second reason is that people are reluctant to put money into a Government which goes in for gross extravagance. If the Government want people to invest their money in Government Stock, they must satisfy the public that that money will not be grossly misused and wasted in a dozen different directions. The third reason why people are not putting money into national savings is that a growing number disapprove of the uses to which that money is put. They disapprove of many of the Government's nationalisation schemes. They are not prepared to see their money being used to finance those schemes.
The last reason, in some ways, is perhaps the most important of all. When people save they do not save for no purpose at all. They do not save in the abstract. Most people who put aside money have the idea of drawing it out at some time for some specific purpose. The largest single inducement to most people to save money is the desire to put it into a house. If the housing policy of the Government were so designed that 465 those who were willing and able to invest their money in houses were allowed to do so, then we would see an immediate increase in savings all over the country. As things are, we have the perfectly ridiculous situation that four houses out of every five which are built in this country today are being subsidised whether or not the people who occupy the houses need the subsidy. On the other hand, if the Government were prepared to allow those people who were willing, to put their money into a house, then and only then, would we get an increase in savings month by month.
§ Mr. GammansI would take off the subsidies in the case of those who did not need them. What could be more fantastic than that four out of five houses today should be built with a subsidy whether or not the people occupying them need a subsidy? There is no country in the world that could stand a housing policy worked on that basis of economics. The present housing policy will fail for no other reason but that. It is bound to fail if four out of every five houses have to be subsidised by the rest of the community.
§ Mr. Edward Evans (Lowestoft)Is it not true that almost every local authority has a "points" scheme by which they allocate these houses, and that the prime test is the need for a house?
§ Mr. GammansI do not see what that has to do with this question.
§ Mr. EvansIt has everything to do with it. It knocks the bottom out of the hon. Gentleman's argument that the allocation of houses is not based on need.
§ Mr. GammansI am very sorry. I must have put my whole case very badly when the hon. Gentleman comes along with an interruption like that. What I say is that if people who are willing and able to put their money into a house were allowed to do so, that would be a great inducement to saving. When people are denied the reason why most of them want to save, then they will not put their money into savings movements. If the Government are worried about savings—and I hope that they are—then they must put right the basic causes which are preventing people from saving today. Let us have a Government which bases its policy on 466 sound finance. Let us have a Government prepared to leave its political prejudices outside the Savings Movement.
§ Mr. WiggI am obliged to the hon. Gentleman for giving way. If we are going to be asked to put aside our political prejudices, will he address his remarks to the noble Lord the Member for South Dorset (Viscount Hinchingbrooke), whose prejudices are so intensified that he invited his fellow countrymen deliberately to sabotage the savings movement in his own class interests?
§ Mr. GammansI am not here to address the noble Lord, but to address the Government. The noble Lord is entitled to hold these views if he wants to do so. What I am trying to tell the Government and the Committee is why, in my opinion, the savings movement is proving an increasing flop. The reasons are those which I have just given. People are losing faith in the value of sterling, they are not prepared to put money into a Government which is extravagant, and I want to tell the Committee and the Chancellor that, not only will he be unable to maintain the present level of savings, but that the position will get worse.
§ 7.31 p.m.
§ Mr. Lever (Manchester, Exchange)It is a pity that the Tory party always seems to argue on grounds which seem to have little connection with logic. They always pick the 1 per cent. and ignore the 99 per cent. They always seem to see the widows and orphans who hold debentures in railway stocks when nationalisation comes along, and never the multi-millionaire investment trusts; always the few workers who have got a bit more money than the rest and who can afford to pay a little more for their food, and not the great majority of the people of this country who cannot stand any increase in the cost of living. They only seem to pick on the man who can afford to be without a subsidised house, but leave alone the ever-whelming majority of the people who are benefiting from the liberal policy which the Minister of Health has been pursuing in seeing that the houses built after this war are not putting money in the hands of speculative builders in favour of people who have got a bit of money and can outbid those who cannot afford to buy them. They will not convince us by such examples that our policy is not justified.
§ Mr. GammansDoes the hon. Gentleman realise that the Minister of Health in this House the other day was boasting that he was now building houses through the local authorities for the middle classes, and that my question is why the rest of the community should subsidise the middle classes?
§ Mr. LeverBecause, as a matter of fact, the middle and professional classes have been very badly hit by the inflationary period in which we are living, and because we, on this side of the Committee, not representing big capitalist interests, but all workers by hand and brain, have vigorously espoused the cause of the middle classes and intellectuals, who have shown a noticeable dislike for the reactionary policy of hon. Gentlemen opposite. They must not tell us that we are narrow and sectarian people because we support the provision of these homes for the middle class people of this country. The more thoughtful Members on this side of the Committee realise that their interests are identical with the interests of the professional and working middle classes.
We must try to avoid shedding too many tears over the dispossessed widows and orphans who had saved up and bought stock in the railways, and concentrate our attention in the operation of the food subsidies, which benefit the working classes. In one of the most stupid speeches I have heard, the hon. Member for Louth (Mr. Osborne), with a sincerity only equalled by his complete ignorance of current conditions, demanded the immediate abolition of the food subsidies, because, he said, we are subsidising spivs. The hon. Member does not think of the 750,000 men in the mines whose food has been subsidised, but concentrates on a few gentlemen with padded shoulders loafing around the West End. It is interesting to note that, while the pundits of the economic journals have been lecturing the Chancellor heavily on this subject, none of them has had either the effrontery or the courage of the hon. Member for Louth in suggesting that we should take away the subsidies entirely. They have only suggested something like a 15 per cent. reduction. They will toe happy to see that the Chancellor has arrived at the same result, because the Chancellor has got the same money without hitting the 468 poorest section of the people by taking it off food, and by putting it on more expenditure for drink.
So far as football pools are concerned, I have never been an advocate of nationalising them, but I think it is quite a good idea to rationalise them. I think the Chancellor is going to make twice as much profit out of it as the present owners, because I understand that they work on a 5 per cent. profit and the Chancellor will get 10 per cent., and I think that his "suggestion is an advance on the suggestion made by those who wish him to take over these businesses. I think it is right that the Chancellor should be urged to try some more modern approach to get the working people of this country to take more interest in the Savings Movement. I think he ought to offer more favourable terms for small savings, and show some imagination in planning a savings drive and linking it up with better old age pensions and the like. He really must not be afraid to innovate in these matters, but must think out new schemes.
I think, too, that the hon. Member for Hornsey (Mr. Gammans) has given the Chancellor a very useful tip, which I hope my right hon. Friend the Financial Secretary will pass on to him. The hon. Member tells us that the moneyed people in this country would not plump for 2½ per cent. "Daltons" because they have no confidence in sterling. What are they doing? They are sending money out to South Africa and Eire at the rate of £45 million a year, that we know of. The Chancellor gave me this figure in an answer to a Question, and said that £45 million had been exported by way of capital to South Africa and Eire in the last 12 months. These are the Chancellor's figures, and I should say that it would be a safe bet to double these figures in trying to arrive at the right amount of what has been exported in capital to those countries alone, and there are many other countries to which capital is permitted to go in the sterling area.
I want it to go on record that this money is going out at an ever-increasing speed, and that, if the Chancellor does not do something about it now, he will have to do something about it soon, sterling bloc or not. I hope he will be firm on this, and will say that this time we will have the door locked before the horse has 469 gone, because, if the door remains open much longer, it will not be possible to lock it, and not only the horses but half the stable will have gone, through the operations of people who have no confidence in sterling and who are taking their money out to South Africa and other areas. I urge him, at any rate, to move now before being compelled to take action later.
I am glad the Chancellor resisted the suggestion that the Budget should be based on what "The Economist," I think, called a mass attack upon the spending power of the people of this country. The capital inflation that exists in this country now is not due to the spending of the mass of the people but in some measure to the fact that most of the companies in this country today, swollen with large retained war profits and postwar profits, are embarking on new schemes of capital expenditure because they have large sums of money available for the purpose. No physical control can cope with all this spending power in the hands of the companies of this country, especially when conditions are so very profitable from their point of view. I urge upon the Chancellor that he should do something to immobilise the large capital sums which have been accumulated by companies and industries in this country, until times are easier. He must not allow it to go on as it now goes on, spending itself freely and creating an inflationary situation which leads to all sorts of chaos and hold up.
§ Mr. J. LewisWould my hon. Friend care to elaborate on what those companies are now spending the money? Surely, he realises that there are controls of both materials and labour?
§ Mr. LeverI am sorry that my hon. Friend is so naive. If I were a Minister, I would say that if he would write to me, I would give him a full explanation, but I will tell my hon. Friend, because it is an important point, briefly the position. Huge sums of profits are made by companies, private and public, and are retained by them after paying the standard rate of tax. This money is ploughed back into the business and is available for spending. I submit to my right hon. Friend the Chancellor and to hon. Members, who know perfectly well that is true, that while we have these 470 hundreds of millions of pounds awaiting expenditure, no amount of physical control will be able to stop large amounts being spent lawfully and unlawfully by lobbying and by wangling of all sorts.
§ Mr. J. Lewisindicated dissent.
§ Mr. LeverIt is no use my hon. Friend shaking an innocent head at me. It only needs the evidence of our own eyes to see what is going on. I hate to do what an hon. Member somewhat naively did a little while ago—refer the Committee to a previous speech he had made in order to have a second audience for what was little cared for at the first hearing. I must, however, refer my hon. Friend to my recent speech on luxury building in order to prove that controls have become ludicrous when there is a vast amount of money available for spending.
§ Mr. J. LewisLuxury building may be one thing, and that is a matter with which my hon. Friend dealt. Unfortunately, there are one or two inaccuracies which he has not corrected. In this case, I challenge him to give the Committee tonight any concrete example of where, on a large scale, sums of money retained by companies are being expended in the way he suggests.
§ Mr. LeverI find it difficult to be brief with so much Left Wing criticism directed against me and with all this Socialist heckling by the hon. Member for Bolton (Mr. J. Lewis) which has become almost a continuous barrage. I retract nothing of what I said about the grossly extravagant luxury building that has gone on in this country. If my hon. Friend wants examples of it, he must come with me on a conducted tour, and I will show him that practically every luxury industry has ploughed-back money to spend. Luxury and non-essential firms have large sums of money which they have ploughed back to spend and they are spending it. If my hon. Friend really believes that what I am saying is not right, he must come and see me, and I will give him chapter and verse, and add to his economic, financial, political, and general wisdom.
I have something else to say to the Committee on the question of taxation. I am sorry that my right hon. Friend the Chancellor is not present, but no doubt he can be persuaded to read my words, after he has finished softening the blow 471 to the nation over the air tonight. It is the question of putting the burdens on the backs of those best able to bear it. We have always assumed that the backs able to bear high taxation are those in the high income groups. That is not so any longer; taxation on earned income has already reached an excessive rate and certainly ought not to be pushed any further. The backs able to bear it are not those of the people declaring large sums for Income Tax and Surtax. If anything, I should say that the rates of Surtax on earned income ought to come down. If this shocks any of my hon. Friends, I am sorry, but I am a practical man and believe that a reduction of taxation on earned incomes is desirable at the present time.
Never mind the spivs; let us talk about company directors and others. As a matter of fact, capital appreciation is a new form of income earning which is much more profitable than ordinary income which is liable to Surtax at 19s. 6d. in the £. Therefore, there is an enormous professional business being carried on now of discovering means o£ capital appreciation which avoids Income Tax, and it is obvious that this a practised on a tremendous scale. The decent ordinary people who earn, say, £3,000 or £4,000 a year—senior civil servants, and people of that sort—get quite a modest living out of their taxed salaries, and the only people who are really wealthy today are those who earn large sums of money which escape tax because they come within some antique complicated rules which make the money received capital appreciation rather than taxable income. Those moneys are not capital appreciation, but a form of earning which people achieve, and add to their income. I place no blame on the individuals who benefit but on the system which allows their capital profits to escape tax. The further thing that becomes obvious is that my right hon. Friend the Chancellor ought to get down to the question of making people pay tax on their real incomes, and stop these various wriggles, legal and illegal.
I beg my right hon. Friend not to be afraid to act, not to be lethargic and advised by over-cautious conservative advisers, who have regularly been proved wrong over the last 30 years and are likely to be proved wrong as long as he 472 is in office. He should call in the currency, change it, and eliminate millions of black market and tax-evading money which exists in this country and which is being spent, much to the aggravation of people who pay their taxes and live reasonably honourable lives. My right hon. Friend must not, simply on the grounds of some administrative difficulty, fail any longer to do this. I appreciate what he says about not getting a new horde of officials; but, of course, a few officials in charge of the right financial controls will save ten times that number of officials operating physical controls.
I did not expect that my right hon. Friend the Chancellor was going to perform a social revolution in this intermediary Budget, but we expect a lot more from him in the Budget next year. This is not a spectacular Budget. On the one hand, he has managed to hold on his course in the things that matter, but I certainly do not think that the penny on beer should be imposed. He could get the same amount of tax by putting more on whisky and gin, without harming the great majority of the people who drink those fluids. In any case, most of them do not get it at 25s. 9d. a bottle; they buy it mostly in nips at their pubs, hotels and clubs at about £5 a bottle, and another 10s. on whisky and gin would have saved him this penny on the beer. I hope that my right hon. Friend, with that resilience which is one of his most marked and attractive characteristics, will make the necessary alteration in respect to that matter.
While I warmly congratulate him on his having stood firm against an immense reactionary-pressure from all sides, and especially from economic pundits, I must ask him to realise that we on this side of the Committee expect a great deal more from him on the control of capital and tax evasion, the calling in of the currency, and the realisation that the working people of this country—in spite of what was said by the hon. Member for Louth, who has just made his reappearance, but, unfortunately, not in time to hear my views on his speech—honestly cannot afford to have any more burdens placed upon them. If more burdens are placed on them, they will rightly demand more wages, and an inflationary spiral will be set in motion. Hon. Members on these back benches will object to any further burdens being laid upon the working 473 people of this country. While congratulating the Chancellor, I hope he will take notice of the various points that have been raised, and that any matters he has left a little in the air in this interim Budget will be cleared up in the Budget which we expect from him next year.
§ 7.53 p.m.
§ Major Tufton Beamish (Lewes)I shall not detain the Committee for any length of time. In fact, I intend to speak for only 30 seconds. I want to make one remark for the information of the Chancellor of the Exchequer, who I am sorry is not here this evening. I very rarely visit the cinema, but after the last Budget speech I decided to pay one of my rare visits, and the choice was clear. I went to "The Road to Utopia." This year, after listening to the right hon. Gentleman's speech, as soon as I leave the Chamber, I am going to see "Gone with the Wind."
§ 7.54 p.m.
§ Mr. Monslow (Barrow-in-Furness)I will endeavour to emulate the hon. and gallant Member for Lewes (Major Beamish). I would like to congratulate the hon. Member for Louth (Mr. Osborne) on having exposed the Tory policy. Now we know what it is.
§ Mr. OsborneThe hon. Member must be fair. I said that I was speaking for myself, not for my party.
§ Mr. MonslowI listened to the hon. Member for Hornsey (Mr. Gammans) with certain misgivings. I would say to him that his speech concerning the Savings Movement was a most disreputable and unpatriotic speech. I also thought that his observations with regard to housing subsidies rather implied the trend of mind which would leave housing to the rent racketeers.
§ Mr. GammansWould the hon. Gentleman say what was disreputable or unpatriotic in what I said about savings?
§ Mr. MonslowI say quite frankly that, to my mind, the speech was clearly indicative of a trend of mind which was advising the people of this country not to save. The Members of the Tory Party, who sometimes express themselves in two voices, have been endeavouring to make political capital out of the crisis not only of our own country but of the world. They blame the present Government for 474 all our economic ills, but if they were asked to take over the functions of Government they would shudder and run away from such responsibilities.
§ Mr. OsborneResign and see.
§ Mr. MonslowThe right hon. Member for Woodford (Mr. Churchill) has made two rather important declarations during the last few days. He said that the longer the dismissal of the Labour Government is postponed, the worse it will be. I want to contrast that statement with the declaration of the hon. Member for Lonsdale (Sir I. Fraser). He said:
Britain's industrial production is 10 to 20 per cent. greater than in 1939 and we have more men and women at work than ever before. Britain has made a remarkable recovery from the exhaustion of war and it is time we patted ourselves on the back.We thank the hon. Member for Lonsdale for that admission of the great work done by the Labour Government. What a pity these two Tory spokesmen did not compare their notes before expressing themselves.The Chancellor dealt very effectively with the statements of the right hon. Member for the Scottish Universities (Sir J. Anderson) both inside and outside the House. The right hon. Gentleman said that food subsidies were a running sore and the Government had acted too hastily in paying even the existing level of pensions and allowances, and that that expenditure should be ruthlessly pruned. The people with fixed incomes—I refer to those with allowances and pensions—can rejoice tonight that we have a Labour Chancellor of the Exchequer, for that statement proves beyond any question of doubt the sort of interim Budget we could have expected if it had been introduced by the right hon. Member for the Scottish Universities.
The Chancellor has not only protected the interests of those with pensions and allowances, but he has also protected the great majority of the workers. He has not accepted the dictation of the City and the financial magnates who have been pursuing him for weeks and urging the freezing of wages. That policy would never have been accepted by hon. Members on this side of the House. The decisions taken on Inland Revenue, Customs and Excise Duty should have been taken earlier, and I believe that it would have been more desirable if the 475 Betting Duty had been 20 per cent. instead of 10 per cent. Few Chancellors have framed a Budget amid such insistent advice from their enemies. I am glad the Chancellor has rejected the advice of these self-appointed counsellors.
In this interim Budget, in spite of the economic crisis my right hon. Friend has not placed on the shoulders of the working people more burdens than they can bear. True, it is a deflationary Budget, but not on the lines suggested during recent weeks by the City and by Tory Members. Let us examine what would have happened had hon. Members opposite been in power. Food subsidies and controls would have been removed. There would have been no limitation of profits. There would have been a reduction in the Surtax and a cut in the social services. In the difficult economic crisis through which this country is passing, the Chancellor deserves our highest commendation for keeping in check the wolves who, had they been responsible for the Government today, would have devoured the ordinary men and women.
§ 7.58 p.m.
§ Mr. George Wigg (Dudley)I want to congratulate the Chancellor on the interim Budget which he has introduced, and on the triumph which he has achieved over what I will call the tyranny of so-called informed opinion. In days and weeks past the Conservative Press have been demanding an interim Budget which would bring about cuts in the food subsidies and the building up of Purchase Tax on articles of every day use. Had the Chancellor taken that line and accepted the advice that was so freely offered to him, it would have brought about major doubts in the minds of many of my hon. Friends on this side of the House. The Conservative Party have still to learn the lesson of the General Election of 1945, but I must confess that in recent months there have been signs that they are beginning to realise there is a lesson to be learned. The more intelligent of them know that as long as there is a policy of full employment and there are no labour surpluses, the conditions do not exist for the return of the Conservative Party to power.
In the 20 years between the two wars the balance of political power in this 476 country did not rest at 10, Downing Street, but in the City of London, where the control of credit was exercised. Today the credit instrument, the fiscal instrument, has been brought under control by the Treasury. The balance of political power no longer rests in the City of London but is in the hands of the miners, because the basic commodity in short supply is not gold, nor credit, but coal. If anyone thinks for a moment—anyone on the benches opposite—that the miners of this country would work better for a Tory Government than they would work for a Labour Government, all I can say is they would believe anything.
§ Air-Commodore Harvey (Macclesfield)They did work better before the war.
§ Mr. WiggThey did not work better before the war—except under the scourge of unemployment and bad conditions, the fear of which drove them to break their backs in the strike of 1926. I have no doubt that that is what hon. Gentlemen opposite want them to do, and have been manoeuvring to ensure in the last few weeks. If the Chancellor had walked into the trap very carefully prepared for him—very ably prepared for him by such organs as the "Economist" and "The Times"—and had, in fact, cut the food subsidies or put a tax on electricity and gas, he would have been guilty of a major crime—it would have been a crime—of a Labour and Socialist Chancellor carrying out a Tory policy. I want to say to those who have built up considerable reputations as economists—I confess that they are considerable reputations—that if they want to introduce unemployment in this country, if they want to cut food subsidies, if they want the Tory policy carried out, then let the Tory Party do it. At all costs the Labour Party must keep away from such a policy.
I am very glad, and my heart has been considerably lightened, because of this Budget today. It shows that the Chancellor has stood up not only, as I have said, to the tyranny of informed opinion: he has also triumphed over the Treasury. I say that because I am quite certain that very considerable pressure must have been put on him in the name of financial orthodoxy. Having looked at what the result of the policy of the Budget is going to be in this fiscal year, I wonder why an autumn Budget was introduced at all, 477 because the total amount is so small that, really, it could have been left over to the Budget that will be introduced in the spring. Therefore, the great interest for me in this Budget is not what is in it but what has been left out.
It is a fact that we have avoided the Tory trap. We have avoided the trap of 1931 when the Tories played exactly the same game. Then they used the May Committee, a Committee composed of all the great financial interests which, despite the Tories' industrial charter, still hover and always will hover in the background behind the Tories, shaping their policy—the gentlemen who have subscribed the million pounds and who want something back for that. They are not the widows and orphans, but they are the fellows who shape Tory Party policy. They want something and that something is not industrial democracy but industrial discipline, which would mean the re-creation of unemployment. That is the policy outlined for us by the "Economist." We have not had the Tories coming out to endorse that policy today. But the right hon. Gentleman the Member for the Scottish Universities (Sir J. Anderson) has got very near it. Less intelligent hon. Members of the party opposite—the very honest Members like the hon. Member for Louth (Mr. Osborne)—have come out today and have told us what they would do with the food subsidies if they had power. Now we know where we are. We know now that there is a clear-cut division between us, and that if hon. Gentlemen opposite had their way they would cut the food subsidies.
§ Mr. E. P. SmithI do not think the hon. Gentleman had the advantage of listening to what I said on the subject.
§ Mr. WiggI am sorry. If the hon. Gentleman disagrees with the policy of his party, let me congratulate him and ask him to come over here, because clearly there is no place for him on those benches. I have voiced my congratulations to the Chancellor on his courage, and on the renewal of his Socialist faith which, I must confess, sometimes in the past I have had reason to doubt. There is much joy over a repentant sinner, and there is great joy on these benches tonight. If he had followed the alternative policy, I should for the first time, have been forced to go into the Lobby against the Government, because if the country 478 wants a Tory policy, let the country have it and the consequences; but I would not be a party to carrying it out.
Having voiced my congratulations to the Chancellor I want to sound a note of condemnation. I think that the Betting Duty, as the Chancellor has outlined it, is unsatisfactory. Occasionally I am an innocent punter—and one who never backs a winner. I have been to dog race tracks three or four times, but I lave never backed a dog that won. However, I have observed that the practice of going to dog race tracks and backing dogs is one which gives enjoyment to a considerable number of my constituents, although we have no dog track in the constituency. When I have been to dog race tracks I have found that the majority of people who go to them are workingclass folk having an evening out, risking a nimble bob; and I do not think they are any the worse for that enjoyment. I think it is fundamentally wrong that the Chancellor should tax them, the working class, while those who go in for the more aristocratic form of betting on horse racing should escape.
I am astonished that the Chancellor, who is, after all, an extremely intelligent person, should come to the House and use the argument that there is a difference between dog track races, because they are private ventures, and horse racing, where the totalisator is run by the Betting Board. In the long run, whether one puts a bob on a dog or two bob on a horse, it is the punter who is going to pay, not the Betting Board, not the race track not the dog track. Furthermore, from my observations, the man who goes to the dog track gets much more value for his money. He can take his wife or his girl and enjoy a meal in reasonably comfortable surroundings.
§ Mr. McKinlay (Dumbartonshire)Is my hon. Friend speaking as a Socialist, or as a track representative?
§ Mr. WiggI am speaking as a Socialist, because I object to a tax being imposed upon the working class, whilst the more leisured and wealthier sections of the community can escape from it. If the hon. Gentleman expects me to see any particular measure of Socialism in the working of the Betting Control Board, all I can see is that he and I differ on fundamentals. My point at the moment is that 479 I think the Chancellor's argument that dog racing should be treated differently from horse racing, merely because one is owned by a private company and the other by the Betting Control Board, is quite fallacious. The wealthy citizen who wants to have a bet has only to pick up the telephone and contact his agent, when he can wager what he likes. There can be no doubt but that in the course of every race run under the Jockey Club or the National Hunt Committee thousands of pounds change hands. That money ought to be taxed, although I recognise that it is extremely difficult administratively.
I certainly think it would be possible to reintroduce a fairly steep tax on the book-making fraternity. The fact that the Chancellor would find the amount of money thus brought in comparatively small is, to my mind, quite irrelevant. In this world, it is not sufficient merely to be just; one must appear to be just and to give the impression of doing one's utmost to be just. The way this tax is to be administered will cause a great deal of resentment—I must confess, quite rightly—for those people who spend some of their evenings at the dogs will feel they have been picked out for special treatment, whilst those who go horse racing are escaping. Therefore, I say to the Financial Secretary that whilst I approve, and indeed applaud, the measures taken by the Chancellor, at a later stage I shall put down an Amendment to bring horse racing within the provisions of the Finance Bill; and I hope that one of my hon. Friends who has greater knowledge of the bookmaking question than I will join with me, so that we can exercise our ingenuity to see how the bookmaking fraternity can be included.
§ 8.12 p.m.
§ Mr. Scollan (Renfrew, Western)I have only one or two points with which I desire to deal. The first is with regard to the fear of inflation. Inflation is here, and has been here since about 1940; but it has been kept under control, largely by controlled prices and the scarcity of goods which have been rationed. Surplus money chasing scarce goods has found an outlet in some of the very places which my hon. Friend the Member for Dudley (Mr. Wigg) has been denouncing—in the pools, the greyhound-racing tracks and on the racecourses. A larger circulation 480 has certainly taken place among those who operate the black market. The unfortunate thing about having all this money in circulation is that once it gets to certain proportions, it becomes the source and springboard for a large black market, thus undermining the faith of the people in the control and rationing system, which has been successful up to now.
It is not very difficult to understand, when the people of this country learn that the worthless mark in Germany was given a fictitious value of 40 to the £, and that we lost some £59 million in a kind of black market transaction which took place, how easy it is to take a step in the same direction here. That certainly is an easy step, when there is this accumulation of money, and when the newspapers are concentrating on telling the people that gangs are going round buying up cattle, sheep and pigs and having them slaughtered and sold on the black market at fanciful prices with which the ordinary dealer cannot hope to compete. Up to the moment no plan has been devised to deal with that situation. So long as we allow only a certain amount of money to circulate, a stop is put to many of the transactions which might otherwise take place. At the same time, it simply blocks certain channels through which the money might escape, and it is now merely accumulating.
The Chancellor ought to examine the question of changing the currency completely. I do not know what the objections are to doing so, but not so very long ago the Chancellor had to come to the Committee and tell us that we had to give £20 million worth of silver to the United States, which we owed them, and that to do so the small change currency must be altered; we had to abolish the silver coinage and introduce cupro-nickel. To my mind, that was a much harder task than would be simply changing the form of the pound note. As a matter of fact, I have often wondered why we did not change it when the Bank of England was nationalised. During the 1914–18, war when the Bank of England and the Joint Stock Banks of this country could not pay their way and closed down, we had to use postal orders and to introduce Treasury Notes, which had a picture of the Houses of Parliament on the back, showing that they had the backing of the whole nation. The first thing that happened after the 481 war finished was that the Bank of England reasserted its authority and withdrew the Treasury Notes, issuing notes with a picture of the Bank of England on the back. The first thing we should have done when we took over the Bank of England was to reassert the authority of Parliament, and to bring out currency with a picture of the Houses of Parliament on the back. I suggest that the Chancellor of the Exchequer might seriously consider the reintroduction of Treasury Notes. It would force the people with large accumulations of currency to come forward and claim the new currency in place of the old. So long as we have this floating money, we shall have this sore of the black market.
I am very much concerned about the operation of the Purchase Tax. In this connection, a case which came to my notice quite recently is rather interesting. A woman showed me some dockets she had for bedding. She told me that she had had them for six weeks, but that she had not been able to get a utility bed. I told her that I thought it rather strange, and I went to one of the places which makes beds. I was told by the man in charge that the woman had been to see him, that he had offered to sell her a bed with Purchase Tax put on, but that she wished to wait her turn for a utility bed.
It is obvious that if she had bought the bed it would have cost her four or five times more than a utility bed, which she could not afford. I ask the Chancellor of the Exchequer seriously to go into this question, because after six years of war and two years hardship after the war—[An HON. MEMBER: "Under a Socialist Government."] Where was the hon. Member living during the war? Did he not know that there was a war going on and does he not know that it was the war which created the world shortage of goods? No matter what Government was in power, it could not have produced a single grain more wheat than there is today. All these things are in short supply for two reasons. First, the materials are in short supply, and secondly, the necessary labour is directed into other channels at the present time in view of the national emergency. I suggest that the Chancellor of the Exchequer could, with advantage, withdraw the Purchase Tax on such things as bed linen, bedding and beds, and all those other things which by now have 482 become absolutely worn out, and for which the housewives are clamouring today.
I was disappointed that the right hon. Gentleman increased the price of whisky. In prewar days the price of a bottle of whisky was 12s. 6d., and the retailer did very well out of it. The price then jumped to 25s. 9d. a bottle, which was not a controlled price, but a price fixed by the trade as being fair, one which would pay the tax and allow the retailer a fair margin of profit. What has happened? I believe that the city of Glasgow is one of the greatest whisky-drinking cities in Britain. I am not saying that discreditably; it is our national beverage. Yet there is no public house in that city where a person can buy a bottle of whisky at 25s. 9d. If he wants a bottle he has to pay £2 10s., or £3, or even £4. What is the point of the Chancellor allowing people a "rake-off" like that, when the money ought to go to the country?
The Chancellor could have put another 20s. on a bottle of whisky, and nobody in Glasgow would have complained. They would have said, "At least, my boy, you are not getting it." In this business, there is no control of any kind. The average man, going into a public house in Scotland, has what he calls a half of whisky. Formerly, that meant a quarter gill, but now the publican gives him a dash of whisky. He measures it out so that he gets £2 10s. or £3 for each bottle he sells, or even more. Take the man coming out of a steel works, who has been working very hard all day. He goes into a public house for his half of whisky, and there stands his lordship behind the counter, dressed up like a dish of fish, with a big gold albert across his chest, master of all he surveys. He hands out a little cash of whisky, and exploits the steel worker to the tune of 2s.
The Government take steps to control the butcher. They tell him to charge so much for his meat, and no more. They take steps to control the baker. Why should the publican be free to rob the people of anything he likes? [An HON. MEMBER: "Because he is a sinner."] Yes, and that means that the Chancellor is the patron saint of sinners, because he has been very kind to them. My right hon. Friend has made a mistake about putting another penny a pint on beer. 483 Scots people believe that all the beer should be sent to England, and the whisky kept in Scotland. I do not know whether the Chancellor drinks beer, but most of the beer sold in England is simply coloured water. It is the kind of stuff which used to be shown in chemists' bottles in their shop windows. But I am serious in what I have said about bedding. In many houses in the country the bedding is finished. People cannot get dockets; prices are simply prohibitive, and I believe that the increased Purchase Tax will aggravate the evil. Steps should be taken to mitigate that evil.
§ 8.24 p.m.
§ Mr. Medland (Plymouth, Drake)I do not propose to keep the Committee long tonight, but I want to address a particular question to the Chancellor on his Budget speech. Before doing so, however, I would like to reply to what the hon. Member for Hornsey (Mr. Gammans), who has left the Chamber, said about the National Savings Movement. The reason the National Savings Movement is not getting such good results as it did two years ago is because of the underground movement against National Savings. It is because there is a great falling away of the members of the Conservative clubs who were collectors and the street collectors. For some remarkable reason, they seem to have lost their enthusiasm. Whether that is inspired or not, I do not know, but when I recall the speech of the hon. Member for South Dorset (Viscount Hinchingbrooke), I have every reason to be suspicious that that is one of the main reasons for the loss of National Savings. We were a long time in our street before we could get our collector back, and until we did get someone, we were losing savings. That, I am quite sure, is happening all over the country.
I address myself to a specific part of the Chancellor's speech, and I hope that I shall receive a reply tomorrow. In introducing his Budget, the Chancellor indicated that not only had he to put on taxes, but he had to make some savings, and he began by saying that his big savings were to be through the reduction of the Armed Forces. Then he informed us that there was to be a reduction of £200 million on capital construction. In other words, the capital expenditure by 484 public authorities, public organisations generally, and the utility societies was to be reduced by £200 million. That was first announced in the speech by the Minister for Economic Affairs on 23rd October, but he did not pursue it far enough to settle some of the uneasiness in the minds of certain public and local authorities.
I would like to have in this Budget a clear indication as to how far the proposed reduction of £200 million is to go, and to whom it is to apply. Is it to apply to a reduction of capital expenditure on railways? I take it that in no circumstances will it apply to a reduction of capital expenditure on mines. Where is the £200 million to apply? Is it to apply to housing? If so, how far will it mean a reduction in our housing programme? Most of all, I am interested to ask: will any capital expenditure schemes be disallowed in cities which have been badly blitzed and destroyed, and which have reconstruction programmes? Are we to be allowed to go on with our reconstruction programmes up to 100 per cent. of our plans and proposals? May we continue to build schools? Can we make our plans for the rebuilding of our business centres? What steel allocations are we to get for the building of our commercial and business premises and factories which have been destroyed? How far does the £200 million affect the reconstruction of blitzed cities?
I am asking that in order that I shall have some reply before this Debate ends, because it is causing grave concern in those centres which were blitzed. I would ask that in this respect it shall not be forgotten that we are the victims of war. We did not ask to be destroyed. There are many cities which will have their allocation of steel for factories which never had a bomb. Some of our cities have been very nearly wiped out, and we say that it is the right of those cities to come first in these priorities. I am asking with all the strength and vigour that I have that, as far as the blitzed cities are concerned, there shall be no interference or reduction of their programme of reconstruction, and I hope before this Debate concludes we shall have a very emphatic assurance on those lines.
§ 8.31 p.m.
§ Air-Commodore Harvey (Macclesfield)I agree with much of what the hon. Mem 485 ber for Drake (Mr. Medland) said about Plymouth. I was stationed there during the war and during the raids, and I think that there should be some priority for the rebuilding of that great city. I think it most unfair for the hon. Member to blame the Conservative Party for sabotaging the National Savings Movement. We get blamed for most things—
§ Mr. MedlandWe lost our collectors.
§ Air-Commodore HarveyA few months ago the Lord President of the Council said we were a poor Opposition and ineffective, and if we wanted any lessons he would give them to us. Hon. Members opposite cannot have it both ways. I have spoken in many parts of the country, on behalf of the National Savings Movement, both in my constituency and in other places. I remember one of my hon. Friends speaking out his mind by saying he did not agree with National Savings, but that is one amongst 200 and there will always be some people in any party who disagree with that party. Again hon. Members cannot have it both ways, and I think that generally it will be found that the Conservative Party is behind the National Savings Movement. The trouble goes much further. It is because people have to some extent lost confidence, and it is no use thinking otherwise. I, personally, shall continue to support the Savings Movement, because I believe that is the right way to prevent a rise in prices and to keep the money until times are better.
I agree with much of what the hon. Member for West Renfrew (Mr. Scollan) said in what I think was a very witty speech. He referred to the question of bed linen. If anybody needs a break these days, it is the housewives. They have stood the brunt of the war and the two years of peace, and they are going to stand the brunt for the next two years. I should have given the housewives a really good incentive. In a matter of time let them have all the bed linen and things that they want to make life easier. It is only a few months ago since the Minister for Economic Affairs said that he put his foot through his sheet, and I hesitate to think what the state of that sheet is today. It is over a year since it was done.
The same applies to beer. A penny a pint on beer, which is coloured water, 486 will not bring the Government in a great deal when we think of the astronomical figures with which we are dealing today. It will annoy the workman and it will annoy everyone who drinks beer, and all for the sake of a penny on a pint. I should certainly leave it exactly where it is and would not irritate, inconvenience or trouble them. Instead of helping things it will make matters worse, for it will distress the workman, and the last thing anyone wants to do today is to give any further annoyance.
The hon. Member for Dudley (Mr. Wigg) spoke about traps being laid for the Government and the Chancellor of the Exchequer by "The Times" and the "Economist." If we cast our minds back to a year ago, there were no two papers which gave the Government greater support. They were great friends of the Government. I do not say they are today, because they are facing up to reality. He went on to refer to the speech made by my hon. Friend the Member for Louth (Mr. Osborne). It is no good saying he speaks for the entire Conservative Party any more than the hon. Member for King's Norton (Mr. Blackburn) or the hon. Member for East Middlesbrough (Mr. A. Edwards) speak for the Labour Party. There again, we must take things as they come. I thought that my hon. Friend made a very courageous speech. I did not agree with it. I would go so far as to say that food subsidies must stop where they are now, and there must be a scaling down, provided always that the working class and the lower wage groups do not suffer. If we can reduce their taxation and see that people like the old age pensioners are looked after, and that there is an overall balance, I would say, scale the subsidies down; certainly do not let them go beyond what they are now. It is no good saying that my hon. Friend spoke for the Conservative Party. This Debate will continue tomorrow, when hon. Gentlemen opposite will get the truth from our Front Bench.
I was most disappointed with the Budget. The Chancellor of the Exchequer—I say it without any disrespect to him—in his usual conceited way was saying what a fine Chancellor he was and how wonderful it all was. It just was not wonderful. It is no use thinking that because we have balanced our Budget at home and can show a large surplus that things are fine. They are not, and it is just kid- 487 ding ourselves to think they are. We have to think in terms of what we can import to eat and raw materials to keep our factories going, and how they have to be paid for in hard currency. To present any other picture is misleading the people. It would' be much better for the Chancellor of the Exchequer to balance our internal affairs having regard to the balance of payments. There was no reference to the American Loan or to the convertibility of sterling. Those are all gone, all forgotten, by now. It is far better to go a little more into the detail of such things because they are all financial matters which come into this current year.
I would like to make one reference to betting. I go to a race meeting perhaps once a year. I think it is right that betting should be taxed, but if we are attempting to do it, those who bet should be taxed just as people are taxed who go to cinemas. Why should we tax the tote and not the people who bet on the dogs with bookmakers? The Minister of Labour tells us that he is going to put out his net to catch the drones and the spivs, but the proposals of the Chancellor will find employment for such people. The Chancellor should go into these matters in much greater detail by the time his next Budget comes along, and perhaps he can produce something more concrete to deal with this problem as it should be dealt with. Today, he has only half dealt with it, and in a most unfair way. This country is in for a most difficult time financially. The only thing I would ask of the Chancellor is that he should put his big ideas aside and face realities, and that he should tell the people exactly where we stand. By doing that he will get them to understand the problems and to work. This Budget to a great extent misleads the British people.
§ 8.39 p.m.
§ Mr. Walker (Rossendale)The hon. and gallant Member for Macclesfield (Air-Commodore Harvey) said he was disappointed with the Budget and that he failed to see anything wonderful about it at all. We expect that kind of criticism from the opposite side of the Committee. I have sat here and listened to Debates ever since I was elected to this Parliament, and only on very rare occasions, generally on minor matters, have we had any agreement whatever from the other 488 side, or any meed of praise. Therefore, we do not expect to get any support, admiration or praise from the people who sit over there.
§ Air-Commodore HarveyI did not criticise adversely what was announced in today's speech. I only said what could have been done by the Chancellor in addition to the steps he has suggested-
§ Mr. WalkerThe hon. and gallant Member simply said that as far as today's Budget was concerned, he was disappointed. He also declared that there was nothing wonderful about the Budget. Those were his words.
§ Air-Commodore HarveyI do not disagree with the hon. Member.
§ Mr. Walker. I suggest that from the first phrases that fell from the lips of the Chancellor this afternoon there was something very wonderful about what he had to say, namely, the fact that already in this financial year there was a surplus of no less than £253 million. If the Government are such a set of incompetent people and so lacking in judgment and administration as hon. Members opposite repeatedly declare, not only in this House, but in the country, there is something wonderful about the fact that the Chancellor can announce a surplus of £253 million in days like these. At the time of the April Budget the Chancellor had a surplus of about £250 million. What did the Opposition say about that? They said that it was a false surplus and that it was not a surplus at all. Yet it was there in hard cash. The same may be said today. I. do not think this Government are making the bad job of our finances that hon. Members opposite are so fond of saying. I congratulate the Chancellor on this interim Budget in which he can declare to the country that the work of the Labour Government in its financial arrangements, administration and general policy has, at the end of six months, shown this magnificent surplus of £250 million.
I want to say a word or two about food subsidies. There is no doubt that in every middle class and working class home in the country these subsidies are valued very much indeed. They mean something to every working class family, and especially to the younger portion of the community, the newly married and those 489 who are trying to build up their homes. It is a considerable feature when, as the Chancellor indicated, those subsidies represent a value of 12s. 6d. a week to a man with a wife and two children. I was glad to note that the Chancellor gave some kind of promise that though those subsidies had risen at such a tremendous pace during the last few years that today they amounted to £392 million, he was not prepared to cut them although he warned us that they would have to be held in check in the future. If the Government are providing £392 million per year in subsidies, they are giving a substantial amount of benefit to all the homes in the country. I am sure that if there had been any suggestion of a cut in the subsidies, there would have been a tremendous outcry from the people.
I would like to say a word about the astonishing statement that the arrears of taxes amount to the tremendous sum of £780 million. Of course the Chancellor explained that perhaps that was not the actual amount in arrears. Who are these people who owe arrears to the Inland Revenue? They cannot be the working people, for they have to pay their tax week by week through Pay As You Earn. They must belong to the business and professional classes. I want to know what kind of patriotism, what idea these people have of their country in these days when they fail to pay their Income Tax, and I hope the Chancellor will be severe upon them and make them toe the line. I am glad to think that he will charge them three per cent. on their arrears of over £1,000. It will do them good, and perhaps spur them on to pay.
I think the Chancellor has adopted a good line over advertising expenses. The amount of advertising in the country today is abnormal when we are short of goods. I know that the businessman regards it as a feature of his business to advertise—
§ Air-Commodore HarveyWould the hon. Member allow me to interrupt?
§ Mr. WalkerI shall only speak another three minutes, and then I will sit down. Some years ago I saw a play called "It Pays To Advertise" at the Aldwych Theatre, in which somebody had made a good soap which nobody would buy. By 490 he simple medium of advertising they were able to create a large business in the sale of this good soap. This kind of advertisement is going on all over the place, and if business people—especially big business—advertise at the expense of the Inland Revenue, I think they are a mean lot of folk and that this tax will be rather good for them. At any rate the country will benefit by at least 10 per cent. Taking the Budget as a whole, from the point of view of the general public, it has many pleasant features and I think it will be regarded by the majority of people who are sensible enough to realise what it portends, as something rather wonderful in these days of austerity and difficulty.
§ Air-Commodore HarveyBefore the hon. Gentleman sits down, would he explain how advertising can be abnormal when the newspapers are about one-sixth of their prewar size, and it takes six months or more to get an advertisement in a paper?
§ Mr. WalkerI have been in the newspaper industry all my life and I am familiar with the fact that no newspaper in the country today would be able to show any profit at all were it not for its advertising.
§ Air-Commodore HarveyThe hon. Member said "abnormal."
§ Mr. WalkerThe point is that a large portion of the small amount of paper available for newspapers is used for advertising purposes and not for news, purposes. That shows that all these firms are taking that way of escape from paying the Inland Revenue, and are advertising at the cost of the Government and not at their own cost.
§ Mr. E. P. SmithWould the hon. Gentleman answer me this question? Has he ever encountered any business which advertises entirely at the expense of the Government?
§ Mr. WalkerI can only reply that there must be something in this matter that has prompted the Chancellor to come along and take 10 per cent., which he has the right to do, if this kind of thing is going on. I do not know, because I am only an ordinary individual—
§ Air-Commodore HarveyThe hon Member said he knew.
§ Mr. WalkerI have never done any advertising in my life, but I am taking it as indicative that this kind of thing is going on. Therefore, I say the Chancellor has a perfect right to take advantage of it for the benefit of the nation as a whole.
§ 8.50 p.m.
§ Mr. House (St. Pancras, North)The Chancellor has brought forward a very good interim Budget, in which he has endeavoured to place extra taxes on elements best able to bear them. I am glad he has resisted the temptation to reduce the food subsidies because, contrary to opinions expressed on the opposite benches, I think the food subsidies ought to be maintained. After all, they benefit persons according to their degree of poverty and are a greater benefit in proportion to the size of the family.
I am glad he has not increased taxation of tobacco, because that would have been a mistake. I think he has definitely made a mistake in taxing beer by another penny a pint. It will cause irritation which will not be worth the. added increase. He would be well advised to think it over. There is a practical way out, as was suggested by other hon. Members, in that he could transfer the amount of increment which he anticipates from beer to whisky. As was suggested by the hon. Member for West Renfrew (Mr. Scollan), having regard to the black market price for whisky, the added burden there would not be felt at all. The added burden on the whisky at black market prices would to a very large degree be paid by the wealthier classes and in the main by those who have the ability to bear it. The hon. Member also referred to the hardworking steel worker who after spending a day in front of a hot furnace is entitled to his glass of beer if he feels so inclined; I say that although I am a teetotaler. To put a penny on to beer, which is the working man's beverage, is an error, and the Chancellor would be well advised to reconsider it.
The Chancellor has without doubt made an error in putting a tax on the dog tote and not putting it on the horse racing tote. He should bear in mind that we hon. Members have to meet our constituents, and though, of course, we are glad to meet them, we have to meet their criticism. No hon. Member can stand 492 up and answer the challenge that "The tax has been put on the dog tote, but not on the horse tote." Whatever case the Chancellor puts up—and I do not agree with the merit of the case he has submitted—taxation should not only be morally sound, but should appear to the public to be sound. This impost may be technically sound, but it does not appear sound to the public to put the tax on the dog tote and not on the horse racing tote. That will be a very hard question for hon. Members to answer in their constituencies. The sound statement has been made that dog racing is the working man's sport, whereas horse racing is the wealthy man's sport. Dog racing has been attacked by restricting it to Saturdays only, while horse racing has not been similarly restricted. We shall now have the added charge that dog racing has been singled out as against horse racing. From every aspect, I think the Chancellor should think about that, and should put the tax on the horse tote as well as on the dog tote.
He then said, if I understood his remarks rightly, that the reason he did not propose taxing the horse racing tote is that it contributes towards improving horse breeding. Horse breeding must be a very fascinating profession for those who are engaged in it, and I cannot imagine any tax that the Chancellor would put on the horse racing tote would have any deteriorating effect on the quality of horse breeding- or on the value of its export market, so I think from that aspect the Chancellor has a poor case. One sentence from the Chancellor's statement with regard to putting a tax on betting is that he proposes putting it on the tote, as far as dog racing is concerned, because it is expedient and practicable. If he is going to put a tax on the dog tote on the basis of it being expedient or practicable, I think from the same standpoint he could have brought in a larger element of the bookmakers. It is my submission that the Chancellor will be very well advised indeed to think again on this aspect, and consider that the tax he is placing on dog racing also ought to be placed on the horse racing tote, and, furthermore, he ought to see whether he cannot bring in the large scale bookmakers as well. Generally speaking, I think this autumn Budget is very well thought out. It is quite a constructive Budget but it is undoubtedly weak in regard to the placing 493 of a penny a pint on beer, and its limitation with regard to the tax on betting.
§ 8.57 p.m.
§ Mr. Berry (Woolwich, West)I am not sure that my hon. Friend the Member for North St. Pancras (Mr. House) has not an unwarranted attack of modesty when he confesses to his inadequacy to explain to an audience the difference between a tax on the dog racing tote and a similar tax on horse racing. Further, I frankly could not quite follow him when he said that dog racing was the sport of democracy, whereas horse racing was the sport of every class. For as long as I can remember it has been the fashionable sport of people right through all the ages, who desired to have a bet on this horse or that horse. In my opinion it is like music—it is a study in sharps and fiats. That is my personal opinion. It is rather new to hear that horse racing is an aristocratic sport. I can only ask my hon. Friend to use his usual ingenuity and I am sure he will be able to explain it away quite well.
§ Mr. HouseI think the hon. Member can rest assured that I can explain it quite well. One has only to go to Ascot to see them.
§ Mr. BerryI also have been to Ascot and other places. I have seen them but never joined in them. I am bound to confess that while I am pleased in one direction with regard to this interim Budget, I am also a shade disappointed. I am very pleased that the Chancellor did not succumb to the cooing notes that went out to him to put an increased tax on tobacco. But I am disappointed that the Chancellor did not look at the question of those old age pensioners who are not State old age pensioners. There are many thousands of old age pensioners who have other forms of old age pension and who have been excluded from the State old age pension, but are unable to get tobacco at the cheaper rate. I was hoping that the Chancellor would look into that hardship, which has been brought very much to his attention; it is a very real hardship indeed to those who are excluded from cheap tobacco. Even at this late hour I hope it will not be too late for the Chancellor to look at it once again, and while I agree that from the point of view of administration it may be very difficult, nevertheless, 494 I think we get a very large amount of ingenuity from civil servants when they are told what has to be done. While they can always find 20 good reasons for not doing a thing, if they are pressed they can always find 20 equally good reasons for doing it.
I do not intend to follow other hon. Members in their speculations on whether an increased duty on beer is better than an increased duty on whisky. It seemed to me that between my hon. Friend the Member for St. Pancras, and the hon. Member for Western Renfrew (Mr. Scollan) there was a danger of a revival of the wars between England and Scotland, the hon. and gallant Member for Western Renfrew standing up for the claims of whisky as the national drink of Scotland, and my hon. Friend the Member for St. Pancras indicating that the plebeian drink which passes under the guise of beer, was the national drink of England. I aim a child in these matters. I am not prepared to pass judgment even though I have a crowd of expert friends always prepared to advise me to give me the benefit of their long, and at times deep, experience. It is true, as I think I heard an hon. Member say, that I have had some experience with the Metropolitan Water Board. If beer be as if is described today, merely coloured water, I would rather pay my water rate and get pure water.
We must recognise that the Chancellor had a very difficult problem. There is one point which I should like him to clear up. In common with other hon. Members, I appreciate that there is a surplus of £253 million. I believe that it includes a number of non-recurring items. I suggest, therefore, that in arriving at the real surplus we should dismiss from our minds the non-recurring items, because we shall not have the benefit of them next year. We ought to get down to the solid basis of what will be our situation without these non-recurring items. I hope that the Financial Secretary to the Treasury will deal with that point in his reply.
In regard to national savings, as one who has given years of his life under various administrations of varying political colours, to the National Savings movement, I, like other hon. Members on both sides of the House, have been dis- 495 appointed at the falling off in savings. National savings ought to be encouraged as much as possible. We require something of the wartime spirit in the minds of the people. We should cultivate the feeling that what they save really assists in the salvation of the country. The situation is the same today as it was during the war. What is saved helps towards the financial and economic salvation of the country. I hope that there will be a rallying of all men of good will, no matter what may be their political opinions, to support the National Savings movement. I pay my tribute to all the voluntary workers who have done so much for the movement and I hope that we shall see an increase in savings It is on that, I believe, our financial stability, internally, at least, will depend. I do not touch on the external situation. I think that the Budget, like all things evolved by the human mind, has drawbacks; nevertheless, it is an indication of our increasing internal financial stability.
Ordered, "That the Chairman do report Progress, and ask leave to sit again."—[Mr. Snow.]
Resolutions to be reported Tomorrow; Committee also report Progress; to sit again Tomorrow.