Commons Sitting of 11 July 1949

Preamble
The House met at Half-past Two o'Clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  DARTFORD TUNNEL (EXTENSION OF TIME) BILL
  Read the Third time, and passed.
  HARWICH HARBOUR BILL [Lords]
  Read the Third time, and passed, with an Amendment.
  ROYAL ALEXANDRA AND ALBERT SCHOOL BILL [Lords]
  As amended, considered: to be read the Third time.
  DOVER HARBOUR BILL [Lords]
  Read a Second time, and committed.
ORAL ANSWERS TO QUESTIONS
  COAL INDUSTRY

    Concessionary Coal
    Mr. J. Langford-Holtasked the Minister of Fuel and Power the final figure of concessionary coal issued during 1948; and what classes of individuals are entitled to receive this concession.
    The Minister of Fuel and Power (Mr. Gaitskell): The final figure of concessionary coal issued to miners during 1948 is not yet available, but it is not expected that it will differ substantially from the provisional figure of 4,990,000 tons given in reply to the hon. Member for Northwich (Mr. J. Foster) on 16th May. The classes of individuals who are entitled to concessionary coal under collective wage agreements, by their contract of service or by customary practice, vary from district to district, and even, in some districts, from colliery to colliery. The main class is, of course, the mineworkers, but in some places ancillary workers, colliery officials and staff get it. Generally speaking, the recipient must be the head of a family, or a householder.
    Mr. Langford-Holt: Can the right hon. Gentleman say when the final figure will be available? Can he also either confirm, or deny, that it is the policy of the Government and the National Coal Board to discontinue this practice?
    Mr. Gaitskell: In reply to the first part of the Question, I expect to get the figures about the beginning of August. As to the second part of the Question, I do not think it is our policy to discontinue this method of payment, but the whole question is now under consideration by the National Coal Board and the National Union of Mineworkers.
    Mr. Emrys Hughes: In some parts of the country clergymen still get coal; are they classified as ancillary workers?
    Mr. Gaitskell: No, but I expect there is a contract under which the Coal Board deliver coal to them.

    Miners (Restrictions)
    Mr. Langford-Holtasked the Minister of Fuel and Power what approaches have been made to him by the Coal Board or the National Union of Mineworkers, with a view to permitting miners who so wish to leave the industry.
    Mr. Gaitskell: The National Coal Board, in agreement with the National Union of Mineworkers, have asked the Government to consider withdrawing the present restrictions on miners taking up work outside the coalmining industry. My right hon. Friend the Minister of Labour and I are considering this request, but no decision has yet been reached.
    Mr. Langford-Holt: Is the right hon. Gentleman aware that this matter involves a very important matter of principle, which has affected both sides of this House for a long time? When will a final decision be made?
    Mr. Gaitskell: I am not sure that I could quite agree that it is a matter of principle. It affects only the coal mining industry and the Ministry of Agriculture. At the moment, I cannot say when a decision will be reached.
    Sir John Mellor: As the reason formerly given for preserving this restriction is that both sides wanted it, can the right hon. Gentleman say why it could not be dispensed with straight away?
    Mr. Gaitskell: The consequences it would have on the output of coal have to be considered.

  PETROL SUPPLIES

    Foreign Visitors
    Mr. Francis Noel-Bakerasked the Minister of Fuel and Power for what reason the allowance of petrol for foreign visitors who borrow motor cars free of charge in the United Kingdom can be granted only once in respect of any one motor car during the six-month period, rather than only once in respect of any one visitor; and whether he will revise the present arrangement so that more than one visitor may borrow the same car during the period.
    Mr. Gaitskell: Because it is necessary to minimise the risk of this special allowance for foreign visitors becoming in effect an illicit additional ration for some British motorists. The answer to the last part of the Question is, accordingly, "No, Sir."
    Mr. Noel-Baker: Is my right hon. Friend satisfied that there is no other way of checking on the bona fides of people using the scheme, because it seems a little illogical that the identity of the motor car, but not of the borrower, should determine the amount of petrol granted for six months?
    Mr. Gaitskell: I could not agree that it is illogical. If my hon. Friend's suggestion were adopted we should be running the risk of losing a great deal of petrol through the black market.
    Mr. Langford-Holt: Is the right hon. Gentleman aware that advertisements in the United States, issued on behalf of His Majesty's Government, give the impression that plentiful supplies of petrol are available in this country for visitors?

    Hospital Visits
    Mr. Mott-Radclyffeasked the Minister of Fuel and Power for what reason the issue of supplementary petrol coupons can only be made to cover two visits a month for the purpose of visiting cases of serious illness in hospital, where no alternative means of transport are available.
    Mr. Gaitskell: There is no automatic restriction on the number of visits to hospital for which supplementary petrol allowances may be granted. Every application is dealt with according to the circumstances; and if the hon. Member will let me have particulars of any case he has in mind I shall be pleased to look into it.
    Mr. Mott-Radclyffe: Is the Minister aware that in the case of a constituent of mine, which I will send him, the regional petroleum officer said that the maximum allowance which could be given to my constituent to visit a sick relative was sufficient for two visits a month?
    Mr. Gaitskell: If the hon. Member will be good enough to let me have particulars I will look into the case.

  ELECTRICITY SUPPLIES

    Bankside Power Station
    Mr. Skeffington-Lodgeasked the Minister of Fuel and Power whether he will make an up-to-date statement regarding progress in the erection of the new Bankside power station.
    Mr. Gaitskell: I am informed by the British Electricity Authority that part of the foundations are now completed, and that the erection of the steelwork of the main building will start in the autumn.
    Mr. Skeffington-Lodge: Can my right hon. Friend say anything about the outcome of the experiments which have been undertaken to eliminate noxious sulphur fumes from this plant?
    Mr. Gaitskell: As I have explained previously, there was never any doubt that such fumes could be eliminated. The purpose of the experiments was to decide by what means they should be eliminated. The experiments are not yet completed.
    Mr. Somerville Hastings: Have these noxious fumes ever been eliminated from any such plant in this country?
    Mr. Gaitskell: As I have previously pointed out, there is a gas washing plant in operation at Battersea power station.
    Mr. Keeling: Does not the Minister recall that in this House 18 months ago he said that the power station:
    "will not be completed unless we are satisfied that no sulphur fumes will be produced"?—[OFFICIAL REPORT, 5th February, 1948; Vol. 446, c. 1879.]
    How can the right hon. Gentleman be satisfied if the experiments are not complete?
    Mr. Gaitskell: The experiments confirm that they can be eliminated. There is, however, the question of cost involved—as to which of two methods it is better to adopt.
    Captain Crookshank: If the experiments show that these fumes can be eliminated can there be any doubt as to whether they will be eliminated?
    Mr. Gaitskell: Obviously not.

    Cables (National Park Areas)
    Mr. Granville Sharpasked the Minister of Fuel and Power if he will make a statement as to the instructions he has given or proposes giving to the British Electricity Authority for the laying of underground cables instead of overhead transmission lines in national park areas of exceptional beauty; and whether the additional cost of such work will be met by the British Electricity Authority or by the planning authority concerned.
    Mr. Gaitskell: Since my consent is required before any overhead line can be erected anywhere and since before such consent is given I have to grant the local planning authority and the local authority an opportunity of stating their views, instructions of this kind would not be appropriate. As regards the second part of the Question, if consent to an overhead line is refused, the extra cost involved in laying any underground cables would fall on the electricity board concerned.
    Mr. Sharp: Does my right hon. Friend's reply mean that the cost will fall on the British Electricity Authority as a whole or on the area concerned?
    Mr. Gaitskell: It will fall on the board responsible for laying the underground cable.
    Mr. Wilson Harris: Can the Minister give any indication of the average difference in cost between overhead and underground installation?
    Mr. Gaitskell: It can certainly amount to about 10 times as much underground compared with the cost of overhead transmission lines.
    Mr. Henry Strauss: Can the Minister give the House any assurance that, if overhead transmission is adopted, a mock-Tudor style will not be adopted?

    Winter Tariff
    Mr. A. Edward Daviesasked the Minister of Fuel and Power if he will take steps to ensure that there will be no extra winter-time charges for electricity next year such as operated with great inconvenience and hardship to many small consumers last winter.
    Mr. Gaitskell: Last year the electricity boards introduced, at my request and in accordance with the recommendations of the Clow Committee, a surcharge for electricity during three winter months, together with a rebate during the remaining months of the year. The purpose of this differential tariff between winter and summer was of course to reduce the domestic load during the peak hours of the winter and so diminish the risk of load shedding for industry. There was, in fact, very little load shedding last winter, but it is not possible to prove conclusively that this was due to any material extent to the differential tariff.
    I have now been informed by the British Electricity Authority and the area boards that they do not favour the continuance of the differential tariff next winter, and in this they are supported by the majority of the electricity consultative councils and by the Electricity Sub-Committee of the National Joint Advisory Council. In view of this advice, of the fact that the tariff was regarded by many as harsh and unfair in its incidence and of the absence of cogent evidence that it exercised a sufficiently decisive influence on peak demand, I do not propose to ask the electricity boards to continue it next winter. I must, however, warn the House that the gap between generating capacity and peak demand is unlikely to be much less next winter than last; and, as stated by my right hon. Friend the Minister of Labour last Tuesday, domestic consumers must therefore limit their demand during peak hours in cold weather if load shedding on a serious scale is to be avoided.
    Mr. Davies: Does my right hon. Friend recognise that his reply will give great pleasure and satisfaction to people who wish to help the Government, and that if a proper appeal is made he will get better results than would be obtained from the imposition of any measure similar to that which he proposes to avoid this year?
    Captain John Crowder: When will the Electricity Authority be announcing the amount of the rebate which is to be given during the summer readings?
    Mr. Gaitskell: They have already announced the rebate, which is 0.1d. for the remaining nine months of the year. The Authority have also said that if they gain financially over the whole period
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    of the operation of the scheme they will give a further rebate, but they would not be able to do that until the year ends.
    Mr. W. R. Williams: Will my right hon. Friend consider refunding charges where they can be proved to have imposed a great deal of hardship to people in all-electric houses?
    Mr. Gaitskell: That would be quite impracticable.

  FOOD SUPPLIES

    Establishment Staff
    Mr. Langford-Holtasked the Minister of Food what are the duties of the Establishment staff of his Department; and by what number this staff has decreased in the last 12 months.
    The Minister of Food (Mr. Strachey): The Establishment staff are responsible for the organisation, staffing and general management of the offices of my Department. The number engaged on general establishment duties fell by four during the past 12 months, but 21 more were employed on organisation and methods work, staff inspection duties and office accommodation.

    Milk Rationing
    Sir Waldron Smithersasked the Minister of Food if he will give an undertaking that he will not reimpose milk rationing until after the school holidays.
    Mr. Strachey: Such a proposal, if adopted, would have meant serious mal-distribution and hardships in many homes. As the House knows, to avoid this the milk allocation scheme was reintroduced with effect from yesterday.
    Sir W. Smithers: In view of the fact that milk is not supplied to schools in the holidays, is it not obvious that less milk will be consumed by children at home unless they can get that milk? Is the Minister aware that all this maldistribution is alleged by the Milk Marketing Board and the public to be the fault of State control by his Ministry? May I have an answer?
    Mr. Thomas Reidasked the Minister of Food when he hopes to be able to abolish milk rationing.
    Mr. Strachey: As soon as we are sure that the demand for liquid milk can be met without endangering essential manufacturing uses, such as baby food.
    Captain Crowder: Will the Minister do something to help old people who are living alone? Three pints of milk a week is very little for them, and in many cases their health is being ruined. Could he do something for old people and for members of small households?
    Mr. Strachey: Fortunately, the milk allocation is increasing year by year. It was only 2½ pints per week at this time last year, and it is now three pints. It depends on the weather, but we hope that we shall be able to maintain the allocation at the higher level.

    Sweets
    Mrs. Castleasked the Minister of Food whether he is aware that certain firms are exploiting the sweet shortage by putting trashy sweet substitutes on the market at exorbitant prices; and what steps he intends to take to protect the public against this profiteering.
    Mr. Strachey: A small number of products resembling sweets are being manufactured under licence and sold at agreed prices. They are made of wholesome ingredients, but they are not sweets and should not be sold as such. If my hon. Friend has in mind any sweets which are being made without a licence, I will willingly investigate any particular cases of which she can send me details.
    Mrs. Castle: Is my right hon. Friend aware that the National Union of Small Shopkeepers is very concerned about this matter? Cannot he take steps to prevent children being exploited by the sale of trash like "Yankee Tit-bits," a sealed packet of which, when opened, is found to contain nothing but a few broken wafers, a locust bean and three nuts?
    Mr. Strachey: The enforcement of the law on health grounds is, under the Food and Drugs Act, the responsibility of local authorities, and I cannot interfere in that matter.
    Mr. Austin: For further information on this matter would my right hon. Friend refer to an article on this subject in "Reynolds News" yesterday, and to the suggestion made therein that the
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    Ministry of Food should request local authorities to take certain powers which they already have?
    Mr. Strachey: Perhaps my hon. Friend means that they should use them, for they already have them.

    Bacon Ration
    Mr. Thomas Macphersonasked the Minister of Food if, in view of the increasing supplies of bacon now becoming available from home production and European countries, he will arrange for an early increase in the bacon ration.
    Mr. Strachey: I shall, of course, increase the bacon ration as soon as stocks and supply prospects allow.

    Groundnuts Scheme, East Africa
    Sir W. Smithersasked the Minister of Food if he will now make a statement as to the progress and present condition of the groundnuts scheme in East Africa.
    Mr. Strachey: Yes, Sir. During my recent visit to East Africa, I found that the harvesting of groundnuts and sunflower was in progress. About one-half of the groundnut crop, and about one-sixth of the sunflower crop had been harvested. As I informed the House on 9th May, yields at Kongwa will be very low this year, owing to the drought which has affected the whole of East Africa so severely. From the crop so far harvested the yields averaged 245 1b. for groundnuts and 99 1b. for sunflower per acre. Nevertheless, as I have also informed the House, the first small shipments of oilseed to the United Kingdom will be made shortly from this year's crop.
    Work is in hand in the three areas of the Scheme, namely, Kongwa, Urambo and the Southern Province, in the preparation of the ground for next year's planting. The initial operation of bush flattening has been completed on the whole of the land which is required for the three units which are being established at Kongwa. The Overseas Food Corporation expect the contractors to complete the clearing of this land, which involves windrowing and rooting, by October next. In this connection, let me repeat that when I use the word

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    "cleared" I mean prepared for cultivation or for roads, camps sites, etc., whatever was the original state of the land, and whether much or little work had to be done on it.
    Arrangements have now been made for the transfer of land clearing equipment to Urambo and the Southern Province in order to increase the pace of clearance there. At Urambo some 20,000 acres should, the Corporation advise me, be cleared in time for next year's planting. In the Southern Province 2,000 acres are being cleared for planting this year. This effort is all that can be supported until the new railway has been built. Work on the railway is going ahead steadily, and the rail head should reach the area by the end of this year. Until then clearing operations could not be undertaken in earnest in the Southern Province, which, all the experts on the spot are convinced, is much the most fertile and promising of the three areas in which the scheme is operating.
    I have found—
    Mr. Langford-Holt: On a point of Order. Is not this the type of answer to a Question which should be given at the end of Questions?
    Mr. Strachey: I recognise that my answer is long, but I have been very strongly pressed by the House to give a full and clear exposition of the scheme, and I am endeavouring to comply with the wish of the House in that matter.
    I have found that the men and women on the spot possessed a spirit of determination to surmount the very grave difficulties—some expected and some unexpected—which have confronted them. The drought had, of course, been a bitter disappointment to their hopes for this year's crops, but they had rallied from this blow. I should welcome an opportunity, when time is available, to make a fuller statement to the House.
    Sir W. Smithers: How much of the taxpayers' money has been spent to date on this scheme, and what is the loss to date? Why has the right hon. Gentleman referred to the drought? It is typical of the Socialist Party to blame something else.
    Mr. Strachey: The answer to the first part of that question arises on the
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    accounts of the Corporation, but, roughly speaking, between £20 million and £25 million is the capital cost of this scheme to date. The trading accounts will only begin this year.
    Captain Crookshank: Can the right hon. Gentleman give us—we shall want to study his long answer; I have warned him of that—any estimate of what the tonnage of the crop is likely to be this year.
    Mr. Strachey: As the harvesting in respect of groundnuts is only one half completed and, in respect of sunflower, only one-sixth completed it would be difficult to give an estimate of the tonnage at this stage; but it will be only a few thousand tons.
    Captain Crookshank: If half has been harvested could the Minister say how much has been harvested, so that we could multiply it by two?
    Mr. Strachey: The yields differ very much in the different areas because some areas received very much more rain than others. It would be quite misleading to say that double of what has now been harvested would be the final result.
    Mr. Dye: Is not my right hon. Friend aware that the yields of sunflower seed on what are regarded as marginal lands in the Eastern counties are ten times as great as the figure he has given? Would he try and develop the growth of sunflower in this country to a much greater extent?
    Mr. Strachey: The yield of sunflower seed at Kongwa in this drought year is virtually a failure, and is no comparison with the proper yield of sunflower seed. There is no reason why farmers in this country should not grow sunflower seed.
    Mr. Frederic Harris: Would the Minister like to revise by 50 per cent. the estimate he gave during the last Debate on groundnuts?
    Mr. Strachey: To what estimate is the hon. Member referring?
    Mr. Harris: The Minister's own estimate of the anticipation of the yield of groundnuts for the whole scheme. Is the right hon. Gentleman prepared to say that the statement he has now made means a yield of something like 50 per cent. less?
    Mr. Strachey: Oh, no, Sir, certainly not. The original estimate in the White Paper, to which the hon. Member refers, is 750 1b. per acre of the yield of groundnuts over the whole area year by year. I particularly asked my experts on the spot if they had any reason to revise that, and they said, "No."
    Mr. Baldwin: Dealing with that part of the Minister's statement in which he said he would increase transport to one of the fields in East Africa, would not it be better to use the transport provided for the groundnuts in West Africa, where they are rotting for want of transport?
    Mr. Strachey: No, Sir. The areas do not conflict. Railway material is being sent out to West Africa as fast as possible, and the building of the railway in East Africa does not interfere with that.
    Mr. Gammans: Can the Minister give us any idea when the result of this scheme is likely to reflect itself in the increase of the fat ration in this country? Will it be next year, or the year after?
    Mr. Strachey: We should have a very small contribution this year, a somewhat larger one next year, and it will be gradually increased year by year.
    Mr. Oliver Stanley: When the right hon. Gentleman talks about a "very small contribution" to the ration can he give us any idea of what it will mean to the individual consumer?
    Mr. Strachey: I have already answered the right hon. Gentleman, it will be only a few thousand tons this year.

    Apples
    Mr. Sutcliffeasked the Minister of Food what arrangements he is making to obtain a supply of apples during the winter.
    Mr. Strachey: As my right hon. Friend the Secretary of State for Commonwealth Relations announced on 9th May, we intend making a limited purchase of apples from Canada. In addition, we shall obtain all we can from non-dollar sources of supply.
    Mr. Sutcliffe: Is the Minister aware that the absence of dessert apples last winter was felt more than the absence of any other fruit, and that when the
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    Italian crop arrived many retailers found that no less than one-third of the apples in each case were bad?
    Mr. Baldwin: Does the Minister realise that a plentiful supply of English apples is being grown this year, and will he take care to issue licences only when the increased supply has been exhausted?
    Mr. Strachey: In the winter I think we shall wish to import all the dessert apples we can get from non-dollar sources.

    Industrial Canteens
    Mr. Blackburnasked the Minister of Food in what circumstances rationed goods are supplied to industrial canteens.
    Mr. Strachey: Rationed foods are supplied to industrial canteens to provide meals for the workers.
    Mr. Blackburn: Is my right hon. Friend aware that at the Austin factory the price of food at the industrial canteen has been put up, despite the fact that the workers are loyally abiding by the Government's wages policy. Further, is he aware that this inflationary process is brought about by caterers who probably belong to the Tory Party and who appear to be allying themselves with the Communist Party in an attempt to bring to ruin the Government's wages policy? Will the Minister do something about it, and indicate that he deprecates this rise in food prices?
    Mr. Strachey: I do not think that we could attempt to put price control on industrial canteens, but I would certainly deprecate any increase in prices of industrial canteen meals.

    Scottish C.W.S. (Employees)
    Sir David Robertsonasked the Minister of Food if he will inform the Scottish Co-operative Wholesale Society that their employees enjoy the same rights as all other citizens to register for rationed and other goods with traders of their own selection, and that threats of economic compulsion must not be used against them in future.
    Mr. Strachey: As the Board of the Scottish Co-operative Wholesale Society already allow their employees complete

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    freedom of choice of retailers when registering for rationed foods, I do not feel called upon to take any action.
    Sir D. Robertson: Does the right hon. Gentleman deny that the Scottish Co-operative Wholesale Society wrote to their workers threatening them with dismissal unless they registered with and purchased from them, and that that letter was withdrawn?
    Mr. Strachey: As I understand the circumstances the manager of one branch wrote a letter which the Scottish Co-operative Wholesale Society immediately repudiated.
    Sir D. Robertson: Is there any reason why there should be any misunderstanding in the mind of the right hon. Gentleman, because I sent him the letter in question? It was signed by the northern area manager and was addressed to all branch managers and concerned all the employees of the Society in that area?
    Mr. Strachey: As a matter of fact, it was the manager of the Golspie branch.
    Sir D. Robertson: On a point of Order. In view of the misrepresentation to the House on this matter, I beg to give notice that I shall raise it on the Adjournment.

  CAT AND DOG FOOD
  Mr. Mott-Radclyffeasked the Minister of Food whether he is aware that the advertised contents of certain cat and dog food include fresh fish and fresh milk; and if he will state the total quantities of these commodities which are being devoted for this purpose.
  Mr. Strachey: The use of fresh milk in manufactured cat and dog foods is not allowed, and the only fish normally used in them is fish waste. The hon. Member may be referring to a small quantity of canned fish products imported by private traders, which could not be sold for human consumption, and have had to be sold as pet foods.
  Mr. Skeffington-Lodge: On a point of Order. As the loudspeaker equipment does not seem to be working effectively, Mr. Speaker, would you be good enough to ask Ministers to speak a little louder so that we can hear their replies?
  Mr. Mott-Radclyffe: May I send to the right hon. Gentleman an advertisement for cat and dog food, known as "Harmony Food," which, according to the advertisement, is made from 50 per cent. fresh fish, 42 per cent. fresh milk and 6 per cent. potato flour? The advertisement says, "It is a scientific food and your pet will like it."
  Mr. Strachey: I will willingly investigate that.

  TRANSPORT

    Accident, Virginia Water
    Captain Marsdenasked the Minister of Transport if his attention has been drawn to the fatal accident that occurred near the Wheatsheaf Hotel, Virginia Water, on Sunday, 12th June; and what steps he proposes to take to make this dangerous crossing safer for pedestrians.
    The Parliamentary Secretary to the Ministry of Transport (Mr. James Callaghan): Yes, Sir. I am arranging for the road to be widened and a pedestrian refuge to be placed at this spot.

    Road Executives (Expenses)
    Mr. Errollasked the Minister of Transport what arrangements for expenses are being made in respect of the whole-time and part-time members of the Road Passenger and Road Haulage Executives.
    Mr. Callaghan: Whole-time and part-time members of the Road Passenger and Road Haulage Executives are reimbursed from the Executives' funds their out-of-pocket travelling and subsistence expenses incurred on the business of their Executive.
    Mr. Erroll: Are there to be no fixed expenses allowances granted in respect of any of the members, either whole or part-time?
    Mr. Callaghan: No, Sir.

    Ferries (Report)
    Brigadier Medlicottasked the Minister of Transport what steps he has taken to put into operation those parts of the recommendations of the Committee

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    on Ferries which can be dealt with by administrative as apart from legislative action.
    Mr. Callaghan: None, Sir, as yet. My right hon. Friend is reviewing the Committee's recommendations as a whole in consultation with his colleagues. He will announce their conclusions as soon as possible.
    Mr. McLeod: How soon does "as soon as possible" mean? Might I point out that this Report has been in the hands of the Minister's Department for about a year, and that on the last three occasions when I have put down a Question I have been told that it is under consideration, How soon can we expect to get a decision?
    Mr. Callaghan: In this case, I think it means in the near future.

  MINISTRY OF SUPPLY

    Vans (Shortage, Herefordshire)
    Mr. Baldwinasked the Minister of Supply whether he is aware that owing to the delay in delivery of motor vans to distributors in the Ledbury area, Herefordshire, food distribution is becoming increasingly difficult; and what steps he proposes to overcome these shortages.
    The Minister of Supply (Mr. G. R. Strauss): I am aware that there is a general shortage of light vans in the home market, but supply could only be increased at the expense of exports and the economic situation makes this undesirable.
    Mr. Baldwin: Is it not false economy to keep these old vehicles on the road? They consume unnecessary quantities of oil and petrol, and cause a great deal of delay because of repairs.
    Mr. Strauss: Yes, Sir. We have to strike a balance. A very substantial number of new vans have to be exported.

    Motor Equipment (Costs)
    Mr. Edelmanasked the Minister of Supply whether, in view of the monopoly which exists in the industry supplying certain types of motor equipment and the consequent inflation of motor manufacturing costs, he will refer the matter for consideration to the
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    National Advisory Council for the Motor Industry.
    Mr. G. R. Strauss: No, Sir. I do not consider that the course proposed would serve any useful purpose.
    Mr. Edelman: Does not my right hon. Friend agree that the price of these monopoly products is as much as three times higher than the price of comparable American equipment? In view of the great handicap caused to motor exporters, particularly in the dollar market, will he not intervene in order to bring the price down?
    Mr. Strauss: I understand that some little time ago there was a considerable disparity in price, but I am informed that it has now largely disappeared.
    Mr. Beswick: Does not my right hon. Friend think that this industry is one which might properly have been referred to the Monopolies Commission, and that had it not been for the fact that the Commission is already overworked, it might have been referred to them? Could not a useful inquiry be made by the National Advisory Council?
    Mr. Strauss: It certainly could be investigated, but the Monopolies Commission does not propose to add to the list of industries whose affairs are to be investigated by that Commission. We have no complaints by the motor industry on this matter. If serious inconvenience was caused to the motor industry we can be certain that they would complain to us.

    Engineering Standardisation
    Mr. Errollasked the Minister of Supply if, in view of the fact that the Lemon Committee on engineering standardisation is concerning itself with rationalisation proposals he will so amend its terms of reference as to exclude this subject from its purview and ensure that it confines itself to its terms of reference.
    Mr. G. R. Strauss: The Committee has considered the possible effect of increasing standardisation upon the structure of the engineering industry, but I am not aware that they have made, or are likely to make, proposals for the rationalisation of the industry, or any part of it.

    Motor Trial (Official Visit)
    Sir John Mellorasked the Minister of Supply what business with the British Motor Racing Research Trust required a senior official of his Department, accompanied by his wife, to visit the Shelsley Walsh hill-climb on 11th June in an official car; where did the journey begin and end and what mileage was covered; and why he authorised this.
    Mr. G. R. Strauss: My Department takes an active interest in the work of the Trust, one of whose objects is to enhance the prestige of the United Kingdom motor and engineering industries by the construction of new racing cars. The performance of certain car units was under examination at the hill-climb, and it was appropriate that my Department should be represented. The journey began and ended at Nottingham, where the official is stationed, and covered 192 miles.
    Sir J. Mellor: If the journey was really necessary, which I doubt, could it not have been performed less expensively by train and taxi?
    Mr. Strauss: It is a most inconvenient cross-country journey. It would have taken very much longer, and the official is very busy.

    London Metal Exchange
    Sir W. Smithersasked the Minister of Supply if he will now allow the London Metal Exchange to re-open.
    Mr. Parkinasked the Minister of Supply whether he has now concluded his consideration of the desirability of reopening the London Metal Exchange.
    Mr. G. R. Strauss: I have carefully considered commercial and industrial representations on the advantages of reopening the London Metal Exchange, in particular the hedging facilities which this would provide. It is, however, generally accepted that a free market in non-ferrous metals would have to be severely restricted to prevent a loss of our dollar resources and I am convinced that these limitations, if they are to be effective, would so restrict the freedom of the market as largely to nullify the benefits which its advocates desire to bring about. Even more important, the abandonment of bulk buying of these commodities from Commonwealth countries would seriously endanger our supplies from
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    these sources and make us more dependent on dollar purchases. For these reasons I am at present unable to agree to the re-opening of the Metal Exchange for the purchase and sale of copper, lead and zinc. Other considerations apply to tin, which is now the subject of international discussion. I have not, therefore, reached any conclusion about the future marketing of this metal.
    Sir W. Smithers: In view of the announcement made at Chequers during the week-end, and the urge for more multilateral free trade, will the Minister please re-open the Exchange now and free metal from all controls? Will he cease to allow political bias to interfere with economic recovery?
    Mr. Stanley: Does this mean that the right hon. Gentleman, if he does not propose to re-open the Metal Exchange, at least will make these metals available to industrial consumers at parity with world prices?
    Mr. Strauss: Yes, Sir. New prices are being fixed today for copper, lead and zinc. That will bring them on a par with prices in the United States.
    Sir W. Smithers: The Minister has just said that new prices are being fixed. By whom—by the Government, or by the law of supply and demand?

    Patents Branch (Staff)
    Mr. Errollasked the Minister of Supply what are the functions of the Patent Division of his Department; and how many persons are employed in it.
    Mr. G. R. Strauss: The number of staff employed in the Patents Branch of the Ministry of Supply on 1st July, 1949, was 130. Their functions are to deal with claims arising out of the use of inventions in equipment manufactured for Crown purposes to the order of the Ministry of Supply and certain other Government Departments; and to protect inventions made in the establishments of the Ministry and of certain other Government Departments, and to exploit these inventions.
    Mr. Erroll: Is the size of this Department due to arrears of work which arose from war developments, or is it envisaged that this Department should be retained permanently at its present size?
    Mr. Strauss: This is still a very busy Department. About 600 claims come

    21
    before it every year, and we find that it saves the Government substantial sums of money. It has been calculated that over £2 million has been saved since the end of the war.

  MINISTRY OF WORKS

    Airfield, Norfolk (Occupation)
    Brigadier Medlicottasked the Minister of Works for what purposes his Department is occupying buildings on Ludham airfield, Norfolk; and for how long such occupation is likely to continue.
    The Minister of Works (Mr. Key): The buildings are used by the Home Office for the storage of fire fighting equipment. I am not yet able to say when the accommodation will be released.
    Brigadier Medlicott: If, as is possible, there is some agricultural activity on this airfield in the near future, would the Minister then try to find other accommodation?
    Mr. Key: Yes, certainly.

    Brick Production
    Mr. Beswickasked the Minister of Works what is the current rate of brick production; and if he is satisfied that this is sufficient for current requirements.
    Mr. Key: Production of bricks of all types during May, the last month for which returns have been received, was over 451 million. There are indications that the improvement in output which has taken place this year is being maintained. I am not aware of any failure to meet requirements in the country generally.

  LOCAL GOVERNMENT BOUNDARIES (PETITIONS)
  Mr. Ernest Daviesasked the Lord President of the Council whether, in view of the proposed repeal of the Local Government (Boundary Commission) Act, 1945, petitions for the grant of Charters of Incorporation presented by the councils of urban districts will now be received and acted upon and, in particular, if such a petition from the Council of the Urban District of Enfield will be considered.
  Mr. Beswickasked the Lord President of the Council in view of the proposed dissolution of the Local Government Boundaries Commission, whether any petitions for a Charter of Incorporation from an urban district council will now be considered and a decision given and, in particular, if such a petition from the Urban District Council of Uxbridge will be considered.
  The Lord President of the Council (Mr. Herbert Morrison): It is, of course, open to the council of an urban district to submit a petition under Section 129 of the Local Government Act, 1933; but in present conditions I cannot hold out any hope that His Majesty would be advised to grant a charter, save in very exceptional circumstances.
  Mr. Davies: Is my right hon. Friend aware that for a number of years, in view of the appointment of the Commission, local authorities have held up the filing of these petitions? Can he indicate when it will be possible for the large urban district councils who have so acted to make their petitions in the expectancy that they will be favourably considered?
  Mr. Morrison: I see my hon. Friend's point, but the question of policy is one for my right hon. Friend the Minister of Health rather than myself, and should really be dealt with by him. It will be remembered that my right hon. Friend said that after the disbandment of the Local Government Commission we should revert to the position which existed before the setting up of the Commission.

  RESEARCH FARM, WALES
  Mr. Goronwy Robertsasked the Lord President of the Council what research is being undertaken by the Agricultural Research Council to improve the quality of mountain sheep upon which much of the success of Welsh hill farming depends.
  Mr. H. Morrison: I am glad to inform my hon. Friend that the Agricultural Research Council has decided to purchase a farm in North Wales, where research on the breeding of Welsh mountain sheep will be carried out by the Animal Breeding and Genetics Research Organisation

  23
  recently set up by the Council under the direction of Professor R. G. White. With the help of the Merioneth Agricultural Executive Committee, a suitable farm has been found near Corwen and final negotiations are in progress for its purchase. This project is distinct from the experimental husbandry farms, one of which will be a hill farm, which my right hon. Friend the Minister of Agriculture and Fisheries is proposing to establish in Wales.

  GERMANY

    Ex-Nazis
    Mr. Ellis Smithasked the Secretary of State for Foreign Affairs if he will give the names and positions of ex-Nazis who have been appointed members of the I. G. Farben disposal panel or in the management of the steel industry.
    The Under-Secretary of State for Foreign Affairs (Mr. Mayhew): One of the six members of the I. G. Farben dispersal panel, Freiherr Von Ritter, and three of the 12 persons to whom invitations have been sent to accept appointments to the German Steel Trustee Association, Messrs. Deist, Dinkelbach and Von Valkenhausen, were members of the Nazi Party. All four have, however, been cleared by de-Nazification panels, as have all other members and prospective members of these bodies.
    Mr. Skeffington-Lodgeasked the Secretary of State for Foreign Affairs whether he will give an estimate of the number of Germans who were Nazi leaders and members of Hitler's General Staff and who have gone underground; and what steps are being taken to trace them.
    Mr. Mayhew: One hundred and twenty-eight prominent members of criminal organisations declared illegal at the Nuremberg Trials are still being sought in Germany. The German authorities are responsible for tracing them. All leading members of Hitler's general staff were found after the collapse of Germany.
    Mr. Skeffington-Lodge: Is my hon. Friend aware that only about 40 out of 150 of the permanent guard of Buchenwald concentration camp had been
    24
    apprehended? Is it not a menace to security that these and many others like them, who have changed their names, should be at large in Germany today?
    Mr. Mayhew: Yes, I would agree with that, but from time to time arrests are made; we have had one or two recently.
    Mr. F. Noel-Baker: Can my hon. Friend say how many Nazi leaders and European Quislings are still being given asylum in Franco Spain?
    Mr. Mayhew: Not without notice.
    Mr. Paget: Can my hon. Friend say when we shall have an Act of Indemnity and stop chasing these men?

    De-Nazification Decisions
    Mr. Ellis Smithasked the Secretary of State for Foreign Affairs why decisions of the Lubeck panel for de-Nazification have been quashed and applicants advised to seek de-Nazification before a board in the French or American zones; and what is the British, American and French Military Governments' policy on the interchangeability of de-Nazification decisions.
    Mr. Mayhew: The Schleswig-Holstein de-Nazification law provides that cases shall be heard in the locality in which the person concerned was best known during the Nazi régime. In a few cases heard by the Lubeck panel this provision was infringed, and the Land Committee for de-Nazification therefore quashed the decisions. In addition, two decisions of this panel have been quashed by Military Government. Mutual recognition of deNazification decisions between the three Western zones is complete but for recognition of British decisions in the French zone. Discussions are now taking place with the object of obtaining this.
    Mr. Smith: In view of the new arrangement which has been made whereby the Allied High Commissioners will consider these matters in future, will the Under-Secretary ask his right hon. Friend to consider the advisability of submitting this matter to the Allied Commission with a view to an investigation being made into it?
    Mr. Mayhew: I am not sure that the assumption in the first part of the Question is correct, and I should like notice of it.
    Mr. Smith: Is my hon. Friend aware that I have here Command Paper 7727, on pages 4 and 5 of which it is laid down clearly that these matters can be submitted to them?
    Mr. Ellis Smithasked the Secretary of State for Foreign Affairs if he can give the names and pre-war positions of the persons who served on the panel that considered the case of Privy Councillor Gustav Breacht of Cologne, confirmed according to a notice which appeared on 27th January, 1949, in the British Licensed paper, "Die Welt"; why was he give a certificate and placed in category V by the panel at Miesbach on 3rd April, 1948; why is he to be a trustee of I. G. Farben; and is he to be considered as a candidate for trusteeship in the German Coal Industry.
    Mr. Mayhew: As the answer is long, I will, with permission, circulate it in the OFFICIAL REPORT.
    Mr. Austin: Is my hon. Friend aware that whatever may be the merits of the present attitude to de-Nazification there is grave concern about the military resurgence which is beginning to re-appear in Germany? Is he satisfied that his Department are watching the matter with all care and attention which it deserves?
    Mr. Mayhew: Yes, Sir, we are watching it, but if there are any particular cases which my hon. Friend knows about I would be glad if he would draw my attention to them.
    Following is the answer:
    Mr. Brecht's de-Nazification case was heard in the United States zone, and we are, therefore, dependent on the United States authorities for our information. The names of the members of the panel were Otto Enders, Fritz Oberhauser, and Hans Lachner. I have no information concerning their pre-war positions. The panel placed Brecht in a category called "not concerned," a classification which is peculiar to the United States zone and which is reserved for persons who had no connection with the Nazi regime. Since his name had been cleared he was, therefore, eligible for appointment to the I. G. Farben dispersal panel. His name has appeared on lists of nominations submitted by various German bodies for employment as a trustee of colliery assets, but no selection has so far been made.

    Visits
    Mr. Skinnardasked the Secretary of State for Foreign Affairs whether the French and American occupied zones of Germany are now open to ordinary visitors as a result of the negotiations between the three Western Powers.
    Mr. Mayhew: Yes, Sir, and similar arrangements now extend to the British and United States sectors of Berlin.

    Oil Plants (Dismantling)
    Mr. Emrys Hughesasked the Secretary of State for Foreign Affairs on what date the Military Government of the British Zone of Germany authorised the grant of a licence for repair work to oil-from-coal plants; what was the nature of the repair work authorised; whether the Military Government was aware at the time that the plant was to be dismantled; and if an estimate of the cost of such repairs was submitted and considered before this expenditure was authorised.
    Mr. Mayhew: Eleven such licences were issued at different times between 1945 and 1948 to six of the 10 synthetic oil plants in Western Germany. Eight licences were in respect of plants now to be dismantled. In the case of five of the plants the licences were for partial re-activation, and in the other case the licence was for maintenance work only. Military Government was always aware that these plants were liable to be dismantled and this was made clear to the Germans whenever licences were issued.
    In one case only, that of the Krupp Treibstoffewerke, which plant belonged to a group of colleries, an estimate which amounted to RM. 3 million was submitted and approved.
    Mr. Hughes: Will the hon. Gentleman explain in non-technical language why this expenditure was allowed to be incurred on plant which was scheduled for demolition?
    Mr. Mayhew: The expenditure was not sanctioned for the production of oil from coal; it was for partial re-activisation for other products, and the Germans knew all the time that these plants were scheduled for dismantling.

    Joint Export-Import Agency
    Mr. Piratinasked the Secretary of State for Foreign Affairs what are the respective financial totals contributed by the United Kingdom and the United States of America Governments to the Joint Export-Import Agency.
    Mr. Mayhew: The sum contributed by the two Governments to the capital of the Agency amounts to approximately £15,750,000 each. In addition, His Majesty's Government have, since 1st January, 1948, when the agreement of 17th December, 1947, came into operation, spent about £25 million from appropriated funds on goods and services for the German economy, and during the same period the United States Government have spent from appropriated funds about £250 million as well as providing aid under the Economic Co-operation Act to the Bizone of about £100 million.

  IRAQ

    Oil Pipeline
    Mr. Eric Fletcherasked the Secretary of State for Foreign Affairs what representations have been made to the Government of Iraq with regard to the re-opening of the pipe line to Haifa.
    Mr. Mayhew: His Majesty's Ambassador at Bagdad has made representations to the Iraqi Government on more than one occasion during the last six months with regard to the resumption of supplies of crude oil through the pipeline to Haifa.
    Mr. Fletcher: Will my hon. Friend assure the House that his right hon. Friend will continue to press the Governments of Iraq and Israel to enable this pipeline to be re-opened, in view of its enormous importance to this country and to both those Governments?
    Mr. Mayhew: We appreciate that, and the representations we made to the Iraqi Government are continuing now.
    Mr. Janner: Can my hon. Friend confirm that the Government of Israel are quite prepared to use that line, and say what were the results of the inquiries to Iraq?
    Mr. Mayhew: Since the representations are still continuing, I would rather not disclose what is going on.
    Mr. Frederic Harris: Would the hon. Gentleman not agree that the important staff engaged on the pipeline have been withdrawn, so that it cannot be reopened for another two years?
    Mr. Sydney Silverman: What are the representations that are being made to the Government of Israel? While we understand that representations are being made to Iraq, is it not the case that there is no difficulty in regard to the other Government?
    Mr. Mayhew: There was no suggestion of that. The Question dealt with representations to Iraq, and I have referred to them.

  INTERNATIONAL RED CROSS CONFERENCE
  Mr. Wyattasked the Secretary of State for Foreign Affairs why our representative at the recent international conference on the Geneva Conventions was instructed to vote against the Russian proposal to declare the concentrated bombing of civilian centres a war crime.
  Mr. Mayhew: I would refer my hon. Friend to the reply given to my hon. Friend the Member for South Ayrshire (Mr. Emrys Hughes) on 6th July.
  Mr. Wyatt: Can my hon. Friend say, however, what attitude our representative will adopt when this proposal does come forward?
  Mr. Mayhew: I do not think any proposal of this nature will come forward. This conference is not generally concerned with war crimes at all.

  ARGENTINA

    British Shareholders (Compensation)
    Mr. William Teelingasked the Secretary of State for Foreign Affairs the date on which negotiations will be opened with the Argentine Government concerning the payment of compensation to British shareholders in Buenos Aires Transport Corporation, and Primitiva Holdings.
    Mr. Mayhew: I would refer the hon. Member to the reply given to him by

    29
    my right hon. Friend the Chancellor of the Exchequer on 28th June, to which I have nothing to add.
    Mr. Teeling: As a fortnight has elapsed since the signature of the Agreement, do I understand that nothing has happened since then? What has the Embassy done in the last fortnight?
    Mr. Mayhew: Representations were made to the Foreign Minister, the latest of them on 24th June.

    Agreement (Text)
    Mr. Teelingasked the Secretary of State for Foreign Affairs why the detailed text of the Anglo-Argentine Agreement has been issued to London newspapers before the White Paper has been presented to this House.
    Mr. Mayhew: The hon. Member is under a misapprehension. The text of the Anglo-Argentine Agreement was not released in London until the publication of the White Paper presented to the House of Commons on 6th July.
    Mr. Teeling: Surely the hon. Gentleman must have read the text which was published in the "Financial Times" and other papers on Monday of last week? The White Paper was not issued until Thursday.
    Mr. Mayhew: A statement which summarised the main headings of the Agreement was issued on 27th June, because we learned that the Spanish text had been released immediately after signature. That was merely a summary.

  POLAND (BRITISH SUBJECT'S ARREST)
  Mr. Mott-Radclyffeasked the Secretary of State for Foreign Affairs upon what grounds the Polish Government have based their refusal to allow His Majesty's Consul in Warsaw to visit Mrs. Halin Firth in prison, following her arrest by the security police nearly two months ago.
  Mr. Mayhew: The Polish Government have informed His Majesty's Ambassador at Warsaw that they are unable to allow Mrs. Firth to see His Majesty's Consul on the ground that she is under preventive arrest in order that a legal investi-
  30
  gation may be made into the crimes of which she is accused; and that in such cases the legal authorities are not bound under Polish law to allow a third party to see an accused person until the case for the prosecution is completed, even though the accused be a foreign national and the third party a diplomatic or consular representative. His Majesty's Ambassador at Warsaw has protested against this violation of international usage, and has since renewed his representations.
  Mr. Mott-Radclyffe: Can the hon. Gentleman assure the House that His Majesty's Government will not take lightly the refusal of a foreign Government to allow a British Consul to visit a British subject under arrest in a foreign country?
  Mr. Mayhew: Certainly; we take it very seriously.
  Earl Winterton: Is the hon. Gentleman aware that the country is very disturbed at the number of these cases—quite unprecedented in our history—which are going on all over the place behind the Iron Curtain? Will he consider the action of a certain South American Government who have retaliated against a foreign country, with a view to taking similar action?
  Mr. Mayhew: We appreciate that these incidents are occurring with deplorable frequency, and we are not content to let things remain where they are now.

  HAIFA OIL REFINERY
  Mr. Cuthbertasked the Secretary of State for Foreign Affairs if he is now able to report when the arrangements now going on between our oil interests at Haifa and the various Governments concerned are likely to reach a satisfactory solution, thus relieving the petrol situation in this country by the opening of the Haifa oil refinery.
  Mr. Mayhew: No, Sir. It is much to be hoped that an early solution to this problem can be found; and that is what my right hon. Friend is working for.
  Mr. Cuthbert: Would the Minister inform the House if there is any truth in the information which I have received

  31
  that the oil is not being allowed to go through the pipeline by a certain Government until they have received moneys from the oil companies, in other words, force majeure?
  Mr. Mayhew: I am not aware of that; perhaps the hon. Gentleman would give me notice of it.
  Mr. Warbey: Is this not a matter in which urgent action is required? Will my hon. Friend consider suspending all deliveries of arms to the Arab States concerned until they have stopped this damaging form of economic sabotage?
  Dr. Segal: Should not advantage be taken of the presence in this country of distinguished guests from Iraq in order to accelerate a settlement in this matter?
  Mr. Mayhew: As I have already said, we are in touch with the Iraqi Government on this subject.
  Mr. H. D. Hughes: Will my hon. Friend tell the House what is the loss of oil supplies in this connection, and also the dollar loss?
  Mr. Mayhew: It is serious, but I could not give the figures without notice.
  Mr. Erroll: Is it the case that the Egyptian Government have said that they will not allow tankers through the Suez Canal to supply Haifa by sea?
  Mr. Mayhew: I have nothing to add to what my right hon. Friend said on the subject last week.

  BRITISH EMBASSY, MOSCOW (MISS PETERS)
  Mr. Gammansasked the Secretary of State for Foreign Affairs if he will make a statement on the disappearance of Miss May Peters from the British Embassy in Moscow.
  Mr. Mayhew: Miss May Peters was employed as a telephonist at His Majesty's Embassy in Moscow. She had for some years past been seeking the permission of the Soviet authorities to leave the Soviet Union and come to this country. She is regarded by His Majesty's Government as a British subject, but the Soviet authorities claim that she is also
  32
  a Soviet citizen by reason of the fact that her mother adopted Soviet nationality in 1929. On the evening of 17th January, 1949, while returning to her flat after leaving the Embassy, Miss Peters disappeared and has not been heard of since. Her case, along with others, formed the subject of an aide-mémoire addressed to the Soviet Government on 27th April and complaining that the Soviet authorities, by intimidation and otherwise, were seeking to dictate the composition of His Majesty's Embassy and interfering with its work. The attitude of His Majesty's Government has thus been made clear to the Soviet Government. My right hon. Friend regrets that there is, in his view, no further action which His Majesty's Government can take on Miss Peters' behalf at present.
  Mr. Gammans: Does the latter part of the hon. Gentleman's answer mean that Miss Peters' relations in this country have very little hope of ever seeing her again, and that employees of the British Embassy who are regarded as British subjects can be taken away and disappear, and nothing happen?
  Mr. Mayhew: I can only say that we regard the Soviet reply to our aidemémoire as entirely unsatisfactory, and that the Soviet Government cannot expect to be able to persecute the staff of His Majesty's Embassy in Moscow while, at the same time, enjoying the most favourable treatment as regards their own staff over here.
  Mr. Stanley: Does that answer mean, in view of this the latest, and, I think, the worst example we have had, that the Government are now going to do something?
  Mr. Mayhew: I do not want to commit my right hon. Friend at present on that specific point, but I think his attitude has been made clear by what I have just said.
  Mr. Paget: Can my right hon. Friend say how we can continue to have diplomatic relations with a country which kidnaps our representatives?
  Earl Winterton: Is the Under-Secretary aware that exactly the same answer as he has now given to my hon. Friend was given to me by the Foreign Secretary when I raised the question of the Russian

  33
  wives a year ago? The right hon. Gentleman then said he was considering what action, if any, he could take with regard to the Russian Embassy here. Why does he not show what I would call "guts" in the matter?
  Mr. Emrys Roberts: Can the hon. Gentleman tell us whether there is any possibility of bringing a deplorable act of this character before the United Nations? May I have an answer to that question?
  Mr. Benn Levy: Would not my hon. Friend's task be eased if a concrete suggestion were made by the Opposition as to what precisely they mean by "doing something"?
  Mr. Keeling: Will the hon. Gentleman say why there are so many weeks' delay in communicating with the Russian Government?
  Mr. Mayhew: I should need notice of that.
  Mr. Thurtle: Has my hon. Friend considered the question of retaliatory action?
  Mr. Mayhew: I think my reply has made quite clear the attitude of my right hon. Friend on that subject. We shall certainly have to consider retaliatory action if we are pushed to it by the continuance of incidents like this.
  Mr. Mott-Radclyffe: Could the hon. Gentleman say whether Miss Peters had in her possession a British passport or Soviet papers?
  Mr. Mayhew: I understand that she had a British passport in her possession. The Soviet Government, however, claimed to regard her as a Soviet national.
  Mr. Mott-Radclyffe: Would it not be better if the Secretary of State for Foreign Affairs altered the wording on the British passport, entitling the possessor to some protection?

  COUNCIL OF EUROPE (STATUTE)
  Mr. Battleyasked the Secretary of State for Foreign Affairs whether he will now make a statement on the proposals of His Majesty's Government for the rati-
  34
  fication of the Statute of the Council of Europe.
  Mr. Mayhew: My right hon. Friend proposes to take the necessary steps for ratification in the very near future.

  HOUSE OF COMMONS CATERING
  Mr. Heathcoat Amoryasked the hon. Member for Walthamstow West, as Chairman of the Kitchen Committee, whether he is aware of the propensity of the ice-cream machine in the cafeteria to break down instantly in a heatwave; and what steps he is taking to prevent this occurrence.
  Mr. McEntee: Yes, Sir, I am always made aware of such important matters. The machine is the property of a firm supplying ice cream to the House, and they were immediately informed of its bad habits. They replied that it would be thoroughly overhauled, and, if necessary, replaced at the earliest opportunity by a new one, which, I trust will show a greater sense of its responsibility to hon. Members and others who are authorised to use the cafeteria. The old machine is at present working satisfactorily.
  Mr. Amory: Is the hon. Gentleman aware that there is an impression among the patrons of the cafeteria that at times, when the ice cream system is operating under strain, the principles of multilateral non-discrimination as between the Members and the Strangers' Dining Rooms and the cafeteria are not being strictly adhered to?
  Mr. McEntee: There is no discrimination; the same kind of ice cream is supplied to all.

  HORSES (TRANSIT CONDITIONS)
  Lieut.-Colonel Sir Thomas Mooreasked the Minister of Agriculture how many horses have died during transit between Ireland and this country in the course of the three months ended 31st March, 1949.
  The Joint Parliamentary Secretary to the Ministry of Agriculture (Mr. George Brown): The returns received by the

  35
  Department show that one horse died during transit between Ireland and this country during the first three months of this year; and that one other horse was slaughtered on board owing to weakness.

  STRIKE, LONDON DOCKS (EMERGENCY POWERS)
  Mr. Eden(by Private Notice) asked the Minister of Labour whether he has any statement to make on the present situation in the Port of London.
  The Minister of Labour (Mr. Isaacs): The following is the position as reported by the National Dock Labour Board and by the Transport and General Workers' Union at 10.45 this morning:
  Tooley Street area: Practically no change. Butler's Wharf has resumed work, but as against this Cotton's Wharf has stopped. London Docks and Regent's Canal area: There was some resumption of work at the western end of the area, but men at the eastern end went to the Victoria Park meeting. Millwall, India, Royal and Surrey Docks areas: No change from Saturday. Tilbury: Work is proceeding normally.
  At the Victoria Park meeting held this morning, which was attended by somewhere about 2,500 of the 10,000 men out, it was decided not to resume work on the Canadian ships. At the present moment there are 10,222 men on strike, 112 ships idle, and six ships undermanned, but the number at work in the docks this morning is approximately 15,000.
  Mr. Eden: May I ask the right hon. Gentleman to tell the House what steps the Government are taking to try to make their point of view known to the men at these meetings? If one is to judge from accounts in the evening papers, at the Victoria Park meeting no kind of statement was made either on behalf of the Government or on behalf of the leaders of the trade unions. The only message came from the hon. Member for Thurrock (Mr. Solley), which was read at the meeting. In this very dangerous situation, is it not the responsibility of the Government and of the trade union leaders to put their case at these meetings so that, at
  36
  any rate, the men, when they are taking decisions, know on what ground or in face of what argument they are taking those decisions?
  Mr. Isaacs: The meetings are not convened by the Government or by the unions concerned. They are convened by the unofficial strikers, and even then it is difficult for those who wish to be loyal to get their case over, as was instanced at the stevedores' meeting. The Government very largely rely upon statements which are made in the House.
  May I now repeat the situation? The men are apparently confused on the legal position, and I would repeat that they are acting in breach of an agreement and in breach of the Dock Labour Scheme, and everything flows from that. If they would only carry out the terms of the scheme, the matter could be quite easily settled.
  Earl Winterton: I wish to ask the right hon. Gentleman a question which affects the constitutional position of this House. May we be informed at the earliest possible opportunity who are the persons to whom the Attorney-General, speaking with all the authority of his office, on Saturday last, referred as being engaged in subversive activities in connection with this strike? He actually used the word "treason." Can the right hon. Gentleman assure us that if a Private Notice Question is put down tomorrow, he will be able to say who these people are and what action the Government are going to take?
  Mr. Isaacs: I understand that the question of the action taken by the Government to-day will come up for debate in the House on Wednesday. Perhaps the noble Lord will be good enough to put his question then.
  Mr. Sydney Silverman: In view of the fact that the Government are contemplating taking action under the Emergency Regulations, would it not be a good thing if the Government offered to send speakers to the meetings organised by the unofficial strikers so that they might hear at first hand the Government's view of the matter at issue, and not at second hand and not by means of such hysterical speeches as the Attorney-General made on Saturday?
  Mr. W. J. Brown: Granted the difficulties of imposing Government speakers upon unofficial strikers, is it not possible for us to utilise the resources of the wireless to a very much greater extent than has been done so far to get the merits of this case over to the men?
  Mr. Isaacs: We did that on the last occasion, and the question is whether repeated exhortation is going to be successful in view of the open defiance to the appeals made, or whether it is necessary to take some other action in the matter.
  Mr. Eden: May I press the right hon. Gentleman a little further? I do not think anybody can read the accounts in the evening papers, supposing they are correct, of what has happened at these meetings without being impressed by the great number of men who quite obviously will not accept, or have not been seized of, what we think is the very strong Government argument. There is a very great responsibility on the Government to let the men know these things, whether it is done by wireless or in any other way.
  Mr. Isaacs: At the moment the Government are doing all they can, but we will see whether there is anything further to be done. I ask the House to appreciate the awkward position which would arise if a Minister were asked to address a meeting of unofficial strikers.
  Mr. Gammans: Is it true that the troops were withdrawn from work at the docks this morning, and if so, why?
  Mr. Isaacs: No, Sir, it is not true that they were withdrawn. They were witheld so that there should be no reason for men who wished to go back to work to say that they would not go back while soldiers were there. They were witheld so that the men could go back, and they went in again as soon as it was clear that the men would not go back.
  Mr. McGovern: Is there not in the mind of the Government growing evidence that trade union leaders in this country seem to have lost complete control and seem to be out of touch? They have delegated to a large extent their duties and obligations to the shop stewards, who are composed largely of
  38
  Communists, and there has got to be a very serious revision of industrial control.
  Mr. Piratin: In view of the Minister's statement that the resolution passed this morning at Victoria Park was to the effect that they would not handle these two Canadian boats, but that they did not say that they would not go back to work—which in fact they desire to do—will not the Minister, even at this hour, look into the matter once again in order to ensure that these men can go back to work, which is their desire?
  Mr. S. Silverman: Does my right hon. Friend realise that if over 10,000 London dockers persist in what they are doing in the face of the exhortations, appeals and pressure, it is not because they are Communists or that they are being dragged at the heels of the Communists? It is because they do not understand what the issues are. Is there not, therefore, a great obligation upon the Government to make sure that, instead of making frantic charges of one sort or another, somebody goes down and responsibly explains what the issues are?
  Mr. Godfrey Nicholson: The right hon. Gentleman suggested that the question of the Attorney-General's speech should be left over until Wednesday. Is he aware of the grave disquiet that the speech caused, and will he tell the House now whether the speech was made with the full authority of the Government and whether the right hon. Gentleman himself was consulted before the speech was made? Has it foundation or not?
  Mr. Isaacs: I think that question ought to be addressed to the Prime Minister. May I say, with a sense of responsibility, that any speech that anybody can make which will bring this matter to an end in the proper way ought to be made.
  Mr. Harrison: Will my right hon. Friend indicate what steps have been taken by the unions through official panels, which are particularly interested in this strike in the docks, such as the Transport and General Workers' Union and other unions, to bring the facts to the notice of the workers generally?
  Mr. Isaacs: There are two unions concerned, and I can say with all sincerity that, so far as the Transport and

  39
  General Workers' Union are concerned, the officials have done everything in their power to bring the matter home to their members.
  Captain Hewitson: Would my right hon. Friend go on the air this evening and explain to the thousands of loyal dockers who cannot get a hearing at these meetings the true position, so that the mass of the dockers can hear the Government's point of view? I think that if that were done, there would be some response.
  Mr. Boyd-Carpenter: Can the right hon. Gentleman say whether the troops, whom he said were withheld this morning, are now back at work?
  Mr. Isaacs: Yes, Sir. They were withheld for only half-an-hour or so.
  Mr. Austin: In view of the fact that the origins of this grave situation lay in a dispute between two Canadian trade unions, is there any appropriate machinery or agency whereby my right hon. Friend can attempt to use his influence or that of our Government, through our machinery in Canada, to mediate between these two unions?
  Mr. Isaacs: So far as Canada is concerned, this situation has resulted in the Canadian Seamen's Union being expelled from the Canadian Trades Union Congress.

MESSAGE FROM THE KING
Message from His Majesty brought up, and read by Mr. SPEAKER, as follows:
The Emergency Powers Act, 1920, having enacted that if it appears to His Majesty that any action has been taken or is immediately threatened by any persons or body of persons of such a nature and on so extensive a scale as to be calculated, by interfering with the supply and distribution of food, water, fuel or light or with the means of locomotion, to deprive the community, or any substantial portion of the community, of the essentials of life, His Majesty may, by proclamation, declare that a state of emergency exists: and the stoppage of work on an extensive scale in the Port of London having, in His Majesty's opinion, constituted a state of emergency within the meaning of the said Act:
His Majesty has deemed it proper by proclamation made in pursuance of the said Act and dated the eleventh day of July, nineteen hundred and forty-nine, to declare that a state of emergency exists.
Mr. Solley: Shame!
Hon. Members: Order!
Motion made, and Question put,
"That His Majesty's most gracious Message be taken into consideration upon Wednesday."—[Mr. H. Morrison.]
The House divided: Ayes, 315; Noes, 0.

Division No. 203.]

AYES

[3.48 p.m.

Acland, Sir Richard

Binns, J.

Chetwynd, G. R.

Adams, Richard (Balnam)

Blackburn, A. R.

Cluse, W. S.

Agnew, Cmdr P. G.

Blyton, W. R.

Cobb, F. A.

Albu, A. H.

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

Cocks, F. S.

Allen, A. C. (Bosworth)

Boothby, R.

Collindridge, F.

Allen, Scholefield (Crewe)

Bottomley, A. G.

Colman, Miss G. W.

Amory, D. Heathcoat

Bowen, R.

Comyns, Dr. L.

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

Bower, N.

Conant, Maj. R. J. E.

Assheton, Rt. Hon. R.

Boyd-Carpenter, J. A.

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

Attewell, H. C.

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

Cove, W. G.

Attlee, Rt. Hon. C. R.

Braithwaite, Lt.-Comdr. J. G.

Cripps, Rt. Hon. Sir S.

Austin, H. Lewis

Brook, D. (Halifax)

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

Ayles, W. H.

Brooks, T. J. (Rothwell)

Crossman, R. H. S.

Bacon, Miss A.

Broughton, Dr. A. D. D.

Crowder, Capt. John E.

Baldwin, A. E.

Brown, George (Belper)

Cuthbert, W. N.

Balfour, A.

Brown, T. J. (Ince)

Danies, P.

Barlow, Sir J.

Brown, W. J. (Rugby)

Darling, Sir W. Y.

Barnes, Rt. Hon. A. J.

Buchan-Hepburn, P. G. T.

Davies, Rt. Hn. Clement (Montgomery)

Barstow, P. G.

Bullock, Capt. M.

Davies, Edward (Burslem)

Barton, C.

Burke, W. A.

Davies, Ernest (Enfield)

Battley, J. R.

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

Davies, Harold (Leek)

Baxter, A. B.

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

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

Beamish, Maj. T. V. H.

Byers, Frank

Davies, R. J. (Westhoughton)

Bechervaise, A. E.

Carson, E.

Deer, G.

Bellenger, Rt. Hon. F. J.

Castle, Mrs. B. A.

Dobbie, W.

Benson, G.

Channon, H.

Dodds, N. N.

Beswick, F.

Chater, D.

Dodds-Parker, A. D.

Drewe, C.

Kinley, J.

Roberts, Goronwy (Caernarvonshire)

Driberg, T. E. N.

Kirby, B. V.

Robinson, Kenneth (St. Pancras, N.)

Dugdale, J. (W. Bromwich)

Lambert, Hon. G.

Robinson, Roland (Blackpool, S.)

Dumpleton, C. W.

Langford-Holt, J.

Rogers, G. H. R.

Duthie, W. S.

Lennox-Boyd, A. T.

Ross, William (Kilmarnock)

Dye, S.

Levy, B. W.

Sanderson, Sir F.

Eccles, D. M.

Lewis, A. W. J. (Upton)

Scott-Elliot, W.

Ede, Rt. Hon. J. C.

Lewis, J. (Bolton)

Segal, Dr. S.

Edelman, M.

Lindsay, M. (Solihull)

Sharp, Granville

Eden, Rt. Hon. A.

Linstead, H. N.

Shawcross, Rt. Hn. Sir H. (St. Helens)

Edwaros, A. (Middlesbrough, E.)

Lipton, Lt.-Col. M.

Shepherd, W. S. (Bucklow)

Edwards, W. J. (Whitechapel)

Lloyd, Selwyn (Wirral)

Silverman, J. (Erdington)

Erroll, F. J.

Longden, F.

Silverman, S. S. (Nelson)

Evans, E. (Lowestoft)

Lucas, Major Sir J.

Simmons, C. J.

Evans, S. N. (Wednesbury)

Lyne, A. W.

Skeffington-Lodge, T. C.

Ewart, R.

McAdam, W.

Skinnard, F. W.

Farthing, W. J.

McEntee, V. La. T.

Smith, C. (Colchester)

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

McGhee, H. G.

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

Follick, M.

McGovern, J.

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

Foot, M. M.

McKay, J. (Wallsend)

Smithers, Sir W.

Fraser, H. C. P. (Stone)

Mackeson, Brig. H. R.

Snow, J. W.

Fraser, Sir I. (Lonsdale)

McKie, J. H. (Galloway)

Soskice, Rt. Hon. Sir Frank

Fraser, T. (Hamilton)

Maclay, Hon. J. S.

Sparks, J. A.

Gammans, L. D.

McLeavy, F.

Spearman, A. C. M.

Ganley, Mrs. C. S.

MacLeod, J.

Stanley, Rt. Hon. O.

Gates, Maj. E. E.

MacPherson, Malcolm (Stirling)

Steele, T.

Gibbins, J.

MacPherson, N. (Dumfries)

Stoddart-Scott, Col. M.

Gibson, C. W.

Macpherson, T. (Romford)

Strauss, Henry (English Universities)

Gianville, J. E. (Consett)

Mainwaring, W. H.

Stross, Dr. B.

Glyn, Sir R.

Maitland, Comdr. J. W.

Stubbs, A. E.

Gomme-Duncan, Col. A.

Manningham-Buller, R. E.

Studholme, H. G.

Greenwood, Rt Hon. A. (Wakefield)

Marples, A. E.

Summerskill, Rt. Hon. Edith

Greenwood, A. W. J. (Huywood)

Marsden, Capt A.

Sutcliffe, H.

Grey, C. F.

Marshall, D. (Bodmin)

Sylvester, G. O.

Gridley, Sir A.

Marshall, S. H. (Sutton)

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

Grierson, E.

Mathers, Rt. Hon George

Taylor, H. S. (Mansfield)

Griffiths, D. (Rother Valley)

Mayhew, C. P.

Taylor, R. J. (Morpeth)

Grimston, R. V.

Medlicott, Brigadier F.

Teeling, William

Guy, W. H.

Mellish, R. J.

Thomas, Ivor (Keighley)

Haire, John E. (Wycombe)

Mellor, Sir J.

Thomas, I. O. (Wrekin)

Hall, Rt. Hon. Glenvil

Middleton, Mrs. L.

Thorneycroft, G. E. P. (Monmouth)

Hamilton, Lieut-Col. R.

Monslow, W.

Thorneycroft, Harry (Clayton)

Hannon, Sir P. (Moseley)

Moore, Lt.-Col. Sir T.

Thornton-Kemsley, C. N.

Hardy, E. A.

Morris, Hopkin (Carmarthen)

Thorp, Brigadier R. A. F.

Hare, Hon. J. H. (Woodbridge)

Morris-Jones, Sir H.

Thurtle, Ernest

Harris, F. W. (Croydon, N.)

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

Tolley, L.

Harris, H. Wilson (Cambridge Univ.)

Morrison, Maj J. G. (Salisbury)

Touche, G. C.

Harrison, J.

Mort, D. L.

Usborne, Henry

Harvey, Air-Comdre A. V.

Mott-Radclyffe, C. E.

Vernon, Maj. W. F.

Hastings, Dr. Somerville

Moyle, A.

Viant, S. P.

Haworth, J.

Neal, H. (Claycross)

Wakefield, Sir W. W.

Head, Brig. A. H.

Nicholls, H. R. (Stratford)

Walker, G. H.

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

Nicholson, G.

Wallace, G. D. (Chislehurst)

Henderson, Rt. Hn. A. (Kingswinford)

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

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

Henderson, John (Cathcart)

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

Warbey, W. N.

Herbison, Miss M.

Nutting, Anthony

Webb, M. (Bradford, C.)

Hewitson, Capt M.

Odey, G. W.

Webbe, Sir H. (Abbey)

Hinchingbrooke, Viscount

Oliver, G. H.

Weitzman, D.

Holman, P.

Orr-Ewing, I. L.

Wheatley, Rt. Hon. John (Edinb'gh, E.)

Holmes, H. E. (Hemsworth)

Paget, R. T.

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

Holmes, Sir J. Stanley (Harwich)

Parkin, B. T.

Whiteley, Rt. Hon. W.

Hope, Lord J.

Paton, Mrs. F. (Rushcliffe)

Wilkins, W. A.

Hoy, J.

Paton, J. (Norwich)

Willey, O. G. (Cleveland)

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

Pearson, A.

Williams, C. (Torquay)

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

Peart, T. F.

Williams, Ronald (Wigan)

Hulbert, Wing-Cdr. N. J.

Poole, Cecil (Lichfield)

Williams, W. T. (Hammersmith, S)

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

Popplewell, E.

Williams, W. R. (Heston)

Hynd, H. (Hackney, C.)

Porter, E. (Warrington)

Willis, E.

Irvine, A. J. (Liverpool)

Porter, G. (Leeds)

Wilmot, Rt. Hon. J.

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

Prescott, Stanley

Winterton, Rt. Hon. Earl

Isaacs, Rt. Hon G. A.

Prior-Palmer, Brig. O.

Wise, Major F. J.

Janner, B.

Proctor, W. T.

Woodburn, Rt. Hon A.

Jay, D. P. T.

Randall, H. E.

Woods, G. S.

Jeffreys, General Sir G.

Ranger, J.

Wyatt, W.

Jeger, G. (Winchester)

Reed, Sir S. (Aylesbury)

Yates, V. F.

Jenkins, R. H.

Reid, T. (Swindon)

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

Jones, D. T. (Hartlepool)

Rhodes, H.

Younger, Hon. Kenneth

Keeling, E. H.

Ridealgh, Mrs. M.

Keenan, W.

Roberts, Emrys (Merioneth)

TELLERS FOR THE AYES:

Mr. Hannan and Mr. Bowden.

NOES

NIL.

TELLERS FOR THE NOES:

Mr. Piratin and Mr. Solley.

BUSINESS OF THE HOUSE
Motion made, and Question put,
"That the Proceedings on Government Business be exempted, at this day's Sitting,
from the provisions of Standing Order No. 1 (Sittings of the House)."—[The Prime Minister.]
The House divided: Ayes, 218; Noes, 103.

Division No. 204.]

AYES

[3.55 p.m.

Acland, Sir Richard

Foot, M. M.

Peart, T. F.

Adams, Richard (Balham)

Fraser, T. (Hamilton)

Piratin, P.

Albu, A. H.

Ganley, Mrs. C. S.

Poole, Cecil (Lichfietd)

Allen, A. C. (Bosworth)

Gibbins, J.

Popplewell, E.

Allen, Scholefield (Crewe)

Gibson, C. W.

Porter, E. (Warrington)

Attewell, H. C.

Glanville, J. E. (Consett)

Porter, G. (Leeds)

Attlee, Rt. Hon. C. R.

Greenwood, Rt. Hon. A. (Wakefield)

Proctor, W. T.

Austin, H. Lewis

Greenwood, A. W. J. (Heywood)

Randall, H. E.

Ayles, W. H.

Grey, C. F.

Ranger, J.

Bacon, Miss A.

Grierson, E.

Reeves, J.

Balfour, A.

Griffiths, D. (Rother Valley)

Reid, T. (Swindon)

Barnes, Rt. Hon. A. J.

Guy, W. H.

Rhodes, H.

Barstow, P. G.

Haire, John E. (Wycombe)

Ridealgh, Mrs. M.

Barton, C.

Hall, Rt. Hon. Glenvil

Roberts, Emrys (Merioneth)

Battley, J. R.

Hamilton, Lieut.-Col. R.

Roberts, Goronwy (Caernarvonshire)

Bechervaise, A. E.

Hardy, E. A.

Robinson, Kenneth (St. Pancras, N.)

Bellenger, Rt. Hon. F. J.

Harrison, J.

Rogers, G. H. R.

Benson, G.

Hastings, Dr. Somerville

Ross, William (Kilmarnock)

Beswick, F.

Haworth, J.

Scott-Elliot, W.

Bing, G. H. C.

Henderson, Rt. Hn. A. (Kingswinford)

Segal, Dr. S.

Binns, J.

Herbison, Miss M.

Sharp, Granville

Blackburn, A. R.

Hewitson, Capt M.

Shawcross, Rt. Hn. Sir H. (St. Helens)

Blyton, W. R.

Holman, P.

Silverman, J. (Erdington)

Bottomley, A. G.

Holmes, H. E. (Hemsworth)

Silverman, S. S. (Nelson)

Bowen, R.

Hoy, J.

Simmons, C. J.

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

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

Skeffington, A. M.

Braddock, T. (Mitcham)

Hughes, Emrys (S. Ayr)

Skeffington-Lodge, T. C.

Brook, D. (Halifax)

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

Skinnard, F. W.

Brooks, T. J. (Rothwell)

Hynd, H. (Hackney, C.)

Smith, C. (Colchester)

Broughton, Dr. A. D. D.

Irvine, A. J. (Liverpool)

Smith, Ellis (Stoke)

Brown, George (Belper)

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

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

Brown, T. J. (Ince)

Isaacs, Rt. Hon. G. A.

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

Brown, W. J. (Rugby)

Janner, B.

Snow, J. W.

Bruce, Maj. D. W. T.

Jay, D. P. T.

Solley, L. J.

Burke, W. A.

Jeger, G. (Winchester)

Soskice, Rt. Hon. Sir Frank

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

Jenkins, R. H.

Sparks, J. A.

Byers, Frank

Jones, D. T. (Hartlepool)

Steele, T.

Castle, Mrs. B. A.

Keenan, W.

Stress, Dr. B.

Chater, D.

Kinley, J.

Stubbs, A. E.

Chetwynd, G. R.

Kirby, B. V.

Summerskill, Rt. Hon. Edith

Cluse, W. S.

Lewis, A. W. J. (Upton)

Sylvester, G. O.

Cobb, F. A.

Lipton, Lt.-Col. M.

Taylor, H. B. (Mansfield)

Cocks, F. S.

Longden, F.

Taylor, R. J. (Morpeth)

Collindridge, F.

Lyhe, A. W.

Thomas, I. O. (Wrekin)

Colman, Miss G. M.

McAdam, W.

Thorneycroft, Harry (Clayton)

Comyns, Dr. L.

McEntee, V. La. T.

Thurtle, Ernest

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

MeGhee, H. G.

Tolley, L.

Cove, W. G.

McGovern, J.

Vernon, Maj. W. F.

Cripps, Rt. Hon. Sir S.

McKay, J. (Wallsend)

Viant, S. P.

Crossman, R. H. S.

McLeavy, F.

Walker, G. H.

Daggar, G.

MacMillan, M. K. (Western Isles)

Wallace, G. D. (Chislehurst)

Daines, P.

MacPherson, Malcolm (Stirling)

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

Davies, Rt. Hn. clement (Montgomery)

Macpherson, T. (Romford)

Warbey, W. N.

Davies, Edward (Burslem)

Mainwaring, W. H.

Webb, M. (Bradford, C.)

Davies, Ernest (Enfield)

Mallalieu, J. P. W. (Huddersfield)

Weitzman, D.

Davies, Harold (Leek)

Mathers, Rt. Hon George

Wheatley, Rt. Hon. John (Edinb'gh, E.)

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

Hayhew, C. P.

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

Davies, R. J. (Westhoughton)

Mellish, R. J.

Whiteley, Rt. Hon. W.

Deer, G.

Middleton, Mrs. L.

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

Dobbie, W.

Monslow, W.

Wilkins, W. A.

Dodds, N. N.

Morris, Hopkin (Carmarthen)

Williams, Ronald (Wigan)

Driberg,, T. E. N.

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

Williams, W. T. (Hammersmith, S.)

Dugdale, J. (W. Bromwich)

Mori, D. L.

Williams, W. R. (Heston)

Dumpteton, C. W.

Moyle, A.

Willis, E.

Dye, S.

Naylor, T. E.

Wilmot, Rt. Hon. J.

Ede, Rt. Hon. J. C.

Neal, H. (Claycross)

Wise, Major F. J.

Edelman, M.

Nicholls, H. R. (Stratford)

Woodburn, Rt. Hon. A.

Edwards, W. J. (Whitechapel)

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

Woods, G. S.

Evans, E. (Lowestoft)

Oliver, G. H.

Wyatt, W.

Evans, S. N. (Wednesbury)

Paget, R. T.

Yates, V. F.

Ewart, R.

Parkin, B. T.

Younger, Hon. Kenneth

Farthing, W. J.

Paton, Mrs. F. (Rushcliffe)

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

Paton, J. (Norwich)

TELLERS FOR THE AYES:

Follick, M.

Pearson, A.

Mr. Hannan and Mr. Bowden.

NOES

Agnew, Cmdr. P. G.

Hannon, Sir P. (Moseley)

Mott-Radclyfle, C. E.

Amory, D. Heathcoat

Hare, Hon. J. H. (Woodbridge)

Nicholson, G.

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

Harris, F. W. (Croydon, N.)

Odey, G. W.

Assheton, Rt. Hon. R.

Harris, H. Wilson (Cambridge Univ.)

Orr-Ewing, I. L.

Baldwin, A. E.

Harvey, Air-Comdre. A. V.

Pickthorn, K.

Barlow, Sir J.

Head, Brig. A. H.

Prescott, Stanley

Baxter, A. B.

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

Prior-Palmer, Brig. O.

Beamish, Maj, T. V. H.

Henderson, John (Cathcart)

Reed, Sir S. (Aylesbury)

Birch, Nigel

Hinchingbrooke, Viscount

Robinson, Roland (Blackpool, S.)

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

Holmes, Sir J. Stanley (Harwich)

Sanderson, Sir F.

Boothby, R.

Hope, Lord J.

Shepherd, W. S. (Bucklow)

Bower, N.

Hulbert, Wing-Cdr. N. J.

Smithers, Sir W.

Boyd-Carpenter, J. A.

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

Spearman, A. C. M.

Braithwaite, Lt.-Comdr. J. G.

Jeffreys, General Sir G.

Stanley, Rt. Hon. O.

Buchan-Hepburn, P. G. T.

Keeling, E. H.

Stoddart-Scott, Col. M.

Bullock, Capt. M.

Lambert, Hon. G.

Strauss, Henry (English Universities)

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

Langford-Holt, J.

Studholme, H. G.

Carson, E.

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

Sutcliffe, H.

Channon, H.

Lennox-Boyd, A. T.

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

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

Lindsay, M. (Solihull)

Teeling, William

Crowder, Capt. John E.

Linstead, H. N.

Thomas, Ivor (Keighley)

Cuthbert, W. N.

Lloyd, Selwyn (Wirral)

Thorneycroft, G. E. P. (Monmouth)

Darling, Sir W. Y.

McKie, J. H. (Galloway)

Thornton-Kemsley, C. N.

Dodds-Parker, A. D.

Maclay, Hon. J. S.

Thorp, Brigadier R. A. F.

Drewe, C.

MacLeod, J.

Touche, G. C.

Eccles, D. M.

Macpherson, N. (Dumfries)

Turton, R. H.

Eden, Rt. Hon. A.

Maitland, Comdr. J. W.

Wakefield, Sir W. W.

Erroll, F. J.

Manningham-Buller, R. E.

Webbe, Sir H. (Abbey)

Foster, J. G. (Northwich)

Marples, A. E.

Williams, C. (Torquay)

Fraser, H. C. P. (Stone)

Marsden, Capt. A.

Winterton, Rt. Hon. Earl

Fraser, Sir I. (Lonsdale)

Marshall, D. (Bodmin)

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

Gammans, L. D.

Marshall, S. H. (Sutton)

Gates, Maj. E. E.

Medlicott, Brigadier F.

TELLERS FOR THE NOES:

Glyn, Sir R.

Mellor, Sir J.

Major Conant and

Gomme-Duncan, Col. A.

Moore, Lt.-Col. Sir T.

Brigadier Mackeson.

Grimston, R. V.

Morrison, Maj. J. G. (Salisbury)

ORDERS OF THE DAY
  FINANCE BILL
  As amended (in Committee and on re-committal), further considered.
  FINANCE BILL

    Clause 13.—(REMISSION OF CUSTOMS DUTIES ON CERTAIN AIRCRAFT AND PARTS AND EQUIPMENT THEREFOR.)
    Amendment proposed [6th July]: In page 7, line 27, to leave out Clause 13.—[Mr. Selwyn Lloyd.]
    Question again proposed, "That the words proposed to be left out stand part of the Bill."
    4.3 p.m.
    Mr. Selwyn Lloyd: With the leave of the House, I should like to say a little on this Amendment which I moved formally at our previous Sitting.
    When this Clause was proposed to the House it was dealt with very briefly by the Economic Secretary. The Clause gives power to exempt from import duty certain large types of aircraft imported into the United Kingdom and the spare parts and equipment for them, but the exemption applies only to aircraft with a wing span greater than 120 feet, so that in practice it applies only, I think I am right in saying, to the Constellations and Stratocruisers of B.O.A.C. The Economic Secretary was quite frank as to the purpose of the Clause, but when I asked him to give an estimate of the cost, he replied:
    "It will be very small."—[OFFICIAL REPORT, 27th June, 1949; Vol. 466, c. 862.]
    He then indicated, with his usual courtesy, that he would communicate to me what the actual cost would be. He did that. He told me, first of all verbally, that the cost would be £1 million annually. Later in a letter he said:
    "The actual remission of duty on aircraft and aircraft spares is likely to amount to over £1,400,000 this year, with a further El million spread over eight to ten years. The latter figure covers spares imported during the lifetime of the aircraft."
    I think that two points arise on this matter, and the reason I move the deletion of the Clause is so that the House may have an opportunity of hearing what they are.
    First, I must say, with the greatest respect, that I think it is wholly wrong for a Minister to come here to support a
    48
    Clause of this sort without knowing what the cost will be, particularly when that Minister is a representative of the Treasury, because in the course of his Budget statement the Chancellor gave all Members of the House a short lecture about their duties as custodians of the public purse and defenders of the interests of the taxpayer. Well, what is sauce for the ordinary Member of the House should, it seems to me, be sauce for a Minister representing the Treasury.
    The first point to which I think we must draw some attention is the fact that this expenditure of £1,400,000 should be described as being "very small." When we on these benches have frequently raised the question of public expenditure being extravagant we have been challenged, and the attitude of mind which can describe an expenditure of £1,400,000 as "very small" is indicative of the attitude of the Government towards the question of public expense. I expect I shall be met with the answer that this is only a transfer, that it is a remission of import duty, and that it will go to make the running of the nationalised airways more profitable. The fact remains that this year the taxpayer must find this £1,400,000, or at any rate forgo that amount of revenue, which means that the burden of taxation will be correspondingly higher. That is the first point with which I think the House should be acquainted.
    The second point is this. It should be made quite clear that this is a substantial subsidy to the Government-operated airlines. We all know what a hullabaloo there would be if it were proposed to give any private industry a subsidy amounting to £1,400,000. I am not saying it is a wrong thing, but I am saying that it should be known and appreciated by the House and the public that as a result of this Clause the Government-operated airlines are to receive a subsidy this year amounting to £1,400,000.
    Air-Commodore Harvey: There is a very large sum of money involved here in dollar expenditure. I do not want to get involved in a discussion of the set-up of the Government airline Corporations. We warned them over a long period that they would be confronted with a situation in which they would have to buy large quantities of spare parts from the United States, and I am surprised that the Chancellor ever agreed that these

    49
    large orders should be placed in the first instance. Inevitably, once such an order is placed we must for many years go on purchasing both airframe and engine spares.
    This remission is a form of subsidy, and I have no doubt that when the next accounts for the airline Corporations are published we shall be told that they have done very well compared with last year and with some foreign operators. I am in the aviation business myself, but that is not why I support the Amendment, because my interests are not affected in the slightest. Nevertheless, there are one or two companies in this country which possess aircraft with a wing span of 117½ feet. This Clause imposes a minimum wing span of 120 feet in qualifying for this remission, so that the poor private operator, who is helping the Government out in all their difficulties all over the world, is excluded from benefit. I believe that there are only about four aircraft involved. I hope that the Government will meet us by at any rate including multi-engined aircraft of the Skymaster type and above.
    What will happen in a few years' time when the Government airline Corporations, if they still exist—which I very much doubt—come to sell this equipment in the private market? The whole business is wrong from beginning to end. I object most strongly to this form of subsidy. I object to this money in dollars being exempt from taxation for these Government Corporations which are now losing £11 million a year.
    The Secretary for Overseas Trade (Mr. Bottomley): The Treasury have power to use this Clause only on the recommendation of the Board of Trade, and the Board of Trade make recommendations only in the national interest. [HON. MEMBERS: "Oh."] That is true. I should have thought Members would have realised the importance of civil aviation, particularly in the earning of dollars. For that reason we have to have the type of aircraft which will help the industry, and those particularly likely to help the industry in this connection are Constellations and Stratocruisers. It is in this connection that we want to have this Clause. This is precisely the principle which has been in operation for a long time, the principle that in the national interest it is sometimes necessary
    50
    to remit import duties to get necessary machines and spare parts. It is true that my hon. Friend recently said that this was a small amount, and I should have thought Members would have recognised that £2,400,000 spread over 10 years cannot be said to be a considerable figure. It is in that sense that my hon. Friend spoke of the amount as being small. As the hon. and learned Member for Wirral (Mr. Selwyn Lloyd) has said, this is really a matter of transferring something from one account to another, which means no loss to the Treasury.
    Mr. Erroll: The reasons put forward by the Secretary for Overseas Trade are most misleading and most unlikely to convince the House. If this is a bookkeeping transaction, it is of a very dubious character. There is no reason why the Corporations should not pay their import duties and have them reflected in the fares charged. This is another form of subsidy. The revision of these duties will reduce the un-profitability of the Corporations—in other words, we are authorising a subsidy of £1,400,000 to be paid.
    Mr. Bottomley: Would the hon. Member prevent the aircraft industry from being competitive?
    Mr. Erroll: I cannot see that it can be made any more uncompetitive than it is at present. If it is necessary to subsidise the Corporations, the proper way to do it is to grant an increased subsidy and not to do it in this backhanded manner, particularly when it is not made clear to which aircraft this concession will extend. Is it intended to apply it only to aircraft owned and operated by the Government Corporations, or will the concession apply to any private companies which may have similar aircraft?
    Mr. Bottomley: They will have the same facilities, subject to the same conditions which apply in the case of B.O.A.C.
    Mr. Erroll: The Clause has aptly been arranged to ensure that it will not confer any benefits at all on private companies. This Clause has been cunningly devised, and it now stands revealed as a naked subsidy to the aircraft Corporations. It ought to be brought forward as such, instead of being brought in supposedly

    51
    to meet the public interest. It is merely a Clause to bolster up at a cost of £1,400,000, an inefficient organisation of the Government. When we suggest some small concessions involving less than £1 million Members opposite tell us that the country cannot afford it, but when it is a matter of a subsidy to these Corporations the public coffers are as usual wide open.
    I should like to know whether this concession will be extended to foreign countries in respect of spare parts for the servicing of their aircraft, and whether reciprocal facilities have been agreed to for spare parts which B.O.A.C. and B.E.A. may require for their servicing depots in other countries. We are entitled to know where we stand in this matter. If this concession is intended to apply to foreign airlines, it should also apply in the case of our airlines operating overseas. For these and other reasons I hope the House will show that it regards this as a thoroughly pernicious Clause.
    4.15 p.m.
    Mr. Skinnard: I am at a loss to understand the logic of the argument of the hon. Member for Altrincham and Sale (Mr. Erroll). In the first place, he says that this £1,400,000 is a hefty amount, but only last week I heard £2 million described by Members opposite as chicken feed when they wanted some concession from my right hon. and learned Friend; indeed, a concession offered by my right hon. and learned Friend was announced as no concession at all because it amounted to a total of only £2 million. The Opposition are now arguing that the amount involved in this concession, which is to be spread over some 10 years, is an obstacle to this relief. On several occasions I have brought to the attention of the Board of Trade certain industries which wanted concessions by way of remission of duty in order to obtain spare parts from overseas to service machines producing for their export programmes. The benefits from such concessions would make the sums involved in remissions seem very small indeed. I am grateful to the Secretary for Overseas Trade for what he has done to assist in this way. I hope that the argument of Members opposite will be followed to its logical conclusion. If this is too large
    52
    a sum then there is no point in arguing that numerous other additions should be made to it.
    Lieut.-Commander Gurney Braithwaite: We have not had the pleasure up to now of the company of the Secretary for Overseas Trade during our long pilgrimage on the Finance Bill. Nor have we heard from the hon. Member for East Harrow (Mr. Skinnard), who I understand has been concentrating on tonsorial matters elsewhere. Had they been here during our previous discussions, they would not have brushed aside quite so light-heartedly the views which have been put from this side of the House. The Financial Secretary will at least recall the considerable efforts made during the Committee stage to exempt from import duties certain spare parts necessary for our export industries for machinery and alike, and that they were resisted very strongly by the Government by advancing precisely the opposite argument which has been put in the mouth of the Secretary for Overseas Trade this afternoon.
    It is no good riding off with the phrase "in the national interest," because we have now come to be more than aware that what the Government mean by that is "in the nationalised interest," which is an entirely different matter. That is what they are endeavouring to do on the ground of dollar earnings, and all the arguments adduced from these benches have been rejected when we pleaded for those industries, upon whom alone lies any hope of this country holding or extending the export markets. This has been a short, revealing Debate. It shows once again that when private industry is endeavouring to make the efforts which are demanded of it—and only last Wednesday the right hon. and learned Gentleman pleaded with manufacturers to come to the nation's rescue—their demands are sternly turned down, but nationalised industries, which are floundering deeper and deeper into the mire, have only to make a request and that request is granted.
    Sir Ralph Glyn: I understood the Secretary for Overseas Trade to say that this concession would be available to people other than the nationalised corporations. If that is so, why has this figure of 120 feet been inserted in the Bill. It seems to me that it must be there for some reason? If the concession

    53
    is going to be available generally speaking, and is not confined to the nationalised Corporations, why is it there? Someone suggested that this figure of 120 feet had some significance. I am much more interested in the fact that this is a deliberate deterrent to cut out people other than the Corporations. I understand that the Secretary for Overseas Trade denies that. He said that this is to apply to anybody, and all I am doing now is asking for information.
    Mr. R. A. Butler: I should like to support the point of view put forward by my hon. Friends on this side of the House. I was responsible for moving a modest Amendment at our last Sitting on the subject of small lengths and parts that certain industries required for industrial research. We drew attention to the fact that academic research was permitted to introduce into its laboratories certain small lengths and parts at a cost almost exactly similar to that involved in this concession. We used the illustration that we should give the Board of Trade the opportunity of judging each individual case. I am certain that our point of view was sound on that occasion, and I am also certain that it was widely backed up by industry. It was put forward on behalf of industrial research as a bona fide proposal.
    I was quite disgusted, therefore, when I came to the House this afternoon, and heard the Secretary for Overseas Trade using language exactly the same as I used in support of our Clause, and going on to argue that this sum of £1,400,000 should be taken from the taxpayer by remitting this duty. The little Amendment for which I was responsible was important in its own way, and would not have cost a very large sum of money. We in the Opposition have a genuine grievance here, because we have not been treated fairly. When a matter for private industry and research is brought forward and we ask the Board of Trade to decide when it is a bona fide case, it is turned down by the Government, but when a concession is asked for which will benefit the nationalised Corporations, the Government are ready to support the argument and the nationalised industries. We consider that here we have a genuine grievance, and in those circumstances we are ready to support those who wish to have this Clause deleted from the Bill.
    Mr. Charles Williams: In this Clause the Government have followed the usual procedure. In the first place they say that this is a very small concession, but they have not given us an exact figure of what it will cost. They say that in the first year it will cost £1¼ million, and the total cost will be spread over the next ten years. The result is that an impression is given outside that this is a very small matter indeed. Such procedure has been adopted on many other occasions by this Government, and it is one of the chief reasons why the public outside do not know the true position. It is only by looking at these things bit by bit that we can hope to expose these matters, because this is quite a wrong use of money.
    The point has been raised about help given to industry by means of a tariff or a duty. Before the war when this system was set up, we in our party thought it was perfectly fair that the Board of Trade should be the arbitrator in this matter between the general public and a particular industry, which might be helped by having a freer importation of certain goods. They were to decide the dispute, but they were not interested in a financial way except as a collector of taxes. Up to that point it worked fairly well, but as has been pointed out, the position now has entirely changed. The Board of Trade are part of the Government, and what they say is in the public interest, is not necessarily in the interest of trade as a whole, but in the interest of those industries which the Government have nationalised, and whose position they wish to safeguard, thereby safeguarding their own position as a Government. It is not fair that we should be in a position in which the Government, by using the Board of Trade, can remit a duty so as to give a private subsidy to their own particular industries. That is a point which ought to be emphasised again and again in this House. It has put the whole of these particular duties in a totally new position. What, in effect, they are doing here is to give a hidden subsidy to their own mismanagement. I should like to join with my hon. Friends in asking why this arbitrary figure of 120 feet has been fixed.
    It is quite obvious that some mess has been made and that this Clause has

    55
    been put in, regardless of the public interest and taxation, purely and simply to safeguard the Government. It is not to be inserted in the Bill to help our manufacturers or our skilled workers, but to help the Government and to hide a bad loss. I hope that we on these benches will vote against the Clause, and that we shall be joined by hon. Members on the other side, who have heard the argument and who have a belief in economy. Here they see a case where economy can be properly effected, and where it will help the industries and the workers of this country—if there is anyone on the other side of the House who cares two hoots for the workers and skilled artisans of this country.
    4.30 p.m.
    Sir William Darling: I am glad to see the Parliamentary Secretary to the Board of Trade here, because there are three question I should like to ask him on this matter. The first is whether it is possible for someone other than the Government to import aeroplanes with more than 120 ft. wing span, and if it is, whether dollars will be made available for that purpose, provided that the transaction is in the national interest? The second question is: What steps are being taken to have these spares made in this country under licence? Will the Minister bear in mind that the Ford Company came to this country for the manufacture of spares only and that they subsequently developed from a business manufacturing spares to a total car manufacturing business. Has the Minister considered having the spares made under licence? Admittedly it would be a very costly busines, but not so costly as spending what this Clause is going to cost.
    My third question to the Parliamentary Secretary is whether the licence to import spares which is justified on the ground of dollar earnings is to be extended in other directions? I am in correspondence with his Department on behalf of a constituent of mine who wants to import some spares for a piece of American agricultural machinery. Can such spares be imported under this Clause?
    Mr. Deputy-Speaker (Major Milner): The Clause relates to the remission of
    56
    Customs Duty only upon certain aircraft, and parts of equipment therefor.
    Mr. Oliver Stanley: On a point of Order. Is it not in Order to ask whether the facilities which are here being made available to a nationalised industry, are also being made generally available to private enterprise?
    Mr. Deputy-Speaker: I do not think that the inquiry of the hon. Member for South Edinburgh (Sir W. Darling) would really he relevant to this question.
    Sir W. Darling: I am grateful to you, Mr. Deputy-Speaker. I take it therefore that Clause 13 means that the Treasury are willing to facilitate the spending of dollars upon the replacement of parts and spares for certain American aircraft but not for other kinds of machinery which are also dollar earners.
    Mr. Beswick: Is it not the case that the Treasury, the Government, and the National Corporations were prepared to buy British aircraft of the size mentioned in this Clause but that the British aircraft manufacturing industry could not at this time provide that type of aircraft which the air Corporation wanted? It is not true and it is not correct for any hon. Member opposite, including the hon. and gallant Member for Macclesfield (Air-Commodore Harvey), to say that by this Clause or by any other means His Majesty's Government are favouring the American aircraft manufacturers as against the British manufacturers. The Government gave British manufacturers a perfectly good chance to produce these aircraft but the manufacturers have failed, temporarily, that is, for the time being, to provide suitable aircraft for the Corporations. It seems to me to be proper, again I hope temporarily, that the duty upon aircraft and aircraft parts of this size should be waived so that our airline operators should be competitive.
    Air-Commodore Harvey: Does not the lion. Member know perfectly well that the British aircraft industry as a whole was manufacturing fighters and bombers during the war and that the American industry were manufacturing transport aircraft? What the hon. Member has said is a slur upon the British aircraft industry, who are doing their utmost to pull the industry round.
    Mr. Beswick: It is not a slur on the industry. It is true that the industry was manufacturing fighters and it is also true that at the present time they are manufacturing good competitive aircraft below the figure mentioned in the Clause. That is the reason why the figure "120 feet" is mentioned in the Clause. Below that size, the British aircraft manufacturing is able to provide machines and parts that are wanted. As for there being any slur, I was only saying publicly in this House what hon. Members on the opposite side of the House say privately.
    Mr. R. A. Butler: On a point of Order. Are we to get a reply from the Government, Mr. Deputy-Speaker?
    Mr. Bottomley: Yes, Sir. With the permission of the House I should like an opportunity of speaking again and replying to what has been said. The right hon. Member for Saffron Walden (Mr. R. A. Butler) put a very fair point. I shall try to give him an answer to satisfy him. In connection with the earlier Debates it is true that there was resistance, in the sense that he mentioned. It is for this reason: we only remit import
    duty if the material, equipment or plant is not available here, or will not be available in a reasonable time. If it is shown that it will be available in a reasonable time, then we keep the duty on. In connection with this kind of aircraft it does not seem that it will be available within a reasonable time. Indeed, if they were available now, there would be no intention on the part of the Government to ask for the remission of the duty.
    One other reason why we want these powers is that other civil aviation undertakings, our biggest competitors, do not have to pay this duty, which makes the position much more favourable for them. It is only so that we may be on the same terms as our competitors that we ask for the Clause. I hope that this is the answer to the hon. Member for Abingdon (Sir R. Glyn). I would now ask hon. Members opposite not to press the Amendment to a Division.
    Question put, "That the words proposed to be left out stand part of the Bill."
    The House divided: Ayes, 209; Noes, 104.

    Division No. 205.]

    AYES

    [4.37 p.m.

    Acland, Sir Richard

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

    Hannan, W. (Maryhill)

    Albu, A. H.

    Cove, W. G.

    Hardy, E. A.

    Allen, A. C. (Bosworth)

    Cripps, Rt. Hon. Sir S.

    Harrison, J.

    Allen, Scholefield (Crewe)

    Daggar, G.

    Haworth, J.

    Alpass, J. H.

    Daines, P.

    Henderson, Rt. Hn. A. (Kingswinford)

    Attewell, H. C.

    Davies, Edward (Burslem)

    Herbison, Miss M.

    Austin, H. Lewis

    Davies, Ernest (Enfield)

    Hewitson, Capt. M.

    Ayles, W. H.

    Davies, Harold (Leek)

    Holman, P.

    Bacon, Miss A.

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

    Holmes, H. E. (Hemsworth)

    Balfour, A.

    Davies, R. J. (Westhoughton)

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

    Barstow, P. G.

    Deer, G.

    Hughes, Emrys (S. Ayr)

    Barton, C.

    Delargy, H. J.

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

    Battley, J. R.

    Dobbie, W.

    Hynd, H. (Hackney, C.)

    Bechervaise, A. E.

    Dodds, N. N.

    Irvine, A. J. (Liverpool)

    Benson, G.

    Driberg, T. E. N.

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

    Beswick, F.

    Dumpleton, C. W.

    Janner, B.

    Bing, G. H. C.

    Dye, S.

    Jay, D. P. T.

    Binns, J.

    Edelman, M.

    Jeger, G. (Winchester)

    Blackburn, A. R.

    Edwards, W. J. (Whitechapel)

    Jenkins, R. H.

    Blyton, W. R.

    Evans, E. (Lowestoft)

    Jones, D. T. (Hartlepool)

    Bottomley, A. G.

    Evans, S. N. (Wednesbury)

    Jones, P. Asterley (Hitchin)

    Bowden, Fig. Offr. H. W.

    Ewart, R.

    Keenan, W.

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

    Farthing, W. J.

    Key, Rt. Hon. C. W.

    Braddock, T. (Mitcham)

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

    Kinley, J.

    Brook, D. (Halifax)

    Follick, M.

    Kirby, B. V.

    Brooks, T. J. (Rothwell)

    Foot, M. M.

    Lawson, Rt. Hon. J. J.

    Broughton, Dr. A. D. D.

    Fraser, T. (Hamilton)

    Lewis, A. W. J. (Upton)

    Brown, T. J. (Ince)

    Ganley, Mrs. C. S.

    Lipton, Lt.-Col M.

    Bruce, Maj. D. W. T.

    Gibbins, J.

    Longden, F.

    Burke, W. A.

    Gibson, C. W.

    Lynn, A. W.

    Castle, Mrs. B. A.

    Glanville, J. E. (Consett)

    McAdam, W.

    Chamberlain, R. A.

    Greenwood, Rt. Hon. A. (Wakefield)

    McGhee, H. G.

    Chater, D.

    Greenwood, A. W. J. (Heywood)

    McGovern, J.

    Chetwynd, G. R.

    Grey, C. F.

    McKay, J. (Wallsend)

    Cluse, W. S.

    Grierson, E.

    McLeavy, F.

    Cobb, F. A.

    Griffiths, D. (Rother Valley)

    MacPherson, Malcolm (Stirling)

    Cocks, F. S.

    Guy, W. H.

    Macpherson, T. (Romford)

    Collindridge, F.

    Haire, John E. (Wycombe)

    Mainwaring, W. H.

    Colman, Miss G. M.

    Hall, Rt. Hon. Glenvil

    Mallalieu, E. L. (Brigg)

    Comyns, Dr. L.

    Hamilton, Lieut.-Col. R.

    Mallalieu, J. P. W. (Huddersfield)

    Mann, Mrs. J.

    Reid, T. (Swindon)

    Thomas, I. O. (Wrekin)

    Manning, Mrs. L. (Epping)

    Ridealgh, Mrs. M.

    Thurtle, Ernest

    Mathers, Rt. Hon George

    Robens, A.

    Tolley, L.

    Mellish, R. J.

    Roberts, Goronwy (Caernarvonshire)

    Vernon, Maj. W. F.

    Middleton, Mrs. L.

    Robinson, Kenneth (St. Pancras, N.)

    Viant, S. P.

    Monslow, W.

    Rogers, G. H. R.

    Walker, G. H.

    Mort, D. L.

    Ross, William (Kilmarnock)

    Wallace, G. D. (Chislehurst)

    Moyle, A.

    Scott-Elliot, W.

    Wallace, H. W. (Walthamstow E.)

    Naylor, T. E.

    Segal, Dr. S.

    Warbey, W. N.

    Neal, H. (Claycross)

    Sharp, Granville

    Wells, P. L. (Faversham)

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

    Silverman, J. (Erdington)

    Wheatley, Rt. Hon. John (Edinb'gh, E.)

    Nicholls, H. R. (Stratford)

    Silverman, S. S. (Nelson)

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

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

    Simmons, C. J.

    Whiteley, Rt. Hon. W.

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

    Skeffington, A. M.

    Wilkins, W. A.

    Oliver, G. H.

    Skinnard, F. W.

    Willey, O. G. (Cleveland)

    Parker, J.

    Smith, C. (Colchester)

    Williams, D. J. (Neath)

    Parkin, B. T.

    Smith, Ellis (Stoke)

    Williams, J. L. (Kelvingrove)

    Paton, Mrs. F. (Ruthcliffe)

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

    Williams, Ronald (Wigan)

    Paton, J. (Norwich)

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

    Williams, W. T. (Hammersmith, S.)

    Peart, T. F.

    Snow, J. W.

    Williams, W. R. (Huston)

    Piratin, P.

    Solley, L. J.

    Willis, E.

    Poole, Cecil (Lichfield)

    Sorensen, R. W.

    Wilmot, Rt. Hon. J.

    Popplewell, E.

    Soskice, Rt. Hon. Sir Frank

    Wise, Major F. J.

    Porter, E. (Warrington)

    Sparks, J. A.

    Woodburn, Rt. Hon. A.

    Porter, G. (Leeds)

    Stross, Dr. B.

    Woods, G. S.

    Price, M. Philips

    Stubbs, A. E.

    Wyatt, W.

    Pritt, D. N.

    Summerskill, Rt. Hon. Edith

    Yates, V. F.

    Proctor, W. T.

    Sylvester, G. O.

    Randall, H. E.

    Taylor, H. B. (Mansfield)

    TELLERS FOR THE AYES:

    Ranger, J.

    Taylor, R. J. (Morpeth)

    Mr. Pearson and Mr. R. Adams.

    Reeves, J.

    Taylor, Dr. S. (Barnet)

    NOES

    Amory, D. Heathcoat

    Gates, Maj. E. E.

    Mott-Radclyffe. C. E.

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

    Glyn, Sir R.

    Nicholson, G.

    Assheton, Rt. Hon. R.

    Gomme-Duncan, Col. A.

    Nutting, Anthony

    Baldwin, A. E.

    Grimston, R. V.

    Odey, G. W.

    Barlow, Sir. J.

    Hannon, Sir P. (Moseley)

    Orr-Ewing, I. L.

    Beamish, Maj. T. V. H.

    Hare, Hon. J. H. (Woodbridge)

    Pickthorn, K.

    Birch, Nigel

    Harris, F. W. (Croydon, N.)

    Poole, O. B. S. (Oswestry)

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

    Harvey, Air-Comdre. A. V.

    Prescott, Stanley

    Boothby, R.

    Head, Brig. A. H.

    Reed, Sir S. (Aylesbury)

    Bowen, R.

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

    Robertson, Sir D. (Streatham)

    Bower, N.

    Henderson, John (Cathcart)

    Robinson, Roland (Blackpool, S.)

    Boyd-Carpenter, J. A.

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

    Sanderson, Sir F.

    Braithwaite, Lt.-Comdr. J. G.

    Jeffreys, General Sir G.

    Smithers, Sir W.

    Brown, W. J. (Rugby)

    Keeling, E. H.

    Spearman, A. C. M.

    Buchan-Hepburn, P. G. T.

    Lambert, Hon. G.

    Stanley, Rt. Hon. O.

    Bullock, Capt. M.

    Langford-Holt, J.

    Stoddart-Scott, Col. M.

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

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

    Strauss, Henry (English Universities)

    Carson, E.

    Lennox-Boyd, A. T.

    Studholme, H. G.

    Challen, C.

    Lindsay, M. (Solihull)

    Sutcliffe, H.

    Channon, H.

    Linstead, H. N.

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

    Conant, Maj. R. J. E.

    Lloyd, Selwyn (Wirral)

    Teeling, William

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

    Lucas, Major Sir J.

    Thomas, Ivor (Keighley)

    Cuthbert, W. N.

    McKie, J. H. (Galloway)

    Thorneycroft, G. E. P. (Monmouth)

    Darling, Sir W. Y.

    Maclay, Hon. J. S.

    Thornton-Kemsley, C. N.

    Davies, Rt. Hn Clement (Montgomery)

    MacLeod, J.

    Thorp, Brigadier R. A. F.

    Digby, Simon Wingfield

    Macpherson, N. (Dumfries)

    Touche, G. C.

    Dodds-Parker, A. D.

    Maitland, Comdr. J. W.

    Turton, R. H.

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

    Marlowe, A. A. H.

    Webbe, Sir H. (Abbey)

    Drewe, C.

    Marples, A. E.

    Williams, C. (Torquay)

    Duthie, W. S.

    Marsden, Capt. A.

    Williams, Gerald (Tonbridge)

    Eccles, D. M.

    Marshall, D. (Bodmin)

    Winterton, Rt. Hon. Earl

    Erroll, F. J.

    Marshall, S. H. (Sutton)

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

    Foster, J. G. (Northwich)

    Medlicott, Brigadier F.

    Fraser, H. C. P. (Stone)

    Mellor, Sir J.

    TELLERS FOR THE NOES:

    Fraser, Sir I. (Lonsdale)

    Moore, Lt.-Col. Sir T.

    Commander Agnew and

    Gammans, L. D.

    Morrison, Maj. J. G. (Salisbury)

    Brigadier Mackeson.

    Clause 22.—(BORROWINGS AGAINST LIFE POLICIES TO BE TREATED AS INCOME IN CERTAIN CASES.)
    4.45 p.m.
    The Solicitor-General (Sir Frank Soskice): I beg to move, in page 15, line 25, to leave out from "arrangements" to "provision," in line 26, and to insert:
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    "made on or after the seventh day of April, nineteen hundred and forty-nine."
    The object of the Amendment is to take away the retrospective effect of the application of the Clause to certain policies of insurance. When we were discussing the Clause in Committee, many hon. Members opposite felt strongly that

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    it should not be retrospective. I deployed the reasons which seemed to us to be adequate for giving it retrospective effect of a very limited character. However, those reasons did not commend themselves to hon. Gentlemen opposite, and I think that my hon. Friends also felt that the Clause should not be retrospective. In those circumstances we have reconsidered the matter, and, having regard to the general view expressed, we have thought it right that the Clause should not be retrospective.
    Mr. R. A. Butler: I thank the Solicitor-General for a concession by the Government which meets the legitimate criticism which the Opposition put forward. This Amendment makes the Clause much easier to accept. It is a sign of grace that the Government should have listened to criticism and accepted so handsomely what was put before them.
    Mr. Benson: I am not, at all certain that the Amendment is a wise one, For many years now we have discussed these various complicated arrangements by which income is transmuted into capital for the purpose of taxation, and from time to time, Chancellors of the Exchequer have threatened that when they dealt with these matters they would make the provisions retrospective. I believe that upon one or two occasions we have done that. That general warning has been given not once but many times in this House by Chancellors of the Exchequer. Our determination to do this should not be weakened by taking notice of the protests of the Opposition, because Opposition Chancellors in the past have given that warning. On this Bill the Opposition have been clamouring for retrospective legislation when it was in the nature of concessions on the depreciation allowances. Where these schemes are deliberately designed for the purpose of tax avoidance, the penalties which have been threatened should be imposed as a warning to those who attempt to avoid taxation by these devious methods.
    Lieut.-Commander Braithwaite: I rise merely to point out to the hon. Gentleman that during the last discussion on this matter the Solicitor-General was at some pains to make the point that hon. Gentlemen on these benches had taken exception to retrospective machinery, and that some of his hon. Friends felt the same
    62
    way. So I do not think there is a point here at all. The fact of the matter is that retrospective legislation, and retrospective taxation in particular, has many objectionable features which we have discussed so often in this House that I will not reiterate the arguments now.
    Mr. Benson: I was not trying to make a party point. I drew the attention of the House to the fact that these warnings have in the past been given by Conservative Chancellors.
    Lieut.-Commander Braithwaite: Yes, but the hon. Gentleman pointed a minatory finger in this direction when delivering some of those sentences, and it would be a pity if it went on record that objection to this kind of legislation is by any means confined to any party. The hon. Gentleman and I have both been here long enough to know that the attitude of mind to the Government on those occasions is determined by whatever side of the House one happens to be sitting on at the time. However, I have always felt that retrospective taxation of this kind is objectionable, unless there have been the clearest warnings 12 months earlier, and I hope the House on this occasion will support the Government in the concession they have made.
    Mr. C. Williams: I agree with the right hon. and learned Gentleman that no one wishes to do anything else but make tax evasion difficult, but the hon. Member for Chesterfield (Mr. Benson) was a little hard on the Chancellor of the Exchequer today. Here is the Chancellor, with all his difficulties, for once doing something of real value for productive purposes, and when the Chancellor follows directly the Opposition's advice to do something sensible, the hon. Member for Chesterfield says he doubts the wisdom of it. I do not think it is fair of the hon. Member to treat his own Front Bench in that way, and I would warn the hon. Member, whose abilities I admire in a sense, that if he goes on like that many times, he will be in danger of being mistaken for a Member of the smaller Liberal group in this House, which kind of reactionary behaviour seems to be growing.
    For that reason, I hope the hon. Member for Chesterfield will abstain from needlessly lengthening debates by

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    sheer abuse of his own Front Bench when they are really being very good. I regret what has happened, because it is one of the rare occasions when we can all say that the Treasury have done something wise, not at the instance of the Treasury or of the Government, but mainly of the Tory Party, supported by certain sensible back bench Members opposite.
    Mr. Henry Strauss: The only back bench Member opposite who gave us some help on the last occasion was, I think, the hon. and learned Member for East Leicester (Mr. Donovan). I cannot help thinking that the hon. Member for Chesterfield (Mr. Benson), who I know gives these matters great thought, might have refreshed his memory of what happened in that Debate. If he does so, he will satisfy himself that this is not one of those cases where, on the basis of any declaration previously made by a Minister, retrospective action would be suitable.
    The fact is that this Clause results from a victory in the courts of the hon. and learned Member for East Leicester, and the House of Lords itself decided that certain payments were not income for Income Tax purposes. While it may or may not be proper to reverse that decision, it cannot be in the interests of British insurance, or, indeed, of the credit of our insurance companies who are seeking to win invisible exports, that the meaning of a policy should be altered retrospectively, when people have entered into these contracts in the light of a decision of the highest tribunal in this country. For those reasons, I hope that the hon. Member for Chesterfield will not disagree with Ministers who have come to a wise decision in making this Clause not retrospective.
    Amendment agreed to.
    Mr. Deputy-Speaker: I think it will be convenient to discuss the next two Amendments together, namely, to leave out Clause 24 and to leave out Clause 25.

    Clause 24.—(ABOLITION OF DUTIES.)
    Mr. R. A. Butler: I beg to move, in page 16, line 31, to leave out Clause 24.
    We now come to one of the major Debates of this afternoon, that is, on the
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    subject of the alteration in the Death Duties and the abolition of the Legacy and Succession Duties. You have suggested, Mr. Deputy-Speaker, that the Debate on these Clauses should take place together. I think that will be convenient, and we should like to reserve our position in regard to voting on one or both of these Clauses. The Debate thus gives us an opportunity to consider what the Chancellor described in his Budget speech as a moderate lift in the Death Duties. The more we have examined this matter, either from the angle of the desire of the Chancellor not to favour the family or from the point of view of the lift, the more we think this is a subject which deserves further Debate upon the Report stage of the Bill.
    Now, there appear to be several propositions put forward by the Government with which we disagree profoundly. The first proposition was put forward by the Solicitor-General in the course of our previous Debates, and that was that the present law is unjust in its operation. The second proposition put forward by the Government, and the Chancellor during his Budget speech, is that it is better not to favour the family when making a will. The third proposition is that the burden of the Death Duties should be increased. I confess that I feel more inclined to be highly critical upon the first two propositions, and on the subject of the burden of the Death Duties simply to express my great regret that this section of the Revenue should be called upon to raise a large sum of money in order to help us through our present economic crisis and difficulties—but I will deal with that matter at the end of my remarks.
    I shall now make one or two general observations which apply to the various propositions put forward by the Government spokesmen. The first general observation is that it is quite clear that the Chancellor and the Government have undertaken this so-called reform in regard to Clauses 24 and 25 for what is described as administrative convenience. They are proud of themselves for abolishing the Legacy and Succession Duties because, they claim, those duties have been difficult to administer and because, presumably, they occupy a large staff in their administration. I call this a very poor peck at tax reform. If we are to reform all our taxation structure, I would direct the

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    attention of the Government to the need for reforming our Income Tax generally, instead of concentrating so much upon these two taxes which have been operating for many years to the satisfaction of all those who have been beneficiaries and, I hope, to the satisfaction of those who have now passed away.
    5.0 p.m.
    I do not believe that to approach a reform of the taxation system simply from the angle of these two taxes is either an important move or a just move, I do not believe that the result which will be produced by the Government's so-called reform will be just to the widow and family. The second general observation is that the really heavy incidence of the alteration of the burden is due to the Government being in a muddled state of mind, for I maintain that they have tried to combine a reform in the Legacy and Succession Duties with the very considerable lift upwards which the Chancellor has tried to give to the Death Duties. When we examine the effect of these two efforts together—an attempt at reform and an attempt at lift—we see that at cerain scales in the range of estates a definite, severe injustice has crept in; and no taxation system will endure if there is injustice. I doubt whether the Revenue in future years will be able to look forward to the same results from the Death Duties generally as it has done in the past.
    The first arguments to which I want to address my attention are those put forward by the Solicitor-General in the course of our previous Debates. They are chiefly on the subject of the elimination of the preference for the family, which normally we should desire the testator to have. I quote the actual words of the Solicitor-General in his first argument, because it is very important that the whole case of the Government on this matter should be demolished. The right hon. and learned Gentleman said:
    "… notwithstanding that the testator has intimated as his desire that the relative shall have her legacy free of duty, we, in enforcing the present law, go contrary to his wish and carve the Legacy Duty out of the residue of the estate … the present state of the law is … utterly irrational."
    During the Committee stage, hon. Members on this side attempted to show that
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    it is not the state of the law that is irrational, but the Solicitor-General's mind, because it must be clear to him, the Solicitor-General, that if it is the intention of a testator to leave a certain sum to a beneficiary, if he consults a capable firm of solicitors or lawyers of repute he will be given advice which will enable him to make his own wish in making his will.
    For example, if a man takes legal advice in making his will, which it is usually desirable to do, he can, with the aid of modern science in the legal world, presumably reach an accurate picture. He can so draw his will that the Legacy Duty under the present state of the law is taken from the residue, and so the point made by the Solicitor-General is met. We do not, therefore, think that the right hon. and learned Gentleman's first point, that the law does not now operate fairly, can hold water, because, if a will is properly made, with legal advice, it is possible for the testator to aim at the target and to hit it. If, however, the testator does not wish to consult a lawyer and makes his will in a wrong way, it is possible to uphold the Solicitor-General's argument.
    The Solicitor-General's next argument in defence of this irrational proposal to remove the preference or benefit from the family was when he said:
    "Whereas we have an increase of from 3 per cent to 13 per cent. in the case of an estate of £6,000, with a big estate—an estate charged at the rate of 75 per cent. which is the rate charged on estates over £2 million—the increase is 2½ per cent. That is another reason why the present rate of Legacy Duty is indefensible."
    It is rather an extreme case to take a £2 million estate as an illustration, but it is obvious that when we start by a levy of 75 per cent. extra duty in one case and 3 per cent. in the other, any percentage rate for Succession Duty must mathematically represent the smaller proportion or the larger initial figure. If we look at the illustration given by the Solicitor-General, we find that in the end the gentleman who is in the fortunate position of owning a £2 million estate has to pay a tax of about £1,550,000. The Solicitor-General might well feel satisfied that, taking the whole of the duties together—Succession, Legacy and the ordinary Death Duty lift—the Chancellor does

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    quite well out of the larger estate. In the case of the smaller estate—the £6,000 estate—the total liability will amount to about £750. I do not, therefore, think that the present law is operating particularly much in favour of the larger estate, and when we come to the increase in the lift the larger estate will, of course, be very much more hit than it was before.
    The Solicitor-General's third argument was in these words:
    "At the same time we have considerably advantaged the poor dependent relatives who, in the future, will not have to pay the 20 per cent. which, in the case of a small legacy, is very heavy indeed if the relative is dependent largely upon the legacy for his or her support …"—[OFFICIAL REPORT, 27th June, 1949; Vol. 466, c. 792, 794.]
    The right hon. and learned Gentleman went on to make the burden of his argument that, thanks to the new irrational procedure proposed by the Government—taking away the preference given to the family—it would now be possible for the Government, so to speak, to insist that testators leave fairly and squarely the right amount of money which the Government think they ought to leave to people who are not their own near relatives. I do not believe that the distant aunt, the mistress, the friend, the chauffeur or anybody else will be advantaged by the Government's proposal, or that any Government can dictate to a testator how he decides his own will. At present, as I have tried to show, if we take legal advice and operate the present law as it stands, we can, in fact, achieve the results we desire; if we want to leave more to our families than to other people, we can achieve that result. If we want to switch the burden of our legacy on to the non-family person, non-related by blood, we can equally well do so.
    I do not believe that these things will be effected better by the Government's reform. In fact, the very reverse will happen to what the Solicitor-General said he desired, because if he tells, as he is telling, the public in this country that the present preference rate for the family—the widow especially—is to be removed, and that, in fact, the incidence of the new rates at certain levels over £17,500 is to go right against the family such care will be taken by testators to look after their own families that the distant relatives—those who have served
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    them faithfully and who are not relatives by blood—will be much worse off than before. Therefore, I draw the Solicitor-General's attention to the weakness of his own arguments, because I believe that this reform will not achieve the result he desires and that he will be cursed by the ass, as Balaam was in the end, instead of being blessed by that venerable animal.
    I want now to turn to some of the broader aspects of this particular reform. The Solicitor-General's main argument was that in the case of the family with an estate below the level of £17,500, the situation had been positively improved. However, if we examine some slightly larger figures, we find that the facts are somewhat disturbing as between the present and the future proposed law in regard both to the family and to strangers in blood or charities of any sort. Take, for example, an estate of £23,000. Under existing law the present rate of duty for a stranger is 12 per cent. Under the Budget proposals, however, there will be an actual reduction, as against the family, of some £3,358, as compared with the burden which would have fallen on the stranger under the existing law. Take the same estate of £23,000, and in the case of the family we find that, instead of a reduction as compared with the existing position, there is actually an addition of £286. As far as I know those figures are correct and they indicate a colossal improvement in the case of a stranger and a slight deterioration in the case of the family. On an estate of £67,000, where the general rate has gone up from 27 per cent. to 40 per cent., we find that the family, the widow and child or lineal descendants, are worse off by £7,734, whereas the stranger is still better off by £1,072.
    These are striking examples of the particular range of income to which the Solicitor-General did not give his attention very closely when he was addressing us on the last occasion. We claim that it is quite wrong for the Government to satisfy themselves that they are being equitable in the figure of £17,500 if, in fact, they are introducing gross anomalies of this sort in the general range of duties higher than that. We are told that there should not be one law for the rich and one for the poor. I am using those terms relatively in reference to these figures, but it is not an equitable basis on which to erect any taxation system

    69
    that we should treat certain people's estates with gross unfairness just because we combine the general lift of £20 million which the Chancellor wants from Death Duties with these new proposals for the abolition of preference under the Legacy and Succession Duties.
    The Financial Secretary to the Treasury (Mr. Glenvil Hall): My right hon. and learned Friend indicated that in the middle ranges the scales were, to use the words of the right hon. Member for Saffron Walden (Mr. R. A. Butler), somewhat anomalous and in collecting the extra £20 million he has evened out the scales in the middle ranges. Therefore, it is quite easy to get the type of figure which the right hon. Gentleman is quoting. The anomaly was there before.
    Mr. Butler: I should be quite ready to detain the House by giving a series of anomalous figures which would take a considerable time because, with the aid of very able advice, I have been able to collect combined tables which are extremely impressive and from which I have picked these two examples at two particular ranges, one which is above the range to which the Solicitor-General previously referred and one at a range of £67,000. If the Financial Secretary wishes to be completely convinced, I can continue to quote cases until the cows come home to show how unfair the matter is.
    If the right hon. Gentleman rises to intervene in my observations, I would ask why the Solicitor-General did not satisfactorily answer a similar case put forward from this side when the matter was previously discussed, and if today the right hon. Gentleman is so much aware of the anomalies in the Chancellor's proposals, why did he not put the cases fairly and squarely to us at an earlier stage? They completely justify the Opposition in raising these matters on the Report stage and the procedure of the House which enables us to go over these matters again. We have now, for the first time, a fair and square admission from the Government that the Chancellor's proposals operate in an inequitable manner over a range of incomes and we must ask the Government to give us satisfaction before we come to the end of the Debate, which is likely to take some little time. I have attempted to deal with some of the inequities arising out of the decision of the Chancellor to combine his lift with
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    the abolition of the preference hitherto given to the family and lineal descendants.
    5.15 p.m.
    I now turn to the second general part of the Debate—the effect of this lift on certain other aspects of the Revenue. The first point I wish to make is in relation to business and agricultural land. When we are considering Death Duties we very often find that the Debate is clouded by passion or class considerations, because we have in our minds a dear old boy, having a pleasant, fat and jovial exterior, who will be mulcted by the Chancellor, and the general impression on the other side of the House is that that would be a good thing and that at any rate the disparity is too great between one section and another. The argument is that it would be a good thing for the younger people to make their own way in the world and that Death Duties are an amiable way of giving the young a better opportunity in life.
    I will not argue on that basis this afternoon, for we are all ready to face the new world into which we have been moving and in which we are all closely knit together and there is not the same disparity of income. I consider that there are certain social results which follow raising the Death Duties and which, on the whole, all sections of the community will wish could have been avoided. I refer to certain traditions in England which it will not be possible to carry on because of the incidence of Death Duty.
    I want to concentrate the attention of the House this afternoon on the effect of these Death Duties on the small business and on the business of agriculture. Death Duties do not, of course, apply in the case of a continuing company, but they hit extremely hard the small family business and small family farm. I should like to get from the Financial Secretary or the Solicitor-General some indication of the effect they think this moderate lift of Death Duties will have on small businesses in this country. I have been able to collect no impressive statistics on the matter, but I know, from talking to people in my own district and discussing with them in private small businesses, whatever they may be, that the effect of the new lift will not only complicate the normal passage

    71
    of a business from father to son, which is a proper and legitimate thing, but will have an effect on keeping them in being.
    I understand that this Duty is to bring in £300,000 at the expense of agriculture. It will have the effect of what is described by economists as a disincentive on agricultural production. The agricultural industry entered a contract that the capital side of the industry would endeavour to support good estate management under the Agriculture Act, 1947. That entails greater and greater investment in agricultural land. Those with whom I have discussed this matter in the agricultural industry do not find it very encouraging that in this Budget they are expected to find by way of Death Duties a greater amount from agricultural land itself. In this respect the Chancellor has not been able to follow his predecessor's excellent example—the only excellent example given in the whole régime of his predecessor—and he has felt obliged to put a further burden on agricultural land. The effect will be that the Duty on an estate of some £100,000 level is more than 70 per cent. greater than it was before.
    I wish to refer to a further possible social consequence if we are to continue putting extra duties on agricultural land. The effect will be that some of the larger agricultural estates will be parcelled out, and I believe the division and cutting up of agricultural land is, in the end, against the interests of food production in this country. The party opposite have never been against the size of an industrial concern. It is certain they have not gone out to humanise that concern in the way we have, but they have never been against the size of industrial concerns. It is, if I may say so, extremely old-fashioned to think that for social reasons it is a good thing to cut up an agricultural estate. In fact, the more we cut up our agricultural estates, the less likely we are to get efficient food production, to provide full opportunity for the men on the land and to be able to employ modern machinery on the land. Therefore, I deprecate any attempt to use the taxation system for the purpose of parcelling up the land and cutting it up into small bits. I believe it would result, as it has done in European countries in British agriculture being less
    72
    able to meet the vital need of saving dollars by producing more food at home.
    On this matter of agricultural Death Duties, I do not desire unduly to exaggerate the position. I have named the total sum which is likely to accrue from this source. I have made these observations simply in order to indicate to the Government that I think it wrong, when they ask the capital side of the agricultural industry to invest more freely in the land, to impose extra burdens upon it. I think it right to ventilate these matters because, if not ventilated, they slip by without notice and observation, and their consequences are not registered either by the House or by the country.
    After raising most of the issues in connection with the family and with the moderate lift in Death Duties, I turn, in conclusion, to the main issue—the question of whether we ought ourselves to oppose this sum of £20 million on which the Chancellor depends from this source in this Budget. The issue is divided between the two Clauses, and, if I may give my opinion to my hon. Friends, I would say that we should be wise to oppose Clause 24 by our vote, and thereby in that way indicate our disagreement with the Chancellor in the methods he has chosen to adopt to discriminate against the family, and to make a very unfair arrangement under which the original family preference goes in the incidence of the Duties. In the case of the large sum of money which the Chancellor is expecting to get from Death Duties, I should like to indicate most strongly our regret that any more money has to be raised from this source, but in view of the severe financial difficulties which we are facing, I cannot advise my hon. Friends to vote at this time for leaving out that Clause. I have tried to cover the subject. I hope that we may now have a more convincing answer from the Government than we have yet had.
    Mr. Eccles: My right hon. Friend has clearly indicated that there are two quite separate issues which this Debate is to cover. In the first place there is the family principle upon which we had considerable discussion during the Committee stage. I very much regret that the Chancellor is not with us on this occasion because we particularly wished to have his views upon a matter on which many of us feel very strongly. The Chan-

    73
    cellor is altering the law of the land so that whether I leave a large or a small sum of money to my wife or child, or to a distant relative, or to a stranger, or to a cats' home, the total Estate Duty levied upon that legacy will now, for the first time, be the same.
    We feel very strongly that that is wrong. I have taken the trouble to read the debates on Sir William Harcourt's Budget when these duties were first introduced in a large way. It is quite clear that the House of Commons then felt, and I believe the same is true today, that the principle of the family is something which we ought to defend irrespectve of the weight of taxation imposed upon any particular estate. It is not a question of how much money a man or a woman is allowed to pass on at death; it is a question of whether the nearer members of the family should not be preferred over the more distant beneficiaries.
    I should have liked to ask the Chancellor to give us a clear answer on why he has abandoned the principle of consanguinity. As my right hon. Friend pointed out, we cannot be satisfied with the answers which have been given by the Solicitor-General. Has the Chancellor done this because he does not think that the principle of the family is of importance, or has he done it entirely for administrative convenience, in order that he might raise more revenue? We really must have a clear answer on that point because it is a matter of concern to us to know upon what social principles the Government base their whole attitude towards the legislation of this country.
    I shall say no more about that, and will turn to the second point, which is the increase in the revenue to be collected from Estates Duties. We did not discuss that at any length on the Committee stage. I put down a Question to the right hon. and learned Gentleman for written answer, which was answered last Monday. I put it down in an endeavour to find out exactly who is to pay the £20 million additional revenue. The answer which I got from the Treasury was not clear and was. I am bound to say, very unsatisfactory, because it must have been obvious that what I was trying to find out was from what particular categories of estate was the £20 million to come.
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    In his reply, the Chancellor said:
    "The existing Estate Duty scale is being retained for estates up to £17,500, …"
    That means that no one will pay more, whether they be a near relative or a stranger, on money coming to them out of estates not exceeding £17,500.
    The answer goes on:
    "Above that figure and up to £35,000 the proposed new scale of duty will not exceed the average of the three old duties taken together on estates of the same size."
    That means that none of the £20 million extra money will come out of estates in the category between £17,500 and £35,000. But in practice the distant relative and the stranger and the cats' home will pay less and the near relative will pay more, and the two will balance. That is thoroughly wrong as a principle of taxation if we are altering the duties.
    The final part of the answer is the part to which I really object. It says:
    "The additional £20 million of new revenue will come from estates above £35,000."—[OFFICIAL REPORT, 4th July, 1949; Vol. 466, c. 137.]
    The Chancellor knew perfectly well that I put down the Question in order to know from which estates of over £35,000 the £20 million a year is to come. I cannot make the calculation with the same accuracy as the Treasury, but is it not a fact that the great bulk of this £20 million will come from estates of between £35,000 and £100,000, and most of it from estates between £35,000 and £60,000. [An HON. MEMBER: "Between £35,000 and £75,000."] My hon. Friend says £75,000. That is very serious because it means that the lift in the Death Duties will not hit the very rich people but the middle range of estate, the sort of estate which is built up by men of initiative who get on in their own business and accumulate just about that size of fortune—something between £35,000 and £75,000. I think that those are the most desirable people to encourage on what I would call the enterprising or management side of our economy. Yet I believe they are the very people who are to bear the new duties, and not the very rich people, or those with estates of £250,000 to £5 million, or whatever may be the largest estate. Therefore I object to the scale on that ground as well.

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    5.30 p.m.
    Like my right hon. Friend, I wish to make one or two short observations upon this whole question of raising taxation upon capital and spending it upon anything which the Government have on the expenditure side of their Budget. If we go on as we are going now, what will happen is that the whole burden of taxation will finally rest upon the lower income groups. If successive Governments continue, for reasons of their social theory, to wipe out fortunes of any size at all, of course someone else will have to pay the taxation. The Death Duties injure our economy in two ways. In the first place, they reduce the taxable income on which Surtax can be levied. Perhaps hon Gentlemen opposite do not mind that. But they do something else which at the present time is a great deal more serious; they reduce savings.
    There cannot possibly be anything more likely to discourage people from saving than the Death Duties. When we read in the newspapers that in the first 14 weeks of the financial year the net result of small savings in this country was a deficit of £10 million I wonder what hon. Gentlemen opposite consider are the prospects for savings in this country over the next few years. We have not the figures for the big savings, and in this Clause we are largely dealing with people who make big savings. But we can be quite sure that if there is any dis-saving on the part of small people then it is even larger on the part of big people. I submit to the House that we shall not recover our position in the world if we destroy the sources of savings.
    The fact is that the original conception of Socialist policy was that it would be self-financing. It was originally supposed that it would be independent of taxation upon individuals. The State was to acquire the ownership of all means of production, exchange and distribution, and of course, having got that ownership into its hands, the State could decide how much of the national income the people could consume. It would be the complete arbiter over the proportion between savings and consumption. Hon. Gentlemen opposite have gone through a revolution in their thinking. They have quite abandoned the idea of Socialism being self-financing; now they seem to think that we can have Socialism financed by high taxation upon individuals.
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    I wonder if they realise how new a doctrine that is, and whether they have put it to their people that if they go on as they are going on now, it means that it will be the wage-earners who will have to bear the whole cost of the State. I am firmly convinced that they have not thought this out, and that they will find the people of this country did not expect that from their State Socialism. They expected it would be paid for by somebody else, but that has been abandoned; and now we have a system of taxation which will wipe out all the top fortunes. It may be that for reasons of social justice, hon. Gentlemen opposite think that is a good thing to do. But from the point of view of economics it can have but one result; the wage-earners will have to pay the whole cost of the State, and they will not like to do that.
    I myself do not like great extremes of wealth; I think they are incompatible with the age in which we live; but here we have a proposal which is not really attacking the great extremes of wealth. It is levying a duty on that middle band of fortunes which, as I have said previously, I think represent the most enterprising section of the whole population. I do not think the British people really dislike inequality. I have never found any of them who minded a man earning £5,000 a year if he came down to the factory and took off his coat and did a good day's work. That kind of inequality all British people, in their heart of hearts, admire; because they aspire to it themselves.
    I quite agree that it is somewhat difficult when we come to the conception of inequalities of fortune as opposed to income. But we must make up our minds that if hon. Gentlemen opposite—for some principle of social justice which I think most of them hold—believe it right to wipe out private fortunes, they are wiping out the capital which nourishes our industry and agriculture; and they must find some substitute for it. It appears to me logically impossible to have the great expense of the welfare State, which we have now, if all the cost of it is to be laid upon the backs of the working classes.
    Mr. H. Strauss: I think it was very much in the interest of our Debate that it was ruled that we might discuss these

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    two Clauses together. Having regard to the admirable speeches to which we have just listened I shall detain the House for only a few minutes. I wish to deal with what seem to me, as to the previous speakers, to be two separate points; the discrimination against the family and the height to which the total duties are being raised. In my opinion those two things together are quite disastrous. I was astonished by one sentence of the right hon. and learned Solicitor-General in his speech on the last occasion. It seemed to me to be very characteristic of what looked like logic, but as a matter of fact was quite foolish. In resisting the Amendment put forward from this side the right hon. and learned Gentleman used these words:
    "Either Estate Duty is wrong or it is right."—[OFFICIAL REPORT, 27th June, 1949; Vol. 466, c. 790.]
    thus implying that the height to which the duty was raised had nothing whatever to do with its merits. I cannot imagine a more short-sighted or a more foolish argument.
    Let me take first the question of the discrimination against the family. I do not wish to repeat the admirable statement of the facts which has been made by my hon. Friend the Member for Chippenham (Mr. Eccles) and others. But let us see what is admitted. It is admitted that over a large section of all the estates in this country, if the testator leaves his fortune to a stranger, that stranger will be better off after this change in the law than before; while, if he leaves it to his wife and children, the wife and children will be worse off under the change of law than they were before. I have not heard any justification of that at all. On a previous occasion the learned Solicitor-General drew a pathetic picture of a maiden aunt, who, he thought, might not under the existing law get quite what she might otherwise get. I do not know why he thought that.
    If this Finance Bill goes through in its present form, every well-advised person who has drawn a will will certainly reconsider all the legacies that he or she has left in order to minimise the great injury done to the family. But why should hon. Members opposite wish to do this injury to the family? It looks like a simplification of the law, of course, to
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    abolish Legacy Duty and Succession Duty and only to have Estate Duty, but, if Legacy Duty and Succession Duty are the only convenient method for securing some advantages to the wife and family over the stranger, then I think we should certainly resist their abolition. I hope that before this Debate ends, some hon. Member opposite will say why the Socialist Party desire to do this admitted injury to the family. So far, we have not been told, though the injury to the family is now not disputed.
    The other matter is the greatly excessive height of these duties, when we look at the rates in the Seventh Schedule. It is quite useless for Ministers to say that comparatively few people will be injured by this proposal. Even if it were true, and it is not, there is no real ground for being unjust to a few. It is thoroughly bad policy to discourage, and even to end, saving, nor will it further the policy, if any, of the right hon. and learned Gentleman the Chancellor of the Exchequer.
    There are a few hon. Members opposite who, as my hon. Friend the Member for Chippenham (Mr. Eccles) said, may think it very desirable as a matter of social policy to wipe out great accumulations of wealth. Assume that that is a desirable end. I think that if they study the economists who have given the most thought to this subject they will find out that, if that is their object, there is no need to raise even the maximum rates of Estate Duty to anything like the heights mentioned in the Seventh Schedule. A rate of Estate Duty between 30 per cent. and 40 per cent. would itself in a comparatively short time wipe out great accumulations of capital. It is wholly unnecessary for any purpose which I believe hon. Gentlemen opposite have in mind to raise the duty to the heights now suggested. With other measures that they have taken, it clearly discourages and, I suggest, ends saving.
    I know that hon. Members opposite can often satisfy their consciences by taking steps which will have these effects which they deny and then, a year later, they express extreme surprise that the financial state of the country entirely justifies the warning previously given them from these benches, the force of which they had hitherto denied. But I think even those hon. Members who have thought least

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    should begin to think when they have these two Clauses before them. They should begin to wonder whether there is not something slightly wrong in a philosophy that says that it is right to benefit the stranger, the cats' home, the mistress or any outside body to whom the testator may leave his money, and it is also right to penalise the widow and the children.
    5.45 p.m.
    I ask them to think again of the figure which has been mentioned of the size of estate which falls within the mischief of this Clause, according to their calculations—an estate over £35,000. An estate over £35,000, with the £ at the value that it had before the last war, may have sounded a fairly big estate. But I wonder if an estate of £35,000, at the present value of the £, is the sort of estate which has been much mentioned even by hon. Members opposite when they have sought to rouse the passions of the mob against great accumulations of wealth.
    Mr. Hugh Fraser: What about the value of the £ in future?
    Mr. Strauss: I doubt if I should be in Order if I went into that. No reason has been given for this differentiation against the family. If the only effective legal method of differentiating in favour of the family is to have Legacy Duty as well as Estate Duty, then I am against the abolition of the former. But, if there is an alternative method, let the Government and their skilled advisers advise us what that method is. What is quite certain is that they have not accomplished anything but injury to the family under the Clauses as they now appear in the Bill.
    Secondly, I say that the height of these Estate Duties is obviously and demontrably too great. Some hon. Members have used the revolting word, "disincentive," which I imagine to be the latest jargon for what used to be called a "deterrent." Certainly, now we have deterrents to saving. I think that it is time that we stopped deterrents to saving. Thirdly, I say that even if it were true that only a few were affected, and it is not true, that is no argument in support of the Clauses. Lastly, I say that
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    it is quite unnecessary to have duties of this height, if the aim in view is to end great accumulations of capital.
    Mr. Haworth: I did not intend to intervene in this Debate, but the very attractive way in which the hon. Member for Chippenham (Mr. Eccles) expressed his dissent from the Government's policy compels one to try to put the other point of view. In pursuing our Socialist policy and deciding that in this case an increase in Death Duties is justified, we are dealing with the problem which arises from our attempt to be just in the operations which we are carrying out. We have tried to be just to the people from whom, for instance, we have bought over shares in the various undertakings which we have nationalised.
    If we try to transform our society and, at the same time, try to give the same amount of money to all the shareholders in the various industries, we encounter a problem which can only be solved by fiscal methods. If we say, as in effect we have said up to now, "We will guarantee you practically the same income, because we will give you a fair purchase price for the industries we take over," then it is only the Chancellor of the Exchequer who can rectify that position if we try, as we do, to give a greater share of the national income to those who, in our opinion, deserve it most—the people who are right down at the bottom of the scale.
    Our view is that the more we spread out the national wealth, the greater the benefits to the whole of the community, even to the top people, because I think the hon. Member for Chippenham will agree that it is not a good thing morally or in any other way, that a few people should enjoy too much wealth. We are trying to remedy that position in the increase in the scale of the Death Duties, and it is because of the spread-over that we are improving the position of the vast mass of our people.
    There are cries of poverty and of the hardships that are caused from the Opposition, but if one travels about the country or in London, one can see no diminution in the numbers of people who are enjoying great fortunes. If one goes to the Dorchester or Savoy Hotels, or indeed to any first-class hotels in London,

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    one does not see any falling-off in the number of people who are living on a very high standard. I have not seen any difference in that respect, even with Death Duties as they are. There is no real falling-off in the number of very high incomes, though there has been some change in the division of incomes.
    The people who are suffering most are the people in the intermediate stages; the salaried workers are the hardest hit. Those most affected are at the top and at the bottom, but those at the bottom are considerably better off, those at the top slightly better off, and those in the middle considerably worse off. That does not indicate, however, a great falling away in the direction in which the Chancellor is suggesting in this Clause. This change can only he made by fiscal methods of changes in taxation.
    The other way would have been to appropriate the various industries, but we said that we would buy them out fairly, and, in our opinion, what is creating the difficulties is the fact that we took over these industries when they were practically bankrupt. We took over the coal industry when it was practically bankrupt, we guaranteed a full market price for it and gave to the shareholders in the industry a considerable amount of money more than the industry had been earning, and, for the first time, we have given to the workers in that industry reasonable conditions of work. The same thing applies to my own industry, the railways, which are bankrupt, not because of nationalisation—they would have been bankrupt anyway—but because we have to find £30 million in order to buy out somebody who had make investments in the railways in the past. As a result, we have been told that we have to change our outlook.
    As a Socialist, I have been brought up to believe that the only source of wealth is labour, and that it is only labour that can create wealth. People invest their money, and we like them to do so, but their investment does not mean the creation of wealth. It is only the people who work who earn a return on those investments. [Laughter.] It may be comical, but it is true, and until we get down to that position, I do not see any other remedy than for the Chancellor to increase the taxation on the shoulders of the people who can best afford to pay it. For that reason, I shall support the Chan-
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    cellor's proposal and oppose the Amendment.
    The Solicitor-General: Hon. Gentlemen opposite have intimated that they desire to discuss this matter fully, and I thought that possibly it might be helpful if I intervened now to deal with part of their arguments. Their arguments have fallen mainly into two categories. One is the sort of argument which the hon. Member for Chippenham (Mr. Eccles) outlined regarding the general character and incidence of taxation, and whether it should be raised and so on, while the right hon. Gentleman the Member for Saffron Walden (Mr. Butler) put forward an argument the main burden of which was that we were doing injury to the family, and the hon. and learned Member for the Combined English Universities (Mr. H. Strauss) went further and said that we were not only doing that, but were discriminating against it. I am quite sure that all hon. Members regard this as a matter of great importance which we should discuss without prejudice or heat, and nobody so far has endeavoured to engender either heat or prejudice.
    May I state quite dispassionately what we think, and why we have drawn this Clause as we have done? Of course, we accept at once, as I hope everybody in this House and outside it does, that the unity of the family and the preservation of the family tie are of prime importance to the future and welfare of this country. The question is whether, by this fiscal measure, we are in any way invading that principle. We think that we are not. I hope, without unduly restating what I said in the Committee stage, to put some aspects of the matter from the point of view which we take.
    I have said that, to start with, in 98 per cent. of the cases, the testator or the intestate leaves less than £17,500. I pointed out to the Committee that, in the case of estates up to £15,000, the new rates are the same as the old Estate Duty without the addition of Legacy and Succession Duties, and that, indeed, is the case for estates up to £17,500. In that sense we preserve the position, and in the case of estates up to £15,000 they do not have to pay the 2 per cent. Legacy and Succession Duty. As for estates between £15,000 and £17,500 the combined duty is not raised beyond what Estate Duty was alone. That covers about 98 per cent. of the cases of death

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    in this country either where there is intestacy or a will.
    I think that any impartial observer must say that, so far as 98 per cent. of our people are concerned, it cannot possibly be said that we are invading that principle. Indeed, it would be a complete travesty to say that we were. It is true that, although we are not lightening the burden for the widow, except for estates between £15,000 and £17,500, we are at the same time lightening the burden of the relative who is not so close as the wife and also for the stranger, because we remove from them the burden of having to pay Legacy Duty and Succession Duty. We put them on a par in cases of estates up to £17,500, which covers the vast majority or 98 per cent. of the people in this country.
    Next, it is said that we are removing a preference in favour of the wife and child. We are preserving the rule of the law, under which at the moment, upon the death of a spouse upon whom money has been settled by his or her deceased spouse, Estate Duty is not payable, so that there is to that extent a preference given in the cases of wife and child, and that exists not only in cases of estates of £17,500, but below. That is the position with regard to the majority of people in this country. It is then said that we are invading the principle in regard to estates over £35,000.
    In the case of the other estates of between £17,500 and £35,000, the new Duty is the equivalent of a combination of the three existing duties. It is said that when we get to estates above £35,000, we are beginning seriously to invade the principle that there should be some preference in favour of the family. I ask the House not to base their arguments on the great principle of the sanctity of the family, because that has nothing to do with it. It is true that we are now, in the cases of estates above £35,000 and those up to £17,500, putting the relatives, the cats' homes and the wife on the same footing. We have one duty now instead of three, and we really think that that works out more fairly than the present system. It is true that we are not giving the wife and child in any case any preference. We do not think that justice requires that we should, nor that the principle requires
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    that we should. We think it is proper to put them upon the same footing in relation to this combined duty.
    Mr. R. A. Butler: Why, in that case, did the right hon. and learned Gentleman make so much in the earlier part of his remarks of the argument he advanced of the cases below £17,500? Why does he preen himself upon that, and then proceed to the opposite argument over the 2 per cent.?
    6.0 p.m.
    The Solicitor-General: I was not conscious that I was preening myself upon anything. I was saying that we are, in point of fact, lightening the burden between £15,000 and £17,500. In the case of estates of up to £15,000, the wife and child simply pay what they paid before by way of Estate Duty only. That is to say, the new compound rate is only the equivalent of the old Estate Duty by itself. I said also that in the case of small estates, relatives, more distant relatives and strangers are advantaged in that they do not have to pay the Legacy and Succession Duties which they otherwise would have to pay. In the case of larger estates, as I said, they are all put upon the same footing.
    It is perfectly true, if one works it out arithmetically, that supposing a whole estate is bequeathed to a stranger in blood, that stranger, inasmuch as he would otherwise have had to pay 20 per cent. Legacy or Succession Duty before this Clause was introduced, by not having to pay it now, is considerably advantaged. He has to pay much less. It is also true that the family has to pay more than it otherwise would have to pay, but I shall make two comments with regard to that. The increase which the family has to pay is only to a certain extent attributable to the combination of the duty. It is largely attributable to the lift in the rate of duties as a whole in order to produce the £20 million. Therefore, the net result is that where there is a stranger or a relative not so close in blood as a wife and child, or where there is a wife or child, they are put upon the same footing.
    During the Committee stage, I sought to justify that by asking the Committee to look at the normal state of affairs. In the ordinary case of a large estate, it is not left to a stranger or to a cats' home,

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    and, thank heaven, it is not left to a mistress. That is not the normal practice of this country, and I hope it never will be. It is normally left to a close relative; if there is a wife and child, it is left to them. They get the whole of the residue, but the estate does, in point of fact, carve out modest legacies to dependants. I talked about dependent aunts, and so on, and hon. Gentlemen opposite poured a certain amount of scorn upon it. But it should not be treated with levity because, generally speaking, such people are dependent on the legacy. In their case, we have taken the view that the present scale of Estate Duty and Legacy and Succession Duties operates unfairly because, as I pointed out, we might constantly get a case of a son who is young and in the prime of life, and who can earn his living, inheriting £40,000 or £50,000 on which he has to pay 2 per cent. under the present rate of Legacy Duty.
    The relative who gets £5,000 or even £1,000, which means a great deal more to him or her—having regard to the fact that they are generally too old to work—than the £40,000 or £50,000 means to the son still young and able to earn his living, has to pay 10 or 20 per cent., as the case may be. We do not think that is fair, and that is what I meant by saying to the Committee that we thought that the present system works unfairly. It is much too burdensome upon the relative who is dependent upon the small legacy he or she receives, and it is too favourable, by reference to that relative, to the son who inherits the whole of the residue. All we have done is not to discriminate against the family—and in saying that, the hon. and learned Gentleman the junior Member for the Combined English Universities was really misdescribing the position—but to put them on the same basis. That is the way in which we have reconstructed this duty.
    If it were the case that an estate is nearly always left to a stranger, and if it were not normally the case that an estate goes to a wife or child with moderate legacies carved out of it for relatives, servants, and so on, there might be more to be said for the view that we should not take off the burden to such an extent in the case of the stranger and increase it in the case of the family. But that is the abnormal case; it is the case
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    which one comes across far more rarely than one comes across the case where the estate goes to the nearest relative, the wife or the son. For those reasons, we do not think that the change we have made is unjust, and we certainly repudiate and resent the suggestion that it in any way interferes with the sanctity of the home.
    We ask hon. Members on both sides of the House not to judge this matter as if it were the normal thing for testators to hesitate whether to leave their estates to their wives or to their mistresses. That, fortunately, as I have said, is not the state of affairs in this country. The normal thing is for the testator to leave his estate to his wife and to make provision for his other dependants, servants, and so on. For those reasons, we think that the new form we have embodied in the Bill works out fairly and reasonably.
    I said that two testators out of three, in the case of small legacies, evinced the desire, by the terms of the will, that such legacies should be free from Legacy and Succession Duties. Of course, it is perfectly true that by having his will properly drawn, the testator can carry out his intention. In the change we are making, we are seeking to reflect in the state of the law, the desire evinced by two out of three testators in leaving the small bequests which they make to dependants and servants free of Legacy and Succession Duties. I hope hon. Members will agree that it is not correct to accuse us of invading the sanctity of the home, and that those are reasons which justify us in the new form of duty we are seeking to put on the Statute Book.
    The right hon. Gentleman opposite said that this was simply administrative convenience. It is very far from that. We are firmly convinced that accountants, solicitors, members of families, legatees and everybody concerned in a bequest of any sort are gravely inconvenienced by not knowing when they have paid the last amount which they are called upon to pay. It is to their advantage to know once and for all, what is to come out of the estate by way of Estate Duty, and when they get the residue or their legacy, to know that nothing is to come out of it. As things stand at the moment, a legatee receives his legacy and then finds that he has to pay more out of it. It is that which we seek to avoid in

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    endeavouring to simplify the whole of the Death Duty code.
    With regard to the question of agricultural property, the rate at which we are giving relief—45 per cent.—is, as the House knows, just over the average rate under the present system. With regard to the lift, that is to say, the £20 million, only £300,000 of that will come from agricultural estates, and I do not think it can be said that there is very much ground for the apprehension expressed by the hon. Member for Chippenham in his speech when he said that would have the effect of causing many estates to be broken up into smaller and uneconomic units.
    With regard to the incidence of the duty upon small businesses, one has to remember that it is only in the case of estates over £35,000 that there is any increase in the rate. In the normal case, a small business would come either wholly or partly below that £35,000 limit. For those reasons, I hope the House will agree that there is no ground for wishing to delete this Clause. It only proposes to bring about a change which is necessary, and which is sensible in its framing.
    Mr. Eccles: Could the Solicitor-General tell us how much of the £20 million it is expected will come out of estates of between £35,000 and £75,000?
    The Solicitor-General: I shall have the figure obtained, but I can tell the hon. Gentleman that the great proportion of the £20 million—I speak subject to correction—will come from estates of between the £35,000 and the £100,000 limit. I shall have the figure obtained and checked, and then possibly it can be given to the House during a later stage of this Debate.
    Mr. Hugh Fraser: When we listened to the Solicitor-General during the previous stage of the Bill I must say that we on these benches were not impressed by his argument. As one of my hon. Friends pointed out, one of the most extraordinary answers the Solicitor-General put forward at that time was that either these duties are right or wrong. That was the burden of his argument last time. He may become a learned judge one day and say that imprisonment is either right or wrong, whether it is 15 or 20 years. We have the same attitude in
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    this euphemistic talk about the so-called "lift," as though it were something happy and glorious, like the advertisement for American cigarettes, "Get a lift from a Camel."
    In point of fact, this is an imposition of the heaviest sort. This is another example of scraping the barrel to its uttermost depth. That is precisely what the Government are doing. They produce extraordinary reasons why these duties are right and proper. The Solicitor-General has gone even further in distinguishing himself in his argument this afternoon. One of the arguments which the Solicitor-General produced in the first half of his speech, as was pointed out by my right hon. Friend the Member for Saffron Walden (Mr. R. A. Butler), was that it is all right for families at such and such a level, but that above that level it is not quite so good for them. Is it a new Socialist doctrine that some families are more sacred than others? This is very much an "animal farm" argument, such as we have been having this afternoon.
    Then the Solicitor-General said, "What we are really protecting is the maiden aunt of the fairly rich man; the maiden aunt or the mistress, as the case may be, should receive her bequest duty free." But such provision could be made if the will was properly drawn up. Surely, there is no need to defend that class of person against the possibility of the will being drawn on bits of old envelopes and left lying about. The serious arguments of the right hon. and learned Gentleman were put forward on the Committee stage, and they do not impress me. All that has happened is that the Government need £20 million, and are determined to get it. For that reason they have brought themselves into a quite absurd ideological position. The jump, or the "lift," falls heaviest on precisely those people who may be the most efficient and most dynamic—those who are making their way in the world, who have had considerable success and who may go well ahead. It is precisely those people to whom this duty is a grave disincentive.
    6.15 p.m.
    The next thing it attacks is the land. We must see that over the next few years something like a further £100 million is

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    invested in the land, and it is thoroughly bad that there should be this disincentive against further investment. For the Government to do anything which will decrease production from the land is crazy. It is time that hon. Members opposite thought seriously about these matters. They know that it is manifestly unjust to make these impositions in the interests of the Socialist State and the Socialist Party. Hon. Members opposite ought to stop going in for vote catching, and do a bit of serious breadwinning for this country. That is what is needed. This form of taxation is destroying the guts of our economic structure.
    Lastly, I come to the question of family legislation. The Solicitor-General said that this proposal is not in any way aimed against the family, but I submit that the effect of it is. One sometimes wonders whether the Chancellor of the Exchequer, being a younger son, is hankering to return to the succession system under which younger sons inherited the home. The effect of this imposition will be not in favour of the family but in favour of relations. We know that in certain areas of the world there are remote tribes where the uncle is the most important person, and where the act of marriage is not connected with birth.
    The principle behind this proposal is aimed against the family, despite the fact that the Chancellor is a leading person in a movement known as "Christian Action." I believe that any discrimination against the family is wrong. The Government are trying to get the maximum amount of money to pay for their own dissolute and ridiculous expenditure; and they are putting up wise and admirable people such as the unfortunate Solicitor-General to put before the House the most ridiculous arguments to which it has ever listened.
    Mr. Selwyn Lloyd: I should like very shortly to reinforce the forceful remarks of my hon. Friend the Member for Stone (Mr. H. Fraser). I think the only remark of the Solicitor-General with which I can agree was his remark to the effect that it was too hot for heated controversy. Apart from that, I was not in the least convinced by anything he said. He began by saying that 98 per cent. of the people were not affected by this problem at all.
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    It is not true. We believe that in this matter lies something which goes a very long way towards continued prosperity and production of wealth in this country. It is quite wrong to say that 98 per cent. of the people are not affected; they are extremely concerned.
    The first argument with which the Solicitor-General dealt was the simplification argument. I think we all agree that it would be a good thing to simplify these three types of duty, but we are not prepared to see them simplified if it means that the consanguinity principle is to go. How can he seriously deny that the consanguinity principle is affected in view of the figures? I have quoted some of them before, but I do not apologise for quoting them again. In the case of a man who leaves an estate of £50,000 to his son, the son has now, under the new order, to pay £3,720 more than he would have had to pay had these proposals not been brought forward.
    In other words, so I am told, the duty he will have to pay will be £15,500, whereas in the case of a stranger benefitting from the same-sized estate, the stranger will be £3,300 better off. I do not know whether those figures are correct or not, but they were given to me by an eminent chartered accountant and I do not think they are greatly wrong. The principle is that in the case of the man who leaves his property to his son, his estate will be very much more seriously affected. I say that that is a blow at the family, a blow for which no defence has been put forward this afternoon.
    The right hon. and learned Gentleman has not dealt with that last argument at all. His second argument was, "It is a very good thing in the interests of the poor relative." The right hon. and learned Gentleman is always very courteous and one hesitates to be discourteous to him, but it really is brazen effrontery to expect the House to accept an argument of that sort, because the matter lies entirely within the power of testator. He can decide how much the relative is to get under the new regime just as he could decide it under the old regime.
    The effect of this alteration may be that in certain cases the impoverished relative will be cut out altogether rather than derive any extra benefit, the point

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    being that under the present law it lies within the power of the testator to decide how much the impoverished relative will get and it will equally lie within his power to make that decision under the new order. If the Government want to bring in something which will prescribe how much should be left to elderly relatives, that is a very different business; but under these proposals freedom of action will still be with the testator. Therefore, that argument does not carry us any further.
    As my hon. Friend the Member for Stone just said, the real reason for this increase is clear. This proposal is dressed up in the same way as the increased duty on matches was dressed up as a benefit to the match-maker. In the same way, the relief of tax on national insurance benefits was dressed up, and the fact was concealed that it involved a further £10 million burden on the ordinary taxpayer. In this case it is an allegation of simplification and of help to the elderly relative, when what is really meant is to conceal the fact that it is the exaction of a further £20 million from the taxpayers of this country.
    The Chancellor himself introduced this proposal, if I may say so, in very diffident words. Perhaps I may quote them to the House:
    "Although, as I have stated earlier, there is not much further room for the equalisation of incomes by taxation, there is still a degree of inequality in the ownership of property, which may well be the subject of further adjustment."—[OFFICIAL REPORT, 6th April, 1949; Vol. 463, c. 2095.]
    I do not think these are frightfully enthusiastic arguments in favour of what is described as this "moderate lift."
    Who will be hit by this proposal? I am told that much of this money will come from people who leave between £35,000 or £75,000. The hon. Member for Walton (Mr. Haworth) talked about people he sees at the Dorchester doing themselves extremely well. If they are in that class, they are doing themselves extremely well in order to get rid of money so that they will have less to leave on which Death Duties will be payable. But in fact, it is not people within that class who are those who go and spend their money in that way at the Dorchester. This proposal will hit a type of small estate, of family business, which
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    I maintain represents a very important part of this country and which deserves every sort of encouragement.
    We are in a pretty critical condition so far as savings are concerned. Figures have already been quoted. I gave some figures on the Second Reading of the Finance Bill showing that at the present time net personal savings amounted to practically nothing. So far as industry is concerned, although there is this figure of £550 million or whatever it is, it is conceded that a great proportion of it has to go back in order to replace equipment and machinery, leaving a net saving in private industry of £200 million to £250 million a year. Where are the other savings to come from? Presumably they can come only by compulsory savings from the public and, in view of the mounting expenditure, it looks as though the Chancellor has not very much chance of obtaining much from there.
    Another aspect of the position is revealed in the figures for gross capital formation. The Chancellor, not very recently, talked about the Government's great capital investment programme. I have not the 1948 figures with me, but I think the 1947 figures for gross capital formation were £2,020 million. If one considers how that money was disposed of, it will be obvious that it was not too much. On one analysis I have seen it is calculated that replacement and repairs should have absorbed £1,175 million, that increase in working capital owing to the increasing cost of carrying stocks would be about £400 million and that expenditure on housing and various other capital projects, such as schools, etc., would be about £460 million.
    If those items are added together, it will be seen that they come to an excess over the £2,020 million without any provision for new industrial plant and machinery. There was not in fact adequate provision for replacement of old plant and machinery and, therefore, there was some expenditure on new plant and machinery. But the figures show, in my submission, that we do not suffer from excess of gross capital formation and, therefore, to make an additional tax on capital is wholly wrong.
    Like my hon. Friend the Member for Chippenham (Mr. Eccles) I looked up the old discussions on this matter in 1894 and I noticed with some interest

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    a memorandum from Sir William Harcourt to Lord Rosebery, dated 4th April, 1894. He was dealing with some criticism of his proposals from Lord Rosebery, who was the Prime Minister of the day. Sir William Harcourt wrote:
    "The fear as to the taxation of capital had some foundation 50 or 60 years ago when capital in this country was in deficiency. At the present time it is super-abundant and, not finding sufficiency of employment at home, runs to waste in Argentine and elsewhere."
    That is rather a curious and significant comment on overseas investment and Sir William Harcourt would no doubt be surprised to know that a subsequent generation has had to rely for their meat ration for one year on some of that money that had run to waste in the Argentine. In defending his proposals he spoke of capital being "superabundant." That is not the case in this country at the present time and an additional attempt to tax capital is, to my mind, wholly contrary to most of the things which the right hon. and learned Gentleman, the Chancellor, has been saying during the past year. The very fact that he includes within this Finance Bill a further measure taxing capital makes one doubt how much weight should be attached to the other things which he says.
    Mr. Benson: There is, at any rate, one point of agreement between this side of the House and the hon. and learned Member for Wirral (Mr. Selwyn Lloyd), and it is that Death Duties as a whole are, at the present time, a great deal too complex and should be simplified. The Chancellor has attempted to do that fairly successfully. But if we make a change we invariably tend to affect somebody adversely. When listening to the language which hon. and right hon. Gentlemen opposite have used with regard to the effect of the changes upon the family, it is very difficult indeed to take them seriously.
    6.30 p.m.
    This change has been described as an anomaly. It is not an anomaly; it is merely a change. There is no particular reason why the old form of Death Duties, the old incidence of Death Duties, should have been chosen in preference. It has been suggested that the change is disastrous to the family. Those were the words of the hon. and learned Member
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    for the Combined English Universities (Mr. H. Strauss), and I think someone else used the word "disastrous" as well. To use the language of hyperbole destroys any effectiveness a case may have—certainly the effect of the case put up by hon. Gentlemen opposite. What is the effect on the family? The Solicitor-General pointed out that 98 per cent. of the families in this country are not affected.
    Mr. H. Fraser: That has nothing to do with the argument.
    Mr. Benson: 98.2 per cent. of the families are not affected in any way, and therefore this change cannot have a disastrous effect on those families. Surely that stands to reason. What about the other 2 per cent.? Is it really suggested that this change will undermine the other 2 per cent.? Hon. Gentlemen know it is nonsense. As a matter of fact, the whole of this problem of the stranger and the family has been puffed up quite beyond what the facts warrant. The Chancellor is asking for £185 million in Death Duties this year. To what extent is the stranger actually going to benefit because of that £185 million? By a very tiny fraction indeed. I know it is possible for hon. Gentlemen opposite to pick out certain ranges of tax and say that the change would mean this effect or that in the case of a specific estate, if this amount were left to the stranger. One can always pick out examples of that kind. But what is the actual weight of benefit? It is less than 5 per cent. of the total amount of tax. It is a very tiny fraction—less than 5 per cent.
    But what is the definition of "stranger"? The right hon. Member for Saffron Walden (Mr. R. A. Butler) talked about mistresses and chauffeurs. It includes everyone further away than a brother or sister. The vast majority of the estates which are left to strangers, even by that definition, are really still left inside the family. The actual amount left to completely non-consanguineous strangers is a tiny fraction. Even where the money is left, it is, as everybody knows, frequently left free of all taxation. So that when we came to put this question of the stranger's inheriting as against the family into the proper perspective, we find it is really a very tiny little problem indeed, and to suggest that this

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    change, which is a tiny little change so far as the actual amount of money involved is concerned, will have a disastrous affect on the family is to reduce our Debate in this House to a farce.
    Mr. Assheton: I do not want to bring this interesting Debate to a close, but I should like to make an observation or two.
    The Solicitor-General: Would the right hon. Gentleman allow me? I gave a figure in answer to a question asked by the hon. Member for Chippenham (Mr. Eccles) with regard to the ranges of fortune upon which this £20 million principally fell. The figure I gave was not quite correct, and I am sure that it will be the desire of the House that the correct figure should be given. It is this. Of the £20 million net increase in the Estate Duty, approximately a quarter comes from estates between £35,000 and £75,000; one half comes from estates between £75,000 and £250,000; the remaining quarter comes from estates over £250,000.
    Mr. Assheton: I am sure the House is most indebted to the right hon. and learned Gentleman for correcting the figures he previously gave, and I am sorry that my hon. Friend the Member for Chippenham (Mr. Eccles) is not here to hear him. I want to intervene in the Debate for only a few minutes. I spoke during the Committee stage on this subject. I want to make one or two observations with regard to some things that have been said, particularly by the hon. Member for Chesterfield (Mr. Benson). He made the case that this particular imposition was not to have a disastrous effect on the family. I should like to put the matter to him in a rather different way.
    The Chancellor of the Exchequer comes along to the House with a new proposal for dealing with the whole question of Death Duties, and at first blush many hon. Members think there are attractions in the new proposal. It is a simplification, and we have so many additional complications these days that if any Chancellor or any Minister comes along with a simplification it naturally attracts a good deal of sympathy. It is only when the House comes to examine this more closely that it finds that there are a great many snags. The hon. Member for Chesterfield made the case that this
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    is not going to be disastrous to the family. He said that 98 per cent. of the families would not be affected, and that as far as the remaining 2 per cent. were concerned—I am not sure how concerned he is about them—it was not going to be disastrous.
    What I want to put to him is, that if we are to make a new plan for levying taxes such as the tax of Death Duty, why not make the best plan we can?
    Mr. Benson: We have.
    Mr. Assheton: I want to suggest to the hon. Member and to the House that the way this plan is worked out it is not the best plan that can be proposed in the circumstances. It was brought out when we looked at the figures that all the way up to estates of £67,000 the stranger was to gain, and that family was to lose all the way up from £19,000. I do not believe it is the wish of the country as a whole that in estates in general there should be considerable additional tax on close relatives who inherit property, and, at the same time, a considerable concession to strangers and distant relatives.
    The figures have been quoted so often, but I should like the House to look at them again, because they are very interesting indeed. Take an estate of £4,000, which is quite a small estate. It goes to a stranger, and a stranger has to pay £1,100 less. If we take an estate of £8,000 the difference in the amount the stranger has to pay is £1,536 less.
    Mr. Glenvil Hall: Did the right hon. Gentleman mean £4,000 or £40,000?
    Mr. Assheton: An estate of £4,000. I think I am not going wrong. If the whole estate is left to a stranger, on £4,000 the difference in the amount payable is—I beg the pardon of the House—£784. In an estate of £8,000 it is £1,536. These are two comparatively small estates, and in both cases the stranger has to pay a great deal less, and I cannot for the life of me see why, taking the whole range of estates up to £35,000 there should be a considerable advantage given to the stranger at the expense of the family. That is the point I wanted to put to the hon. Member, without using any exaggeration.
    Mr. Benson: What the right hon. Gentleman is doing now is to explain

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    the anomalies in the past rates of taxation, not in the present one.
    Mr. Assheton: I am merely saying that when the balance is changed the money is taken out of the pocket of the family and put into the pocket of the stranger, and I do not think that is a very sensible thing to do.
    The hon. Member for Walton (Mr. Haworth)—whom I have the pleasure of meeting frequently on the Public Accounts Committee, and who always makes very valuable contributions to its proceedings—made one or two points which I think cannot be substantiated. I shall not argue with him whether or not it is only labour that produces wealth, because it would take far too long and is not wholly relevant to this occasion. Nor shall I argue with him the merits of having paid £1,000 million to railway stockholders and then subsequently finding that interest has to be paid, whether or not the interest is being earned. That would not have been the case, of course, had the railways not been nationalised.
    But I do want to argue with him the actual effect of taking this money from the testators and using it as income. The hon. Gentleman seemed to think that in some way or other that would be of great advantage to the rest of the community. He suggested that when the railways or the coalmines were nationalised the shareholders were paid out with Government stock, and the only way to put that right was to take it off them when they died. That, he argued, would be a great benefit to the community. I suggest that when the money is taken off them when they die that wealth is used to meet annual expenditure.
    The Chancellor is asking for approximately £170 million a year; he is using it as income; it is being used once-for-all. That wealth, I am sorry to say, is being destroyed, and it is a great pity that it is being destroyed. If it were used for capital purposes there would be at any rate a sounder economic argument than there is when it is used entirely for income.
    Mr. Benson: It is not being used for income.
    Mr. Assheton: Well, it is being used by the Chancellor in his Budget. He told us that he had a surplus of £14 million, and as this figure is £170 million—
    The Chancellor of the Exchequer (Sir Stafford Cripps): May I correct the right hon. Gentleman? I do not want any misunderstanding to arise in the country about this. He will appreciate that the capital expenditure of the Government, including loans to local authorities for housing, is met out of revenue, so that a great many capital items are discharged by the revenue receipts of the Budget, and that of which he is speaking is one.
    Mr. Assheton: It is perfectly true that there are considerable capital commitments which are met by the Budget. It is also true that the Chancellor has drawn lines in three different places which make it a little more difficult for the general public to understand it.
    Sir S. Cripps: I do not want them to be misled.
    Mr. Assheton: It is none the less true, as the Chancellor will see, that over the last 50 years or more since these heavy duties were imposed in 1894, money has been taken year by year from the capital resources of the country and used as income. There is not the slightest doubt about that.
    Sir S. Cripps: The right hon. Gentleman must not blame me for what Conservative Governments have done over the last 50 years.
    Mr. Assheton: There have not been Conservative Governments in power all the time during the last 50 years. Moreover, we shall wait to see how the Chancellor's proposal turns out. He does not differentiate the £170 million in his Budget. He puts it in as an item, and we are perfectly justified in suggesting that the revenue being garnered for this tax is being used for expenditure.
    The Solicitor-General told us that he accepted the family tie, and said that the principle of the family was not invaded. His arguments have not convinced the House, and I do not think anybody on this side of the House shared the view that the burden ought to be increased upon the family and reduced pro rata for the benefit of the stranger. A great many arguments have been used, and I have not yet found out how the Chancellor explains this to be a moderate lift. It has been shown how the lift is as steep as 70 per cent. in certain agricultural estates, and the Chancellor describes that as "moderate." He may argue that

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    they were taxed too low before. I think he does. But it certainly is not possible to argue that a lift of 70 per cent. is moderate.
    The argument of my hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd) is one to which we must attach a great deal of importance. The country as a whole is only just beginning to understand the full significance of these proposals; it is only-just beginning to understand the great increased burden which is being placed upon the family; and it is only just beginning to understand the increased burden being placed on agriculture and upon moderate sized businesses. When the effects of all these things come to be felt in the years ahead we shall bitterly regret the change proposed today.
    6.45 p.m.
    Mr. David Renton: Liberal statesmen of a bygone age have been quoted in this Debate, and it is perhaps time that one who has a Liberal origin and background should express his views. Let us make no mistake about it: there is no difference between the parties in this House as to whether we should redistribute and transfer wealth by means of Death Duties. It was first done a long time ago by Sir William Harcourt, and the duties which he imposed have been increased from time to time by successive Governments of different complexions. What does matter, however, and what is between us in discussing these two Clauses, is how it is done: whether it is justly done and whether the results will be beneficial or otherwise to the people as a whole.
    In the first place, I suggest that when dealing with other people's property, whether it be the property of rich people or of not so rich people, we should remember that the people of the country probably feel that, if the Government cannot act fairly in a big way and with regard to big estates, they are not likely to be capable of acting fairly in smaller ways and with regard to smaller people. It is, therefore, as important that we should be just where the larger esates are concerned as where much smaller ones are concerned.
    I was appalled to hear the Solicitor-General, with all his courtesy and charm, say not once but several times—as be has
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    done since this Bill was introduced—that these Clauses do not interfere with the sanctity of the home. One cannot find words to express one's views of such a remark made in such a glib way. Hon. Members have shown us clearly how this proposal does interfere with the sanctity of the home. I would only repeat the remarks of the right hon. Member for the City of London (Mr. Assheton) when he pointed out clearly what the net result will be if these Clauses are accepted; how in some estates wives and children will be worse off, while in comparable circumstances those who have no ties of blood, who may have only the crankiest of relationship or affinity, will be better off than they would have been before.
    For the Solicitor-General to say that this does not interfere with the sanctity of the home is palpably absurd, especially when we realise that an estate of £35,000—which, to use modern jargon, is the "dead line" in this matter—even if no duties were deducted from it at all, would at 3 per cent., deducting 9s. in the £, produce a yearly income of only £577 10s. But by the time the duties have been deducted the widow will find herself living on something like £1 a day. Therefore, to say that this figure of £35,000 affects—as I think was implied in the arguments of hon. Members opposite—people who are in any case very well able to look after themselves, is clearly incorrect. I was surprised that the hon. Member for Chesterfield (Mr. Benson), of all hon. Members, should advance in defence of these Clauses the housemaid's traditional excuse, by saying that in any case this is a very small matter affecting only a very few people and involving not a very large amount of money. What is important is that we should get our principles right. That is far more important, perhaps, than the quantities.
    The other matter we should bear in mind, on an occasion like this, is that if we are not very careful we shall defeat the object which Members on both sides have in attempting to redistribute wealth, as it has been done in the last 50 years. The hon. Member for Chippenham (Mr. Eccles) pointed out very clearly that, if we are not very careful, we shall inflict on the masses of the people of this country a greater burden of taxation than they would otherwise have to bear; that is, if we so redistribute

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    wealth that there are fewer high incomes on which Surtax is paid.
    I am not in favour of the unlimited accumulation of wealth; I am in favour of Death Duties; but I do say that this has to be done very carefully. The Government, in spite of the attitude of the hon. Member for Walton (Mr. Haworth)—who has given an example of the kind of oratory more frequently heard from platforms outside this House, and Communist platforms at that, when dealing with serious fiscal and economic matters—have succeeded in making the rich poor without any evidence whatsoever being given that the poor have become richer. I say that with all respect to the hon. Member, because I know he is a very sincere Socialist and thinks that he is a moderate one.
    Mr. Haworth: I tried, very inadequately no doubt, to show to the House that the reason we had to take this money was that we had to pay it back; it is because of having to draw the money to pay it back, usually to the same people.
    Mr. Renton: If the hon. Member seriously believes that the money which is taken in Death Duties finds its way into the pockets of the poor, he had better attend even more diligently to his work on the Public Accounts Committee.
    I feel it is important that the Liberal view, which has permeated the ideas of many members of both the Socialist and Conservative Parties, should be expressed, and I hope that the other section of the Liberal Party will be spurred by my somewhat provocative remarks to say something on this important matter. This is a line of thought and action which was started by our forebears many years ago, and it is up to us to see that we bring it to a sensible conclusion so that its whole object is not defeated.
    General Sir George Jeffreys: My right hon. Friend the Member for the City of London (Mr. Assheton) has dealt with the objections to the taxation of capital and spending the proceeds as income, so I will not labour the point. I will merely say that if an individual does this sort of thing, he is considered to be on the road to ruin; yet the sum of all individuals' capital constitutes the nation's capital, which the Government are dissipating like the individual who spends his capital, as many are compelled
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    to do nowadays by the Government's policy, the Government therefore losing the income by confiscation of the capital. The capital in the hands of individuals produces income. It produces Income Tax for the Government, and that tax the Government will no longer get when they have confiscated the capital which produces it.
    My right hon. Friend has pointed out how the Government's policy must militate against savings. Why should anyone save if the Government are to take the money and the savings? Is not the provision for children and dependants the greatest incentive of all, both to making money and to saving money? I know of no greater incentive, and I do not think there is one. The Government are not only taking as much as they can, but are now preventing widows and children from succeeding on better terms than non-relatives. There may be arguments for Death Duties on a moderate scale. Personally, I do not like them at all, and I do not pretend to like them. There may be arguments for spending the proceeds on capital expenditure, or possibly on the repayment of debt, but there are no valid arguments for Death Duties on the present huge scale, and for spending the proceeds as revenue.
    We have heard a great deal from hon. Members opposite about the undesirability of large fortunes, but if they had said the undesirability of fortunes of any kind, medium, moderate or large, they would have been nearer producing arguments on their own ideas for this Bill. They have quoted the undesirability of large fortunes as reasons for confiscatory taxation, but they do not consider whether it will do any good, as far as I can make out, or where the revenue is to come from when they have abolished income-producing capital. The fact is they are more concerned with doing harm to those who are, in general, their political opponents rather than with doing good to anyone at all.
    The Solicitor-General repudiated any idea on the part of the Government of any action against the home. We all know the old song to the effect that "Be it ever so humble, there's no place like home." I venture to suggest to hon. Members opposite that, apart from humble homes, there are less humble homes, there are moderate homes and there are even noble homes,

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    and that to those whose homes they are there is no place like home. The Chancellor of the Exchequer is definitely taking action to break up all but the humble homes in the country—[Laughter.] It is not too much to say that. It is already the result of the Death Duties. I have no doubt that hon. Members opposite are laughing at that.
    Sir S. Cripps: It is laughable when 98 per cent. of the homes, the humble homes, in this country have nothing whatever to do with this point.
    Sir G. Jeffreys: The right hon. and learned Gentleman no doubt has a great deal of knowledge of the ordinary life of the country outside the Treasury and the House of Commons. If he would reflect on that, he would realise that what he has said is definitely not the case, and that large homes are being broken up wholesale, as well as many of the moderate homes.
    Sir S. Cripps: What the hon. and gallant Member said was "the most humble." He said the majority of "the most humble homes."
    Sir G. Jeffreys: I beg the right hon. Gentleman's pardon. I think he misunderstood me. I said "all but the humble homes." I said that the largest homes and a great many moderate ones as well were being definitely broken up owing to his policy. I think that is a correct statement.
    Sir S. Cripps: I apologise. I certainly thought I heard, as did my right hon. and hon. Friends, the hon. and gallant Member say "all the more humble homes."
    Sir G. Jeffreys: It is perhaps a little outside the point, but we are now not at war; nevertheless, the same rule applies as regards Death Duties on those who are killed in action, which is definitely another blow at the home. The Treasury are pleased to take the life of a man who is killed, and if he has any property it takes a large slice of that, too, leaving his widow not only in sorrow and bereaved, but often in serious financial embarrassment as well. Though they make a generous gesture by offering her a pension of perhaps £120 a year, to say that that is not a blow at the home is stretching words to a very great extent.
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    I will not labour the point any more. I believe that this policy is disastrous. It is unsound financially to compel people to realise their capital and then to take it and spend it as income on a very large scale. In the end it will cause the Government to lose revenue, and that revenue will have to be found somewhere else, possibly from the very much poorer stratum of the population. I suggest that this is a very definite blow at the home, and is aimed not only at the home itself, but at the family which inherits the home.
    7.0 p.m.
    Mr. Ivor Owen Thomas: I did not intend to intervene in this Debate, but I am prompted to do so by certain of the arguments which have come from the Opposition. I am rather amazed at their constant concern for family life. I look down the proposed scale of rates of Estate Duty in the Seventh Schedule, and I gather that what concerns hon. Gentlemen opposite is the medium sized estate. In terms of figures I do not know what a medium sized estate is, because I am not even on the bottom figure in this list, nor are the vast majority of the people of this country. Millions of families in this country have not yet reached the quite modest achievement of a £2,000 estate, which is the lowest figure in the list in the Seventh Schedule.
    When I hear arguments about the proposed new rates breaking up family life, my memory goes back to the days of the means test, which was instituted by a Tory Government in the years before the war. I think of the hundreds, nay, thousands of families in South Wales, which were broken up by that dastardly policy practised by the Tory Government in those years.
    Mr. Renton: Does the hon. Gentleman deny that there is still a means test in certain instances?
    Mr. Willis: Not a family means test.
    Mr. Thomas: A means test may mean one thing or another. In fact, it may mean many things. What matters is what is left when any duty is imposed in the form of Estate Duty or what is left when a means test is applied, as it was applied in the days when the Tory Government were in power, particularly to the humble homes of working-class

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    families in industrial areas. Unemployment was rampant in those days, and there was no assured income for thousands of families. The last resort was an application for public assistance. The Tory Government applied a means test, which literally meant the breaking up of thousands of ordinary working-class families. When I see the crocodile tears coursing down the cheeks of hon. Members opposite as they make their plea for the people affected by this range of Estate Duty, I am amazed at their effrontery.
    Let us take the medium sized estate in this Schedule. Presumably hon. Gentlemen opposite are not concerned about the effect on the £1 million estate. I would not worry very much if I were to inherit the remainder of a £1 million estate even after 75 per cent. had been taken by the Chancellor of the Exchequer; it would give me a fairly good start in life if I were the youngest son of a so-called noble sire. On an estate of £15,000, which is a medium sized estate, duty of 10 per cent. means a payment of £1,500. That leaves £13,500. If the imposition of Estate Duty of that kind is going to result in the breaking up of family life I am certainly amazed. It is sheer nonsense, and it does not stand the light of reasonable criticism or argument. I hope, therefore, that for the sake of what remains of their good name in the field of logic and real honesty in political debate, there will be no further contributors from the Opposition to the Debate on this Amendment.
    Viscount Hinchingbrooke: I am sure the House enjoyed the incursion of the hon. Member for The Wrekin (Mr. I. O. Thomas) on the subject of Death Duties, and I trust that the House will hear from him again. His speech seemed to be an admixture of "It is more blessed to give than to receive" and sweet revenge for the Socialists. If he looks upon Death Duties in that light then I think he has yet very much to learn.
    The Debate has centred round two things—what is left of the Death Duties and the elimination of the discrimination as between relatives and non-relatives. It was because the Solicitor-General chose to combine both the principles, in replying in such an intricate way, that
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    on this side of the House we were unable to follow what he said. He reminds me of the electronic brain in Manchester University. The scientists, or Members of the House of Commons in this case, set up the conditions for the apparatus by their speeches, and then the brain responds, but it produces an answer on a cathode ray tube which nobody understands. Laymen as we are, we are not always able to follow all the legal intricacies in the speeches of the right hon. and learned Gentleman. That was our position. He did not make his meaning clear, and he did not deal faithfully with the points that were made.
    I deplore the increase in Death Duties. I think that they are extravagantly high and do grave social damage. I want to make a comment in passing. I shall deal more specifically with the main part of what has been said. I deplore the fact that neither the Socialist Party nor any other party over the last 20 years has been able to devise a principle in Death Duties which married wealth to responsibility. Except in the case of agriculture, which is specially treated, there has been no attempt to set aside the case on the one hand of the man who has ended his life, with, say £2 million in securities from which, on his death, the duties were extracted by the Treasury and the residue went to some distant relative, from, on the other hand, the case of the man who is surrounded by a multiplicity of responsibilities in a firm, a business or an estate.
    Farmers, bankers, merchants, lawyers, manufacturers, heads of distributive houses and hundreds of other important men and women in business end their lives and their estates are taken and subjected to penal taxation. In the process of that penal taxation their share in the business is broken up, although it may have been a most vital one. It is handed over to someone else. The business may be forced into becoming a limited liability company. The shareholders take over, and the family interest disappears. The whole connection is lost. Both political parties ought to turn their attention to the possibility of differentiating sharply between on the one hand the case of men and women whose wealth is proportionate to their responsibilities and, on the other hand, the case of men and women whose wealth is absolutely intact and does not affect the lives and businesses of others.

    107
    7.15 p.m.
    I should like to say a word or two about the principle of differentiation. We feel that the same differentiation should have been carried through into this Budget this year and should apply to the enhanced scheme of Death Duties. Here the Solicitor-General was not I think entirely accurate in what he said. He told us that 98 per cent. of persons leave less than £17,500 and are not touched by what is done in this Clause. I have before me a table which shows that the destruction of this principle of differentiation proceeds upwards from estates valued at £4,000. That is exactly what we complain about. All the way up from £4,000 to estates of the greatest magnitude, the Chancellor has made a change this year between what a man leaves to a distant relative or stranger and what be leaves to his widow or to a close relative. We are not trying to dispute the right of the Treasury to exact duties, but are trying to maintain the differentiation that always existed between those who were close and those who were further away.
    My right hon. Friend gave a figure for an estate of £4,000. It is quite wrong that the Chancellor should come along and say that a man's estate should pay £784 less this year than it would have paid last year in leaving the money to a stranger. In the case of an estate of £23,000, the difference is made up this year with £286 more in duty when the estate passes to the widow or lineal descendant, and £3,358 less when it passes to a stranger. That is the kind of example of which we complain. The Chancellor decides to take so much money every year in Death Duties. This year he has made a change in the principle. We ask: Is it right for him to take more this year than he did last year from the widow and less this year than he did last year from the mistress or the cats' home? We think that in this matter the Chancellor is devoid of the finer sensibilities.
    Sir S. Cripps: As I have to go in a few minutes, perhaps I may be allowed to address the House and to give my views on points which have been raised. The first is as to the quantum of Death Duties, that is the general financial point
    108
    whether further charges should be made upon the estates of deceased persons. The second point is the question of how those charges should be levied.
    As regards the first point, I do not think that any further arguments are required than those which were put forward in the Budget speech this year. Though we have by taxation done a great deal to bring incomes into a more equal relationship than they were originally, we have not recently done very much by way of Death Duties to bring estates into a more equal relationship. There still remains plenty of opportunity for bringing these estates into a more equal relationship by the imposition of further Death Duties. That principle I expressed then as being the basis, or the reason, for putting forward increases in Death Duties at this time.
    The second point, which has occupied more of the Debate than the first, is as to whether any damage is done to the family life by this method of taxation. I am bound to say that I do not take quite such a depressed view of the sanctity of home life as to think that it is affected by 2 per cent. or 20 per cent. Succession or Legacy Duties. I believe there is something a good deal deeper in it than that. I hope there is. So far as 98 per cent. of the families of this country are concerned, it must be so, because that incidence does not affect them at all. The question is whether it does affect the other 2 per cent. —
    Mr. Assheton: Whether it is a better plan?
    Sir S. Cripps: No, the point with which I am dealing is whether, as I am accused of doing, I am destroying the sanctity of family life. What does "destroying the sanctity of family life" mean? It is a very easy and glib phrase to use. How does one do it by altering the charge of a Death Duty? Is it really to be said that the sanctity of family life depends upon the amount which is charged on an estate when it passes from the head of the family by death to dependants? Surely, if this is the cash method of assessing the sanctity of family life, it is really in the hands of the testator. It is a matter of where he leaves money which may have an effect. One knows the terrible effect it sometimes has

    109
    in a family when a large sum of money is left or divided in ways which the family did not expect.
    Colonel Dower: I do not think that the Chancellor of the Exchequer has quite got the point. The point is that when a person dies, his wife and his near relatives are now regarded by the State as not being in any kind of preferential position to strangers. In South Africa and other countries, which have high rates of Death Duty, there is no Death Duty at all when a man dies and his money is left to his wife.
    Sir S. Cripps: This is a matter of whether one believes in the free will of the testator or thinks that the State ought to take part in the allocation of the testator's estate. Personally, I have always taken the view that it is better to leave that matter to the free will of the testator. Let him do as he likes. Leave him a fair deal.
    This alteration in the Death Duties will not make the slightest difference to any testator who likes to re-adjust his will. He can re-adjust it to give exactly the same results as he would have got under the old system if he wishes to do so. He will have time to do it. That is why we did not introduce this at the time of the Budget, when the Budget Resolutions are ordinarily introduced; we wanted testators to have time to reconsider the effect on their estates and make whatever alterations they liked. It is entirely and absolutely in their hands. If they think that under their existing will a more distant relative will benefit at the expense of a close relative, they can make the alteration in the sums they leave to the two, and if they wish to do so, that puts them in exactly the same position as they were before.
    We believe as a matter of principle that it is better on the whole to have what is called the estate duty principle rather than the inheritance duty principle. I am aware that the inheritance duty principle has been adopted in many countries—it has been adopted in many of the Commonwealth countries—but very strong arguments have been used against it and in this country 90 per cent. of our Death Duties have always been on the estate duty principle.
    110
    The fact that between 66 and 75 per cent. of testators today disregard the Legacy and Succession Duties by leaving their legacies free of duty, so that the duty falls on the remainder, shows that it is not a popular form of taxation. The fact that for a long time 90 per cent. has been collected in the form of Estate Duty and that the great majority of testators avoid the Legacy and Succession Duties should be sufficient to show that, of the two, Estate Duty is the one that anyhow suits us better. If we are to have a simplification—everybody agrees that it is desirable—we are obviously simplifying it on the basis of the most acceptable form of taxation, which is Estate Duty.
    I hope that hon. and right hon. Gentlemen opposite will not confuse the issue by thinking that somehow or other we have taken away the free will of the testator. We have done nothing of the sort. We have given him a much greater free will than he had before, because there are no longer any elements in the duty which tend to constrain him in a certain direction. It seems to me that, on the whole, that will be a desirable state of affairs for the testator. We take the amount which we consider right over the whole estate, and he is left, without any influence one way or the other, to divide it exactly as he likes, and he can do that after this Bill just as well as he could before. There is really no argument against this method of altering Death Duties so as to make them far more convenient and much more consistent, subject to a better graduated scale than we have ever had before, and something which is more practical in use both for those who are to represent the estates of deceased persons and for the taxing authorities.
    Mr. Frederic Harris: The Chancellor has restated the Government's attitude to Death Duties. The point of view of both sides has been put clearly before the House. The hon. Member for Walton (Mr. Haworth) seemed to base much of his argument that the effect of Death Duties cannot be very serious in respect of estates of this size, on the fact that he goes to places like the Dorchester and sees plenty going on there. If an hon. Member is to participate in a Debate concerned with this sort of legislation, he ought to understand a

    111
    little more about what must be going on in such places. It is apparent that today much of the expenditure going on in such places is out of capital. People are very regretfully spending their money from estates because of the effect of taxation upon death. There can be no doubt that capital is being expended very fast as a result of that, apart from the fact that people use places like that in an effort to get export business, for to do that they must entertain people on that scale.
    Another hon. Member explained what his point of view would be if he were privileged to be left a large estate. He forgot a very material point, and that is that having to realise on such estates in order to pay Death Duties, causes tremendous worry to all concerned.
    7.30 p.m.
    Mr. Ivor Owen Thomas: If the hon. Gentleman is in difficulty, or if he knows of any of his hon. Friends who have a million pounds estate to dispose of, and they are in difficulty about finding suitable legatees, I will endeavour to remedy the deficiency if he will give me details.
    Mr. Harris: I am sorry that the hon. Member will not see my point. All I am saying, quite clearly, is that when estates are left today, the Death Duties are so high that the estates have to be broken up, and therefore it is obvious that to increase the Death Duties in any way, is an obvious design on the part of the Government to break down one estate after another. We have been discussing all this afternoon the effect of these duties, and I cannot understand why we cannot talk from the point of view of saving £20 million instead of looking to Death Duties for a further £20 million. As I understood the Solicitor-General's arguments, they were based on the fact that this would be more simple. I do not think anyone in this House could grumble at any simplification of administration—that is all to the good—but why has there to be a simplification of administration and at the same time an additional burden by way of taxation?
    Mr. Speaker: I must point out that expenditure is outside the scope of this Amendment.
    Mr. Harris: I am sorry, Mr. Speaker, but I was trying to refer to the arguments which have been put forward. I
    112
    will end by saying that instead of considering putting on to those with estates another burden of £20 million, surely we should try to cut out the need for additional expenditure.
    Mr. Mott-Radclyffe: I have considerable sympathy with the Solicitor-General in his obvious difficulty of trying to argue a rather threadbare case. The speech of the Chancellor of the Exchequer did not tally entirely with his speech. The Solicitor-General's argument was that he was trying to protect the aged aunt who was a beneficiary under a will; the Chancellor's argument was that he was removing any pressure upon a testator to leave his money either to his family or outside it. The average individual in this country does not need any advice from any member of any Government on how to make his will. Let him be free to make his own mistakes as he wishes.
    I cannot conceive of any worse argument to put forward in favour of discrimination against a near relative than the argument we have heard this afternoon from right hon. and learned Gentlemen and hon. Gentlemen opposite. The argument appears to be that since 98 per cent. of estates are not touched by this Clause, because they are below £17,500 in value, the other 2 per cent. do not matter. In other words, as a general principle the Government think it is sound that there should be no discrimination against the near relative up to £17,500 only.
    Since when does a principle cease to be a principle above £17,500? If a principle is right, it is right up to 100 per cent., and not only up to 98 per cent. Why should we in this House do injustice to even 2 per cent. without making a protest? It is a pretty grim outlook for the future if, in spite of all the appeals from the Chancellor for the creation of new wealth, the Government envisage that 98 per cent. of the value of future estates will be less than £17,500. That does not show much hope for the creation of the new wealth which the Chancellor demands to meet the financial strain of the enormously heavy Government expenditure.
    The hon. Member for Walton (Mr. Haworth) made a revealing speech. He said that when he now went to the Dorchester Hotel he could not see any

    113
    evidence of less luxury than he saw before. Apparently he saw plenty of his old friends. I have no doubt he did. I have no doubt that he saw plenty of hon. and right hon. Gentlemen from the Front Bench opposite. I have no doubt that he saw some of his colleagues from the Railway Executive—[An HON. MEMBER: "And the Coal Board."] What else did he see? He saw other men and women doing exactly what my hon. Friend the Member for North Croydon (Mr. Frederic Harris) said, "blowing" their capital because they would rather "blow" it at the Dorchester than allow the Chancellor to spend it as he wishes after their death.
    Mr. John Lewis: Is the hon. Member a shareholder of the Dorchester?
    Mr. Mott-Radclyffe: No, I am not a shareholder and I have never been to the Dorchester at my own expense, but if the hon. Member would like to invite me there, I should be glad to accept.
    This lift, as it is called, in the incidence of Death Duties makes nonsense of the appeals of the Chancellor for the production drive, because the urge which impels a man forward to increased efforts is the urge to save for his children and to see that they have at least as good a start in life as he had, and preferably a better one. It is a serious matter that so heavy an increased burden should fall on the middle income groups, that is to say, those who leave estates between £20,000 and £40,000 in value. This cult of the mediocre is dangerous because, on the whole, progress is achieved not by the man of ordinary ability but by the man of extraordinary ability, if the man of extraordinary ability is not permitted to build up something for his family, much progress that might have been achieved is not achieved and the ordinary men and women do not benefit.
    In regard to agriculture, I do not wish to repeat the arguments used already today and in the discussion last week. The Chancellor is in the difficulty that he cannot have his cake and eat it. He has told us that we cannot do so, but he cannot either. From time to time agriculture, like every other industry, needs new capital which is what might be called a blood transfusion. To act on the principle that the more a man
    114
    improves the value of his agricultural estate, the more he penalises his successor and the less likely he makes it for him to succeed, is not the way to attract fresh capital into agriculture. The right hon. and learned Gentleman must understand that the capital sums available for investment in agriculture can either go into buildings and equipment and towards improving the land generally, or they can go into his own pocket in the form of Death Duties, but they cannot go in both directions at the same time.
    Mr. Baldwin: I do not propose to discuss the question of family discrimination. I largely agreed with the Chancellor when he said that a testator could make his arrangements accordingly, but the right hon. and learned Gentleman did not say that what the testator will in fact do is to take good care not to leave as much money as he originally intended. I want the House to take a long-term view of what we are doing with the legislation we are now enacting. Our forefathers, by hard work and thrift, built up a great Empire and amassed great wealth, but we, who follow in the 20th century, are liquidating the British Empire and dissipating that wealth. As was well said by a noble Lord in another place, we are in the middle of a rake's progress. We are not looking ahead in what we are doing.
    We are actually living on capital, and although the Chancellor made the remark that a lot of the taxation now being collected is being spent on capital expenditure—with that I agree—I should like to examine briefly what that capital expenditure is. Take, for example, the money which has been spent on subsidising the building of houses. If we were to transfer the amount of Death Duty which is taken from the big estates and to spend it on building and subsidising those houses, we should be finished with that wealth so far as Death Duties are concerned; those houses would never again be assessed for Death Duties.
    What the Government are trying to imagine is that we are still a wealthy nation. Although out forefathers might have accumulated a fairly substantial heap of gold, our wealth today is very largely—almost entirely, in fact, comprised of confidence in the future. If

    115
    that confidence is destroyed, our wealth will be destroyed overnight. Let me give an illustration of an estate of £100,000, which is represented by the ownership of a factory. When its owner dies the district valuer will assess the value of the factory. That value depends almost entirely on whether the wheels inside the factory are turning or not. If the district valuer wishes to assess a factory at more than its worth I can well imagine the trustees deciding to surrender it to the Chancellor in payment for the Death Duties. The Chancellor, I know, was at one time engaged in agriculture, but I should be very interested to see him engaged in carrying on a factory which had been handed over to him in payment for Death Duties. The House should remember that wealth is represented not by a pile of gold, but by confidence in the future of this country.
    On the question of Death Duties on agricultural land, I do not see eye to eye with some of my right hon. and hon. Friends. I think it would be wrong to exempt agricultural land entirely from liability to Death Duties. If that were done, there would be such a tremendous flow of capital into land and its price would rocket sky high, making it impossible for any young farmer either to buy or to move into a farm. I would much prefer that Death Duties which are assessed on the land should be paid into a suspense account and be reimbursed to the beneficiary if the money is spent on the capital improvement of the land within five years of death.
    It may be asked, why should that be necessary; is it not the responsibility of an owner of an estate to accumulate out of the revenue of that estate sufficient
    money with which to meet the payment for Death Duty? At present that is quite impossible. The revenue from land as assessed in terms of rent per acre, is completely out of step with the cost of maintaining an estate. In the last four or five years rents have been increased by, possibly, 25 to 50 per cent., but expenditure on repairs and building work has risen by over 300 per cent. The effect is that the net income from a large estate is such that there is no possibility of the owner of that estate being able to live and at the same time to maintain its upkeep.
    7.45 p.m.
    Let me relate my experience with an estate in which I am interested. The heir is a young lad still at school. Out of this estate, which has been assessed for Death Duty purposes at £100,000, it is extremely difficult to maintain the young lad at school and to keep the widow in some small degree of comfort. We are endeavouring to provide sufficient money out of the estate with which to pay the Death Duties but I am afraid that that will be impossible. As was so well said by my hon. Friend the Member for Chippenham (Mr. Eccles), we are losing the incentive to save. Wealth is being taxed by penal duties. The effect will be that wealth will disappear and that successive Governments will then find that it is our working people and the small income groups who will in future have to pay all the taxation which is required to maintain this welfare State.
    Question put, "That the words proposed to be left out stand part of the Bill."
    The House divided: Ayes, 242; Noes, 88.

    Division No. 206.]

    AYES

    [7.47 p.m.

    Acland, Sir Richard

    Beswick, F.

    Callaghan, James

    Adams, Richard (Balham)

    Binns, J.

    Chater, D.

    Alexander, Rt. Hon. A. V.

    Blackburn, A. R.

    Chetwynd, G. R.

    Allen, A. C. (Bosworth)

    Blyton, W. R.

    Cluse, W. S.

    Allen, Scholefield (Crewe)

    Bottomley, A. G.

    Cobb, F. A.

    Alpass, J. H.

    Bowden, Fig. Offr. H. W.

    Cocks, F. S.

    Attewell, H. C.

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

    Coldrick, W.

    Austin, H. Lewis

    Braddock, T. (Mitcham)

    Collick, P.

    Ayles, W. H.

    Bramall, E. A.

    Collins, V. J.

    Bacon, Miss A.

    Brook, D. (Halifax)

    Colman, Miss G. M.

    Baird, J.

    Brooks, T. J. (Rothwell)

    Comyns, Dr. L.

    Balfour, A.

    Broughton, Dr. A. D. D.

    Cooper, G.

    Barstow, P. G.

    Brown, George (Belper)

    Cove, W. G.

    Barton, C.

    Brown, T. J. (Ince)

    Cripps, Rt. Hon. Sir S.

    Battley, J. R.

    Brown, W. J. (Rugby)

    Crossman, R. H. S.

    Bechervaise, A. E.

    Bruce, Maj. D. W. T.

    Daggar, G.

    Berson, G.

    Burke, W. A.

    Daines, P.

    Berry, H.

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

    Dalton, Rt. Hon H.

    Davies, Rt. Hn. Clement (Montgomery)

    Keenan, W.

    Randall, H. E.

    Davies, Edward (Burslem)

    Key, Rt. Hon. C. W.

    Ranger, J.

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

    King, E. M.

    Reeves, J.

    Davies, R. J. (Westhoughton)

    Kinley, J.

    Reid, T. (Swindon)

    Deer, G.

    Kirby, B. V.

    Rhodes, H.

    Delargy, H. J.

    Lang, G.

    Roberts, Emrys (Merioneth)

    Diamond, J.

    Lawson, Rt Hon. J. J.

    Roberts, Goronwy (Caernarvonshire)

    Dobbie, W.

    Leslie, J. R.

    Robinson, Kenneth (St Pancras, N.)

    Dodds, N. N.

    Levy, B. W.

    Rogers, G. H. R.

    Driberg, T. E. N.

    Lewis, A. W. J. (Upton)

    Ross, William (Kilmarnock)

    Dugdale, J. (W. Bromwich)

    Lewis, J. (Bolton)

    Scott-Elliot, W.

    Dumpleton, C. W.

    Lindgren, G. S.

    Sharp, Granville

    Dye, S.

    Lipton, Lt.-Col M.

    Shawcross, Rt. Hn Sir H. (St. Helens)

    Ede, Rt. Hon. J. C.

    Longden, F.

    Shurmer, P.

    Edwards, John (Blackburn)

    Lyne, A. W.

    Silverman, J. (Erdington)

    Edwards, Rt. Hon. N. (Caerphilly)

    McAdam, W.

    Simmons, C. J.

    Evans, E. (Lowestoft)

    McEntee, V. La. T.

    Smith, C. (Colchester)

    Evans, S. N. (Wednesbury)

    McGhee, H. G.

    Smith, Ellis (Stoke)

    Ewart, R.

    MeGovern, J.

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

    Fairhurst, F.

    McKay, J. (Wallsend)

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

    Farthing, W. J.

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

    Snow, J. W.

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

    McLeavy, F.

    Solley, L. J.

    Follick, M.

    MacMillan, M. K. (Western Isles)

    Sorensen, R. W.

    Foot, M. M.

    MacPherson, Malcolm (Stirling)

    Soskice, Rt. Hon. Sir Frank

    Fraser, T. (Hamilton)

    Macpherson, T. (Romford)

    Sparks, J. A.

    Freeman, J. (Watford)

    Mainwaring, W. H.

    Steele, T.

    Ganley, Mrs. C. S.

    Mallalieu, E. L. (Brigg)

    Strauss, Rt. Hon G. R. (Lambeth)

    Gibbins, J.

    Mallalieu, J. P. W. {Huddersfield)

    Stross, Dr. B.

    Gilzean, A.

    Mann, Mrs J.

    Stubbs, A. E.

    Glanville, J. E. (Consett)

    Manning, C. (Camberwell, N.)

    Sylvester, G. O.

    Goodrich, H. E.

    Manning, Mrs. L. (Epping)

    Symonds, A. L.

    Gordon-Walker, P. C.

    Marquand, Rt. Hon. H. A.

    Taylor, H. B. (Mansfield)

    Greenwood, A. W. J. (Heywood)

    Marshall, F. (Brightside)

    Taylor, R. J. (Morpeth)

    Grey, C. F.

    Mathers, Rt. Hon George

    Taylor, Dr. S. (Barnet)

    Grierson, E.

    Mellish, R. J.

    Thomas, I. O. (Wrekin)

    Griffiths, D. (Rother Valley)

    Messer, F.

    Thorneycroft, Harry (Clayton)

    Griffiths, Rt. Hon. J. (Llanelly)

    Middleton, Mrs. L.

    Titterington, M. F.

    Guy, W. H.

    Mitchison, G. R.

    Tolley, L.

    Hall, Rt. Hon. Glenvil

    Monslow, W.

    Tomlinson, Rt. Hon. G.

    Hamilton Lieut.-Col. R.

    Moody, A. S.

    Viant, S. P.

    Hannan, W. (Maryhill)

    Mort, D. L.

    Walker, G. H.

    Hardman, D. R.

    Moyle, A.

    Wallace, G. D. (Chislehurst)

    Hardy, E. A.

    Naylor, T. E.

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

    Harrison, J.

    Neal, H. (Claycross)

    Weitzman, D.

    Hastings, Dr. Somerville

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

    Wells, P. L. (Faversham)

    Haworth, J.

    Nicholls, H. R. (Stratford)

    Wells, W. T. (Walsall)

    Henderson, Rt. Hn. A. (Kingswinford)

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

    Wheatley, Rt. Hon. John (Edinb'gh, E.)

    Henderson, Joseph (Ardwick)

    O'Brien, T.

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

    Herbison, Miss M.

    Oldfield, W. H.

    Whiteley, Rt. Hon. W.

    Holman, P.

    Oliver, G. H.

    Wigg, George

    Holmes, H. E. (Hemsworth)

    Paling, Rt Hon. Wilfred (Wentworth)

    Willey, O. G. (Cleveland)

    Houghton, A. L. N. D.

    Paling, Will T. (Dewsbury)

    Williams, D. J. (Neath)

    Hoy, J.

    Palmer, A. M. F.

    Williams, J. L. (Kelvingrove)

    Hughes, Emrys (S. Ayr.)

    Parker, J.

    Williams, Ronald (Wigan)

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

    Parkin, B. T.

    Williams, Rt. Han. T. (Don Valley)

    Irvine, A. J. (Liver pool)

    Paton, Mrs. F. (Rushclifle)

    Williams, W. R. (Heston)

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

    Paton, J. (Norwich)

    Willis, E.

    Isaacs, Rt. Hon. G. A.

    Pearson, A.

    Wise, Major F. J.

    Janner, B.

    Peart, T. F.

    Woodburn, Rt. Hon A.

    Jay, D. P. T.

    Popplewell, E.

    Woods, G. S.

    Jeger, G. (Winchester)

    Porter, E. (Warrington)

    Yates, V. F.

    Jones, D. T. (Hartlepool)

    Porter, G. (Leeds)

    Younger, Hon. Kenneth

    Jones, Elwyn (Plaistow)

    Price, M. Philips

    Jones, P. Asterley (Hitchin)

    Proctor, W. T.

    TELLERS FOR THE AYES:

    Mr. Collindridge and Mr. Wilkins.

    NOES

    Agnew, Cmdr. P. G.

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

    Harris, F. W. (Croydon, N.)

    Assheton, Rt. Hon. R.

    Crowder, Capt. John E.

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

    Baldwin, A. E.

    Cuthbert, W. N.

    Henderson, John (Cathcart)

    Barlow, Sir J.

    Darling, Sir W. Y.

    Hogg, Hon. Q.

    Baxter, A. B.

    De la Bère, R.

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

    Birch, Nigel

    Digby, Simon Wingfield

    Jeffreys, General Sir G.

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

    Dodds-Parker, A. D.

    Lambert, Hon. G.

    Boothby, R.

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

    Lancaster, Col. C. G.

    Bower, N.

    Drewe, C.

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

    Boyd-Carpenter, J. A.

    Duthie, W. S.

    Lennox-Boyd, A. T.

    Braithwaite, Lt.-Comdr. J. G.

    Eccles, D. M.

    Lloyd, Selwyn (Wirral)

    Buchan-Hepburn, P. G. T.

    Fraser, Sir I. (Lonsdale)

    Low, A. R. W.

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

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

    McCorquodale, Rt. Hon. M. S.

    Carson, E.

    Gage, C.

    Mackeson, Brig. H. R.

    Clarke, Col. R. S.

    Gomme-Duncan, Col. A.

    Maclay, Hon. J. S.

    Clifton-Brown, Lt.-Col. G.

    Hannon, Sir P. (Moseley)

    MacLeod, J.

    118

    119

    Macpherson, N. (Dumfries)

    Reed, Sir S. (Aylesbury)

    Thorp, Brigadier R. A. F.

    Maitland, Comdr. J. W.

    Renton, D.

    Turton, R. H.

    Manningham-Buller, R. E.

    Sanderson, Sir F.

    Walker-Smith, D.

    Marlowe, A. A. H.

    Shephard, S. (Newark)

    Ward, Hon. G. R.

    Marples, A. E.

    Shepherd, W. S. (Bucklow)

    White, Sir D. (Fareham)

    Marshall, D. (Bodmin)

    Smithers, Sir W.

    Williams, C. (Torquay)

    Marshall, S. H. (Sutton)

    Spearman, A. C. M.

    Williams, Gerald (Tonbridge)

    Mellor, Sir J.

    Stanley, Rt. Hon. O.

    Willoughby de Eresby, Lord

    Morrison, Maj. J. G. (Salisbury)

    Stewart, J. Henderson (Fife, E.)

    Winterton, Rt. Hon. Earl

    Mott-Radclyffe, C. E.

    Stoddart-Scott, Col. M.

    York, C.

    Nicholson, G.

    Strauss, Henry (English Universities)

    Odey, G. W.

    Studholme, H. G.

    TELLERS FOR THE NOES:

    Pickthorn, K.

    Sutcliffe, H.

    Major Conant and

    Poole, O. B. S. (Oswestry)

    Thomas, Ivor (Keighley)

    Colonel Wheatley.

    Rayner, Brig. R.

    Thorneycroft, G. E. P. (Monmouth)

    Question put, and agreed to.

    Clause 25. (INCREASE IN ESTATE DUTY AND MODIFICATION OF PROVISIONS RELATED TO LEGACY OR SUCCESSION DUTY.)
    The Solicitor-General: I beg to move, in page 18, line 25, at the end, to insert:
    "or if the property so situate passes only by virtue of paragraph (c) of subsection (1) of section two of the Finance Act, 1894, as having been the subject of a gift inter vivos and it is shown that one at least of the said conditions is satisfied."
    This Amendment is to meet an objection raised by the hon. Member for South Hendon (Sir H. Lucas-Tooth), who was concerned that Clause 25 might bring into charge certain gifts which, under the law as it previously stood, would not be brought into charge. It is a very rare case in point of fact which might have been brought into charge and it is not desired, as the House knows, to make any change in the existing law. There are very rare cases where a person domiciled overseas gives property situated in England to another person and dies within five years, and during that time the property goes abroad. That is a rare case and we do not want to cover it. It was not previously covered.
    Amendment agreed to.

    Clause 46.—(EXTENSION OF SPECIAL CONTRIBUTION TO NORTHERN IRELAND.)
    Mr. Selwyn Lloyd: I beg to move, in page 36, line 32, at the end, to insert:
    "(4) Notwithstanding anything in section fifty-four of the Finance Act, 1948, interest on unpaid contribution shall be chargeable only from a date within twenty-eight days from the passing of this Act."
    This Clause deals with the extension of the special contribution to Northern Ireland. When the Finance Act, 1948, was passed there was a provision in Section 82 (9), which stated that:
    "Save as otherwise expressly provided, such of the provisions of this Act as relate to matters with respect to which the Parliament of
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    Northern Ireland has power to make laws shall not extend to Northern Ireland."
    I rather gather from the fact that it has been thought necessary to insert Clause 46 into this Bill that the Special Contribution has not hitherto been extended to Northern Ireland. I hope that the Solicitor-General will tell me if I am wrong in that assumption.
    The Solicitor-General: There is a doubt about it, and it was thought desirable to put it completely beyond doubt.
    Mr. Selwyn Lloyd: My Amendment really deals with a small point arising under the original Special Contribution. I do not propose to go in detail into the merits for or against the Special Contribution, but in so far as this new Clause applies Section 54 of the Act of 1948, it seems to me that it may well be that considerable injustice would arise. In Section 54, it is provided that:
    "Where contribution, whether already assessed or not, is not paid by the first day of January, nineteen hundred and forty-nine, it shall carry interest at the rate of 2 per cent. per annum from that date to the date of payment."
    One can quite understand that it is equitable to make an assessment carry interest from the date upon which the taxpayer received the assessment. There was also a proviso in the 1948 Act whereby, if the taxpayer paid the Special Contribution in advance of the due date, he got interest at 2 per cent. Therefore, it might well be said that if he had not paid by 1st January, 1949, it was equitable that he should have to pay interest at the rate of 2 per cent.
    8.0 p.m.
    In fact, that was a considerable injustice. I am told that of the 120,000 assessments which had to be made under the 1948 Act, only 36,000 had been made by 31st December, 1948. That meant that the remainder who had to pay—a

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    very large proportion of the total—were expected to pay interest before they had received an assessment of the tax they were due to pay. That is bad enough. That it is a considerable injustice is borne out by the fact that at 31st March of this year only 63,000 of the 120,000 had received their assessments. I suppose that it could be argued that a taxpayer would know the provisions of the Act and, therefore, could roughly calculate his liability and make a payment on account. It could be argued, that, therefore, this procedure was not particularly unjust.
    So far as this matter affects Northern Ireland, a very different principle arises. If heretofore they have not been legally liable to pay the Special Contribution—if that is the position, or if there has been a doubt whether or not that is the position—it seems monstrous to make these people liable to pay interest in respect of a tax as from 1st January, 1949, when it has not been made legally clear until July, 1949, that they will have to pay the tax. That is retrospective legislation with a vengeance. It is wholly inequitable. People in Scotland, Wales and England, under the Act passed in July, 1948, had something like five or six months in which to pay the Special Contribution before interest became due. In this Amendment I suggest that people in the North of Ireland should have 28 days as from the date of the passing of this Bill. They will not have anything like as long in which to pay as people in England, Wales and Scotland had, but they will have 28 days as from the passing of this Bill.
    My point is that it seems wrong to make people liable to pay interest from a date before it was legally obligatory upon them to pay the tax in respect of which the interest is levied. It would be just if the Government would give way on this comparatively small matter. There cannot be very much money or very many cases involved.
    Lieut.-Commander Braithwaite: I beg to Second the Amendment.
    The Solicitor-General in his intervention a few minutes ago told us that Clause 46 had been inserted in this Bill because there was some dubiety about the position under last year's Act. It would help if he could tell us what the extent of the dubiety had been. For instance, have there been assessments made and issued in Northern Ireland which have
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    been challenged as being unenforceable in view of the position under last year's Act? If that is not so, I am sure that the right hon. and learned Gentleman will see the force of the argument behind this Amendment. Those resident in the United Kingdom were liable for this 2 per cent. interest charge as from 1st January of this year whether or not an assessment had been made.
    The Solicitor-General will recall that Questions have been put to the Chancellor on this subject during the past month, and the ruling given has been that, whether the assessment had been made or not, if there was a liability then as from 1st January of this year, the 2 per cent. interest charge would operate. The Chancellor said that those whose assessments were in doubt could always "make a shot"—I think that was the phrase—by making a payment to the Exchequer, and the matter could be ironed out later. Obviously, with this doubt existing as to what the situation in Northern Ireland is, that argument cannot apply in any kind of equity to those resident there. I am not aware, though I have no doubt that the Solicitor-General can tell us, whether or not there have been any cases of assessments being levied and disputed. It seems to us on this side of the House that this is a useful subsection for the purpose of clarification.
    The Solicitor-General: It was always intended that the Special Contribution should apply to Northern Ireland, and no question was raised as to whether it did until October of last year. Then attention was drawn to a certain wording in Section 82 (9) of the Act which seemed to give rise to some doubt. That question was investigated and the Government came to the conclusion that on balance in a matter of considerable doubt it would seem to be that the tax had not been effectively imposed upon Northern Ireland. The Chancellor of the Exchequer answered Questions about that on 18th January, 1949. Attention was called to the doubt raised and it was suggested that it was desirable to put the matter beyond any doubt in the Finance Act of the coming year—that is the Finance Bill we are now discussing. In the course of his answer the Chancellor said:
    "Meantime, in accordance with the view hitherto held, assessments to contribution will

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    continue to be made in Northern Ireland."—[OFFICIAL REPORT, 18th January, 1949; Vol. 460. c. 5.]
    I would agree that there was force in this Amendment if this rate of interest was, or was intended to be, a penal rate as under Section 8 of the Finance (No. 2) Act, 1947, which imposed interest on arrears of payment of Income Tax and Surtax. That was a rate of 3 per cent. This is a rate of 2 percent. No deduction is allowed for Income Tax purposes, but the gross rate is allowed as a reduction for Surtax purposes. That being so, it is analogous to the 2 per cent. interest charged in the case of Estate Duty. There interest at the rate of 2 per cent. is charged as from the date of the death, although the actual Estate Duty is not assessed and charged until some considerable time later.
    The purpose of that interest charge on Estate Duty and this interest charge is not at all a penal one. It is simply to compensate the Exchequer for the fact that the taxpayer does have in his possession, and, of course, can use, money which is destined ultimately to go by way of Estate Duty or Special Contribution when it is assessed and charged. The situation is that the taxpayer knows that sooner or later he will be called upon to pay a certain amount of tax. He does not know exactly what it will be. Of course, he could calculate almost exactly what the Special Contribution will be. Until he actually has to pay, he has the use of the money. Indeed, it is kept in the form of some sort of investment which brings him in a dividend or income of some kind. The rate of interest is charged simply to compensate the Exchequer for being out of possession of this sum of money which remains in the hands of the taxpayer until it is paid in the form of tax.
    Mr. Selwyn Lloyd: The right hon. and learned Gentleman says that there has been this uncertainty whether or not people are legally liable to pay the tax. May they not have had this money on deposit in a bank, awaiting some provision such as this, in which case the money would not be earning anything?
    The Solicitor-General: I suppose the vast number of taxpayers keep their money in some form of interest-bearing
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    securities, whatever they may be. No doubt, it is earmarked to pay the tax, but it is invested in some securities bearing interest and from which they derive income during the time in which it remains in their possession. It is in order to compensate the Exchequer for being out of that money during that time, in the case of Estate Duty and Special Contribution, that it was thought right that this interest should be charged.
    I see the force of the argument that there was doubt whether it was chargeable at all, but there is no doubt in the mind of anybody that it was intended to be charged, and it was only an accident which gave rise to the doubt. That being so, we think it is being conveniently imposed, and we can see no reason, this not being a penal charge, but one different in scale in regard to the charge for interest on arrears of Income Tax and Surtax, why the Exchequer should be deprived of taxation which it would normally expect to have, and which was the object of the charge for interest at 2 per cent. in the Finance Act, 1948. There is no reason to deviate from that view, as every taxpayer who was liable knew at that time that he was intended to be included in it, and it was only an accident that there was any doubt whether he was or not.
    Mr. Nigel Birch: We are becoming very accustomed to this contest of wits between the learned Solicitor-General and the Financial Secretary as to who can give the worst answer, but I think the Solicitor-General really got several lengths in front tonight. He started off by saying that it was always intended that this tax should apply to Northern Ireland, and that only the incompetence of the Government's draftsmen did not make it appear that it was so. To say that the drafting was wrong is perhaps not a wholly satisfactory answer, but I think there was additional reason, not only to question what was said in the Finance Act last year, but also what appeared in the Government of Ireland Act, 1920, which I think, if carefully studied, might make it appear doubtful whether such a tax could be imposed upon Northern Ireland by the Imperial Parliament. That is the first point. It was the fact, not only that the Government had drafted the Bill wrongly, but that it might well have been supposed by those living in Northern

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    Ireland who were familiar with the Government of Ireland Act that they were not so liable.
    The Solicitor-General goes on to say that, in any case, it does not matter, because the rate of interest charged is not a penal rate. That really is a very remarkable argument, because it would authorise the Government to charge interest on almost anything, whether due or not. If somebody is not liable for tax, or has a good reason for supposing that he is not liable, and he has not been assessed for that tax, to say that it does not matter because the rate of interest is not very high, seems to me to be the last word in nonsense. It also shows that this particular tax was a capital levy, which was generally denied by hon. Gentlemen opposite. If it were not, we would not expect the money to be paid by the taxpayer to be earning anything at all, because it has to come out of income. The right hon. and learned Gentleman now admits that it was a capital levy, and he says, "We have done wrong; we have drafted our Bill wrong, and also misled those who knew the Government of Ireland Act, 1920. But we are not really doing anything very wrong, because we are only charging 2 per cent."
    That is the old argument which hon. Members will remember to have heard from the other side; it is the old argument that, after all, it is only a little one. It is about time that that sort of thing was stopped. Hon. Gentlemen opposite are now ruining their country deliberately and are putting up this wholly immoral argument in favour of doing so. It is time this sort of thing was stopped. No doubt, we shall be beaten on this, but I hope the country will notice the injustice which is being done here and also the arguments supporting it, which are not only intellectually despicable but immoral.
    Amendment negatived.

    Clause 48.—(SETTLING OF APPEALS, ETC., BY AGREEMENT.)
    8.15 p.m.
    Mr. Selwyn Lloyd: I beg to move, in page 37, line 11, to leave out "whether before or."
    There are on the Order Paper a considerable number of Amendments to Clause 48, and I suggest it would be for
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    the convenience of the House that all these should be considered together. There are really three points dealt with, which I can explain as I go along, if that is for the convenience of the House.
    This is not a very controversial matter, nor, I am afraid, is it a very interesting one, but it deals with the settlement of appeals. I am certain that hon. Members will have studied with great attention the provisions of Clause 48 and will have seen that it deals with a number of matters. Subsection (1) provides that where notice of appeal has been given, but before it has been heard, an agreement has been entered into between the Revenue and the appellant, that agreement should operate as if it was the decision of the Commissioners or the Board of Referees. It provides the procedure for all appeals relating to Income Tax, Sur-Tax, the Profits Tax and the Special Contribution.
    Subsection (2) extends it to claims for relief from E.P.T., and Subsection (3) gives 21 days in which to repudiate the agreement. Subsection (4) refers to verbal agreements after the passing of the Act, and provides for notice to be given in writing confirming them. Then, subsection (5) refers to the withdrawal of notice of appeal, and subsection (6) includes agreements made by agents. Those are the provisions of the Clause as a whole, and, of course, they do constitute a diminution—
    Mr. Deputy-Speaker (Major Milner): I am sorry to interrupt the hon. and learned Gentleman, but I understood that it would be convenient to discuss the first two Amendments together, and that the rest were more or less consequential. Is the hon. and learned Gentleman now referring to the last Amendment to line 30, to leave out subsection (6)? Is it necessary to go through them all in detail?
    Mr. Selwyn Lloyd: With great respect, Mr. Deputy-Speaker, I was trying to discuss all three points together. Out of the nine or ten Amendments, there are really only three points.
    Mr. Deputy-Speaker: The first two Amendments on the Order Paper and the last?
    Mr. Selwyn Lloyd: They are all consequential.

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    I was saying that this does amount to a diminution of the rights of the taxpayer, because at present and until now, the law has been that, if the taxpayer discovers that some adjustment is open to him before the appeal is actually heard, he can raise it, even though an agreement has already been entered into. If an agreement has been entered into with the full knowledge of those concerned, it seems to me not very easy to argue that that agreement should not be binding, or for the general proposition that, once a person has agreed to something, it should still be necessary to go through the machinery of appeal. I do not dispute that it may be a very good thing to make such an agreement binding. But up to now that has not been the law. The law has been that even though a person has entered into an agreement, nevertheless, there would have to be the hearing before the Commissioners or before the board of referees. I do not dispute the purpose of the Clause, although I think it would have been better had it awaited a general clean-up of the tax laws. However, the Government have inserted the Clause and we must deal with it.
    The three points with which my series of Amendments are designed to deal are these. First there is the retrospective point. As the Clause is at present drawn, it will apply to agreements entered into before the passing of this Bill. That seems to me, again, to be quite wrong, because when the agreements were entered into it was well known and understood by the parties concerned that in spite of the fact that there was an agreement, there was, nevertheless, going to be an appeal at which the appellant would have a chance of raising some further point. Although it does not sound as though there is a great deal of equity in that, in point of fact, it has been of considerable benefit to taxpayers.
    Even though they entered into an agreement, nevertheless, when it was subsequently found that they could get some benefit from another provision, they could raise that point. It is quite wrong to give agreements entered into before the passing of this Bill the final force. That is retrospective legislation which I think is wrong and very bad in principle. That is the point with reference to the series of Amendments which relate to
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    the words "whether before or after." I should have thought that the Government ought to have been content to make this change date from the passing of the Bill.
    The second series of Amendments are designed to deal with what I would have thought was a point of common sense. As the Clause is at present drawn, an oral agreement is sufficient. It would have been much safer and wiser, and would have saved time, controversy, and possibly a good deal of litigation if a provision had been inserted that the agreements must be put in writing. At the moment, it covers any sort of oral agreement. It means that any man's accountant can make an oral agreement which can have the force of excluding any future right of appeal. It may be quite right that that agreement should be binding, but for the sake of avoiding uncertainty, heart burning and litigation it would have been much better to make this Clause apply only to written agreements.
    The third point deals with the question of agents being entitled to make agreements. Here we come back to the old point that what is sauce for the goose is sauce for the gander. The Government insist that when a person makes an Income Tax claim, he must sign it himself. When we had a Debate the other night on a new Clause about information being supplied in connection with Income Tax repayments, there was strenuous opposition from the Government Front Bench to the suggestion of an hon. Member on this side that the attorney's certificate should be sufficient for the Inland Revenue. Having refused to permit any claim to be put forward on behalf of the taxpayer through his attorney, the Government now say that in this matter, which may be convenient for the Commissioners of Inland Revenue, the agent's agreement shall be deemed to be adequate. That seems to me to be quite inconsistent and quite illogical. If agents are not to be allowed to bind their principals so far as claims are concerned, they should not be allowed to bind their principals so far as appeals are concerned.
    Those are the three points. There is one other observation I wish to make with regard to the retrospective point. Subsection (4) says:
    "The preceding provisions of this Section shall in relation to an agreement which is

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    come to after the passing of this Act and is not in writing have effect subject to the following provisions."
    It then sets out the procedure for a confirmatory notice in writing. It seems to me that if for every oral agreement entered into after the passing of this Bill a confirmatory notice in writing is required, it is wholly wrong to make the Clause retrospective and to make it cover oral agreements entered into possibly six months before the passing of this Bill. This is not a party matter or one for undue controversy. I think it would be an improvement if the Government agreed not to make the Clause retrospective, to exclude oral agreements, and to say that all agreements must be in writing, and to delete the provision whereby an agent is entitled to make an agreement.
    Lieut.-Commander Braithwaite: I beg to second the Amendment.
    I think that these Amendments would improve the Clause and the understanding of it by those who will have to operate it. I do not propose to re-open the argument about retrospection. It has come our way during the course of previous discussions, and even today the Solicitor-General made a concession on this very matter. I hope he will not be weary of well doing and will be able again too meet us on these Amendments.
    On the subject of oral agreements, I am sure the right hon. and learned Gentleman will see the force of the argument. The difficulty about oral agreement which one so often finds is that there is a difference of opinion as to just exactly what has been said or agreed to, and in matters of this sort, involving as they do claims and the payment of money, and so on, I am sure the right hon. and learned Gentleman will see that such agreements should be in writing. The agency point also I believe to be a good one. I can see no argument which would run counter to that of my hon. and learned Friend as to why the taxpayer should be in a worse position than the tax commissioner. We think that these Amendments will tidy up the Clause and make it more workable, and we hope the Government will accept them.
    The Solicitor-General: I think that there is an adequate answer to each of three points made by the hon. and learned Member for Wirral (Mr. Selwyn Lloyd)
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    and supported by the hon. and gallant Member for Holderness (Lieut.-Commander Braithwaite). One of the reasons for this Clause is that it has on occasions happened that a taxpayer, having been assessed, gives notice of appeal and then an agreement is come to as to the proper amount of his liability. That has happened in the past and it will happen in the future. Attempts have been made in cases where it has happened in the past to say that where there is an agreement, but where the matter has not finally gone to appeal, there has been no final determination of the matter and that therefore it is still open, and that if hereafter any decision should be given in the courts which enables the taxpayer to say that he is liable to pay less tax, he throws aside the agreement and relies upon the decision which may have been arrived at many years later.
    One of the objects of the Clause is to prevent that happening Once an appeal has been entered and has been disposed of, it gives rise to the situation I have been describing. Unless it has been heard and determined, the agreement has no real effect and is of no real avail at all. That is why a taxpayer who has entered into an agreement of that sort is not, as the law stands, precluded hereafter from taking advantage of any decision which may be taken in the courts, no matter how long after, to say that he ought to be assessed at a less amount. The Exchequer could do the same, but of course it does not. It could be two-way traffic, but in fact it is only one-way traffic; it has only been done by the taxpayer. One of the objects of the Clause is to stop that.
    8.30 p.m.
    As I have understood the arguments from hon. Members opposite, there is no dispute that in the case of agreements entered into hereafter, this Clause is useful and necessary because it effects that purpose. If that is so, it ought to apply to agreements entered into before this Bill becomes law. Suppose that five years ago a taxpayer entered into an agreement and paid his tax upon the basis of the agreement entered into. Suppose that a decision is given in 1950 or 1951 which says that he should have paid less; he is in a position which is much more favourable to him than a taxpayer who has not entered an appeal at all or who

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    has entered an appeal and has had the appeal finally decided. A taxpayer whose liability simply depends upon the agreement can tear up the agreement but the taxpayer who has had the matter decided by a final appeal cannot do so, and that is obviously inequitable to the taxpayer who has proceeded with the appeal and has had it decided. Equally this is inequitable to the taxpayer who has not appealed at all but who has been content with the original assessment.
    In making this Clause retrospective we do no more than put the taxpayer who has entered into an agreement in exactly the same situation as a taxpayer who has either not appealed at all or who has taken his appeal for final determination. It cannot be justified on any view of justice or fairness that a taxpayer who has got the tax gatherer to enter into an agreement with him, which it is thought or intended by both at the time should finally dispose of the matter, should be able to tear the agreement up at a later date, whereas a taxpayer who has had his position decided on appeal cannot do that. Justice requires that one should equate the position of those two taxpayers. That is all we are doing by making this legislation retrospective.
    That is my answer to the first argument which was advanced about the retrospective operation of this Clause. As I say, if the taxpayer is to be entitled to tear up the agreement, so should the Exchequer, and it is obviously an unsatisfactory state of affairs that there is no finality about an agreement of this sort and that it can be disregarded years afterwards by either side. That is what we want to stop, by making this Clause apply not only to agreements entered into hereafter but to agreements which have been entered into heretofore.
    The next point which was made was that this Clause should only apply to agreement in writing. If I am right on the first point, if I have made a case for making it retrospective for the reason that I have given, then unless it applies to all agreements whether they are in writing or not, it loses half its effectiveness, because many of these agreements are not entered into in writing. They are entered into as a result of discussion. There may be a minute—no doubt there is a minute—but there is nothing
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    exchanged and nothing which can be pointed to as a formal agreement in writing embodying the terms which have been arrived at.
    If we excluded agreements which have not been reduced to writing, we should be robbing the Clause of half its effectiveness. It does not impose any hardship upon the taxpayer whose agreement has not been entered into in writing, for this reason: if the Revenue contends that there was an agreement, it is for the Revenue to show there was. Unless they can show by conclusive contemporary correspondence or something of that sort that there was an agreement entered into, the Revenue cannot hold the taxpayer to the supposed agreement.
    The operation of this Clause to agreements not in writing entered into before the Bill becomes law does not put any burden upon the taxpayer. If the Revenue cannot show that there was an agreement, and cannot point to some evidence which establishes beyond doubt that an agreement was entered into, not in writing, the Revenue cannot rely upon the provisions of this Clause at all. It is upon them to show that there was an agreement and, if they say there was one, the taxpayer can dispute it and say there was not.
    In so far as agreements entered into hereafter are concerned, we incorporate the provision which we cannot incorporate with regard to agreements entered into before; with regard to agreements not in writing entered into hereafter, we say that the Clause shall not apply to them unless there is, in effect, a notice which confirms it. If the hon. and learned Member will look at subsection (4) he will see that the provisions shall not apply unless there was a confirmatory notice establishing the fact that an agreement has been entered into. We have done that as a matter of precaution with regard to agreements entered into hereafter but, as a matter of necessity, it is impossible to make the same requirement with regard to agreements heretofore.
    Mr. Selwyn Lloyd: Why does the right hon. and learned Member make that proviso for agreements entered into hereafter?
    The Solicitor-General: For the purposes of greater certainty hereafter we

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    think it desirable that there should be a confirmatory notice. It would be desirable if we could retrospectively say that everybody was to give a confirmatory notice, but obviously we cannot do that because we cannot put time in reverse and enact something to happen which, in fact, did not happen.
    Mr. Selwyn Lloyd: If the right hon. and learned Gentleman thinks it necessary to have this confirmatory notice of agreement in the future, would it not be very much better to drop the retrospective element and so have the same system for all?
    The Solicitor-General: First, I did not say "necessary." We thought it was desirable and preferable. Secondly, as I have already explained, if we do not make the Clause retrospective we leave out half of its effectiveness. If my arguments have not carried conviction I am afraid it would not help very much to repeat them all over again.
    With regard to the third point, the question as to whether agreements entered into with agents should come within the scope of the Clause. It is, of course, common practice for taxpayers, particularly those who pay substantial sums of taxation, to have their tax affairs adjusted by somebody who acts on their behalf—a solicitor or an accountant or something of the sort. We believe that taxpayers would probably very much prefer not to be drawn into this matter personally when in point of fact, they had empowered an accountant or an agent to dispose finally of the tax liability for them. For those reasons we think it is desirable, in the interest of the taxpayers themselves, that an agreement entered into by an agent duly authorised by them so to do should be effective. If the agent enters into an agreement without having the authority so to do, it is not an agreement which binds the taxpayer himself.
    Reference has been made to the arguments I used the other day with regard to an agent being allowed to make claims for certain purposes under Section 24 of the Finance Act, 1920, but, as I explained, there were specific reasons for that. As the House will remember, I said it was necessary for such a claim that the total amount of the taxpayer's income from all sources and the total amount of his income liable to United
    134
    Kingdom tax should be taken into account and, as the total amount of income from all sources would be primarily a knowledge within the possession of the taxpayer himself, who, ex hypothesi, was overseas, we thought it was desirable, as has always been the case, that a claim made on his behalf and not signed by him should not be accepted as constituting a valid claim for the purpose of that Section. Thus, the considerations which applied in the case of that Section are not applicable here at all.
    Lieut.-Commander Braithwaite: Can the right hon. and learned Gentleman enlarge on the question of what is, in fact, a valid oral agreement within the meaning of this Clause? For instance, supposing the inspector had an entry in his journal saying that at such and such a time on such and such a day he telephoned Mr. X who agreed his liability as so and so; is that an effective oral agreement? Or is it a conversation followed by a note by the inspector to Mr. X saying, "Confirming our telephone conversation of this day, such and such an agreement has been made"? Is that a valid oral agreement or must it be made in the presence of witnesses?
    The Solicitor-General: The note is not an agreement at all. The note may be evidence that an agreement has been entered into, but an agreement can be entered into either in writing or orally, and if two people in conversation do, in fact, agree upon a particular thing, that is a perfectly valid agreement. There are certain provisions in the law that in some particular cases—some cases relating to the sale of goods, and so on—there must be agreement in writing, but subject to that requirement, which is not applicable to this particular case, an oral agreement—that is to say, an agreement in fact arrived at in conversation between two persons—is quite as effective as a written agreement.
    Mr. Birch: I am not quite happy about this. As I understand it—I am not a lawyer—under the existing law accountants and other agents have no power to bind their clients in matters of Income Tax claims. The Solicitor-General said he would rather deal through accountants and other agents. That may well be so, but I do not know that the clients would also rather be

    135
    bound by an agreement entered into by those agents without knowing what that agreement was. As I understand it, they are not so bound at the monent, but they will be so bound under this Clause.
    I also thought that there was great force in what my hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd) said about the retrospective aspect of this Clause. That is implicitly admitted by the Government, because they say that in future such agreements will have to have some legal basis for them, whereas agreements entered into in the past can be raked up whether there is any legal agreement or not. That does seem to me to raise great possibilities of injustice and of doubt about what has gone on in the past. Also it is going to make people extremely unwilling in the future, I suggest, to enter into such agreements, if they are to be treated in this way. I am inclined to think that this Clause will clog the wheels of the Inland Revenue, and that it may cause considerable injustice, particularly where unreliable agents have been operating.
    Amendment negatived.

    Sixth Schedule.—(ALLOWANCES IN RESPECT OF MACHINERY OR PLANT.)
    Mr. Assheton: I beg to move, in page 53, line 18, to leave out "used in connection with," and to insert:
    "the use of which is dependent on."
    This Amendment deals with the case where the machinery or plant has a longer life than the life of the mineral deposit. The particular object which we seek to obtain by this Amendment is to permit processing plant to be given the same advantages as the plant which is actually used in the extraction of the mineral. It may well be that the processing plant may not have come to the end of its useful life at the time when the mineral deposit is exhausted. One may perhaps find, in the case of an oil refinery or similar business, that the oil may run out before the processing plant is also exhausted. There may be a very good case there for giving just the same treatment to the processing plant as is given in this Schedule to the machinery which is used for extracting the oil.
    8.45 p.m.
    The Solicitor-General: As the right hot) Gentleman has said, the effect of this
    136
    Amendment would be to include plant such as processing plant. At the moment the provisions of paragraph 5 of Part I of the Sixth Schedule, which give a particular basis for assessing depreciation allowances in the case of plant and machinery used in connection with a mine or mineral source, relate only to machinery actually used for the mining operation, as part of the mining operation. The effect of the Amendment, which is to leave the words "used in connection with"—which are words of much narrower import, and which clearly describe only the plant and machinery which form part of the actual operation itself—and to substitute the words suggested, would result in the inclusion of all machinery which could be said to operate in any way in connection with the mine. In other words, it would include any processing plant which in the course of one particular period of time was operated for mine A, although when mine A comes to an end that processing plant would be equally available for the purpose of operation in mines B, C and D.
    What is intended in paragraph 5 is simply to give this special basis of assessing depreciation allowances for the actual plant which forms part of the process of carrying on the mine, if I may so describe it. I do not think that we can very well go beyond that and include plant which may be available for half a dozen different mines, the useful existence of which is not in any sense dependent upon the operation of that plant. It may be a refining plant, or something of that sort, which may be situated in some populous area away from the mine. It may be perfectly possible, and very often will be the case, that that particular plant will be operated for the purpose of refining the produce of some other mine or mineral source when the first mineral source is exhausted. In other words, the Amendment would very greatly extend the scope of paragraph 5, and also of Section 16 (2) of the Income Tax Act, 1945, which paragraph 5 simply reproduces.
    As the House knows, the object of the Sixth Schedule is really to reproduce in statutory form the existing practice which, in the case of mineral deposits, incorporates the provisions of Section 16 (2) of the Income Tax Act, 1945. Accordingly, when we were drafting the Sixth Schedule we had to reproduce the provisions of

    137
    that subsection in the Schedule, and we do so in paragraph 5. We do not think that a case has been made out for extending very substantially the scope of paragraph 5 and also of Section 16 (2) of the 1945 Act, upon which this paragraph is based, with the result that a rather different situation might result. One does not know exactly what would be in and what would be out. Processing plant might even qualify for allowances in connection with its user for the purpose of even two or three mines in succession. For those general reasons, I must ask the House to reject this Amendment.
    Amendment negatived.
    The Solicitor-General: I beg to move, in page 54, line 46, at the end, to insert:
    "and the Board shall consider the application."
    I think it would be convenient to the House if we also discussed the Amendment in page 54, line 47, to leave out from "that," to "may," in line 10, on page 55, and to insert:
    "where the application is made under paragraph (c) of the said sub-paragraph (1), the Board may, if they think fit, require the applicant to satisfy them, as respects the machinery or plant to which the application relates, that in all the circumstances it is reasonable that an application should be made otherwise than under paragraph (a) or paragraph (b) of that sub-paragraph and, in that event, the Board shall consider the application only in so far as it relates to machinery or plant as respects which they are so satisfied.
    (3) On the consideration of an application under sub-paragraph (1) of this paragraph, either as respects all or as respects some only of the machinery or plant to which it relates, the Board of Referees."
    A trader who is dissatisfied with the allowance and fraction which have been assigned to him for the purpose of assessing his depreciation allowances has a right of appeal. He can go to the Commissioners, and if he is dissatisfied with the Commissioner's decision he has a further right of recourse to the Board of Referees. Generally speaking, when dealing with depreciation allowances in relation to plant and machinery, one is dealing with classes of machinery or substantial numbers of persons who use that machinery for a particular purpose. Depreciation allowances are assessed for a whole type of machinery or a whole group of people who operate a particular industry.
    Sometimes a particular trader has a special reason for asking, in relation to
    138
    his own plant and machinery, that a special fraction should be adopted for the purpose of assessing his depreciation allowance. As the Schedule is at present drafted, he cannot go to the Board of Referees if he is an individual, or, in other words, if he wants to go independently of any class of producers, unless he can satisfy the Commissioners that he has a good reason why he should go as an individual and not as part of some trade protection association, or some trade group which goes as a group to have the fraction or basis of assessment adjudicated upon by the Board of Referees.
    Members opposite have put down an Amendment which would take away from the Commissioners power to say, in regard to an individual, that he should not go independently of his group unless the Commissioners said that it was a proper case in which he could so do. That Amendment has not been selected. It is the Amendment in page 54, line 47, to leave out from the beginning, to the end of line 5, in page 55. We have studied that Amendment and considered the argument which has no doubt motivated it, and we feel that we can go most of the way, but not the whole way.
    What we have done is to say that an individual shall not be allowed to go to the Board of Referees and require them to determine his particular case unless the Board of Referees think, when he goes to them, that there is sufficient reason for him going independently. I ask the House to consider the kind of thing that happens. There is the disgruntled individual who thinks everyone's hand is against him and who wants to go in advance of the association to which he belongs. The association may be preparing a very full case, getting the relevant evidence and data together, to go to the Board of Referees, but a particular individual is disgruntled and insists on going independently, without any adequate reason, to have his case adjudicated upon in advance.
    What we desire to do is to give the Board of Referees some means to protect themselves against an individual of that sort. We give them power to refuse to adjudicate on his appeal if they think there is no reason which justifies him going independently to them instead of as one of the class or group of traders to which he belongs. We think that is

    139
    a necessary and an indispensable measure of protection to give to the Board of Referees, although we do agree that it is going too far in the other direction for the Commissioners to say whether or not he should go to them. We feel that we cannot go the whole way, because it would be putting the Board of Referees in an impossible position if they had to adjudicate independently and in advance on the claims of a single individual who wished to go on his own account.
    Mr. Selwyn Lloyd: We on this side of the House are grateful to the Government for going some way to meet us, because I am certain that the right hon. and learned Gentleman would be the first to admit that the Sixth Schedule is exceedingly complicated and very difficult for the ordinary laymen to understand. It is therefore only right that we should pay very careful attention to the provisions relating to applications to the Commissioners or to the Board of Referees. The right hon. and learned Gentleman will agree with me that under the Schedule the matters which can be referred to the Commissioners or to the Board of Referees are whether an allowance has been correctly calculated or not. There are two methods whereby that can be calculated. One might be called the normal method, which has been slightly altered in that the Commissioners are no longer to have the same discretion as in the past, and the alternative method prescribed, which I think can commonly be called the straight line method.
    It is a good thing that this new alternative method is provided, though it is a pity that it should be necessary to couch the whole business in so very complicated a Schedule. Just to illustrate the difficulty which a man might have in deciding whether to go to the Commissioners or to the Board of Referees, I am told that before he can decide his allowance under the first method he requires to have a considerable knowledge of algebra and also to have recourse to the logarithm tables. In fact, I am told that a formula to enable him to determine his allowance per cent. is five-fourths of one hundred minus X where X satisfies this formula:
    XN= 10 (2N—1)
    That is the formula which one has to
    140
    work out before one can calculate the annual amount under the first method.
    I shall be very careful not to embark on certain discussions which I should have liked to raise had certain Amendments of mine been called. It is directly on this point of appeals to the Commissioners that I urge the right hon. and learned Gentleman to make the widest possible circulation of tables such as those which I have sought to provide on the Order Paper. That will obviate the difficulties which I foresee if we proceed as provided under this paragraph. It seems to me that the ordinary business man should be able to tell at a glance from some table or other what his annual allowance is going to be without having to get a professional man to work it out. That is a point of substance which I press on the right hon. and learned Gentleman. In the technical matters relating to appeals, he has gone some way to meet us and we welcome what he has done.
    Mr. Assheton: The House will have gathered from the speech of my hon. and learned Friend that this is a rather complicated affair. All I want to say is that I am grateful to the Solicitor-General for the Amendment which he has moved. We on this side of the House do not think it is as good an Amendment as we would have made. We recognise, however, that the Solicitor-General has gone some way to meet the difficulty, and all I can suggest is that we can only see how this proposal works out. If it works out satisfactorily, well and good, but if it does not, then next year we will put down the same Amendment again.
    9.0 p.m.
    Lieut.-Commander Braithwaite: The right hon. and learned Gentleman has advanced some way in our direction, but I put it to him that much will depend upon the interpretation and the operation of this Schedule. He made one remark which I thought slightly disturbing. He wanted to protect the Board of Referees from what I think he called disgruntled individuals. What they are likely to get is not so much individuals who are disgruntled as those who are not fully gruntled; in other words, those who have some small grievance. It is rather a dangerous criticism to lay down that the Referees can be approached only by some group of persons. There is about that an

    141
    aroma, a faint aroma it may be, of the corporate State.
    It is important to maintain in this country the right of individuals to make use of this machinery. If it be the case that such individuals might ask the Referees to arbitrate on insufficient evidence, or on a case which had not been fully prepared, the Referees can surely say that they are not in a position to arbitrate because of those facts. It would be a pity if it were to go out from this House as an instruction to the Referees that, because they are approached by an individual alone and without the assistance of another group, the individual must be debarred. I hope that that impression will be corrected.
    The Solicitor-General: The individual can go to the Referees, but he may be required to satisfy them that it is reasonable in all the circumstances that he should not go with the others. The hon. and learned Member and his friends obviously went to very great trouble to work out an alternative system and to put it down on the Order Paper. I should like to say one or two words with regard to that Amendment, if I might, although it has not been called. We have considered very carefully that alternative system. There are difficulties which we think insuperable, in the way of its acceptance. The Schedule that we have adopted is certainly complicated, but it is only reproducing the existing practice. In point of fact, it has worked perfectly satisfactorily for many years.
    Mr. Deputy-Speaker (Mr. Bowles): The right hon. and learned Gentleman cannot discuss the proposed Amendment because Mr. Speaker did not select it.
    The Solicitor-General: I beg your pardon, Mr. Deputy-Speaker. That is all I want to say.
    Mr. Selwyn Lloyd: With regard to obviating recourse to this procedure, does the Solicitor-General think that it would be obviated if some tables were generally made available?
    The Solicitor-General: I do not think so.
    Amendment agreed to.
    Further Amendment made: In page 54, line 47, leave out from "that," to
    142
    "may," in line 10, on page 55, and insert:
    "where the application is made under paragraph (c) of the said sub-paragraph (1), the Board may, if they think fit, require the applicant to satisfy them, as respects the machinery or plant to which the application relates, that in all the circumstances it is reasonable that an application should be made otherwise than under paragraph (a) or paragraph (b) of that sub-paragraph and, in that event, the Board shall consider the application only in so far as it relates to machinery or plant as respects which they are so satisfied.
    (3) On the consideration of an application under sub-paragraph (1) of this paragraph, either as respects all or as respects some only of the machinery or plant to which it relates, the Board of Referees."—[Sir S. Cripps.]
    Mr. Stanley: I beg to move, in page 55, line 47, at the end, to insert:
    "and if that person is aggrieved by the decision of the Commissioners on the amount of the capital expenditure so deemed to have been incurred he may appeal to the General or Special Commissioners."
    This is the part of the Schedule which deals with depreciation of hired machinery. We admit that the new subsection (2) is a concession which we welcome, but up till now, although the Treasury have maintained the principle that the depreciation allowance was open to people using hired machinery, the fact that the allowance was restricted to capital expenditure meant that men who were using hired machinery could rarely, if ever, get any benefit from the allowance. Under the new procedure they will be allowed to benefit because it will be the duty of the Commissioners to fix what they think is the share of the capital expenditure included in the hiring charges. It is, therefore, a benefit to the user of the machinery and one for which we thank the Government.
    Our only point is this. At present the fixing of that share represented by capital expenditure is entirely at the discretion of the Commissioners. As far as I can see, no guidance is laid down for them in the Bill, and in those circumstances their decision becomes, to some extent an arbitrary one. We have no doubt that in the majority of cases the discretion will be used with the utmost care, but in view of the fact that that discretion is so wide, we suggest that this is a case where there should be some appeal in case the taxpayer feels aggrieved by an adverse decision. This Amendment provides such an opportunity.
    Mr. Glenvil Hall: I hope that the House will reject this Amendment, or that the right hon. Gentleman will withdraw it after I have explained what is meant by Clause 9 (2). This Amendment is unnecessary because the Commissioners having jurisdiction in the matter are the appellate tribunal to which the right hon. Gentleman refers. As he said, the Inland Revenue or the Board of Referees will fix the percentage, and anyone aggrieved will have the right of appeal, as he desires them to have, to the General or Special Commissioners. The subsection permits that. We are, therefore, really at one, and I hope the right hon. Gentleman will withdraw his Amendment.
    Mr. Stanley: In view of the fact, as I gather, that my Amendment is otiose and that we get what we want, I beg to ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.

    Eleventh Schedule.—(REPEALS.)
    Mr. Glenvil Hall: I beg to move, in page 74, line 5, at the beginning, to insert:

    30 & 31 Vict., c. 5.

    The Dog Licences Act, 1867.

    Section five, from the second "and" onwards.

    The House will remember that we inserted a new Clause dealing with dog licences. At the moment, under the law all licences come to an end on 31st December, and all we seek to do—I hope the House will agree—is to delete the words:
    "and shall terminate on 31st December following."
    Lieut.-Commander Braithwaite: It is extremely fitting that the final Amendment in our long discussions should deal with the only section of the community which has received any benefit whatever from the financial proposals of the Chancellor of the Exchequer. As the curtain falls, one might properly paraphrase a poem many of us learnt when we were young, and say, "The dog recovered from the Budget; the man it was that died."
    Amendment agreed to.
    Bill to be read the Third time tomorrow.

  SUPERANNUATION BILL
  Lords Amendments considered.
  SUPERANNUATION BILL

    Clause 26.—(AVOIDANCE OF NOMINATIONS.)
    Lords Amendment: In page 20, line 36, to leave out subsection (4).
    Mr. Glenvil Hall: I beg to move, "That this House doth agree with the Lords in the said Amendment."
    The reason for this Amendment is somewhat technical. We now propose to omit this subsection, and we are making changes in the next Clause, to which I will refer when we come to it, to insert other words. Under the Bill a civil servant, particularly a woman, could make provision for dependants up to the number of three. What we overlooked was that in some cases such a woman might marry and might desire to change her nomination. Under the wording of the Clause as it at present stands there is an ambiguity which we now seek to put right.
    Lords Amendment: In page 44, line 27, at end, insert new Clause "A"—(APPLICATION TO EMPLOYEES OF CABLE AND WIRELESS, ETC.):
    .—Section six of the Commonwealth Telegraphs Act, 1949 (which enables the Postmaster-General to make regulations with respect to the pension rights of employees of Cable and Wireless, Limited, who enter the Civil Service of the State) shall have effect as if the references in paragraph (d) of subsection (2) of that section to the Superannuation Acts, 1834 to 1946, included references to this Act.
    Mr. Glenvil Hall: I beg to move, "That this House doth agree with the Lords in the said Amendment."
    The provisions of this Act apply to the employees of Cable and Wireless. When Commonwealth Telegraphs Bill was going through it would have been technically out of Order to have inserted in it a section such as we desire to insert in this Bill, because the Superannuation Bill had not then been passed by this House. Now the situation is that we can refer to it and insert the provision regarding these employees in the Superannuation Bill now before this House.
    Remaining Lords Amendments agreed to. [All Amendments with Special Entries.]

  NAVY, ARMY AND AIR EXPENDITURE, 1947–48
  Considered in Committee.
  [Major MILNER in the Chair]
  1. Whereas it appears by the Navy Appropriation Account for the year ended the 31st day of March, 1948, that the aggregate Expenditure on Navy Services has not exceeded the aggregate sums appropriated for those Services and that, as shown in the Schedule hereto appended, the net surplus of the Exchequer Grants for Navy Services over the net Expenditure is £15,776,537 8s. 9d., namely:

  SCHEDULE

  No. of Vote

  Navy Services, 1947–1948 Votes

  Deficits

  Surpluses

  Excesses of actual over estimated gross Expenditure

  Deficiencies of actual as compared with estimated Receipts

  Surpluses of estimated over actual gross Expenditure

  Surpluses of actual as compared with estimated Receipts

  £

  s.

  d.

  £

  s.

  d.

  £

  s.

  d.

  £

  s.

  d.

  1

  Wages, &c, of Officers and Men of the Royal Navy and Royal Marines and Women's Royal Naval Service.

  2,618,890

  7

  4

  —

  —

  487,701

  16

  6

  2

  Victualling and Clothing.

  —

  987,892

  7

  1

  2,783,822

  12

  5

  —

  3

  Medical Establishments and Services.

  84,706

  12

  10

  —

  —

  60,198

  7

  9

  4

  Civilians employed on Fleet Services.

  1,417,183

  11

  11

  —

  —

  11,824

  10

  10

  5

  Educational Services

  —

  —

  33,205

  17

  7

  15,576

  17

  2

  6

  Scientific Services

  —

  —

  1,130,976

  15

  10

  50,843

  6

  7

  7

  Royal Naval Reserves

  —

  49

  15

  0

  174,411

  10

  7

  —

  8

  Shipbuilding, Repairs, Maintenance, &c.—

  Section I.— Personnel

  338,426

  3

  7

  —

  —

  587,825

  8

  2

  Section II.—Matériel

  2,001,928

  8

  2

  —

  —

  8,203,914

  3

  3

  Section III.—Contract work.

  —

  —

  4,315,333

  13

  1

  937,784

  15

  11

  9

  Naval Armaments

  —

  —

  1,116,000

  2

  8

  2,297,411

  0

  9

  10

  Works, Buildings, and Repairs at Home and Abroad.

  —

  —

  2,217,377

  5

  11

  506,652

  15

  2

  11

  Miscellaneous Effective Services.

  2,635,261

  13

  2

  —

  —

  1,007,990

  0

  9

  12

  Admiralty Office

  565,187

  10

  0

  6,314

  18

  5

  —

  —

  13

  Non-effective Services.

  252,935

  13

  2

  5,760

  0

  9

  —

  —

  14

  Merchant Shipbuilding, &c.

  —

  —

  319,794

  14

  1

  520,794

  5

  2

  —

  Balances Irrecoverable and Claims Abandoned.

  88,365

  10

  0

  —

  —

  —

  10,002,885

  10

  2

  1,000,017

  1

  3

  12,090,922

  12

  2

  14,688,517

  8

  0

  Total Deficits:

  Total Surpluses:

  £11,002,902 11s. 5d.

  £26,779,440 0s. 2d.

  Net Surplus £15,776,537 8s. 9d.

  £

  s.

  d.

  Total Surpluses

  …

  26,779,440

  0

  2

  Total Deficits

  …

  11,002,902

  11

  5

  Net Surplus

  …

  £15,776,537

  8

  9

  And whereas the Lords Commissioners of His Majesty's Treasury have temporarily authorised the application of so much of the said total surpluses on certain Grants for the Navy Services as is necessary to make good the said total deficits on other Grants for Navy Services.
  Motion made, and Question proposed, "That the application of such sums be sanctioned."
  9.12 p.m.
  Commander Galbraith: I think you will probably recall, Major Milner, that a few days ago some very serious figures were given by the Financial Secretary to the Admiralty in this House in relation to recruiting, when he told us that a very large proportion of those who might be expected to reengage were not doing so. I wish to draw attention to that and to the fact that it is probably due to the failure to build barracks and married quarters at the planned rate during the past year. I think that it is right that we should draw attention to it in the hope that it may be improved in the future. The same applies to the scientific services.
  There is one other matter to which I would draw the attention of the Committee, and I hope that the Parliamentary Secretary may give us some explanation. It is in connection with the deficiency in Vote 11 occasioned, I understand, by the financing of the engineering firm of S. G. Brown, Ltd. It is a fairly large expenditure on this matter amounting to something over £400,000. May we have some reason why that was incurred, the purpose of it, and what benefit is accruing to the service from that expenditure.
  The Chairman: I ought to inform the hon. and gallant Gentleman that it is not competent to inquire the reason for a deficit, though he may inquire the reason for a surplus.
  9.15 p.m.
  The Parliamentary Secretary to the Admiralty (Mr. John Dugdale): In that case, it would be out of Order for me to reply to the second part of the hon. and gallant Gentleman's speech. In answer to the first part, I would only say that the provision of married quarters is certainly a matter to which the Government attach very great importance. But
  148
  unfortunately in the past there has been a failure to provide them. This Government have found themselves with a gross lack of married quarters for the Navy. We are doing our best to see that they are provided. I hope that as a result we shall find that what the hon. and gallant Gentleman desires and what we desire will take place—namely, that there will be an improvement in recruiting.
  The recruiting situation is due to a number of factors but, in so far as the lack of married quarters may affect the matter, it is due to action which was not taken in the past. We are now remedying the situation and we hope that it will have a good effect upon recruiting.
  Commander Galbraith: Would the right hon. Gentleman care to make some remarks on the failure to improve accommodation in barracks?
  Mr. Dugdale: If I am in Order, I would say that considerable improvements have been made. My hon. Friend the Civil Lord described them in his speech on the Estimates. They are improvements which have been long needed. The conditions in the barracks when this Government came into office were, in many cases, deplorable. We are seeing that improvement takes place as rapidly as possible. The improvements have been out of all recognition to any which took place in the barracks during ten years or more before the war.
  Commander Galbraith: Might I put one short question? The right hon. Gentleman does not think then that the lack of people to re-engage is due to either of these causes?
  The Chairman: I really do not think that those questions arise. I am not at all sure that the right hon. Gentleman was in Order. Probably it was my fault for permitting him to reply in detail.
  II. Whereas it appears by the Army Appropriation Account for the year ended the 31st day of March, 1948, that the aggregate Expenditure on Army Services has not exceeded the aggregate sums appropriated for those Services and that, as shown in the Schedule hereto appended, the net surplus of the Exchequer Grants for Army Services over the net Expenditure is £13,219,660 13s. 11d., namely:

  SCHEDULE

  No. of Vote

  Army Services, 1947–1948 Votes

  Deficits

  Surpluses

  Excesses of Actual over Estimated gross Expenditure

  Deficiencies of Actual as compared with Estimated Receipts

  Surpluses of Estimated over Actual gross Expenditure

  Surpluses of Actual as compared with Estimated Receipts

  £

  s.

  d.

  £

  s.

  d.

  £

  s.

  d.

  £

  s.

  d.

  1

  Pay, &c, of the Army.

  —

  —

  3,981,911

  7

  0

  35,138

  3

  4

  2

  Reserve Forces, Territorial Army and Cadet Forces.

  —

  —

  397,460

  4

  2

  57,352

  7

  1

  3

  War Office

  —

  7,964

  2

  6

  29,870

  9

  6

  —

  4

  Civilians

  415,800

  3

  7

  98,376

  12

  8

  —

  —

  5

  Movements

  —

  —

  3,795,398

  1

  0

  154,166

  16

  3

  6

  Supplies, &c.

  3,755,226

  12

  10

  —

  —

  1,626,533

  14

  5

  7

  Stores

  —

  —

  2,341,091

  5

  0

  5,395,943

  6

  0

  8

  Works, Buildings and Lands.

  —

  —

  1,280,598

  5

  9

  321,830

  12

  1

  9

  Miscellaneous Effective Services.

  —

  —

  1,332,068

  4

  0

  47,900

  8

  11

  10

  Non-effective Services.

  —

  —

  251,047

  9

  2

  6,127

  17

  7

  —

  Balances Irrecoverable and Claims Abandoned.

  3,557,410

  5

  9

  —

  —

  —

  7,728,437

  2

  2

  106,340

  15

  2

  13,409,445

  5

  7

  7,644,993

  5

  8

  Total Deficits:

  Total Surpluses:

  £7,834,777 17s. 4d.

  £21,054,438 11s. 3d.

  Net Surplus £13,219,660 13s. 11d.

  Resolved, "That the application of such sums be sanctioned."—[Mr. Glenvil Hall.]

  And whereas the Lords Commissioners of His Majesty's Treasury have temporarily authorised the application of so much of the said total surpluses on certain Grants for Army Services as is necessary to make good the said total deficits on other Grants for Army Services.
  III. Whereas it appears by the Air Appropriation Account for the year ended the 31st day of March, 1948, that the aggregate Expenditure on Air Services has not exceeded the aggregate sums appropriated for those Services and that, as shown in the Schedule hereto appended, the net surplus of the Exchequer Grants for Air Services over the net Expenditure is £32,477,294 15s. 7d., namely:

  SCHEDULE

  No. of Vote

  Air Services, 1947–1948 Votes

  Deficits

  Surpluses

  Excesses of actual over estimated gross Expenditure

  Deficiencies of actual as compared with estimated Receipts

  Surpluses of estimated over actual gross Expenditure

  Surpluses of actual as compared with estimated Receipts

  £

  s.

  d.

  £

  s.

  d.

  £

  s.

  d.

  £

  s.

  d.

  1

  Pay, &c, of the Air Force.

  4,757,432

  12

  4

  1,793,297

  13

  7

  —

  —

  2

  Reserve and Auxiliary Forces.

  —

  —

  194

  16

  2

  519,033

  2

  6

  3

  Air Ministry

  14,534

  14

  8

  1,373

  14

  6

  —

  —

  4

  Civilians at Out-stations.

  —

  —

  407,693

  12

  9

  165,015

  9

  4

  5

  Movements

  —

  —

  3,167,576

  10

  1

  1,511,139

  19

  6

  6

  Non-technical Supplies.

  1,061,317

  12

  1

  —

  —

  522,948

  18

  6

  7

  Technical Supplies and Services.

  —

  —

  22,362,531

  13

  6

  3,576,491

  17

  3

  8

  Works and Lands

  —

  608,831

  0

  10

  8,360,394

  9

  6

  —

  9

  Miscellaneous Effective Services.

  —

  225,798

  19

  3

  191,784

  7

  4

  —

  10

  Non-effective Services.

  —

  —

  163,075

  17

  9

  92,780

  0

  10

  —

  Balances Irrecoverable and Claims Abandoned.

  100,389

  19

  10

  —

  —

  —

  5,933,674

  18

  11

  2,629,496

  4

  4

  35,172,089

  13

  5

  5,868,376

  5

  5

  Total Deficits:

  Total Surpluses:

  £8,563,171 3s. 3d.

  £41,040,465 18s. 10d.

  Net Surplus £32,477,294 15s. 7d.

  Resolved: "That the application of such sums be sanctioned."—[Mr. Glenvil Hall.]

  £

  s.

  d.

  Total Surpluses

  …

  41,040,465

  18

  10

  Total Deficits

  …

  8,563,171

  3

  3

  Net Surplus

  …

  £32,477,294

  15

  7

  And whereas the Lords Commissioners of His Majesty's Treasury have temporarily authorised the application of so much of the said total surpluses on certain Grants for Air Services as is necessary to make good the said total deficits on other Grants for Air Services.
  Resolutions to be reported Tomorrow.

  TIMBER (CHARGES) ORDER
  9.20 p.m.
  The Parliamentary Secretary to the Board of Trade (Mr. John Edwards): I beg to move:
  "That the Timber (Charges) (No. 10) Order, 1949 (S.1., 1949, No. 1080), dated 3rd June, 1949, a copy of which was laid before this House on 7th June, be approved."
  On 3rd June, the Board of Trade made the Imported Softwood Prices Order of 1949, Statutory Instrument 1079, which came into force on 20th June. The effect is to increase the prices of the better grades of softwood and to reduce the prices of the lower grades. This widens the gap between the prices of the better and lower grades of imported softwoods which a series of flat increases, which from 1940 has been about £42 a standard, has increasingly obscured. At the same time, the new order leaves the general level of prices unchanged, and we hold the view that this revision is most essential in the interests of timber economy and a realistic price structure.
  This order, as I have said, involves increasing the prices of the better grades of imported softwoods, and therefore a Charges Order was necessary to prevent merchants from making a windfall profit on their stocks. The order before us, Statutory Instrument 1080, was accordingly made by the Treasury on 3rd June and came into effect simultaneously with the Imported Softwood Prices Order. The Charges Order imposes a levy corresponding to the increase in price of softwood held by merchants, the prices of which are increased by the prices order.
  The first order to which I have referred, the Imported Softwood Prices Order, by reducing the prices of some of the lower grades of imported softwoods, brings into operation for the first time what has been known as the "Fall Clause." This is not in the order, but it should be borne in mind in considering the order. It is a guarantee given by the Board of Trade to cover softwood merchants against stock losses caused by reduction in the statutory prices. It is, in effect, a reversal of the Charges Order. For convenience in administration and in the timber trade, the Charges Order and the Fall Clause will be combined and each merchant will send a return to the Timber Control, who will calculate the
  154
  net sums recoverable from or payable to the merchant. So far as I can see, the general charges and the Fall Clause will about balance at about £750,000.

  U.S.A. VETERANS' PENSIONS (ADMINISTRATION) BILL [Lords].
  Order for Second Reading read.
  9.23 p.m.
  The Minister of Pensions (Mr. Marquand): I beg to move, "That the Bill be now read a Second time."
  This Bill will give me an opportunity of rendering a very small service to a Government which has already rendered very great services to our people, and I feel sure that I shall be able to secure the agreement of the House to this very small Measure tonight.
  The Bill makes provision for the administration by the Minister of Pensions of veterans' pensions and other sums payable under the law of the United States of America in respect of United States veterans, their wives and dependents resident in the United Kingdom who are unable to manage their own affairs. I want to make that quite clear at the start. Though the Bill itself does not specifically refer to this, it arises from the American law, and the arrangements provided for in this Bill apply only to minors or veterans themselves, or to adult dependents who are unable to manage their own affairs. I should perhaps also explain that these provisions are intended to apply only to dependents of those United States veterans who have been disabled or killed and in respect of whom the United States Veterans' Administration has incurred a financial liability under American law.
  Section 21 of the United States World War Veterans' Act provides that
  "where any payment of compensation, adjusted compensation, pension, emergency officers' retirement pay, or insurance under any Act administered by the Veterans' Administration is to be made to a minor, other than a person in the military or naval forces of the United States, or to a person mentally incompetent, or under other legal disability adjudged by a court of competent jurisdiction, such payment may be made to the person who is constituted guardian, curator or conservator by the laws of the State of residence of claimant, or is otherwise legally vested with the care of the claimant or his estate."

  155
  The United States Government have requested me and, of course, subsequent Ministers of Pensions in this country to act as guardian in these cases and to receive and administer as a trustee such funds as may be payable. I should say at the outset that it is not intended that this Bill shall apply in any case where there is a legal guardian, receiver or committee who is able to receive and administer the funds in question, but only where there is no such person or where, in any exceptional case it is not desirable that such a person should receive the funds.
  The United States Veterans' Administration, through their representatives in this country, have knowledge of the services which we are able to perform here for our own disabled ex-Service men and their dependants, and they are satisfied that we can discharge this obligation for them quite conveniently. I am satisfied that we can do that, taking the work, as it were, in our stride. The total number of persons for whom we shall have to perform this service is certainly not at the moment very large, and it is most unlikely that it ever would become very large, so that the cost of it is negligible.
  Turning to the text of the Bill, paragraphs (1) and (2) of Clause 1 provide that where in respect of any person it is agreed between the Minister and the Administrator of Veterans' Affairs that the Minister shall, during a period known as
  "the period of administration by the Minister,"
  administer any funds received by him, he shall hold them upon trust to deal with them either by paying them to or applying them in the interests of the person concerned or by investing them and applying the investments for the same purpose.
  Paragraph (3) of Clause 1 is concerned with the termination of the period of administration. The Minister may do one of three things. First, he may request the Administrator of Veterans' Affairs to specify to whom and when he is to pay or transfer any moneys or investments still held in trust by him. Secondly, he may hold the moneys or investments upon trust for the person con-
  156
  cerned. Thirdly, if the person concerned has died and the Minister does not act in the manner firstly referred to, he may pay or transfer the moneys or investments to the personal representative of the person concerned or where the aggregate amount or value of the moneys or investments does not exceed £100, he may pay or transfer them to the persons who would be beneficially entitled. This paragraph also includes an express provision preventing any of the moneys or investments escheating or going by way of bona vacantia to the Crown. Obviously it would not be right for moneys emanating from the United States Government to go by way of bona vacantia to the Crown.
  Paragraph (4) of Clause 1 contains an express prohibition preventing the operation of the Bill in any case where a Court in the United Kingdom has appointed a person to act as a guardian, etc., being a person who is competent to act for the purposes of the Bill. Paragraph (5) enables His Majesty by Order in Council to extend the provisions of the Bill to the Isle of Man and the Channel Islands. Clause 2 of the Bill deals with the Short Title and Interpretation.
  I hope that the explanation I have given to the House and the very warm welcome which this Bill received in another place will be sufficient to cause the House to agree to give the Bill a Second Reading.
  9.30 p.m.
  Earl Winterton: I find myself in the unusual position of wholeheartedly blessing a Bill brought in by the Government—a position so rare as to be quite agreeable. The right hon. Gentleman has clearly explained the purpose of the Bill which, I think, is a perfectly proper and worthy one, and I should like to add, as one who has known the United States on and off for very many years, that I am glad that we can be of some reciprocal assistance to a generous and great hearted people with whom we are so closely associated in so many ways.
  Committed to a Committee of the whole House for Tomorrow.—[Mr. Snow.]

  DISABLED EX-SERVICE MEN (MOTOR CARS)
  Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Snow.]
  9.31 p.m.
  Mr. Boyd-Carpenter: I desire to raise a case affecting an individual constituent of mine, which also, it seems to me, raises a question of principle affecting the public faith and reputation of a great Department of State. I say that with the greater regret because the Department concerned is the Ministry of Pensions, which I must admit, in general has shown humanity in the handling of its individual cases greatly superior to that of most other Departments; but I shall submit to the House that in this case that Department has blundered, and that the blunder has not only caused personal hardship to one individual in the Department's care but that in so doing the Department has fallen away from its normal high standard of acceptance and abiding by its own pledged word.
  The case affects a constituent of mine, a Mr. G. H. Upton, who lives in a prefabricated bungalow on the Middleton Estate at Hook in Surrey. This gentleman had the misfortune, while on active service during the war, to lose both his legs and to suffer amputations of both of them below the knee. He has, as have the rest of us, to get to work, and when, therefore, an announcement was made, I suspect a little prematurely, by the Financial Secretary to the Treasury in the Finance Bill Debates last year that it was proposed to provide a certain number of severely disabled ex-Service men with low-powered cars, Mr. Upton was naturally very interested, and at his request I made inquiries of the Department.
  Subsequently Mr. Upton received from the Regional Office of the Ministry of Pensions, located at 20, Great Smith Street, a circular letter dated 16th August, and I anticipate, from a supplementary answer which the Parliamentary Secretary gave me a few weeks ago, that some question may arise as to the precise meaning of this letter. I think it would be as well if I read the necessary and appropriate parts of the letter to the House. I may say in parenthesis that I have given notice to the right hon.
  158
  Gentleman, whose Parliamentary Secretary is present here today, that I intend to raise this precise issue, and I therefore have no doubt that the Parliamentary Secretary is fully equipped with a copy of the circular letter in question. Therefore, when I read it, if the Parliamentary Secretary feels that I have excluded any passage which from his point of view is material, I hope he will give me the opportunity of reading any additional passage.
  The letter, dated 16th August, 1948, addressed to my constituent, is as follows:
  "Dear Sir, It has been decided that at your option you may be supplied with a low-powered motor car (e.g. 8 horse power) in lieu of the motor-propelled tricycle which has been supplied to you. It has to be pointed out, however, that cars will become available in limited number only, and it may be some time before everyone who is eligible and so desires can be supplied. If you elect to receive a car this will be supplied under the following conditions:"
  There are then set out eight detailed conditions with which I shall not trouble the House unless the Parliamentary Secretary so desires. The concluding paragraph says:
  "It may help you in making your decision to know that arrangements are in hand for the production of a new type of motor-propelled tricycle offering all-weather protection and with facilities for carrying a special type of folding, self-propelled chair to be provided in appropriate cases. Supplies of the new machines will not be available for some months, but will then be issued when machines of the present type are due for renewal. Please complete and sign the accompanying form of option and undertaking and return it, with one of the letters signed."
  It seems to me that any reasonable person who received such a document would understand, as Mr. Upton in fact understood, that at his option the Ministry were undertaking to supply him with one of these cars, and no question arose to cast any doubt upon that interpretation of that letter until, in the course of a supplementary reply a few weeks ago, the Parliamentary Secretary did so. I think I am entitled to remind him and the House that during the prolonged correspondence which has taken place between his Minister and myself, no suggestion was made by the Minister that a definite undertaking was not included and, on considering the terms of that letter, I think it is clear that any reasonable man was entitled to understand that he could have a car if he wished it.

  159
  In any event, Mr. Upton so understood it. He promptly replied, on 28th August, to say that he accepted the offer of a car and he proceeded, with what I think the House will regard as admirable speed, to undertake, at his own expense, driving lessons which cost him a matter of £16, and to obtain a certificate of proficiency to drive, notwithstanding his disabilities. These documents were forwarded to the Ministry on 8th October. Nothing having elapsed for some time, he approached me again and, on 25th February this year, I wrote to the Minister. I regret to say that there was a considerable delay in obtaining a reply, despite a reminder, and it was by one of those happy coincidences with which the House is now familiar that his reply finally arrived three days after I had placed a Question on the Order Paper of this House inquiring when a reply could be expected. In any event, the reply came on 17th May, and I should like, again, to read the material parts to the House. After certain preliminary matters with which I will not trouble the House, unless the Parliamentary Secretary so desires, the right hon. Gentleman proceeds as follows:
  "As I stated in the House last July, a limited number of small cars are being made available to certain classes of very seriously disabled war pensioners, such as double-leg amputees who have at least one amputation above the knee, paraplegics, and pensioners suffering from other disabilities resulting in the total or almost total loss of use of both legs. Mr. Upton is not included in these priority classes and I very much fear that it is improbable that there will be a car available for him when the needs of the more severely disabled have been met. You will see that a bad mistake was made. It arose because Mr. Upton has a double amputation, but below the knee. I greatly regret that such an error should have occurred. I could not now supply him with a car without depriving some pensioner who is even more seriously disabled; but I will, if he would like to have one, supply a motor-propelled tricycle. Perhaps Mr. Upton will let me know direct whether he wishes to accept this offer."
  The House will see from that letter that, on 17th May, the Minister was not disputing that an undertaking had been given to provide a car but was simply saying that this had happened as a result of a bad mistake. That made rather more surprising, I think, the Parliamentary Secretary's supplementary answer to which I have already referred and which was given on 31st May. After several of what the Press would describe
  160
  as Parliamentary exchanges, I asked the Parliamentary Secretary this supplementary question:
  "The answer of the Parliamentary Secretary did not deal with the gravamen of the complaint—that a definite promise was made. Will the Parliamentary Secretary state whether it is right that a Government Department should repudiate a promise made to a seriously disabled man?"
  Then the Parliamentary Secretary, whom I am glad to see in his place, replied:
  "We deny that a definite promise was made. A circular was sent out saying that he would be supplied with a car;"—
  I ask the House to note the word "would"—
  "that there were certain categories and that the more seriously disabled people would have priority. We are not saying now that he will not receive a car. All we are saying is that he cannot receive a car at the moment until we see how many applications we get from the people in the higher categories."—[OFFICIAL REPORT, 31st May, 1949; Vol. 465, c. 1886.]
  I think the facts speak sufficiently for themselves, and that it will be unnecessary for me to take up any time of the House in commenting upon them. I will, therefore, confine myself to saying this. This severely disabled man receives a letter from a Government Department, the terms of which I have already read to the House; he believes that he is being given the offer of a car; he accepts that offer; he not only bases his plans and arrangements for the future on the understanding that he is going to receive that car, he not only puts himself to a great deal of trouble in connection with it—because, as the House will appreciate, learning to drive a car when one has two artificial legs is not one of the easier feats to which humanity can attain—but he puts himself also, incidentally, to the expenditure of some £16 in obtaining the necessary lessons. He is then told—or I am told on his behalf—that the offer was made as a result of a bad mistake.
  I say, with respect to the Parliamentary Secretary, that, accepting that as true, what is the right line for a great Department of State, that has made a mistake which has caused an individual to suffer, to adopt? Surely the only possible line for that Department of State to take, particularly when it is, as I have said, a Department of State with a very high reputation for humanity in its administration is to say that it will honour the promise that was made, however mistakenly. I ask the Parliamentary Secre-

  161
  tary not to try to quibble as to the precise terms in which the undertaking was given, but to accept the broad proposition that where a Department of State has made an error it is the Department of State that should accept the consequences of that error and not the individual whom its administration affects.
  Frankly, I am not at all impressed by the argument in the concluding paragraph of the Minister's letter, to the effect that if a car is given to Mr. Upton somebody will have to be deprived of one. I do not rate as low as that either the administrative resources of the Ministry of Pensions or the productive resources of the British motor car industry. I do not believe for one moment that if the right hon. Gentleman or his Parliamentary Secretary really believed that wrong had been done as a result of a mistake, and decided to right that wrong, there would be the slightest difficulty in taking the necessary administrative steps, with the co-operation of the motor industry, to provide not only one, but, if necessary, several more of these machines, so as to secure that no one should suffer as the indirect consequence of their having done right in another direction.
  I have pressed this matter, as the Parliamentary Secretary knows, and will certainly know from consideration of the relevant Departmental file, to a point at which I fear that the Department must regard me as having made myself insufferably tedious, but I ask the Parliamentary Secretary tonight to look at this matter not through Departmental eyes, but from the point of view—which he of all men is personally fitted to do—of the disabled man who, having received that letter, suddenly finds this bitter disappointment inflicted upon him. I know that if the Parliamentary Secretary looks at it from that point of view, he will regard this, not merely as an unfortunate Departmental administrative error which can easily be rectified by the withdrawal of the promise, but as a challenge to do his best to meet the undertaking and to honour the pledge of a great Department.
  9.45 p.m.
  Sir Richard Acland: I do not, of course, usually agree with the hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), but this evening I am particularly grateful to him for having gone through the no small trouble
  162
  involved in securing an Adjournment Debate, and for having raised this particular subject, because it so happens that I also have given notice to the Parliamentary Secretary of an almost identical case, which is in course of argument with the Ministry, to that which has been raised this evening.
  This case comes to me from a constituent of mine, a Mr. A. B. Chambers, who also lives in a prefabricated bungalow in Gravesend. He too received this circular letter, the relevant parts of which have already been read. The only point of difference is that Mr. Chambers received his letter some 10 days sooner than the constituent of the hon. Member for Kingston-upon-Thames. He too took this letter as a promise with the obvious qualification in the second paragraph that it might be some time before everyone who is eligible and so desires could be supplied. That is quite understandable, and if the Parliamentary Secretary in reply were to say something to the effect that within a reasonable time—perhaps one year, 18 months, even two years—the promise would be honoured, I, for my part, should not be wholly dissatisfied.
  Subject to that, it must be agreed that the letter does look like an undertaking to supply a car on which a man would be justified in acting. And Mr. Chambers did act. He did not take driving lessons; I am not informed whether he could do so; maybe he could already drive a car; I am not informed on that. He noticed that his own prefabricated bungalow was so situated that no car could drive into the plot of land associated with it, and he drew the attention of this to the Housing Department of the Gravesend municipality. They were so impressed with this letter to the effect that a car was coming in due course, that they moved Mr. Chambers into another prefabricated bungalow. True it was in the same road, but that is not a thing lightly to be done. That was not done at the cost of the constituent but at the cost of the Gravesend municipality, who also made a concrete ramp so that when this car came it would be able to go in. Therefore, there was—I do not want to put it too high—perhaps not a great deal but certainly considerable action taken on the strength of this letter.

  163
  There is another and special point in the case of my constituent. I hope it will not appear that I am in any way putting my constituent into competition with the constituent of the hon. Member for Kingston-upon-Thames, but as I am sure will be appreciated I am bound to mention all the points that can be urged in favour of Mr. Chambers. I am bound to draw attention to a slightly peculiar feature of his case. Although it is true, physically speaking, that both his legs were amputated below the knee, yet one of those amputations—I must be forgiven if I am not very well acquainted with the technical surgical and medical details—produced an effect of such a tender nature that no direct weight can be put upon it, and he cannot be fitted with the ordinary artificial leg normally fitted in the case of amputation below the knee. He has to be fitted with an artificial leg working from his seat. He is fitted with the same sort of artificial leg as would be the case if his leg had been amputated above the knee. Although from the physical point of view he falls outside the first three categories to be supplied with a car, from the practical point of view of how well he can walk about, he is in the same class as many of those who have had one of their legs amputated above the knee. It is in all essentials exactly comparable to the case the hon. Member has raised.
  I add my support to the appeal which has been made. I add, too, my praises of the humanity of the Ministry of Pensions and to the way they have tried to treat the citizens with whom they are concerned, not merely as numbers on a card index and cogs in a machine, but as living human beings. It would be appropriate if such a Ministry admitted that a mistake had been made and would go at least to the length of offering some sort of assurance that, in relation to these men who have been led so strongly to expect and to hope that a car would be supplied to them, they are not postponed for ever, and that although there may be a little bit more delay than was anticipated when this circular letter was sent out, yet it is the intention of the Ministry to press on and, after having supplied more urgent cases, then next to supply these others who have been, through the Ministry's mistake, led to hope for so
  164
  great a change in their whole attitude to life. If the Parliamentary Secretary can give us some sort of hope that these men are not shut off for ever from having a car, it would be in line with the high traditions which both the Department and the Ministers have set for the last several years.
  9.54 p.m.
  The Parliamentary Secretary to the Ministry of Pensions (Mr. Simmons): I thank both hon. Members for the manner in which they have raised this matter tonight, and I welcome the wider opportunity than that provided by way of question and answer to restate the conditions under which very badly disabled war pensioners can be supplied with small cars. My right hon. Friend dealt with the matter very fully in the House on 27th July. A limited number of cars, not exceeding 1,500, were to be made available during the next two years. These cars were to be supplied free of charge, with a £45 annual maintenance allowance, to certain classes of seriously disabled pensioners who might elect to receive a car in place of a motor-propelled tricycle to which they are entitled.
  The classes of disabled were announced by my right hon. Friend when he made his statement, and are as follows: disabled with leg amputations, at least one being above the knee, paraplegics, and disabled sufferers from other disabilities resulting in the total, or almost total, loss of both legs. Later it was decided to allocate 50 of these cars to blind pensioners. My right hon. Friend also said that when the need of these cars had been satisfied, any balance within the number stated would be distributed on as fair a basis as possible to other disabled pensioners, at present supplied with motor-propelled tricycles, to enable them to retain or obtain employment.
  Mr. Upton, whose case has been raised by the hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), has a double below-the-knee amputation. Therefore it does not come within the category named by my right hon. Friend in his statement in the House on 27th July. He heard about the cars and naturally wrote to the Ministry in July, 1948, for information. He was told at that time that there was no information available. He continued to press the Ministry between June and August, and in August he was sent an optional letter. I would

  165
  point out that in most cases approach comes from the Ministry to the pensioner. Our Regional Offices have had instructions that all pensioners who come within the first three categories should be made aware of their rights under this particular scheme, and letters should be sent out to them.
  In this case the approach was made from the pensioner to the Ministry, and considerable pressure was brought to bear. As a result of that pressure the optional letter was sent out in order that Mr. Upton might have all the information he required. I feel that I must quote, as the hon. Member for Kingston-upon-Thames quoted, the first two paragraphs of that optional letter, because when a letter is quoted a good deal depends upon the emphasis and where that emphasis is put. I noticed on one or two occasions that the emphasis placed by the hon. Member was not borne out by any underlined words in the letter itself:
  "It has been decided," says the first paragraph "that at your option you may be supplied with a low-powered motor car in lieu of the motor propelled tricycle which has been supplied to you."
  The second paragraph says:
  "It has to be pointed out, however, that cars will become available in limited numbers only, and it may be some time before everyone who is eligible and so desires can be supplied."
  As Mr. Upton was not in one of the priority categories, it may reasonably be asked by the hon. Gentleman the Member for Kingston-upon-Thames and my hon. Friend the Member for Gravesend (Sir R. Acland) why the optional letter was sent. I agree it would have been wiser not to have sent it until we were sure there was a surplus after the first three categories were supplied. Mr. Upton unfortunately wanted the information and the optional letter was perhaps unwisely sent. My right hon. Friend has expressed his regret and apologised for that mistake. It is unfortunate that Mr. Upton should have been misled by a too cursory reading of the optional letter. The first paragraph makes the proposition:
  "You may be supplied with a low-powered motor car in lieu of the motor propelled tricycle which has been supplied to you."
  A condition that he will get a car was that he had a motor-propelled tricycle, but Mr. Upton has not a motor-propelled tricycle.
  Mr. Boyd-Carpenter: The hon. Gentleman reads the first paragraph as meaning that the possession of a motor-propelled tricycle is a condition of receiving a car. But there is no indication that it is a condition. What it said is that he will be supplied with
  "a low-powered motor car in the lieu of the motor propelled tricycle which has been supplied to you."
  Does the Parliamentary Secretary say that, because his Department have failed to supply one machine, that is a reason why it should not supply any?
  Mr. Simmons: The hon. Gentleman is trying to twist things, because the gentleman in question has been offered a motor-propelled tricycle—
  Mr. Boyd-Carpenter: Since this letter?
  Mr. Simmons: He was offered a motor-propelled tricycle previous to this letter to enable him to obtain or maintain himself in employment. If the case is that he needs a car to maintain himself in employment, it is remarkable that he turned down the offer of a motor-propelled vehicle which would have had the same purpose.
  It being Ten o'Clock, the Motion for the Adjournment of the House lapsed, without Question put.
  Motion made, and Question proposed, "That this House do now adjourn."—[Mr. Popplewell.]
  Mr. Boyd-Carpenter: That is not a fair point. The Parliamentary Secretary knows, because I have conveyed to his department and to him personally, the specific grounds on which Mr. Upton does not feel able to accept a motor-propelled tricycle. He does not feel safe on such a vehicle. It is a little unfair that the Parliamentary Secretary should seek to make a point of it.
  Mr. Simmons: I am glad that the hon. Member has raised that point and I am prepared to deal with it. Mr. Upton said that the vehicle would be dangerous in the event of an accident and more vulnerable than a car. That argument does not hold good with the all-weather motor tricycle. It is an autocar which is stoutly built and roadworthy. That argument falls down there. Mr. Upton spoke of the "horrible sympathy from passers-by" because the general shape of the vehicle

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  denoted that he was a disabled ex-Service man. Evidently Mr. Upton is sensitive. The sympathy is surely balanced by the courtesy he would receive from motorists. With a double amputation he would get sympathy when walking and being taken by his wife to the bus stop. By using this tricycle, Mr. Upton feared, he would lose contact with his wife, relatives and friends and would spend too much time on his own. The grounds on which he had applied for a car were not those of social contact but that he wanted a car to get to and from work. We have offered him that facility in the all-weather motor tricycle. The points that I have raised with regard to the offer of the motor-tricycle hold good.
  Writing to Mr. Upton on the 15th February, my right hon. Friend pointed out that the number of cars was strictly limited and that it was necessary to meet the need of pensioners
  "who are suffering from disabilities more serious than your own."
  Mr. Upton was told that further consideration of his application would have to be delayed until the needs of the more seriously disabled were fully known.
  Mr. Beverley Baxter: I quite understand what the Minister says about the needs of the others have to be met, but how many of these letters went out inadvertently? Were there 100 or 1,000 men who got them and found that they were not entitled to them? Or was it only half a dozen? If it is only a matter of half a dozen, how can the Minister stand there and say that they cannot be met, and so break these men's hearts?
  Mr. Simmons: I cannot say how many of these letters went out but the number of complaints we have had is very small. Those who realised a mistake had been made acted very sportingly in the matter.
  Mr. Baxter: This is a non-party matter. If it is really true that the number is really small, on what principle does the Minister now act, in respect of three, four or five cars, to the disappointment of these men?
  Mr. Simmons: We do not know how many letters may have gone out.
  Mr. Peter Thorneycroft: I appreciate that it is not easy to answer
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  these questions at short notice, but facilities are available within a few yards of the Minister for finding an answer to questions of that kind. If he would continue his argument and pass a message to the proper quarter he would probably get the answer before he sat down.
  Mr. Simmons: I have already told the House that we have not got the information. We cannot tell how many may have gone out inadvertently. All we can say is that there are a few complaints and that in the majority of cases those who have complained have been sporting enough to accept the fact that the Ministry made a genuine mistake and accepted in lieu of the car the offer of the motor-propelled tricycle.
  Mr. Upton was told that further consideration would have to be delayed until the needs of the very seriously disabled were more fully known. I have to inform the hon. Gentleman that applications received from men in the first three categories are now close on 1,500. There are a number of men still in hospital who will become eligible for a car if they so desire. My right hon. Friend can offer Mr. Upton an all-weather motor-propelled tricycle. This model is in fact an auto-car and gives the same effect as a touring car. Production is expected at the end of the year. Mr. Upton can have an existing model until then in order to carry on if he so desires. Should he not elect to take the auto-car, my right hon. Friend will undertake to reimburse him for the cost of his driving lessons.
  I must make it clear that this scheme was conceived as a compassionate gesture to the very seriously disabled. It is a reflection of the new welfare spirit in the Ministry. We hoped that the provision of a car for the seriously disabled man would bring him not only physical but spiritual comfort by widening his horizon and enabling him to get about, in contrast to the isolation which some of these disabilities impose on men. We found that only 1,500 cars could be made available, a number smaller than the number of disabled persons for whom we would desire to provide cars if we possibly could. Though these meant rules and priorities, we hoped that in the operation of them the real meaning and gesture would not be lost sight of. No pensioner is entitled to a car as a right. It is no part of the Royal Warrant. When there

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  are rules, there are sometimes misunderstandings and mistakes.
  My right hon. Friend and I hope that hon. Members will not in consequence of anything that has been said tonight take away with them a picture of this fine scheme in colours of rules and reproaches. The assessment of relative needs in the field of disablement, I can assure hon. Members, is not without its difficulties. We come across them and against them every day. The essence of the scheme is good will, and we could have hoped that it would not be brought to debate in the House in the terms of complaint. In distribution we are guided by a desire to see each car so placed that it will reach its maximum value in terms of human benefit. That is the real priority, and I am sure that on reflection neither the hon. Member for Kingston-upon-Thames nor the gentleman whose case he has so persistently pursued would disagree with the policy of my right hon. Friend in meeting first the claims of those having the greatest need. Mr. Upton could only be provided with a car by depriving someone else whose need was greater, and to ask us to do that is to ask us to reverse the whole policy of my right hon. Friend.
  Sir Wavell Wakefield: Can the hon. Gentleman answer this question? How was the number of cars, 1,500, arrived at? Was it not arrived at a year or more ago, and has not the production position now gone up from what it was a year or more ago? Why cannot more cars be produced in order to satisfy not only priority needs but cases such as the one which has been instanced tonight? Can the hon. Gentleman answer that question?
  Mr. Simmons: I do not think I can because it is not within my province. It may be that the production of cars is better, but surely the hon. Member would not say that the economic position of the country is better.
  10.10 p.m.
  Mr. Peter Thorneycroft: I ask the hon. Gentleman to contemplate for a few moments the speech which he has just delivered, and to recall the letter that he wrote to this disabled man. After all, this man was disabled, and when the hon. Gentleman produced the original scheme whereby disabled men were entitled to a car of this kind, I think the
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  House would agree that it gave immense pleasure and gave an opportunity to these men which they had not contemplated as being possible or within their means. I can imagine, as I think the whole House can imagine, the intense satisfaction that a disabled man must have had when he received the letter which the hon. Gentleman's Department sent out—[An HON. MEMBER: "He is not listening."]—I think the hon. Gentleman is now taking valuable advice on matters of this kind, and I would not interrupt him. I hope that he will be able to tell the House that there are only half-a-dozen cases involved, in which event I hope we can get the whole thing settled amicably and that the man can have his motor car. If that were so, I would not complain about any conversation that goes on.
  I wish to call attention to the letter which was written to this disabled man:
  "It has been decided that at your option you may be supplied with a low-powered motor car … in lieu of the motor-propelled tricycle which has been supplied to you."
  That was the first paragraph of that letter. A point has been made that, in fact, the man had no low-powered tricycle. That is a miserable technicality. It would be a despicable point to take, even in a third-rate police court, but to take the point in the House of Commons that this man had not a tricycle and therefore in no circumstances could he ever be supplied with a better vehicle, would not convince anybody in the House—
  Mr. Simmons: That is not the point. The point is that the motor tricycle was provided for the purpose of a man securing or maintaining his employment, and if that man liked to have a motor car in place of his tricycle, we could supply one. The very fact that the tricycle, and the fact of the possession of the tricycle, was mentioned, should have shown Mr. Upton at once that a genuine mistake had been made.
  Mr. Thorneycroft: I am glad to note that, in effect, the hon. Gentleman abandons the point altogether. Here is a man who has seen that the Government were to supply him with a motor car; that a great Government Department had written:
  "It has been decided that at your option you may be supplied with a low-powered motor car."—
  [Interruption.] I think the hon. Gentle-

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  man would be well advised to allow his hon. Friend the Parliamentary Secretary to deal with this and not interfere, or he might get his hon. Friend into even deeper waters. Here is a letter from a Government Department which says that it has been decided at the man's option that he could have this motor car. To take the point of some reference to a tricycle is, as I say, a miserable point. It is stated in this second paragraph—and this is the paragraph on which he relies—
  "… Cars will become available in limited numbers only and it may be some time before everyone who is eligible, or so desires, can be supplied."
  There is no suggestion whatever that only 1,500 had been supplied, an that there would have to be a surplus. That point is never taken at all in the letter.
  Mr. Simmons: The question of the 1,500 cars was in the statement of my right hon. Friend in the House, as was also the question of the priority position.
  Mr. Thorneycroft: I do wish that the hon. Member—I am sure he can—would forget for a moment his position or mine, and where we are now standing, and try to remember that people who are disabled are not necessarily habitual readers of HANSARD. They do not go through all the Questions and answers on any particular subject. They trust, and they are entitled to trust, a letter from a Government Department signed by a responsible authority. What they say is this: "We understand, broadly speaking. …"—and that is what I understood, and I suppose I am supposed to read HANSARD, although I am afraid that I do not always do so. I understood that the Government were making a supply of these cars available. If I had been a disabled man and had received a letter saying that I was entitled, at my option, to have a motor car, and that it might be some time before I got it, I would understand exactly what was written—that I had a right to the motor car and that I might have to wait a while before it was delivered. I guarantee that that is precisely what in fact this man understood. There is no party point in this—
  The Parliamentary Secretary to the Ministry of Civil Aviation (Mr. Lindgren): Analgesia.
  Mr. Thorneycroft: The hon. Member often does his party a great deal of disservice. I think that, by his expression, the Parliamentary. Secretary to the Ministry of Pensions shows that he wishes that the hon. Gentleman would go elsewhere and not intervene in this Debate. He is not helping at all. I forget what Ministry he represents. I think he is Parliamentary Secretary to the Ministry of Civil Aviation. At one time he had something to do with the Ministry of National Insurance, but I understand that he abandoned that job. What civil aviation has to do with this dispute, I do not know. At any rate, his interventions are not at all helpful.
  If I might return to the remarks of the Parliamentary Secretary to the Ministry of Pensions, I would say that he usually speaks with great sympathy upon these matters. I would point out that here is a plain pledge to a disabled man. It is in plain and specific terms. There is no shred of hedging in the letter. The only point that is made is that it might be a little time before the car is delivered. That, I think, the whole House will understand. We appreciate the difficulty of the supply position. I understand now that the Minister is holding out no hope whatever to this man. It is said now that there is some question of a surplus having to arise. That should have been said at the time to the man concerned.
  Another point taken by the hon. Gentleman was that normally it was the Ministry who approached the pensioner and not the pensioner who approached the Ministry. Surely, the pensioner has a right to approach the Ministry. The Ministry send out circulars which say, "Are you sure that you have got your rights?" This is a circular about which all of us are approached. It must have caused a good deal of correspondence. Here is a pensioner who wanted to know his rights. He got an answer which was later abandoned by the Minister. I must say that I think that this is a shocking mess. I am not concerned whether another 50 cars must be produced in order to honour the pledge which the Ministry have given. I say that this is a deserving section of the community, and I think I carry all sections of the House with me in that. This matter has been urged from both sides of the

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  House. There is no party point in it. I do not think anybody on either side of the House would wish to make a party point of it. Here is a plain pledge given to a disabled man. It would be a disgrace if a great Administration failed to honour it.
  Sir R. Acland: Might I have a word about Mr. Chambers? If it was my fault for not giving the Minister notice, I must accept what he has said, but I understood that his case would be raised. Is the hon. Gentleman's answer the same in his case, as it is in the one that he has now given?
  Mr. Simmons: I received late notice that a second case might be raised tonight. It is almost on all fours with this. I think that the arguments which apply to this matter, apply also to Mr. Chambers.
  10.19 p.m.
  Mr. Beverley Baxter: I wish to put two points to the Minister. First, it is monstrous and unfair to suggest that this is a political matter. We have joined with the hon. Baronet the Member for Gravesend (Sir R. Acland) in this business, and we all recognise that the Ministry of Pensions has conducted its affairs in a sympathetic and humane way. We do not wish to show up the Ministry of Pensions. We are trying to give the Ministry a chance to put this matter right. I want to put the position to the Minister as something of a humanitarian and something of a psychologist. Here is a man, a constituent of my hon Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), who lost both his legs in the war. Not only is that a dreadful physical thing to happen to a man, but it also affects a man's outlook, as is shown when this man says that he does not want pity from the side of the road. A man who is born malformed nearly always has a malformed mind, and this man, who is brutally malformed, is made the more sensitive by that fact, and the Minister must remember that.
  Now, he receives a letter, the opening sentence of which is an honourable contract, a binding contract, subject to delay in delivery, and then, what does the Ministry tell him? They say, "We
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  have made a mistake; the mutilation of your body was a few inches short of what we require for delivery of a motor car." That to a limbless man; it is inhuman. He is suddenly told that he will not have his right to a motor car as promised by the Minister, and that he will have to exhibit his wounds and his helplessness to outside people. This could be obviated, as I gather from the Debate, by the mere ordering of three, four or five cars. But the Minister is in the grip of the same thing that affects all our Departments—that same rule which makes it impossible for natural humanity to work. When we think of the national expenditure and then think of these three ordinary men who have been promised delivery of a motor car after some delay, it is a disgrace that we should now be told that that promise of the Minister is not to be carried out.
  10.22 p.m.
  Sir William Darling: When I heard of this Debate, I felt a little out of sympathy with my hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), because I have never been one of those who shared the universal encomiums showered upon the Ministry of Pensions in this Administration. I have heard others praise not only the present but the previous Minister of Pensions, but I feel very sore because I have a constituent who served in the South African War in 1899 and in the war in 1914–18 and who lost both his legs in the last war, and who wrote to me that he had not got the promised motor car which he thought he was entitled to have. He wrote to me and asked if I could do something about it. I discovered that his legs had been amputated below the knee and I had to advise him that he was not within the narrow terms of the Ministry's regulations which would entitle him to a car. He wrote me again saying that the Government had cheated him, and I did not consider it necessary to point out that he had not in fact been cheated but had been encouraged to believe by the Minister that a motor car would be available for such as he.
  I think the Ministry made a mistake in making this concession without being too precise about the terms on which it would be granted. I should like to know

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  how many people have legitimately applied within the narrow terms of this new interpretation of the availability of these cars, and what the Minister intends to do if the numbers exceed 1,500. Does he not intend to have a Supplementary Estimate? I have a particular recollection of the Minister of Health asking for a Supplementary Estimate for £50 million for teeth, hospital services, wigs, spectacles and the rest. Has not the Minister of Pensions the courage to come to this House to ask for a Supplementary Estimate for 1,000 cars for ex-Service men? I should be very glad indeed to be able to tell my constituent that he was wrong to suggest that the Government had cheated him and that I was wrong in suggesting that the Government had made a promise which I thought they were trying to get out of, since I had now learned that they intended to keep it.
  10.25 p.m.
  Major Legge-Bourke: I do not wish to reiterate the points made by my hon. Friends on this matter. I wish to try to convince, if only the Parliamentary Secretary to the Ministry of Civil Aviation, that I am not trying to make any party capital out of it. Only the other day I had occasion to write to the Minister and thank him for what he had done. I am fully prepared to do that when I feel he deserves it. On this occasion, when the Minister himself admits in the letter which I am now holding in my hand that a bad mistake has been made, I feel that there is only one way in which the right hon. Gentleman can rectify that mistake. I take exception to what the Parliamentary Secretary said when he criticised my hon. Friend for bringing this matter to the House of Commons.
  Mr. Simmons Mr. Simmons indicated dissent.
  Major Legge-Bourke: I got that impression, but I am glad to see that the hon. Gentleman shakes his head. It is only right that when all other methods
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  have failed, these matters should be brought to this House in order to be aired, however distasteful that may be. This is an extremely distressing case, but the Minister should by now have been able to obtain the figures of the number of letters sent out. The question of how many letters were sent out matters a great deal, because, if it is merely a question of one or two, then there can be no doubt that the Minister must give this particular man and any others in a similar position the benefit of the doubt. If, on the other hand, the figures run into hundreds or thousands, then it is a question for the Government to decide how they are going to increase the production of these cars as soon as possible, because this is a case of false hopes being raised, and these are the very last people in whom false hopes should be raised. It is for that reason that I beg the hon. Gentleman to find out how many men are involved. As I say, if there are only a few, then the Minister must give them the benefit of the doubt; if their number is large, then it is up to the Treasury to make arrangements for the necessary money to be provided and for the industry to produce the cars required.
  10.27 p.m.
  Colonel Dower: I hope that in the last three minutes of this Debate the Parliamentary Secretary will really tell the House that he will give this matter his consideration. The raising of cases on the Adjournment, which many of us find the only possible way of righting a wrong, makes us feel that there is some reality in the procedure of this Chamber apart from its being merely a sounding box. In the hope that the Parliamentary Secretary will be able to say that he will give this matter consideration, I sit down with two minutes in hand.
  Adjourned accordingly at Twenty-eight Minutes past Ten o'Clock.