Commons Sitting of 22 June 1949

Preamble
The House met at Half-past Two o'Clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  MERSEY TUNNEL BILL
  As amended, considered; to be read the Third time.
  MOUNTBATTEN ESTATE BILL [Lords]
  To be read a Second time upon Thursday, 30th June.
  URMSTON URBAN DISTRICT COUNCIL BILL (By Order)
  Consideration, as amended, deferred till tomorrow.
  GLASGOW CORPORATION ORDER CONFIRMATION BILL
  Read the Third time, and passed.
  ALEXANDER SCOTT'S HOSPITAL ORDER CONFIRMATION BILL
  Considered; to be read the Third time tomorrow.
  ROYAL BANK OF SCOTLAND OFFICERS' WIDOWS' FUND ORDER CONFIRMA- TION BILL.
  Considered; to be read the Third time tomorrow.
ORAL ANSWERS TO QUESTIONS
  ROYAL AIR FORCE

    Auxiliary Force (Recruitment)
    Wing-Commander Hulbertasked the Secretary of State for Air what action is being taken to encourage airmen and airwomen to join the Royal Auxiliary Air Force on demobilisation.
    The Secretary of State for Air (Mr. Arthur Henderson): Full details of the terms and conditions of service in the Royal Auxiliary Air Force are available at all stations at home and overseas. In
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    addition, at the time of release from service, all airmen and airwomen are given a leaflet containing the addresses of auxiliary and reserve units as well as the conditions of service.
    Wing-Commander Hulbert: Will the right hon. and learned Gentleman consider doing something more than just giving these men and women a leaflet containing the addresses of auxiliary and reserve units? Will he also consider advising the appropriate associations of the names and addresses of these men and women as they are released, so that the officers of the associations may get into touch with them?
    Mr. Henderson: I think I can reply "Yes" to both parts of that question.

    Bombing Range, Frampton Sand
    Major Tufton Beamishasked the Secretary of State for Air what plans he has to establish a bombing range in the Severn Estuary at Frampton Sand; and what representations have been made to him in this connection by the Severn Wildfowl Trust.
    Mr. M. Philips Priceasked the Secretary of State for Air whether he is aware that the use of the sands at Frampton on Severn for a bombing practice ground is likely to be detrimental to the Severn Wildfowl Trust sanctuary nearby; and whether he will consider finding some other area.
    Sir Waldron Smithersasked the Secretary of State for Air if, before deciding on the bomber range on Frampton Sand, he will take into consideration the claims and criticisms of the Severn Wildfowl Trust.
    Mr. A. Henderson: A proposal to bring back into use the war-time practice bombing range known as Frampton Sand has been under examination by my Department. In view, however, of representations which have been made that the use of the range would seriously interfere with the bird sanctuary there, I am reconsidering the whole matter. If the proposal is abandoned it would, of course, involve finding another range in the district for R.A.F. use.
    Major Beamish: Is the Minister aware that while there is not the slightest intention on the part of anyone to interfere

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    with the efficiency of the Air Force, the use of this area as a bombing range runs counter to the interests of all the naturalists in the country? This is a unique place, and if the right hon. and learned Gentleman can find another suitable bombing range it will give a great deal of pleasure to a large number of people in the country.
    Mr. Henderson: I accept that statement, but I hope hon. Members will appreciate the great difficulty in which I am placed. No matter where I seek to go with a view to acquiring a bombing range for the Royal Air Force, in 10 cases out of 10 there is an objection.
    Sir Waldron Smithers: Is the Minister aware that we are glad to find one Minister at least who has got some nice ideas, and if he wants a new bombing range will he try No. 10 Downing Street?
    Mr. Parkin: Further to that somewhat sinister suggestion, may I ask my right hon. and learned Friend not to look in the immediate district for a suitable place but to consider going right outside my constituency?
    Mr. Lipson: When the right hon. and learned Gentleman has come to a decision finally to abandon the proposal to use this spot for bombing purposes, will he see that the House is informed?
    Mr. Henderson: Yes, Sir.

  U.S.A. AIRMEN, RUISLIP
  Mr. Piratinasked the Secretary of State for Air how many United States Service men are being housed in private accommodation in the vicinity of Ruislip; and how many are being housed in the United States Air Force Headquarters building.
  Mr. A. Henderson: I am informed that 116 members of the U.S.A.F. are living in private accommodation at Ruislip, and 280 are living in the Headquarters building.
  Mr. Piratin: Can the Minister assure the House that none of these American soldiers is taking space which would otherwise be occupied by British families? Will he bear in mind what has been happening recently in the neigh-
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  bouring vicinity of Harrow where a number of ex-Service men's families have been evicted by the War Department and no accommodation has been available for them? Surely if 116 Service men can be housed then British ex-Service men's families can also be housed, can they not?
  Mr. Henderson: I do not think the second part of that supplementary question has any reference to the responsibilities of my Department. With regard to the first part of the supplementary, I do not believe that the people of this country are opposed to giving hospitality to American soldiers. I would also say that of the 116 members who are now living in private accommodation, 85 will shortly be found accommodation in the Headquarters Mess.

  CIVIL AVIATION

    Airways System
    Mr. Rankinasked the Parliamentary Secretary to the Ministry of Civil Aviation what agreement has been reached between the Air Ministry and the Ministry of Civil Aviation on the principle of establishing an airways system for civil aircraft over Britain.
    The Parliamentary Secretary to the Ministry of Civil Aviation (Mr. Lindgren): Agreement has been reached between the Service Departments and my Ministry for the setting up of a system of civil airways in which positive Air Traffic Control will be exercised. These Airways will serve the main civil traffic routes within the United Kingdom.
    Mr. Rankin: Can my hon. Friend give the House some idea of the arrangement which is proposed or could he circulate the information?
    Mr. Lindgren: They are the main traffic routes of the country; they are lanes 10 miles wide, with an air cover from 5,000 feet to 11,000 feet; in which area aircraft will be controlled.

    British South American Airways (Canadairs)
    Mr. Niall Macphersonasked the Parliamentary Secretary to the Minister of Civil Aviation what steps are being taken to provide Canadairs for British

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    South American Airways passenger services.
    Mr. Lindgren: It is intended to use some of the Canadairs ordered for British Overseas Airways Corporation on the British South American Airways Corporation routes to South America.
    Mr. Macpherson: Can the hon. Gentleman say what steps are being taken to train, first of all, the flying staffs and, secondly, ground staffs for British South American Airways to operate these planes?
    Mr. Lindgren: The training commences in September ready for the operation of the aircraft in January, 1950.
    Mr. Macpherson: That does not quite answer the question. Can the hon. Gentleman say what steps are being taken to train, respectively, the flying staffs of British South American Airways and the ground staffs of British South American Airways for this purpose?
    Mr. Lindgren: So far as the ground staff is concerned I am not certain that a training programme has been arranged. So far as the flying crews are concerned, B.S.A.A. start conversion training to Canadairs in September.

    Accident, Coventry (Report)
    Wing-Commander Hulbertasked the Parliamentary Secretary to the Ministry of Civil Aviation if he has now received a report on the accident resulting from a collision between an Anson and a Dakota near Coventry; and when it is to be published.
    Mr. Lindgren: My noble Friend has received this Report and the question of its publication is under consideration.
    Wing-Commander Hulbert: Does not the Minister agree that these Reports are invariably published? Why is there any difference in this case?
    Mr. Lindgren: Yes, Sir; they are invariably published and I have every reason to believe that this one will be published. One of the aircraft involved was a Royal Air Force machine, however, and the matter of consultation with my right hon. and learned Friend the Secretary of State for Air arises.

  BULGARIA (LEGATION STAFFS)
  Mr. Platts-Millsasked the Secretary of State for Foreign Affairs how many Bulgarians are employed in the Bulgarian Legation in London; what appointments do they hold; how many British subjects are employed in His Majesty's Legation at Sofia; and what are their appointments.
  The Secretary of State for Foreign Affairs (Mr. Ernest Bevin): As the reply is long, I will, with permission, circulate it in the OFFICIAL REPORT.
  Mr. Platts-Mills: In view of the extreme disparity which it is anticipated the reply will show, there being nine Bulgarians in London and 46 British representatives in Sofia, will not my right hon. Friend at least consider withdrawing some of our military representatives and substituting some trade representatives in Sofia?
  Mr. Bevin: Taking a comparison between two great Powers represented in Bulgaria, the hon. Gentleman will see from the answer and from the facts for which he asked that our staff is much smaller than that of the Soviet.
  Mr. Anthony Nutting: Whatever may be the nominal appointment of members of the Bulgarian Legation in London, will the right hon. Gentleman assure the House that he is keeping a good track of their activities?
  Following is the reply:
  There are six Bulgarian members of the staff of the Bulgarian Legation in London, namely:
  First secretary (Chargé d'Affaires), Third secretary, Attaché, Press attaché, Typist, Clerk.
  The British members of the staff of His Majesty's Legation in Sofia number 42 persons, namely:
  H.M. Minister, First secretary, three Second secretaries, two Third secretaries, Vice-Consul, Military attaché, Assistant Military attaché, Air attaché, 17 clerical officers and clerks, four typists, two translators, eight subordinate staff.
  There is also a non-resident Naval attaché.

  GERMANY

    Erich Koch (Arrest)
    Mr. Bramallasked the Secretary of State for Foreign Affairs whether it is proposed to bring any proceedings against Erich Koch, former Gauleiter of the Ukraine, recently arrested in the British zone of Germany.
    Mr. Bevin: The question of the action to be taken against Erich Koch is under consideration.
    Mr. Bramall: May we take it that the fact that he has been able to keep his identity concealed for this long time will not prejudice the need for him to be brought to justice in view of the incredible atrocities for which he was responsible?
    Mr. Bevin: I have not had time to go through all the papers since my return, but I have the matter under consideration and I must leave it at that at the moment.

    Industrial Plants (Dismantling)
    Mr. Blackburnasked the Secretary of State for Foreign Affairs how many factories have been dismantled in the British zone of Germany during the last three months; and how many remain to be dismantled.
    Mr. Bevin: During the three months ending 31st May, dismantling was in progress at 204 plants in the British zone, of which 12 were completed during the period. On 31st May there were 30 plants due to be dismantled at which dismantling had not begun, but work at seven of these had started by 15th June.
    Mr. Blackburn: While I, of course, in common with I think almost everybody else, do not agree with this policy, will my right hon. Friend bear in mind how important it is to let the German people know why he is pursuing this policy in consultation with his colleagues, because at the moment they are not properly informed of the reasons for our policy?
    Mr. Bevin: That is not correct; they are told; the agreements made between the Allies have been circulated, and every bit of information in connection with them has been explained to them.
    Mr. Ivor Thomasasked the Secretary of State for Foreign Affairs whether he will order a cessation of the dismantling of the Fischer-Tropsch synthetic petroleum plants in the Ruhr, in view of the reasoned case made against it by representatives of the German people.
    Mr. Bevin: No, Sir. I do not accept the implication in the second part of the Question.
    Mr. Thomas: Is the right hon. Gentleman aware that the application of his dismantling policy in this particular case is very difficult to understand, even in the case of those who cannot be accused of tenderness towards the German State?
    Mr. Bevin: Well, this has been carefully analysed and agreed to. It is a long story. This particular plant is in the prohibited and limited industries category, and it is being dismantled accordingly. After all, I would appeal to hon. Members sometimes to have a corner in their hearts for the victims of Germany.
    Mr. Bramall: Can my right hon. Friend assure us that the Germans will not, by their well-known technique of mass propaganda and blackmail, force us into the position of going back on these international agreements?

    Requisitioned Motor Boat
    Mr. Stokesasked the Secretary of State for Foreign Affairs whether he is aware that the motor boat "Rose of York," which belonged to Herr Wilhelm Westrup, having been requisitioned by the Control Commission authorities in Germany has recently been handed back to him in a dilapidated condition with all the fittings that could be removed gone the motor disabled, the propeller missing and the hull damaged; and what steps will now be taken to put the boat in order.
    Mr. Bevin: I am looking into the matter and will write to my hon. Friend.

    Benzin Company, Gelsenberg
    Mr. Stokesasked the Secretary of State for Foreign Affairs how much has been spent on rebuilding the works of the Benzin Company at Gelsenberg, now to be pulled down; and what was the total amount for which a licence was issued by the Military Government.
    Mr. Bevin: The German management of the firm alleges that 17 million Deutsche marks have been spent between September, 1948, and March, 1949. The licence which was issued by the German Land Government of North Rhine Westphalia on the authority of Military Government was not a licence for expenditure but for the re-activation on a temporary basis of that part of the plant which was necessary for the hydrogenation of 15 thousand tons of natural oil residues per annum.
    Mr. Stokes: That being so, may I ask whether the people in the Military Government who approved this scheme were aware of the fact that they were going to insist on dismantling a few months later? That is what is so puzzling.
    Mr. Bevin: The whole thing was arranged with the Germans on a temporary basis, and they quite understand.
    Mr. J. Hynd: Will the Foreign Secretary explain in what way this is going to help the victims of the Nazis?
    Mr. Bevin: My hon. Friend knows very well the full story of the dismantling programme. This country has tried to keep the programme to a minimum consistent with security, and the question of security is a very important thing for this country and others in the future. We do not want to make the mistake we made after the 1914–18 war.
    Mr. Ivor Thomas: While I agree entirely with what my right hon. Friend has said, will he bear in mind that these plants may become of very great importance for peace-time purposes in view of the trend of world petroleum supplies, and in view of the wide range of chemical products of which they are the starting point?
    Mr. Bevin: That is not the only sphere in which they can be used, namely, to contribute to total world supplies. They become a danger when they are held in a country in which security is not yet finally and definitely established.
    Mr. Wilson Harris: When Germany is being totally demilitarised and not permitted to have any Air Force, can four synthetic factories have any effect on world security?
    Mr. Bevin: We went right through the whole of that problem between the two wars, and so long as I am in office I am going to advise this House to take all the necessary precautions.

  INTERNATIONAL CHILDREN'S EMERGENCY FUND
  Mr. Bechervaiseasked the Secretary of State for Foreign Affairs if he is now prepared to make a statement concerning the prospect of the Government making a contribution to the United Nations International Children's Emergency Fund.
  Mrs. Middletonasked the Secretary of State for Foreign Affairs what answer he has made to representations from the United States Government and from the United Nations International Children's Emergency Fund regarding the matching in dollars of contributions from His Majesty's Government to this Fund.
  Mr. Francis Noel-Bakerasked the Secretary of State for Foreign Affairs whether he is now in a position to make a statement about His Majesty's Government's further contribution to the United Nations International Children's Emergency Fund.
  Mr. Bevin: This Fund was primarily created to meet the emergency conditions prevailing after the war and our information is that its resources are now running down. There appears to be little prospect of sufficient contributions from other Governments to match the 20 million dollars already appropriated for the Fund by the United States and the Fund will presumably have to spend a large part of its remaining resources on the run-down of its present widespread commitments. It is therefore unlikely to be in a position to continue or extend the work it has been doing in the Middle East, where the serious plight of the Arab refugees needs urgent attention.
  We have therefore decided, after consultation with my right hon. and learned Friend, the Chancellor of the Exchequer, that we should not make a further contribution to this Fund, but instead should make an additional £100,000 available through the British voluntary

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  societies to the maintenance of the Arab refugees, a large proportion of whom are children.
  Mr. Bechervaise: Can my right hon. Friend say whether the Government supported the General Assembly in the suggested appeal for either 1949 or 1950?
  Mr. Bevin: I must have notice of that I have not the exact information.
  Mr. Noel-Baker: Is my right hon. Friend aware that this answer will cause very great distress in all parts of the House and also in the country? Is he further aware that only about a quarter of the children in Europe, in the direst need, are receiving even the most elementary assistance from this fund and that it is of vital importance, both for humanitarian reasons and for more general reasons, that the assistance provided by the International Children's Fund should not cease in the middle of this winter?
  Mr. Bevin: We cannot go on giving away money all the time. We have to see which is the best place in which to put it and in the case of the Arab refugees we think there is the biggest claim.
  Mrs. Middleton: While expressing appreciation of what the Government have already done in this respect, may I ask my right hon. Friend to take into account the urgent need that exists outside the Arab States among children in other parts of the world and to see that steps are taken to use the offer made by the United States of matching grants from other countries with dollars from America in order that the utmost good may be done to the children who are so urgently in need?
  Mr. Pickthorn: Can the right hon. Gentleman tell us whether His Majesty's Government have consulted with the United Nations on the claims under international law and practice which expatriated Arabs may be held to have against the Israeli Government?
  Mr. Bevin: I must have notice of that question. It does not arise out of the Question on the Order Paper.
  Mr. Kenneth Lindsay: Will the right hon. Gentleman bear in mind that there are 700,000 refugees from Greece, of
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  whom 200,000 are children, and that that is as high a percentage as that of the Arab refugee children? Will he bear in mind that a contribution in that direction, now that the fund is drying up, will be urgently needed this winter?
  Mr. Bevin: The financial aid going to Greece from the United States is very great. I must warn the House that it is all very well to criticise the financial position of the country at one moment and in the next moment to expect us to be able to give to every fund that is raised. When the figures come to be read it will be seen that this country is the leading contributor in the world.
  Mrs. Florence Paton: Is it not the case that some of this money is going to help German children in the British zone of Germany and that we are, therefore, receiving aid from the fund, too? Is it not also the case that if we do not assist this fund a large amount of American dollars will be lost to the fund and the beneficent work will be stopped?
  Mr. Bevin: I have very grave doubt of that. The response made by other countries to whom the appeal is being made is so small that it makes the matching by America very improbable.
  Mr. Stokes: Is it not a fact that the United States promised to add aid very liberally, provided a minimum sum was subscribed by other nations in toto? Is it or is it not the fact that that minimum was subscribed? So far as my information goes, the minimum total has never been reached.
  Mr. Bevin: On that matter I think my hon. Friend had better put a Question down.
  Mr. Bechervaise: In view of the statement concerning the funds we have supplied, is it not fair to say that America, Australia, New Zealand and Canada have subscribed more individually than we have?
  Mr. Bevin: I do not think that that comparison is sound. Certainly some of those countries have small populations and have given large amounts; but although we have a population of 50 million in this country, we have huge liabilities and have suffered much devastation. Therefore, I do not think that the analogy is quite a correct one.
  Mr. Noel-Baker: With very great regret, in view of my right hon. Friend's answer, I feel obliged to give him notice that I shall try to raise this matter on the Adjournment.
  Mr. Bramallasked the Secretary of State for Foreign Affairs what offers he has either from the United States Government or from the United Nations International Children's Emergency Fund regarding the matching in dollars of contributions from His Majesty's Government to this Fund.
  Mr. Bevin: None, Sir.
  Mr. A. R. W. Lowasked the Secretary of State for Foreign Affairs what action has been taken by His Majesty's Government for the promotion of a national appeal in Britain for the United Nations International Children's Emergency Fund in 1949.
  Mr. Bevin: After consultation with the trustees of the Lord Mayor's Committee which made a similar appeal last year, with British voluntary societies doing relief work abroad, and with other voluntary bodies engaged in social and welfare work, His Majesty's Government have decided not to sponsor the promotion of an appeal in 1949. The Secretary-General of the United Nations has been formally notified of this decision.
  Mr. Low: Is it not a fact that His Majesty's Government concurred in a resolution of the General Assembly which called upon all member Governments to sponsor campaigns during this coming year?
  Mr. Bevin: I cannot answer that question. I cannot remember. Someone asked a similar question just now.

  PALESTINE REFUGEES (RELIEF)
  Mr. Skinnardasked the Secretary of State for Foreign Affairs what financial assistance has been given by the United Nations Relief Organisation for Palestinian Refugees to British voluntary societies which have sent out teams to work under the British Red Cross scheme.
  Mr. Bevin: No British voluntary society has sent out teams except the British Red Cross Society itself, which
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  has not received direct financial assistance from the United Nations Relief Organisation for Palestine Refugees. The Society has, however, received from the United Nations Relief Organisation for Palestine Refugees funds through the League of Red Cross Societies approximately £800 for the subsistence of five of the Society's staff for the period ending 31st March, 1949. A similar grant is anticipated for the period ending 30th June, 1949. The Society has also received assistance towards the running expenses of the British Red Cross Society Commission's transport.
  Mr. Skinnardasked the Secretary of State for Foreign Affairs how much of the £1 million given to the United Nations Relief Organisation by His Majesty's Government has been allocated to organisation expenses; and whether he is satisfied that the best use is being made of this donation in the actual relief of distress among Arab refugees.
  Mr. Bevin: The ratio which the administrative and operational expenses bear to the total contributions (including that of the United Kingdom) is 5.5 per cent., which is well within the percentage provided in the Mediator's estimates and approved by the General Assembly. In my view, the United Nations Relief Organisation are doing good work, considering that the resources made available to them are so limited.
  Dr. Segal: Can my right hon. Friend say whether part of the sums now available are being devoted to the purposes of rehabilitation as well as of relief?
  Mr. Bevin: I do not think so. Those that are contributed for relief are going to relief.

  SPAIN (TERRITORIAL CLAIM)
  Mr. Stokesasked the Secretary of State for Foreign Affairs whether his attention has been called to a recent official claim by General Franco that promises had been made him during the war by the Allied leaders that Spain would acquire territory in North Africa at the expense of France on the cessation of hostilities; and if he has any statement to make.
  Mr. Bevin: Yes, Sir; and my information shows that the claim is unfounded.
  Mr. Stokes: Arising out of that reply, and in view of the fact that we have already been made aware of two secret treaties, although we were assured that none such existed, may we have an assurance from my right hon. Friend that the right hon. Gentleman the Member for Woodford (Mr. Churchill) did not enter into any other secret negotiations of which this House has not been made aware?
  Air-Commodore Harvey: Nonsense.
  Mr. Stokes: Can I have an answer?
  Mr. Bevin: I have given the answer to the Question put to me, and I have no reason to suppose anything in the archives of the Foreign Office exists in this respect. So far as I know there is nothing.
  Mr. Eden: As a charge has been made against my right hon. Friend——
  Mr. Stokes: And against the right hon. Gentleman the Member for Warwick and Leamington (Mr. Eden), too.
  Mr. Eden: It is difficult to keep oneself in Order in asking questions on this matter, since the right hon. Gentleman was also a member of the Coalition Government, but may I say that so far as my right hon. Friend and I myself are concerned no such commitment as here described was ever entered into?
  Mr. Platts-Mills: Would my right hon. Friend care to consult with the right hon. Gentleman the Member for Warwick and Leamington as to whether there was not a conversation at lunch on 2nd October, 1941, in the terms reported by the Duke of Alba, the then Ambassador, in his telegram of that date, and whether that was not susceptible to the construction that we were offering to support Franco in his claim to French territory?
  Mr. Speaker: The hon. Gentleman cannot ask a question of the right hon. Gentleman the Member for Warwick and Leamington, but only of the Foreign Secretary.
  Mr. Eden: Since my Leader's reputation has been impugned, may I ask the
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  Foreign Secretary whether there is anything in the records whatever to give any justification to the statements of the hon. Member for Ipswich (Mr. Stokes)?
  Mr. Bevin: Nothing whatever.
  Mr. Stokes——
  Hon. Members: Withdraw.
  Mr. Stokes: In view of the fact—it is within your recollection, Sir—that I was prevented from raising this matter on another occasion earlier, I beg to give notice that I shall raise it again on a suitable occasion.
  Hon. Members: Withdraw.
  Mr. Stokes: Certainly not.

  JAPAN (PEACE NEGOTIATIONS)
  Mr. William Teelingasked the Secretary of State for Foreign Affairs whether, in view of the difficulty of reaching agreement with the Union of Soviet Socialist Republics in Europe, His Majesty's Government will now take steps to bring about a peace treaty with Japan without Russian co-operation.
  Mr. Bevin: I cannot accept the implication in the Question that we should despair of reaching agreement with the Soviet Government on European questions. The future international status of Japan is now under discussion in the Far Eastern Commission on proposals recently submitted by the United States delegate. The measure of agreement or disagreement in the forthcoming debates will doubtless be a guide to His Majesty's Government's future action on this subject.
  Mr. Teeling: Does the right hon. Gentleman appreciate the very grave danger of leaving the peace treaty with Japan so long open, as the Japanese, so far as one knows, have done nothing in the last few years to prevent the making of a peace treaty with Japan?
  Mr. Bevin: I quite admit that there is disagreement between the Great Powers—not so much about getting a peace treaty as about the procedure of how to get it.

  BUENOS AIRES TRAMWAYS CORPORATION
  Mr. Teelingasked the Secretary of State for Foreign Affairs how far the permission by the Argentine appropriate Ministers to open discussions on compensation for British shareholders of Buenos Aires Tramways Corporation has progressed since 1st June.
  Mr. Bevin: No discussions have yet been opened between the Argentine authorities and the representatives of the British companies concerned.
  Mr. Teeling: Has it not been publicly stated in the Argentine that as soon as the trade agreements are settled these negotiations will be opened? Can the right hon. Gentleman assure this House that the Ambassador will take every step to see that this is done?
  Mr. Bevin: Yes.

  HUNGARY (CARDINAL MINDSZENTY)
  Mr. Teelingasked the Secretary of State for Foreign Affairs what further information he can give about the whereabouts and conditions under which Cardinal Mindszenty is living, and the state of his health.
  Mr. Bevin: I regret that I have received no reliable information on the subject.
  Mr. Teeling: Does the right hon. Gentleman realise that people are beginning to feel that we are taking no further interest in the case of Cardinal Mindszenty? Does he not further realise that this is causing great disheartenment to people, especially now that the trouble is starting in Czechoslovakia—that after a short period we drop these people because they are no longer in the public eye?
  Mr. Bevin: I was asked a Question. I have given the answer. I was asked whether I had further information, and I have informed the hon. Member that I have no reliable information on the matter.
  Mr. Teeling: Cannot the right hon. Gentleman say whether any effort is being made to get such information?
  Mr. Bevin: We are constantly on the lookout.
  Mr. Bramall: Will any inquiries being made in Hungary on these matters be extended also to M. Rajk and other people being victimised by the Hungarian Government?
  Squadron-Leader Fleming: Can the right hon. Gentleman tell us whether any special steps were taken to keep the Foreign Office in touch with the where-about of Cardinal Mindszenty?
  Mr. Bevin: Really, I ought not to be asked to answer these questions. [HON. MEMBERS: "Why not?"] How can I take special Steps if I have to tell hon. Members everything I am doing?
  Mr. Blackburn: While entirely supporting the basis of these questions, may I ask my right hon. Friend whether he is aware that he has done far more for the victims of the Communist terror than did the Tory Government?

  AUSTRIA (BRITISH BROADCASTS)
  Mr. Platts-Millsasked the Secretary of State for Foreign Affairs if he will make a statement on the proposed use of an Austrian radio station for the re-diffusion of the British Broadcasting Corporation's foreign language broadcasts.
  Mr. Bevin: Yes, Sir. The British Broadcasting Corporation's foreign language broadcasts to Germany, Italy and South-Eastern Europe are re-broadcast regularly by the former Nazi 100 kilowatt transmitter at Graz-Dobel in the British zone of Austria. The transmitter is under the direct control of the British occupation authorities and the use to which it is put is solely the responsibility of His Majesty's Government. The running costs of the station are paid by the British Broadcasting Corporation in sterling at the rate of about £15,000 a year.
  Mr. Platts-Mills: As the Austrian Chancellor, Dr. Figl, recently said, speaking of the B.B.C., that transmissions were reaching a point in Austria where the Austrian people were being asked to pay for a great deal of foreign propaganda to which they did not want to listen, and

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  as there seems to be a decent chance now of getting a peace treaty with Austria, can the right hon. Gentleman try to influence the B.B.C. at least not to extend their broadcasting from Austria?
  Mr. Bevin: If Dr. Figl said that he could not have been referring to the British Government, because he does not pay anything. We pay for this, so it must have been some other Government that he had in mind.
  Mr. John Hynd: In stating that this broadcasting station is under the sole control of the British authorities, is not the Foreign Secretary aware that hitherto this broadcasting station has been at the disposal of the Austrian authorities for broadcasts in the Austrian language; that only within the last two or three weeks has a peremptory order been given that they must now be diverted to foreign language broadcasts at the expense of the Austrian people; that this is the only effective broadcasting station which is at the command of the Austrian people and that it will be difficult for the Austrian people to appreciate why at this stage, after four years' occupation, we should now seek to take over such facilities on the sole ground that we are the occupying authority?
  Mr. Bevin: I will look into that.
  Mr. Platts-Mills: In view of that last supplementary question, would the right hon. Gentleman like to reconsider the previous answer which he just gave to me?
  Mr. Bevin: The answer I gave was perfectly correct. The hon. Member said that what the Austrians were complaining of was that they were made to pay, and I told the hon. Member that as we were paying them they could not have been referring to us.

  YUGOSLAVIA (TRADE RELATIONS)
  Mr. Blackburnasked the Secretary of State for Foreign Affairs what action he has taken, in view of the economic blockade of Yugoslavia established by the Communist-controlled neighbours of Yugoslavia, to ensure that the fullest com-
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  mercial relations are established between this country and Yugoslavia.
  Mr. Bevin: A trade agreement was concluded with Yugoslavia last December. It provides for the exchange of goods of a total value of about £30 million between that date and 30th September of this year. Negotiations are now proceeding in Belgrade for a long-term agreement.
  Mr. Blackburn: While being in the fortunate position of being able, for once, to agree with both Marshal Tito and Marshal Stalin in what they say about each other, may I ask my right hon. Friend whether he will make it perfectly clear as a matter of the policy of the Government that we will not allow any country to be overcome by economic strangulation in a "cold war"?
  Mr. Bevin: We really must have this business dealt with through the Board of Trade on a trade basis.
  Major Beamish: Is the right hon. Gentleman aware that the Yugoslav Government are still giving some assistance to Communist rebels in Greece, and should not the establishment of fuller commercial relations be made dependent upon the complete closing of the Yugoslav-Greek frontier?
  Mr. M. Philips Price: Is it not a fact that Yugoslavia is able to supply this country with a considerable amount of timber, of which we are in considerable need?
  Mr. Bevin: That is quite true. Talks are going on with Bulgaria, Roumania, Yugoslavia and all these countries in connection with trade, and I cannot from the Foreign Office interfere in every detail that arises and inject political considerations at every turn.
  Mr. Pickthorn: Is a running account kept of the effect of the agreement made last December; and can the right hon. Gentleman tell us how many of this £30 million worth have been (a) exported and (b) imported up to date?
  Mr. Bevin: I suggest to the hon. Gentleman that he should put that question to my right hon. Friend the President of the Board of Trade.

  BRITISH COUNCIL, POLAND (Mr. C. G. BIDWELL)
  Major Beamishasked the Secretary of State for Foreign Affairs if he will make a statement on the resignation of Mr. C. G. Bidwell, the head of the British Council in Poland.
  Mr. Bevin: Mr. Bidwell joined the British Council in 1943 after being released from the Army to do so, and served with it until his recent defection. From 1946 onwards he was the Council's representative in Poland, and appeared to be discharging his duties competently. In September last he married, under Polish law, a Polish woman who had been employed as a secretary in the private office of General Grosz, the Minister of Information. On 4th June he informed His Majesty's Ambassador that he had sent in his resignation to the Chairman of the Council, that he had become a Polish subject and had renounced British nationality. His resignation has been rejected, and he has been dismissed as from 4th June.
  Major Beamish: Was it a cause of surprise to the right hon. Gentleman that Mr. Bidwell, who was known to hold Marxist-Socialist views, should suddenly have the courage of his convictions and become a Communist?

  SUDAN (COTTON)
  Mr. Piratinasked the Secretary of State for Foreign Affairs the value during the last full year of raw cotton exported by the Sudan and of cotton cloth imported; and what was the value of cotton cloth manufactured in the Sudan.
  Mr. Bevin: The value of raw cotton exported from the Sudan during 1948 was £E16,100,000. The value of cotton cloth imported into the Sudan during the same period was £E4,600,000. Cotton cloth is not yet being manufactured on a significant scale in the Sudan, but it is expected that a mill with an annual capacity of 3,600,000 yards will be ready to operate next year.
  Mr. Piratin: Can the Foreign Secretary assure the House that steps are being taken to develop the cotton manufacturing industry in the Sudan, in view of the fact that the raw materials are there; and as
  196
  they are exporting this cotton and importing the made-up goods, can he say exactly what steps are being taken in the matter?
  Mr. Bevin: I have just given the answer. A mill will be introduced next year. At the same time, the scheme is one of the most magnificent developments in the world, and the cotton has to be exported to be manufactured and worn by other nations, as well as used for what they themselves consume.
  Mr. Dodds-Parker: Is the Foreign Secretary not aware that the cotton exported from the Sudan is very often of a different type from that required for making cotton cloth for wearing?
  Mr. Bevin: Yes, that is quite true.

  AFRICAN COLONIES

    West African Office, London
    Mr. Dodds-Parkerasked the Secretary of State for the Colonies whether he will consider establishing a West African office and showroom for West African products and information, centrally located in London.
    The Secretary of State for the Colonies (Mr. Creech Jones): The establishment of a combined West African office was considered, but in deference to local opinion the Governments of Nigeria and the Gold Coast decided to set up separate offices and have made some provision in their current budgets. It is hoped that the offices will be in one building. The question of representation for Sierra Leone and the Gambia is being further considered.

    Aviation Fuel (Tax)
    Mr. Dodds-Parkerasked the Secretary of State for the Colonies why a tax of 9d. a gallon on aviation fuel is charged to private users and charter companies in East Africa, when this tax is not levied on East African Airways Corporation.
    Mr. Creech Jones: East African Airways Corporation is exempted from this tax because it is a non-profit making public utility which is subsidised by the East African Governments.
    Mr. Dodds-Parker: Is that not another example of so-called State enterprise being prejudiced by favourable taxation as against private enterprise?
    Mr. Creech Jones: No, Sir, I think not. This is a decision taken by the three African Governments involved.

    Uganda Cotton Industry Commission
    Mr. Skinnardasked the Secretary of State for the Colonies if he will make a statement on the proposals of the Government of Uganda arising out of the recommendations of the Uganda Cotton Industry Commission.
    Mr. Creech Jones: The policy adopted by the Uganda Government is set out in a long statement which has been published in Uganda. I am sending my hon. Friend a copy, and placing a copy in the Library of the House.

  HONG KONG (LOCAL GOVERNMENT)
  Mr. Collinsasked the Secretary of State for the Colonies if he will make a statement with regard to the provision of a municipal council or for elected representatives to the Legislative Council of the Colony of Hong Kong.
  Mr. Creech Jones: A motion by unofficial members of the Legislative Council on the subject of constitutional reform is down for debate in Hong Kong today. I expect to receive shortly the Governor's recommendations in the light of this debate.
  Mr. Collins: Can my right hon. Friend say, in view of the long delays which have attended consideration of other proposals for representative Government in Hong Kong, how long he thinks consideration of these recommendations will take on this occasion?
  Mr. Creech Jones: The Hong Kong Legislative Council is considering the question today, and it would be unwise for me to make any statement until I hear from the Government.

  ADEN

    Municipal Franchise
    Mr. Rankinasked the Secretary of State for the Colonies what steps he proposes to take to meet the demand in Aden for municipal government based on
    198
    a franchise covering all Aden-born adults.
    Mr. Creech Jones: The question of widening the franchise for township elections is being considered by the Government of Aden in the light of the experience gained from the recent election.

    Juvenile Offenders
    Mr. Rankinasked the Secretary of State for the Colonies if he is aware that whipping is in force in Aden for juveniles and that they are herded in prison with adults; and what provision is being made for Borstal accommodation to segregate them.
    Mr. Creech Jones: Juveniles are still committed to prison in Aden and power still exists to punish offenders with a light cane. I am advised that they are segregated at all times from other prisoners and that they have their own sleeping quarters with exercise yard attached. The great majority of sentences are of short duration. I am discussing whether some other form of treatment would be appropriate.
    Mr. Rankin: Can my right hon. Friend tell us how light is the cane, and if there is any provision in the 10-year plan for Aden for new prisons where segregation may take place which, according to my information, is not now taking place?
    Mr. Creech Jones: The juveniles are segregated, and there has been issued from my Office a circular giving directions to local governments in regard to the treatment of juvenile offenders. Most Governments are following the course recommended.
    Mr. Gallacher: Is the right hon. Gentleman aware that the cane is a brutal method of punishment and, more than that, does no good, because I was caned very often when I was a boy?
    Sir Stanley Reed: Will the right hon. Gentleman accept the assurance of those who have had magisterial experience of juvenile offenders of this sort, that those who have been subjected to a light whipping practically never appear again in court and those who are sentenced to gaol nearly always become confirmed criminals?

  COLONIAL DEVELOPMENT AND WELFARE
  Mr. Piratinasked the Secretary of State for the Colonies how much of the £120 million allocated to the Colonies under the Colonial Development and Welfare Act, 1945, has been taken up each year since the passing of the Act; and what is the overall amount spent in the Colonies on development and welfare each year since the passing of the Act.
  Mr. Creech Jones: The following annual sums have been issued from the Colonial Development and Welfare Vote since the 1946 Act came into force: 1946–47, £3,150,000; 1947–48, £5,130,000; 1948–49, £6,240,000. There are no means of answering the second part of the Question, since many aspects of development and welfare in the Colonies are so closely integrated with normal administration and development that separate overall figures are net available.
  Mr. Piratin: As these figures which the right hon. Gentleman has given in no way bear any relation to the average annual proportion of the £120 million allocated by the Act, can he say what steps are being taken to ensure that the Act is being operated? Is he satisfied, for example, that the Governments of the Colonies are really carrying the Act out in spirit and in letter?
  Mr. Creech Jones: The Governments are carrying out the Act both in spirit and letter. I would remind the hon. Member that a Bill is before the House which deals with the whole of this subject and expenditure under the Act.
  Mr. Oliver Stanley: Is the right hon. Gentleman satisfied, in comparison with other capital developments undertaken by the Government, that there are proper priorities in regard to materials needed for this Colonial expenditure?
  Mr. Creech Jones: Yes, Sir. During the past year there has been a tremendous speed-up in regard to the delivery of capital goods and other raw materials required for this development work.

  MALAYA (INDIAN LABOURERS)
  Mr. Gammansasked the Secretary of State for the Colonies if the Indian authorities have replied to his representations regarding the refusal of the Govern-
  200
  ment of India to allow Indian labourers going on leave to Madras to return to Malaya.
  Mr. Creech Jones: The High Commission has been informed by the Indian Representative in Malaya that in certain special cases involving genuine hardship permission will be granted to return to Malaya.
  Mr. Gammans: Does the right hon. Gentleman appreciate the seriousness of this ban on the return of Indian labour to Malaya, and can he say why it is that the Government of India should adopt this very unto-operative attitude towards another member of the Commonwealth?
  Mr. Creech Jones: All I can say at the moment is that this question is receiving our further consideration.

  FACTORIES (MINISTERS' VISITS)
  Mr. Errollasked the Prime Minister what visits have been paid by Ministers this year to factories either wholly or partly for the purpose of familiarising themselves with joint production committees.
  The Prime Minister (Mr. Attlee): Ministers have of course already made a great many visits to factories during this year. In the course of these visits every suitable opportunity is taken to include an examination of the arrangements for joint consultation whether through production committees or otherwise.
  Mr. Erroll: Will the Prime Minister ensure that in future these visits are not used mainly for the purpose of disseminating Labour Party propaganda?
  The Prime Minister: I do not know to what instance, if any, the hon. Member is referring. Perhaps if he has any particular instance in mind he will refer it to me.

  BROADCASTING INQUIRY (EVIDENCE)
  Mr. Geoffrey Cooperasked the Lord President of the Council on what date he expects that the Radcliffe Committee investigating the British Broadcasting Corporation's affairs will commence its operations; and what is the address to which members of the public wishing to give evidence should apply.
  The Lord President of the Council (Mr. Herbert Morrison): In answer to the first part of my hon. Friend's Question, I would refer him to my statement of yesterday about the Committee of Inquiry into British broadcasting services. People who wish to give evidence should apply to the Secretary to the Committee, Broadcasting Branch, General Post Office Headquarters, London, E.C.1.
  Mr. Cooper: Will the right hon. Gentleman ensure that the utmost possible publicity is given to this address to which people can apply, and also to the procedure to be followed by the Committee to ensure that members of the public, as well as members of the B.B.C. staff, who wish to give evidence will be encouraged to come forward, so that all the relevant matters may be considered?
  Mr. Morrison: I share my hon. Friend's hope that publicity will be given to the particulars of the secretaryship of the Committee. As regards procedure, that is a matter for the Committee.
  Mrs. Jean Mann: Can my right hon. Friend assure me that the Committee will commence its operations in time to consider the scandalous travesty of an alleged impartial broadcast given over the Scottish radio by the hon. and gallant Member for East Renfrew (Major Lloyd) on 10th June?

  SERVICE DOCTORS (MARRIAGE ALLOWANCE)
  Mr. Lowasked the Minister of Defence whether, in view of the relatively late age at which medical officers are called up for National Service, he will authorise the payment of marriage allowances at the recently increased rates to those who have been married before being called up or during National Service.
  The Minister of Defence (Mr. A. V. Alexander): The higher age and special qualifications of National Service medical officers are recognised by the grant of higher rank and pay on entry; if married, they are entitled to marriage allowance at the rates appropriate to other National Service officers. I regret that it is not possible to treat medical officers more favourably than other National Service
  202
  officers or than National Service men in this matter.
  Mr. Low: In view of the considerations which the right hon. Gentleman has just mentioned, will he not reconsider this matter? Is it not very important that these men, who are necessarily called up much later than anyone else, should be treated in a way proper to their age and calling?
  Mr. Alexander: The average age of entry is about 24 years and nine months. These medical officers start with the rank of full lieutenant or the equivalent and are much better off than other National Service officers.
  Colonel Stoddart-Scott: Is the right hon. Gentleman aware that some medical officers are not called up until they are nearly 30, until they have specialised, and that it is a great disadvantage to these men to have a low marriage allowance at that age?
  Mr. Alexander: I do not think that they are badly off at that age compared with the position of other National Service officers.
  Mr. N. Macpherson: Will the right hon. Gentleman bear in mind that the qualifications are exactly the same, whether the medical officers are National Service officers or Regular officers? Could he give the reason for this discrimination? Is it really to the advantages of the Services?
  Mr. Alexander: This matter has already been considered. The policy of the Government has been stated, and I am not in a position to suggest any variation of it.

  FOOD SUPPLIES

    Bexley Cricket Club (Licence)
    Mr. Bramallasked the Minister of Food if he will now give favourable consideration to the repeated request of the Bexley Food Control Committee that the licence of the Bexley Cricket Club should be extended to cover provision for tea for spectators.
    The Minister of Food (Mr. Strachey): The Bexley Cricket Club has now been given a licence which enables them to

    203
    cater for the general public during the cricket season.
    Mr. Bramall: Is my right hon. Friend aware that this helpful decision in favour of one of the oldest cricket clubs in the country will give great pleasure locally, and will reinforce the general view that he is as competent a cricketer as he is a Minister?

    ANALYSES AND NUTRITIONAL VALUE (STARCH EQUIVALENT) OF VARIOUS FEEDINGSTUFFS

    —

    Wheat by-products

    Maize

    Barley

    Oats

    Non-millable Wheat

    per cent.

    per cent.

    per cent.

    per cent.

    per cent.

    Moisture

    …

    …

    13·0

    13·0

    14·9

    13·3

    13·4

    Oil

    …

    …

    4·3

    4·4

    1·5

    4·8

    1·9

    Albuminoids

    …

    …

    14·1

    9·9

    10·0

    10·3

    12·1

    Carbohydrates

    …

    …

    53·4

    69·2

    66·5

    58·2

    69·0

    Fibre

    …

    …

    10·3

    2·2

    4·5

    10·3

    1·9

    Ash

    …

    …

    4·9

    1·3

    2·6

    3·1

    1·7

    100·0

    100·0

    100·0

    100·0

    100·0

    Starch equivalent

    …

    43·4

    77·6

    71·4

    59·5

    71·6

    Mr. Thornton-Kemsley: Does not the Minister agree that the figures will show that no coarse grain is an adequate substitute for the product of milled wheat, which is quite unique in protein value, especially for the weaning of pigs?
    Mr. Strachey: The figures undoubtedly show that wheat products are higher in protein value, but the starch equivalent of maize is a good deal higher.

    Overseas Food Corporation, East Africa
    Mr. Turtonasked the Minister of Food if he is now in a position to state the results of the second year's work of the Overseas Food Corporation in East Africa.
    Mr. Strachey: The Overseas Food Corporation assumed responsibility for the East African groundnuts scheme on 1st March, 1948. It will not therefore have completed its second year's work until 1st March, 1950. As to its first year's work, I have already informed the House that I shall be ready, if desired, to make a statement on the scheme after my return from East Africa.
    Captain Crookshank: Can the right hon. Gentleman explain his reluctance to

    Animal Feedingstuffs
    Mr. Thornton-Kemsleyasked the Minister of Food what is the comparative nutritional value for animal feedingstuff purposes between coarse grains and milling by-products.
    Mr. Strachey: As the answer is a table of figures I will, with permission, circulate it in the OFFICIAL REPORT.
    Following is the information:
    give any information about this matter, in view of the fact that just before the Whitsun Recess he was able to give detailed information about what was being done in Australia?
    Mr. Strachey: The right hon. and gallant Gentleman is misinformed. I have given far more detailed information about the groundnuts scheme than the Australian scheme.

    Sweets (Supplies)
    Mr. Swinglerasked the Minister of Food what is the weekly quantity of sweets and chocolates per head of the population now being produced.
    Mr. Strachey: The weekly production of sweets and chocolates is at present about 5 oz. per head of the population.
    Mr. Swingler: In view of the increased quantity of sweets now being produced, is it not a fact that some retailers are getting fewer sweets from their wholesalers than they did before derationing? Is my right hon. Friend satisfied that any improvement is taking place in distribution?
    Mr. Strachey: Distribution is carried out by the trade, but I should be very surprised if it was a fact that any retailer was actually getting fewer sweets.
    Mr. Keenan: Is my right hon. Friend aware that in spite of improved supplies to the trade, it is impossible to get sweets in any industrial area without having to queue, and that the only remedy is to get back to rationing?
    Mrs. Paton: Is my right hon. Friend aware that many people have not seen any chocolate since derationing? People are asking where it is. Can my right hon. Friend tell us?
    Mr. Strachey: Chocolates are being bought and eaten but it is true that distribution is far more uneven than it was under rationing and that that may well be a good reason for reimposing rationing.
    Mr. Sydney Silverman: Is my right hon. Friend aware that the decision by his Ministry to reimpose sweets rationing would be welcomed by the overwhelming majority of the people?
    Mr. Henderson Stewart: Is there not an easy solution? Would not the right hon. Gentleman permit the trade to have a further small quantity of ingredients with which to increase supplies—[HON. MEMBERS "He has done so."]—which will immediately resolve all these difficulties?
    Mr. Strachey: There is a Question later on the Order Paper which deals with this matter.
    Mr. Piratin: Is the Minister aware that just before Whitsun the Parliamentary Secretary told the House that steps would be taken, if cases were brought to her notice, to ensure that confectioners received the quantity of sweets they were receiving before derationing. I have received a letter from her since saying that no steps could be taken. I now ask the right hon. Gentleman what steps can be taken to ensure that confectioners get the same quantity of sweets as hitherto?
    Mr. Strachey: Actual distribution from the manufacturer or wholesaler to the retailer is in the hands of the trade, and the total amount now being distributed is so much greater that I very much doubt whether any shop is getting less.
    Mr. Swinglerasked the Minister of Food the quantities of sugar and fats allocated to manufacturers of sweets and chocolates since derationing; and the
    206
    quantities allocated in the comparable period before derationing.
    Mr. Strachey: Allocations since de-rationing and for three months before have been at the rate of 15,680 tons of sugar and 865 tons of fats each four-weekly period. In addition, one further allocation of 4,500 tons of sugar and 350 tons of fats has been released for extra production. Allocations for a 4 oz. ration before de-rationing were 13,240 tons of sugar and 730 tons of fats each four-weekly period.
    Mr. Swingler: In view of the fact that this has enabled production to increase since derationing, will my right hon. Friend take note of the widespread protest which has been made in the House this afternoon against the unfairness caused by derationing?
    Mr. Turton: When the right hon. Gentleman made an increased allocation, did he ask manufacturers to secure even distribution to small shops as well as to large multiple shops and co-operative societies?
    Mr. Strachey: Yes, Sir. Whether we were right in leaving distribution so fully in the hands of the trade is another matter, but I think they are doing their best.
    Mr. Ivor Owen Thomas: Is it not the case that under derationing there is and can be no effective check either on distribution or the amounts produced from the quantity of ingredients supplied?
    Mr. Strachey: I agree with the first part of my hon. Friend's supplementary. Derationing and decontrol of distribution must to some extent, go together. As to the second part, I think manufacturers are producing all the sweets they can with the ingredients they are allowed.
    Mr. Blackburnasked the Minister of Food what steps he is taking, in view of the dearth of sweets in confectionery shops, to ensure a fair distribution of sweets throughout the community.
    Mr. Strachey: As I said in the House on 3rd June, I shall not hesitate to reimpose rationing if it proves the only remedy for the present state of affairs.
    Mr. Blackburn: Is my right hon. Friend aware that the facts in relation to sweets abundantly prove how right he

    207
    was to ration bread? Will he make it quite clear, as almost everybody in the country wants rationing of sweets to be reintroduced, that he will take that step at the earliest possible moment if he finds it necessary?
    Lieut.-Colonel Sir Thomas Moore: Since the derationing of sweets won the South Hammersmith by-election is it wise to re-impose rationing now or to keep it for the next by-election?
    Mr. Strachey: I think the hon. and gallant Member will find that by-elections can be won quite easily in any case. In answer to my hon. Friend the Member for King's Norton (Mr. Blackburn), I would say that our position on this is quite simple. If in the case of sweets, or any other commodity, the demand at current prices is persistently in excess of the supply then we think rationing is the proper remedy.
    Lieut.-Colonel Lipton: What other remedies, apart from the re-imposition of rationing, is my right hon. Friend considering at the moment?
    Mr. Strachey: I know of no other remedy for the present situation. If it does not right itself with existing supplies, then I think we must re-impose rationing.
    Mrs. Middleton: In view of the almost unanimous opinion in the country that rationing should be re-imposed, will not the Minister avoid delay by announcing today that he will re-impose rationing?
    Mr. Strachey: I think it is a little premature to do that. After all, it is only seven weeks since sweets were de-rationed. We must wait a little longer.
    Mr. Benn Levy: In view of the accumulated evidence, does not my right hon. Friend consider that the time has now really come to set the people free to secure their fair share?
    Air-Commodore Harvey: Will the right hon. Gentleman say why other countries in Europe, occupied by the enemy for many years, have been able to deration sweets and make them available to the public?
    Mr. Strachey: It would be very easy indeed to maintain derationing and to have no queues by simply increasing the price, as has been done in other countries.
    Air-Commodore Harvey: Rubbish
    Mr. Collins: Can my right hon. Friend say how much longer he will defer a decision? Seven weeks have gone by. Does he think another four weeks, or a shorter period?
    Mr. Speaker: That question has been asked several times.

    Anglo-Argentine Meat Agreement
    Colonel J. R. H. Hutchisonasked the Minister of Food whether in the new five-year Agreement with the Argentine Republic for the purchase of meat there is any clause which permits the price to fall if world prices fall and whether he will make a statement.
    Mr. Strachey: The Agreement is not yet signed. We bad better wait until an agreed text is available before dealing with specific points.

  HONG KONG (DEFENCE)
  The following Question stood upon the Order Paper in the name of Mr. EMRYS HUGHES.
  48. To ask the Minister of Defence what was the purpose of his visit to Hong Kong; and what conclusions he has come to as to whether further military activity there is justifiable.
  Mr. Alexander: Mr. Speaker, with your permission, I will make a statement in answer to Question No. 48. During a short tour in the early part of this month, when I visited Ceylon and Malaya, and also took the opportunity of making a general study of the whole position in the Far East, I stayed for three days in Hong Kong for discussions with the authorities, both civil and military, on the spot. As I indicated, on behalf of the Government, when in Hong Kong, our object is to maintain the friendliest possible relations with whatever may be the Government of China, at the same time taking into account our obligations to the people of the territory for which we are responsible. I found that the responsible authorities are facing their problems with confidence and, in the field of defence, all practicable steps are being taken to ensure the safety of Hong Kong.

  209
  The House will know that His Majesty's Government have already decided to reinforce the garrison in Hong Kong in view of the uncertain position in China and our responsibility for Hong Kong and the welfare of its people. His Majesty's Government have found it necessary to send some additional reinforcements and the necessary steps in the matter are being taken by all three Services.
  His Majesty's Government have furthermore decided to appoint a Commander, British Forces, Hong Kong, to be in command of all the Army, Air and such Naval units as are assigned from time to time for the defence of Hong Kong. They have appointed to this post, Lieut.-General F. W. Festing, and he will also act as General Officer, Commanding-in-Chief, Land Forces. General Festing will leave very shortly and will take up his duties immediately upon his arrival in Hong Kong.
  His Majesty's Government in the United Kingdom have kept the Governments of the other Commonwealth countries fully informed at all stages both of the policy being followed and the measures being taken to implement it. We have also been in touch with the Government of the United States of America.
  Mr. Gammans: May I ask the right hon. Gentleman if the garrison at Hong Kong is being reinforced by taking away or reducing the garrison at Malaya? Would he also say if any approach has been made to the other Commonwealth countries suggesting they might share with us in the defence of Hong Kong, in view of the great importance of Hong Kong not only to this country, but to the whole of South East Asia?
  Mr. Alexander: I do not wish to add details with regard to the Forces this afternoon for obvious reasons, but I would assure the hon. Member that the purpose of the Government is to bring the anti-bandit campaign in Malaya to a successful conclusion. In regard to the other matter, I have said that we have kept the Dominion Governments fully informed and I cannot add anything to that statement at present.
  Mr. Gallacher: Instead of getting in touch with the American Government would it not have been very much better
  210
  to get in touch with the liberation forces in China—a step that will have to be taken sooner or later, and the sooner the better?
  Mr. Alexander: I should have thought that the House was aware that we have been endeavouring to get in touch with the liberation authorities, but with not much success.
  Air-Commodore Harvey: While in Hong Kong, did the right hon. Gentleman have an opportunity of impressing upon the local government there the importance of speeding up the construction of the new airfield?
  Mr. Alexander: I discussed that matter with the Governor, the local defence committee and the Commanderin-Chief, and everything is in hand.

BUSINESS OF THE HOUSE
Mr. Eden: May I ask the Leader of the House if he can say when the Foreign Secretary will be in a position to make a statement about the recent meeting of the Council of Foreign Ministers in Paris?
Mr. H. Morrison: My right hon. Friend the Foreign Secretary has nothing to add at present to the communique which was issued following the conclusion of the meeting of the Council of Foreign Ministers, but it is intended to present a White Paper on the proceedings of the Council held recently in Paris.
Mr. Churchill: May I on a cognate subject ask the Lord President whether he could state what is the date of the meeting of the Council of Europe at Strasbourg? We have been told through the usual channels that it was to be on 29th August. A great many Members—18 Members—are now concerned, and all have to make their arrangements. The 29th August is the date officially communicated to us through the Whips' Room.
Mr. Morrison: The right hon. Gentleman will appreciate, of course, that this is a matter of international consultation. I will be quite frank, I was hoping for the same result as the right hon. Gentleman has indicated; but I understand that owing to some complication of other international gatherings, it is probable that the date will be 10th August.
Mr. Churchill: What date?
Mr. Morrison: I understand that probably it will be 10th August. Of course, these are matters which have to be settled by international agreement.
Mr. Churchill: It is very important that we should be given the information at the earliest possible moment. There is much personal inconvenience caused if these dates are changed like this.
Mr. Morrison: The announcement will come from the Preparatory Commission and I understand it is about to make an announcement immediately.
Mr. S. Silverman: In view of the fact that the result of the Foreign Ministers conference marks, at any rate to some extent, a very welcome change in international relationships, would it not be desirable for a statement to be made in the House and for the House to be given some opportunity of commenting on it?
Mr. Morrison: That is another point. My right hon. Friend will issue his White Paper, and of course Questions can be put down on that if it is desired. But we thought that in view of the fact that the communiqué had been issued, and we had the facts about the situation, the White Paper procedure was the best in the first instance.
Mr. Eden: I think we understand that the intention is to present the House with a White Paper. I have no doubt that the right hon. Gentleman and the Foreign Secretary would agree that after we have had an opportunity to study it the House will wish to discuss a situation of such considerable importance.
Mr. Morrison: I thought it right that the House should have the White Paper first and study it and if there is a general wish for a Debate, that will be considered through the usual channels.
Mr. F. Noel-Baker: When is it expected that the White Paper will be available?
Mr. Morrison: My right hon. Friend the Foreign Secretary has only just returned. He has given instructions about its drafting forthwith and I do not think there will be much delay. We shall get it properly settled as quickly as possible.
Mr. Gallacher: May I ask, in regard to this Tory-Labour combination that is going to Europe, whether other hon. Members who are not in this happy arrangement will be given information about what is taking place, so as to let us know how the marriage works out?
Mr. Morrison: The hon. Member is an opponent of Western Union and I am therefore surprised that he should talk about "this happy arrangement." There is no doubt that the hon. Member will, in due course, get reports of what is happening.

PERSONAL STATEMENT
Mr. Harold Macmillan: With your permission, Mr. Speaker, I wish to make a brief personal statement. My attention has been called to an interruption which I made on 23rd May, when the Central Office of Information was the subject of Debate. I should like, for the purposes of the record, to correct what I said.
While the sale of book translation rights, where they exist, can in general be carried out without outside assistance, I readily admit that, where certain countries are concerned, the help of some official agency is required. I have now ascertained that the publishers were duly informed when, some four years ago, it was decided to entrust this function to the copyright section of B.B.E., from which, within the limited scope available, publishers, including my own firm, have received valuable assistance. I have always received such courtesy from civil servants over so many years that I should not like to leave uncorrected anything which is inaccurate or might seem unjust or ungracious. I hope that they, and the House, will accept my apology.
I am grateful to the Lord President for bringing this matter to my notice, and to you, Sir, for allowing me to make this explanation.
Mr. H. Morrison: May I be allowed, Mr. Speaker, to say, not only for myself but for the Central Office of Information, that we are very much obliged to the right hon. Gentleman for the statement which he has been good enough to make?

ORDERS OF THE DAY

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

  FINANCE BILL

    Clause 1.—(TEA.)
    Motion made, and Question proposed, "That the Clause stand part of the Bill."—[Sir S. Cripps.]
    3.45 p.m.
    Captain Crookshank: I do not think that we can let this Clause go without explanation. The Committee will recollect that under our new procedure, and because of the way that the Resolutions on the Budget have to be passed by the House without any discussion, this is the first opportunity on any Clause to amplify in any way the obviously brief statement which the Chancellor of the Exchequer deems it his duty to make on Budget day. While I understand the purpose of the Clause—I hope that I am not misrepresenting anything that the Chancellor said, because that is the last thing I want to do—to be simply a book-keeping entry, that explanation does not take us very far. I hope that we may get some explanation of what is to be the effect of it.
    As I read the Clause, its effect is that the duty upon Empire tea is entirely abolished, whereas the duty on foreign tea remains. To that extent, therefore, the principle of Empire preference is, I take it, still enshrined in our taxation system. That point is, of course, very important. My hon. Friends and I would like a little further information as to what sort of money is involved in this transaction, because of the difficulty that we all have in dealing with the finances of anything to do with food. In this context, tea comes under the heading of food. With the food subsidy arrangements and the buying arrangements of the Minister of Food, and all the rest of it, we are not where we were in the old days when it was a perfectly clear proposition: so much was the duty, so much was the Imperial preference rate, and that was all there was to it. The position is now, I will not say confused, but complicated, owing to the issue of subsidies on foodstuffs and the difficulty that we have of knowing what they amount to. I hope
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    that one or other of the Treasury Ministers will not mind taking notice of the fact that I am asking for a further explanation on this Clause.
    Mr. Nigel Birch: I should like to back up what has been said by my right hon. and gallant Friend the Member for Gainsborough (Captain Crook-shank) and to ask what the real point is of what we are told is a book-keeping transaction. I could understand our doing something of this sort if it had one of two effects, either eliminating the duties altogether and therefore taking away administrative work, or eliminating the subsidy altogether and, presumably, taking away other administrative work. As far as I can see, this Clause does neither. As my right hon. and gallant Friend has said, there is apparently still to be a duty on foreign tea.
    As I understand the Clause, its effect will be to reduce the subsidy by £11 million. The subsidy last year was a total of £70 million. We cannot tell what will happen under the new tea contracts but it does not appear likely that the subsidy will be eliminated. Therefore, all that we are doing by the book-keeping transaction is artificially to cut down on both sides of the Budget. Frankly, I cannot see any good reason for doing so. We appear to be reducing the food subsidies, but we are not actually doing so. That appears to cause more confusion than it ends. In addition, there is the great difficulty, if we eliminate or largely reduce the duty on imported tea, of what happens if and when the price of imported tea goes down and we want to get the old revenue from tea without raising the price. That seems an additional reason for not doing what is now proposed. The main point is: What is the point of going a long way round to do something which makes no real change in the economic position of the country?
    The Economic Secretary to the Treasury (Mr. Douglas Jay): As my right hon. and learned Friend has said, this Clause contains a perfectly straight-forward and simple book-keeping operation. The duty on tea was 8d. per lb. on foreign tea, and 6d. on Empire tea. What we are doing is to remove as far as possible the duty on tea without abolishing the preference. The situation now will be that the duty of foreign tea is reduced

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    to 2d. and the duty on Empire tea is removed altogether. The effect is that we lose £10.8 million in the present financial year on the tea duty, and that we save that amount on the subsidy. In a full year the book-keeping transfer amounts to £11 million.
    I was asked by the hon. Member for Flint (Mr. Birch) the purpose of making this transfer. The answer is that there is no point in raising money on the one hand and paying it away on the other. That seems to us a needless operation, and therefore, providing that we can maintain the preference for Empire tea, it seems better to make this change.
    Mr. Dodds-Parker: I may be rather slow on this, but perhaps the Economic Secretary could be a bit clearer in giving the figures and say how much he now expects to collect on foreign tea and how much was collected in the past. This appears to the producers to be a Crippso-Schachtian economy. With export taxes in some of the producing territories and import subsidies in this country, it is increasingly difficult for the producers to see the real value of some of their products. It would be of great assistance to all concerned if the Economic Secretary could give us the figures for which I have asked.
    Mr. Jay: Over 99 per cent. of the revenue collected in the past has come from Empire tea. In future on the small remaining duty we expect to collect a small amount of about £250,000.
    Mr. Erroll: The Economic Secretary is being disingenuous when he calls this a simple book-keeping transaction. It certainly is not a simple book-keeping transaction. What is happening is that we are witnessing a permanent loss of revenue to the Treasury by the abolition of the duty. Subsidies are related to the current price of tea, and, as most commodities are now falling in price, one would have expected that the subsidies would be required to be reduced as the months went past. However, we are seeing the total extinction of the duty on Empire tea when it may not really be necessary so far to reduce the price of it.
    It would be much fairer to say that the Government were contemplating a permanent reduction in the cost of tea to the consumer by removing the Tea Duty,
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    except for 2d. per lb. on foreign teas, than to call this merely a book-keeping transaction when the amount required for subsidies is a transit matter. It is fallacious to imagine that tea prices will remain for ever at their present level and that tea will always necessarily require the same amount of subsidy to maintain the same price to the consumer in this country. It is easy to appreciate, and perhaps to sympathise with, the motives which have animated the Treasury, but surely it is unsound to call this simply a book-keeping transaction. It may well lead to a certain amount of difficulty in the future when it is wished to recoup revenue in times of stringency and when one would very much like to have the duty still in being.
    Mr. Oliver Stanley: I am sure that the hon. Gentleman will pardon us for being a little suspicious and wishing to know whether there is anything more in this than the simple bookkeeping transaction to which we have been referred. If that is all and if this was so obviously an unnecessary complication which is now being removed, we are tempted to ask why it has not been done before. Year after year in the Finance Bill we have passed arrangements of this kind. Why is it that it is only this year that it has suddenly been discovered that the method we have been adopting has been clumsy and unnecessary and ought to be changed?
    I do not hold anything against the Economic Secretary—he is a comparatively new arrival—but there is the Financial Secretary to the Treasury who has sat through all the Budgets of this Parliament. Therefore, year after year he has been persuading us that in what we were doing we were adopting the proper financial course. If I might distract his attention from what appears by the look on the Chancellor's face to be one of his rare jokes which he is whispering in his right hon. Friend's ear, may I say that I am sure that the right hon. Gentleman himself would never have advised the House to adopt this form unless he had believed that it was the proper form.
    Could not we be told what has suddenly brought light to the Treasury Bench and what has suddenly brought home to the Government that—I admit that there is some cogency in it—this is an otiose procedure? Until that is ex-

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    plained we shall be tempted to think that there is something more in this than a pure book-keeping transaction. As my hon. Friend the Member for Altrincham and Sale (Mr. Erroll) said, if at some future time, owing to the state of our finances, the Chancellor of the Exchequer feels that the revenue needs still further strengthening, he will find that this change has been far from a simple bookkeeping transaction and that it has weakened the revenue at this moment and may force him at a most unpopular time and a difficult moment to reimpose the duty which he is now removing. I hope that one of the—I was about to say, one of the three representatives of the Treasury on the Front Bench, but I shall say "One of the two" because the Chancellor has not been listening and therefore I would not ask him to reply—could tell us what has suddenly made this change a necessity.
    Question put, and agreed to.
    Clause ordered to stand part of the Bill.

    Clause 2.—(REDUCTION OF DUTIES ON BEER.)
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    The Financial Secretary to the Treasury (Mr. Glenvil Hall): Perhaps I can forestall speeches which might otherwise be made if I indicate what this Clause does. The pre-Budget Excise Duty on beer was £8 18s. 10½d. per 36-gallon barrel plus a surcharge of 6s. 7½d. for every degree above 1,027 degrees. The basic rate has been reduced by 21s., and that will show itself in a reduction in the price of the pint of beer. Part of the reduction of 1d. per pint which has now taken effect will be borne by the brewers out of their profits. It is expected that the brewers will provide something like £4 million during the coming year out of profits which would otherwise accrue to them.
    Mr. Birch: I want to raise one or two points on this reduction in taxation. What I really want to ask is what the Government's anticipations are. The taxation of beer is a melancholy tale. In 1914 it was 2½d. a pint, and the tax now ranges between 6½d. and 10¼d. a pint, depending on the specific gravity. When the Chancellor was introducing this he said that there had been a marked falling off in
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    consumption and the conclusion he drew was that a remission of duty was practicable. I should have thought that it showed that we were reaching the limits of disinflation by direct taxation. What the Chancellor really meant was that it was not practicable to hold the duty at its old level if the revenue was to be maintained.
    In the first quarter of this year the production of beer was down by 18 per cent., and it was down a great deal more compared with 1946. The 1947 figures were disturbed by the fuel shortage. In March there was a very steep fall indeed, from 2,300,000 barrels the year before to only 1,900,000 barrels. In April, the month in which the Budget was introduced, there was a fairly sharp revival in consumption, though it was still not up to the level of the previous year. Whether that revival was caused by people drinking the Chancellor's health in order to celebrate his Budget or whether it was caused by the hot weather at Easter, I do not know, but evidently the Government's anticipation is not only that consumption will stay at its revived level—something like what it was last year—but that it will actually increase. It is difficult to work this out, but the Chancellor assumed that there would be a loss of £20 million in revenue as a result of the change in tax. I have calculated that, if consumption stayed the same, there would be a loss in revenue of £29 million. Therefore, I think we can assume that the Chancellor is thinking that there will be an increase in the consumption of beer, and I should like to know if I am correct in that assumption.
    4.0 p.m.
    When we are talking about beer we should not think too much about intoxicating liquors. I see the hon. Member for West Ealing (Mr. J. Hudson) looking as if he is about to let off a broadside. In the old days one saw notices outside the pubs, "Drunk for one penny, dead drunk for twopence, straw for nothing." Those days are over. It would take a great deal of money and cubic capacity to get drunk on beer. It might be interesting if the Chancellor himself tried; he might draw some useful lessons from it. Last year, when the hon. Member for Southampton (Mr. Morley) was protesting against an increase in the beer duty, he said:
    "There was some excuse for placing the extra duty on tobacco. The excuse was that it

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    was necessary to diminish smoking in order to save dollars. But we do not spend dollars on the manufacture of beer. Beer is now mainly composed of water and we do not import water, so that excuse in regard to tobacco cannot hold in regard to beer."—OFFICIAL REPORT, 1st June, 1948; Vol. 451, c. 855.]
    Of course, when it is nationalised we may, but it is still true that we do not do so.
    The question I want to put to the Government is, do they think that their estimate of consumption will be fulfilled by the present trend? It seems to me that at the moment, overwhelmingly, the interest of this country is that we should raise the maximum tax from beer, and if beer is taxed at what the Chancellor described as an impracticable level, we shall not do so. I am not at all certain that even with this reduction of 1d. a pint it is not still at the impracticable level which will cause a net reduction in the revenue being raised. I end by emphasising once again that this is proving that we are reaching the limits of disinflation by taxation, and that will be the theme of our speeches on this subject.
    Mr. James Hudson: The right hon. Gentleman the Financial Secretary addressed the Committee with an air of sweet reasonableness when he endeavoured to excuse the tax we are now discussing by reminding us that £4 million would be extracted from the pockets of the brewers by the proposal now being made. One would have felt more satisfied about that if one were sure that that was about the limit which the brewers' profits might have borne. However, as the profits of brewers have been in the neighbourhood of £30 million to £40 million during the last few years, and, indeed, have mounted considerably in the last eight or 10 years, there was a case—if it is a question of a taxation of brewers' profits—for proceeding much more vigorously than this proposal has done and in some other way than that which it has taken.
    I do not pursue that any further because I want to draw attention to another aspect of this matter. I agree with what has been suggested on the other side of the Committee that it is probably the case that the Chancellor has allowed himself to be persuaded by the Treasury officials to take off this tax on beer
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    because he believes that as a result there will be a considerable increase in consumption and, in consequence, a considerable increase in revenue. That might be satisfactory from the point of view of the Revenue, but from the larger point of view, with which I should think he is concerned as Minister of Economic Reconstruction, to persuade the people to engage in a greater consumption of beer is bad, both from the point of view of the effect which the beer has on the persons who consume it and——
    The Deputy-Chairman (Mr. Bowles): The speech of the hon. Gentleman is going rather wide. This is a financial Bill, not a moral Bill or an economic reconstruction Bill. The hon. Gentleman must realise that this is a substitution of a certain number of figures for those in an earlier Act of Parliament, and the discussion is, therefore, rather restricted.
    Mr. Stanley: May I raise a point of Order, Mr. Bowles? Surely we are entitled to discuss whether the object of this reduction is to increase the consumption of beer, and whether that is a worthy object, which is what I understood the hon. Gentleman was doing?
    The Deputy-Chairman: I am not sure that the hon. Gentleman is allowed to go too far in discussing how worthy is the object.
    Mr. Stanley: Are we to understand, Mr. Bowles, that if we are told, or if we assume that a financial change has a certain object, we are then not to consider in some detail whether that object is a worthy one? Surely that goes to the root of whether the taxation change proposed is a good one or not?
    The Deputy-Chairman: I will see how wide the Debate goes, but I would point out to the right hon. Gentleman that this is really not a Clause on which we can pin a Debate on whether teetotalism, prohibition and so on would be desirable. So far, I think the hon. Gentleman is just about within the Rules of Order. Mr. Hudson.
    Captain Crookshank Captain Crookshank rose—
    The Deputy-Chairman: Mr. Hudson.
    Mr. Hudson: On that point of Order, Mr. Bowles, I submit to you earnestly that I was not really engaged in giving a

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    moral lecture when you interrupted me. I was dealing with the economic consequences of a tax, and I felt that the Chancellor had made a great mistake from that point of view. I am anxious to preserve that position, and I hope you will permit me to proceed because I want to get away now from the point that was raised—and which you did not contest when it came up from the other side of the Committee—to the following further point. If it be true that this tax leads to greater consumption, which I believe was the intention of the Treasury when the Chancellor was advised to take this step, the consequences on our economic arrangements in many other ways are likely to be extremely serious.
    At this time there is no justification for the diversion of raw materials into the brewing trade when they are so much needed elsewhere. For example, there is the issue of the cereals. If it is a question of increased beer, there will be an increased use of cereals and a diversion of them from livestock feeding. That is an issue which we have been discussing recently in the House. The Chancellor seems to have disregarded entirely his duty with regard to that matter in order to meet the Treasury view that the only concern he need have is to raise the amount of revenue whatever the consequences. I will not discuss that any further, Mr. Bowles, since you have been nervous about the matter.
    Whatever the consequences to the moral condition of the country, I say that the consequences economically, from the point of view of the rebuilding of our economic structure, are thoroughly disastrous. I believe that most people understand this. I am in the happy position on this Finance Bill of being able to argue the question of beer, and the taxation upon it, without being charged with pushing my own fad, as people like to think it is. I am speaking now for what I am quite certain is the point of view of drinkers as much as it is the point of view of teetotallers.
    The resentment expressed about the Budget generally was engendered more by the Chancellor's willingness to lose revenue on beer and to take the risks I have referred to than by anything else in the Budget. I am not proceeding any further with the general criticism I have already voiced about the Budget, but I
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    say that this proposal was from the beginning a very dangerous one. Nothing has been said by any of the representatives on the Treasury Bench to justify it. I wish that the matter could have been reconsidered, but I am afraid that it is too late now.
    Lieut.-Commander Gurney Braithwaite: From time immemorial the Committee stage of the Finance Bill has included a Debate on this subject, certainly for all the time I have been in the House of Commons. Invariably there is a discussion on the merits and demerits of beer, both from the moral and from the financial standpoint. No one would complain for a moment of the remarks just uttered by the hon. Member for Ealing, West (Mr. J. Hudson) who has put forward a very important point of view, but I would make one comment upon his opening sentences which dealt with the contribution being made to this problem through the medium of the brewers' profits. The hon. Gentleman told us that in recent years the industry as a whole had made a profit of between £30 and £40 million. For once he rather under-stated his case, because I find that in the financial year 1947–48 the profit was, in fact, £49 million.
    One aspect of this matter is apt to be overlooked: namely, that the brewers receive no allowance for the depreciation of their public houses and other buildings which they can set off against their taxable income. They are, of course, already bearing a very considerable burden, because those depreciation allowances would, in fact, be very heavy indeed. I believe I am correct in saying that compared with pre-war figures—the hon. Member for West Ealing is probably also well aware of this comparison—the total of brewery profits after taxation are up by some 33 per cent., which, of course, is a considerable increase; but at the same time the cost of renewing and maintaining their property—public houses in particular—is up by something like 50 or 75 per cent. This aspect, therefore, must be borne in mind when we are discussing that particular contribution to the problem.
    It is natural that the hon. Gentleman should take exception to this proposal—we all know his views. Clauses 2, 3 and 4, of course, are all designed to benefit those who consume alcoholic

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    liquor—if beer can still be described as coming within that category; it certainly cannot any longer be described as intoxicating. Here we are up against a very old problem, as to how far revenue is to take precedence over social habits. Beer has become such a strong supporter of the Revenue over a number of years—it has beaten a number of records since the war—that not even the present Chancellor of the Exchequer, with all his ascetic and austere outlook, can be expected to withdraw such a prop. What we are discussing, therefore, is whether, from the revenue point of view, the reduction of 1d. per pint in the duty will be an efficient instrument with which to stem the decline in consumption. It is my opinion that it will do very little, if anything, in that direction. I say that in support of the observations of my hon. Friend the Member for Flint (Mr. Birch), who pointed out what is happening.
    4.15 p.m.
    With beer at its present price it is very unlikely that a man will be attracted to it by the reduction of 1d. per pint. Before 1939 a reduction of 1d. was a considerable item—indeed, it affected the price of a pint of beer very considerably—but at the present price of a pint of beer I am very doubtful whether the reduction of 1d. will stimulate consumption in the way that the right hon. and learned Gentleman evidently hopes that it will. We shall see as we go along, but so far—the new financial year is nearly three months on its course—there is very little indication that this proposal will have the effect desired. The right hon. and learned Gentleman has fallen between two stools, one of which is occupied by the consumer of this beverage and the other by the hon. Member for West Ealing and his friends. The Chancellor has got the worst of both worlds and, even at this stage, he might do well to reconsider the whole question.
    Dr. Segal: Can my right hon. and learned Friend assure us that there is no possibility of any evasion on the part of the brewers of the payment of the £4 million for which he has budgeted? Is it not within the bounds of probability that the brewers may, even now, reduce still further the specific gravity of the beer that is made available? Many of
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    us may doubt altogether whether the term "specific gravity" is correctly applicable to the present type of beer that is sold and whether the term "specific levity" might not, perhaps, be more appropriate. Is not this an obvious opportunity for evasion on the part of the brewers by still further lowering the specific gravity of the beer available for consumption?
    Mr. Erroll: I should like to deal partially with the point raised by the hon. Member for Preston (Dr. Segal). It seems a very unfortunate form of taxation whereby brewers' profits alone of companies' profits are singled out for a special and extra tax in this oblique manner. It has been claimed that the reduction in duty will be met partly out of brewers' profits to the extent of £4 million. That is really an additional form of tax on profits.
    The Chancellor of the Exchequer (Sir Stafford Cripps)The Chancellor of the Exchequer (Sir Stafford Cripps) indicated dissent.
    Mr. Erroll: The Chancellor may shake his head but it has been introduced with that very purpose in mind.
    Sir S. Cripps Sir S. Cripps indicated dissent.
    Mr. Erroll: It is surely a very bad type of fiscal device to employ, to insist on the draining away of £4 million worth of profits by means of a duty on beer. If profits are to be taxed more, then all company profits should be taxed and not just the brewers' profits.
    If there is scope for evasion by altering the specific gravity, that, of course, will alter the yield from the tax itself. What we have to do is, surely, to find out from the Treasury the purpose of the reduction. Is it to maintain approximately the same sort of yield from the consumption of beer, or to get an increased yield, which seems unlikely in present circumstances; or was it designed to stave off a steep falling away in the yield from this tax?
    What is wrong with beer today is the present gravity which is permitted. I am glad to see that the Parliamentary Secretary to the Ministry of Food is here, because I understand that the Ministry of Food have a good deal of control over the permitted gravities of beers which may be produced. We might, in fact, get a greater yield from the tax if beers of a heavier gravity were now permitted to be brewed and sold, because people would rather have one pint of a really good,

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    strong beer than two pints of a lighter beer. Brewers, however, are prohibited from producing the really strong pre-war beer. If stronger beer could be made available, not only might sales be higher but the yield in duty per pint would be greater, and the Chancellor might thereby be able to secure the revenue which it is his purpose to try to obtain.
    The manner of presentation of the case was singularly inept on the part of the Chancellor. To reduce the subsidies on food and at the same time to cheapen beer was certainly not a way to give the country the impression that taxation was intended to be fair. If the purpose of reducing the duty on beer was to secure revenue to maintain the food subsidies, it was an accounting transaction. The hon. Member for West Ealing (Mr. J. Hudson) might perhaps have gone to the people who complained to him and pointed out that it was merely an accounting transaction such as we have been told the tea duties were an accounting transaction, and they might have been satisfied. That is hardly likely and there is no doubt that the presentation of the case has been inept and has made a poor impression on the country.
    Mr. Norman Smith: I think the hon. and gallant Member for Holderness (Lieut.-Commander Braithwaite) was probably right when he said that there is yet no indication that the tax reduction is likely to lead to increased beer consumption and thereby fortify the revenue, but he should not overlook the fact that the former decline in consumption has been arrested. I find evidence of that in my constituency, where I am in the habit of getting it at first hand.
    I wish to correct one wrong impression which may have been made on the Committee by my hon. Friend the Member for Ealing West (Mr. J. Hudson) about the effect of beer taxation on production. My hon. Friend seemed to think that to increase beer consumption would reduce industrial production, but the expectation of being able to consume beer in the near future is an important factor in the morale of workers in factories and other places of production. I wish the Chancellor could have seen his way to go a little further in the reduction.
    Mr. Eccles: I am not sure, but I think £40 million-odd brewery profits, if averaged over pints, would run to between one eighth of a penny and one farthing per pint profit. If so, it is quite clear that the scope for taking profits is limited. I suspect that brewery charges have gone up very much during the last few years. Their costs of all kinds, like other costs, have gone up and the very large profits, which I fully agree they earned in the peak of the boom, really represent that maximum turnover which they are not having any more. The run down in brewery profits, which we shall see over the next two years may be severe. One or two balance sheets have already come out reflecting this big change. Even a 10 per cent. or 15 per cent. drop in the amount of beer consumed might have the effect of wiping out half or more of the profits of a brewery. I have no objection to making arrangements whereby the profit charged for any article like beer is a reasonable profit. If we can make arrangements of that kind it is all right. The whole principle of the Monopoly Commission is right, but I do not think that applies in the case of an article where the profit has been between an eighth of a penny and one farthing per pint. If those figures are not right, no doubt the Government will say so.
    What is more interesting is the argument of the hon. Member for Ealing, West (Mr. J. Hudson) about the principal reason for which we are asked to vote this reduction in the duty on beer. We must know from the Government whether their only object is to maintain the expenditure of money on beer, because the pattern of spending in the British household is already very distorted. I can imagine the housewife saying that she does not want so much money to go on beer every week. Here is the Chancellor of the Exchequer, with all the attributes of sanctity, using the revenue to maintain the amount taken out of the weekly wage packet to be spent in the pub. I wonder if that is not topsy turvy and whether it would not be better spent on food, or, for that matter, on rents.
    This is a very important question because, owing to food subsidies and the social policy which Governments have built up over the last 10 or 15 years, the

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    way in which a British family lays out money every week is far different from that in any other country. We spend far more on alcohol and tobacco than any other nation. What is clear is that the habit of smoking tobacco is much more difficult to break than that of drinking beer. Tobacco revenue keeps up and the Chancellor does not have to reduce the Tobacco Duty, but he is worried about the revenue from beer. What has brought about the reduced consumption of beer? Is it recent high taxes, or the general decline in earnings? Is it a disinflationery policy that has caused it? If so, what is the good of the penny per pint reduction?
    Does the Chancellor seriously think that the penny reduction will maintain his revenue? Is it wise at this moment to do that? Would it not be better, if the general interests of the country are that we should reduce costs of production and maintain as far as possible a disinflationery financing, to see that the amount of money spent on secondary necessities was somewhat restricted? This method may keep up the consumption and, if not, I cannot see what is the purpose for reducing the duty. We should have from the Chancellor a more fundamental explanation of what is his social policy in regard to beer drinking at this moment in the trade cycle.
    Mr. Beswick: There may be another reason why the amount of beer consumed is falling. It may be that the amount was artificially increased during the excitement of the war and that we are now naturally quietening down and the amount is decreasing. It would be appalling if the Chancellor endeavoured fiscally to try to get us back to the artificially excitable state there was—[Laughter.]—certainly, during the war and just after the war. I ask the Chancellor on what basis he calculates that the brewers will contribute £4 million out of their profits? Has there been some agreement by which £4 million will definitely be set aside, or has that figure been reached by calculating on the basis of the pre-Budget consumption and maintaining that sale at a penny a pint less than the pre-Budget rate? If that is the case, I do not follow my right hon. and learned Friend's argument that
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    by reducing taxation he hopes to maintain the income to the Revenue.
    I understand that in 1948 the brewers made a profit of £49 million as compared with £29 million in 1938. When some criticism was made in the country of that excessive rate of profit, it was stated in the monthly bulletin of the brewers which I and, I suppose, most hon. Members receive, that the increased £20 million was, "after readjusting the profits for taxation." In other words, the whole of the increased tax on profits had been paid for by the consumer and the shareholders had not contributed anything to the general revenue of the country. In my view they should have made the reduction of one penny a pint entirely out of their inflated profits. I can see that the brewers may have an interest in stimulating consumption by reducing the price of beer, but I think it quite wrong for the Chancellor of the Exchequer of this Government to endeavour to increase consumption by reduction of taxation.
    4.30 p.m.
    Mr. Selwyn Lloyd: I wish first to answer the argument of the hon. Member for Uxbridge (Mr. Beswick) about brewers' profits. The principal benefactor from brewers' profits is the Chancellor. He gets 10s. 1d. in the £ out of undistributed profits and 11s. 9d. in the £ out of distributed profits. He also receives Surtax from certain people. Therefore, it is probable that of this £49 million which has been mentioned the Chancellor receives £25 million, probably more. When there is this sort of talk of grossly inflated profits it should be borne in mind that the principal benefactor is the Exchequer; the Chancellor is a partner as to more than half the profits made.
    I seek to extract from whoever is to reply to this Debate a definite statement as to whether the purpose of this reduction is to seek to increase the yield of the tax or to maintain its yield. That is a simple question to answer. The Chancellor did not exactly say that in his Budget speech. I hope that the Financial Secretary will do so quite frankly because it will constitute a very important precedent for other Debates which we shall have in the course of our consideration of the Finance Bill.
    Mr. Hollis: I only intervene to reinforce one point which the hon.

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    Member for Uxbridge (Mr. Beswick) raised, about which I should like to be clear. Before I come to that, I must, in passing, comment on the most extraordinary charge which I have heard levelled against the Chancellor that his purpose is to create artificial excitement. What did the hon. Member mean exactly by artificial consumption during the war? I am not quite clear as to what is the precise distinction between the natural and artificial consumption of a glass of beer.
    I do not think that I need delay the Committee longer about brewers' profits. Several of my hon. Friends have adequately answered what has been said on that subject. What is forgotten in these charges is that the brewers receive no allowance for depreciation of their public houses, and therefore the mere quotation of figures does not get us very far. What is the basis on which this figure of £4 million as the cost to the brewers is calculated? It must be calculated upon a certain assumption about consumption. Is it calculated on present consumption, or on the assumption that there will be such an increase in consumption that the same revenue will come to the Exchequer despite the tax reduction, or on what assumption is the calculation made? It seems to me that it is an arbitrary guess at a figure rather than an exact estimate, unless it is based on a much more definite criterion than has so far been revealed to the Committee.
    Captain Crookshank: We have had an interesting discussion. Not the least interesting point was the Ruling which you gave earlier, Mr. Bowles, when you pointed out that this was a financial and not a moral Bill. I take it, therefore, that you meant that this is an immoral Bill; I could not agree with you more. Most of the Government supporters appear to take the same view. The Debate on this Clause opened with a very neat, elegant little speech by the Financial Secretary, which was purely factual. It told us this and that about the money but nothing about the reasons for the Clause, and it is those reasons which are material to our consideration of the Bill as a whole and of the financial policy of the Government in that regard.
    It is clear, in spite of the desires and hopes of the hon. Member for Ealing West (Mr. J. Hudson), that throughout
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    the history of the beer duties, they have never been put on by any Chancellor of the Exchequer in the form of a punitive duty directed against those who like to drink beer; in other words, it has never been a temperance tax. It has been an unfailing and bountiful source of revenue. I imagine—never having been Chancellor—that all Chancellors have, when the time has come to discuss their proposals before producing them in this House and placing them before the country, looked at the Beer Duty and said, "Today it is so much; I wonder what will happen if I increase it by 1d. or 2d. a pint? Shall I still get the same revenue, increased revenue or will a rise in the price be a deterrent, and therefore mean a loss to the Revenue?"
    That seems to me to have been the viewpoint of Chancellors, setting aside the period of artificial excitement to which the hon. Member for Uxbridge (Mr. Beswick) referred. I think that the period of artificial excitement to which he was referring was those few brief fleeting weeks just after the last General Election, when right hon. and hon. Gentlemen opposite were so elated, just as they are deflated today. That was when the artificial excitement was most noticeable. Setting aside that possible consideration, Chancellors have had to weigh up what was likely to be the effect, in terms of pounds, shillings and pence coming into the Treasury, as a result of any change in the duties on beer.
    This year we have had this reduction. I understand that it is expected in the long run to mean a reduction in gross beer revenue of £20 million. The Financial Secretary agrees that that is what it will cost the Treasury; it will get that amount less in a full year as a result of this reduction. The question arises, why is the Chancellor doing it? It is a question which I imagine has been asked particularly by those behind the Chancellor. At a time when he has checked the rising cost of food subsidies, people have asked, "Is it not rather strange that that should happen at the same time as the cost of beer is to go down?" That was the case of the hon. Member for West Ealing.
    That particular aspect of the argument has nothing whatever to do with the financial or budgetary aspect, which is that it is not worth maintaining a heavy

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    rate of tax if as a result, the Exchequer will not get the money it wishes to receive. In spite of Socialist economics there is still such a thing as the law of diminishing returns, and a rate of tax can be kept high while less and less gross tax is obtained as a result. Is that what has moved the Chancellor in this case? If that is the reason, it has, as my hon. Friend the Member for Flint (Mr. Birch) pointed out, a great bearing on the whole of our financial position, if we have reached the stage in which the disinflation has had such an effect. Or is there an entirely different reason? I have not thought of a third reason; there may be others. Is the reason the fact that the right hon. Gentleman, contrary to all his apparent traditions, has thought that he would like to make a gesture to those who like a pint, and that it would be nice to reduce the cost of their favourite beverage—a little less austerity in the public house or elsewhere? Is that the argument?
    I hope that we shall be told whether the reason is the first which I mentioned, the law of diminishing returns, whether the tax has reached too high a figure, whether the Chancellor feels that it is the effect of the disinflationary policy which is responsible for the reduction in the consumption of beer. I should like the Financial Secretary to address himself to the question of whether he is quite satisfied from that point of view that the 1d. is any good. Ought not the reduction to have been 2d. for it really to have had some effect? The hon. Member for South Nottingham (Mr. Norman Smith) is more knowledgeable on this matter than I am; perhaps he could have told us whether he thinks this drop has caused any increased consumption in the circles in which he tells us he is accustomed to move. I have no personal evidence, but from what I have been told this reduction does not seem to have made much difference.
    If the Chancellor is trying to bolster up the Revenue from this duty he has a very difficult problem before him, because the figures I have been given show that in the first quarter of this year compared with the same period last year the drop in consumption was as much as 18 per cent. Has there been any change in that trend? Some little time has elapsed since the
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    Budget, and it might have been possible for the Treasury to have got some figures to show what has happened in the meantime. We should all be grateful to receive such figures from the Financial Secretary, because, while all of us who have been engaged in these financial Debates for a long time know that the subject of beer is apt to be one of the topics frivolously treated, it still remains one of the great pillars of the Revenue. It is not one of the things about which the Chancellor or the Treasury can afford to make any mistakes, because they rely so enormously upon the consumption of beer for the money which is required for their grandiose and somewhat stupid plans.
    If this penny drop in the price of beer has had any effect in checking the drop on consumption already setting in, it would possibly be some justification for it. even at the cost of 20 millions in a full year, but if it has had no effect it seems to me that it is a comparatively stupid proposal, because it has not gone far enough in satisfying those who require, desire and are entitled to enjoy their drink of beer from time to time; nor does it satisfy the West Ealing brigade who want to prevent anyone drinking anything at all: nor does it satisfy the needs of the Revenue. Therefore, it is not only a question of falling between two stools but of three stools or as many stools as one can think of and then double the number.
    I hope the right hon. Gentleman will tell us—he did not do so in his opening speech, but perhaps he wanted to hear what we had to say on the subject—exactly what is the purpose of this reduction. Perhaps he will tell us, whether it has had any effect whatsoever upon consumption, because that is a very material consideration to the whole financial position and the plans enshrined in this immoral Bill.
    Mr. Glenvil Hall: Apart from my hon. Friend the Member for West Ealing (Mr. J. Hudson), many members have changed their point of view since we discussed this matter last year. When my right hon. and learned Friend the Chancellor of the Exchequer put an extra penny on the pint, I remember the speeches that were made from almost every quarter of the House, and certainly from the Benches opposite. They would have led a listener to believe, that he had done

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    an extraordinary thing. If I understood some of the speeches made today, they mean that by taking the penny off he has done something which will have no effect whatever, either on the working man, his pocket or in any other direction. The reasons why my right hon. and learned Friend has reduced the excise rate on beer were very simple—he wanted to reduce the price of beer as beer itself enters into the cost-of-living index, and it would help to keep the cost of living steady, and because, according to the view expressed last year from the benches opposite, it was much too high.
    I was asked whether in the figures that have been given my right hon. and learned Friend was banking on an increase in consumption. If nothing had been done to change the rate it was expected that consumption would continue to fall. During the last six months it began to fall, but I am told that now, due to the fact of the action of my right hon. and learned Friend, that fall has stopped. Whether it will mean that consumption will begin to go up, it is too early to say, but what does appear to be plain is that the drop which was certainly beginning to show itself has now been stopped.
    4.45 p.m.
    In 1948–49 the revenue from this duty was £307¼ million, and the pre-Budget expectation for the current year was £297 million. This figure will now, we expect, because of the reduced rate in operation, come to about £279 million, making the cost to the Exchequer during the current year £18 million, and in a full year, as the right hon. and gallant Gentleman the member for Gainsborough (Captain Crookshank) said, £20 million.
    The only other point of any substance which was made was whether it would not have been possible for the brewers out of their profits to make a reduction of 1d. a pint, with my right hon. and learned Friend making no change at this time. The hon. Member for Chippenham (Mr. Eccles) dealt with this point in particular. Although I cannot off-hand check the figure he gave, I can say from all the information at my disposal that it would have been impossible for the brewers to make a reduction of a penny in the pint out of their profits. Therefore, it was necessary, if this reduction was to be made, that my right hon. and learned
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    Friend should make some change in the incidence of excise duty so that the Exchequer and the brewers between them could give to the consumer this relief of a penny on the pint. That is the story and nothing more. On reflection hon. Gentlemen will agree that this concession will mean money in the pocket of the working man who will be grateful to my right hon. and learned Friend for it. I also hope that with other things it will help to keep the cost of living steady.
    Mr. Stanley: We have listened to the Financial Secretary give an explanation of this change which is quite staggering. Let me recall to him exactly what it is that he has said. He has told the Committee that the purpose of the reduction in the Beer Duty at the cost of £20 million is to cheapen beer, because beer enters into the cost-of-living index, and, therefore, the Chancellor feels that by giving this concession he is doing something to keep the cost of living steady. When that is combined with the fact that at the same time the Chancellor, in dealing with the food subsidies, is making a rise in the cost of living, is this not an extraordinary explanation?
    If the Chancellor wanted to spend £20 million on keeping the cost of living steady, would it not have been much better and much more direct to allow an extra £20 million for the levelling out of the food subsidies which are to be cut than to use this money to reduce the duty on beer? I see the Parliamentary Secretary to the Ministry of Food sitting there. Let her advise us as to the food content which might be obtained for this £20 million. Does she think that there is a greater food content in the extra amount of beer which people will be able to drink because of this £20 million a year, or does she not see that the normal man and the housewife would much prefer to have some of the articles of foodstuffs whose prices have had to be increased owing to the decrease in food subsidies?
    Mr. Warbey: Is the right hon. Gentleman advocating that the food subsidies should be increased by £20 million in contradiction to everything which has been said by hon. and right hon. Gentlemen opposite?
    Mr. Stanley: I am saying that if I had to set out to keep the cost of living steady

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    I would prefer to do it by putting £20 million more on the food subsidies than by taking £20 million off the cost of beer.
    Mr. Glenvil Hall: I have not the slightest doubt that when the right hon. Gentleman makes an assertion of that sort he has himself investigated the figures and seen just how various items in the cost-of-living index weight the figure. Perhaps he will tell the Committee how he would apportion this £20 million so that it would have a quarter of the effect on the cost-of-living figures?
    Mr. Stanley: Does the right hon. Gentleman think that the increases which have had to take place in the prices of certain articles of consumption because of the stabilisation of the food subsidies, are of less importance to the housewife than a fall in the cost of beer? That is the argument which he has put to the Committee.
    I started by saying that this was staggering because it is an argument which has never before been advanced in favour of this proposal, and I think that after the right hon. Gentleman has resumed his seat it will never be advanced again. Surely, it is nonsense. No one really believes that the Chancellor of the Exchequer embarked upon this reduction of the Beer Duty because he thought that it was the best way of keeping the cost of living steady.
    Mr. Beswick: If it be that an expenditure of £20 million on the food subsidies would have kept the cost of living down, would the right hon. Gentleman say what would have been the effect on the index figure if the food subsidies had been reduced to negligible proportions?
    Mr. Stanley: That is wholly irrelevant. I think that the hon. Gentleman must still be living in that era of artificial excitement to which he referred earlier.
    This is a serious subject and I wish to ask whether some member of the Front Bench cannot give us what I believe to be the right explanation. I hope that the Economic Secretary to the Treasury will give us what I think is the explanation of this change in taxation. As far as I can see, there can be only one explanation. It is the one that we have always assumed. This has not been done to benefit the beer drinker; it has not been done as
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    a gift to the housewife, nor has it been done, as the Financial Secretary in his closing remarks movingly told us, to earn the gratitude of the worker. It has been done because unless this reduction was made there would be a further progressive fall in the revenue obtained from the Beer Duty. To me that is a logical argument. Regarding this purely as a question of revenue, I can see that it is the sensible thing to do. Although all appearances are against it, I still prefer to assume that in this matter the Government have done what is the sensible thing.
    But assuming that that is the real explanation, it presents to the Committee and to the country certain anxieties for the future. It means that one of the chief sources of revenue is beginning to fail; that desperate steps must be taken to maintain it, and that other equally important sources may go the same way. We may be faced in subsequent Budgets with further reductions in the duties on certain articles not because they bear particularly hardly on the individual, not because those reductions are necessary for some branch of the national economy, but because without them, it will be impossible to sustain a falling revenue. When hon. Gentlemen combine that fear—a fear brought vividly to our minds by the Clause we are now discussing—with the fact that when we are entering into an era of falling revenue we are going on with the process of an automatic increase in expenditure, we can see full well where the country is heading if it remains under the financial guidance and control of the Financial Secretary to the Treasury for very much longer.
    Mr. Charles Williams: I congratulate the Financial Secretary on something quite new and original. But I wonder what the thousands of good teetotallers in Northern Cornwall who returned a Liberal who now supports the Socialist Government, will think of this reduction in the price of beer and the argument that to reduce the duty on beer helps to reduce the cost of living.
    Mr. Glenvil Hall: I allowed the right hon. Gentleman the Member for West Bristol (Mr. Stanley) to get away with that, but I do not think that I should allow the hon. Member. That was not my principal point. It was incidental.
    Mr. Selwyn Lloyd: No.
    Mr. Glenvil Hall: Yes, it was incidental.
    Mr. Williams: If it was not the right hon. Gentleman's point, all I can say is that his remarks were almost meaningless. I assumed that he had a point because I saw that he read his speech. It must be right to assume that somehow or other between reading what was handed to him and the delivery of his speech he made a mistake. At any rate, in some way or other the cost-of-living index is a point which weighs in the reduction of this beer duty. I think I have the right hon. Gentleman's assent to that. It is a most extraordinary position that when the Government propose to reduce the duty on alcoholic liquor they must consider whether it will affect the cost-of-living index.
    I have always taken the point of view that the duty on beer was too high. In consequence, I agree with this Clause, but there are large numbers of teetotallers who think that beer drinking is extremely wrong. I entirely disagree with them. They are wrong in their idea. However, many of them supported Socialists at the last election. For instance, Plymouth returned three Socialists. Had any one of the teetotallers who voted for them the least idea that the Socialist Government would reduce the duty on beer because it had something to do with a reduction in the cost of living? This is a most remarkable position. I really am extremely sorry for some of the hon. Gentlemen opposite when they have to go back to their good constituents and explain the position to housewives and people of that kind.
    5.0 p.m.
    There is a further point, and it is that I assume that this reduction was made on this high moral basis of reducing the index figure of the cost of living, and that it was done as a sort of preliminary—nothing to do with electioneering purposes, of course—for that high moral standard which was produced at Blackpool the other day. It really is a new one on me and on the Committee that this high moral outlook is ultimately based on the reduction of the price of beer in order to bring down the cost of living. That is something on which the hon. Member for Ealing, West (Mr. J. Hudson) will now be able to make an entirely
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    new speech, in which he will be able to tell his astonished constituents in future that we are now starting upon a new Socialist campaign based upon cheaper beer—not better beer, but cheaper beer—as part of a plan for a new high moral standard based, as someone once said of the Socialist Party, on the type of speech made by certain Nonconformists.
    That is the new outlook of the Socialist Party, and the largest plank in its platform is cheaper beer to produce a lower cost of living. That aim is still not quite clear in the mind of the Financial Secretary, though it is in our minds. I notice that the right hon. Gentleman the Member for Dumbarton Burghs (Mr. Kirkwood) is listening to me with great attention, and I am wondering whether he could not make a wonderful speech on the subject of the Spirits Duty, asking the Government to reduce the taxation on whisky as part of their movement for higher moral standards, because it would definitely help to reduce the cost of living in Scotland.
    We have had a remarkable speech from the Financial Secretary. Every time the right hon. Gentleman speaks, he makes me think of "Alice in Wonderland," and I assure him that he has not in any way departed from the position which he has taken up or from the character with which I have always associated him—the Mad Hatter.
    Mr. Pickthorn: The right hon. Gentleman the Financial Secretary intervened just now and used the word "incidental," and I thought that that intervention went very far towards muddling what he previously said. If it did not make it more muddled, it went some way towards inspissating the blackness. I think it went so far that the Committee is now really entitled to ask him to explain what "incidental" means.
    The Committee will permit me to remind the right hon. Gentleman that he was asked what was the reason why the Treasury, or the Ministers responsible for the Treasury, wish to reduce the Excise Duty upon beer. That was the question put to the right hon. Gentleman—what was the reason? We have now been given two reasons: (a) to reduce the price of beer, and (b) to lower the cost of living, that is, the official formal

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    index figure of the cost of living. If these words mean anything at all, they mean that, in the language used by persons other than himself, he wants to regard the desire to do something as a reason for having the desire to do it. These words can convey nothing else than that the reason was to reduce the formal cost-of-living index figure. That was all, and that was the only reason he gave.
    But now, he gets up in the middle of somebody else's speech and says that he only meant to say that it was incidental. Surely, he ought now to tell the Committee what he means by "incidental," and, if it was incidental, what is the reason for the reduction? If the reason for the reduction is not what he told us before, that is, to cut down the official cost-of-living index figure—if that is not the reason, but is merely incidental in the ordinary sense of the word—what is the reason? We have had so far no answer at all, and it really is due to the Committee that we should be told what it is.
    On the other hand, if what the right hon. Gentleman first said is right, that is to say, that the reason is that it is worth spending £20 million in order to lower the paper figure of cost of living, then, is it to go on being done in this way? It does not, on the face of it, seem to be what the ordinary common sense of the community would take for granted that the best way of keeping down the cost of living is to make sure that people do not spend less on beer. If that is the reason, does he mean to go on doing it? Does the Chancellor mean to go on, I will not say staggering, but pottering round after the pub crawler, reducing the duty by a farthing or a penny every time the pub crawler looks as if he is going to stop crawling? Is it really the best possible way to keep down the cost of living to spend £20 million on keeping up the consumption of beer, because that is really what the Financial Secretary told us? If that is not the best possible way of keeping down the official figure of the cost of living, then surely we are still entitled to some explanation from the Treasury Bench.
    Question put, and agreed to.
    Clause ordered to stand part of the Bill.

    Clause 3.—(CONTINUATION OF DUTIES ON HOPS, ETC., AND BEER.)
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    Mr. C. Williams: This is a rather important Clause, which covers a rather large field. I feel sure that the Chancellor of the Exchequer, now that he is back after having refreshed himself with a cup of tea—having missed the speech of the afternoon, which was made by the assistant master in the absence of the schoolmaster, and caused no little excitement among his back benchers—will explain to us what it means. I am glad to see that the right hon. and learned Gentleman is taking notice of that memorable speech, which no doubt added enormously to the high moral standards of the Socialist Party. Will the Chancellor undertake to explain to me what Clause 3 means, because I really do not know what is meant by it?
    Mr. Glenvil Hall: This Clause continues for another four years from 16th August next the Customs Duty of £4 per ton in respect of imported hops. This duty was first imposed in 1925 and it comes up, as I think hon. Members will remember, every four years. The present duty ends on the 16th August next, and unless the Committee gives its assent to this Clause, the duty will then lapse. There is a preferential duty of two-thirds of the full rate on Empire hops.
    Mr. Williams: I must thank the right hon. Gentleman for his explanation, which I can assure him is quite right. I know that this particular duty goes back to 1925, and the only quarrel which I have about it is not that it was done in 1925, because that was one of the thousands of good things done by the Conservative Party between the two wars, but that it might be better now, when every hon. Member on both sides of the Committee is agreed about the value of this duty, to renew it for a period of 10 years so that it is not necessary to do it quite so often. Can he give us an assurance that after the next Election we shall not find the Socialist Party in Opposition and opposing this duty? I just put that point of view because they said some very naughty things about us, and I want to congratulate them on being

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    converted to this commonsense Conservative point of view on this particular duty.
    Question put, and agreed to.
    Clause ordered to stand part of the Bill.

    Clause 4.—(WINES.)
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    Mr. Birch: I do not think it will be possible for the Financial Secretary to make such a big gaffe on this Clause as he made on the last one, because, as far as I know, the cost of wine does not appear in the cost-of-living index, although some of the same considerations which apply to this duty apply also to the Beer Duty. I think that part of the Chancellor's Budget speech which dealt with the taxation of wine was clearer than the part which dealt with the taxation of beer. When he was talking about wine, he used these words:
    "The receipts from the duties on the cheaper kinds of table wines, those taxed as 'light wines imported in cask,' have fallen off very sharply in the last few months. I propose to make a substantial reduction in these duties, and I hope that this will, in due course, bring about an increase in consumption. …"
    Therefore, it was perfectly clear that his object was, first, not to pull down the cost-of-living index, but to get more revenue by lowering the price, and, secondly, as he pointed out, to do something to help Western Union. At the end of his remarks on wines, he added:
    "I cannot extend the scope of this concession to any wines other than those falling within the definition."—[OFFCIAL REPORT. 6th April, 1949; Vol. 463, c. 2100.]
    That is to say, that heavier types of wines and wines imported in bottle were not affected in any way by these reductions.
    The history of the Wine Duty is as follows. Before the war, it was 4s. a gallon on light wine and 8s. a gallon on heavy wine. Before the reduction imposed by this Budget, the duty on light wine was 25s. and on heavy wine 50s. a gallon, showing an enormous increase over pre-war. On top of that, there was an extra duty of 2s. 6d. a gallon on wine imported in bottle. The effect of this taxation has been that the consumption of all wines is running, I believe, somewhere between 50 and 60 per cent. of what it was before the war, and that of heavy wines is running at something like 30 per cent. of the pre-war figure, that is
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    to say, less than one-third. Therefore, I think the Chancellor was clearly wise to reduce taxation which was killing its own object.
    But again, as on beer, we should like to ask a few questions. The first is, is the duty fall likely to be enough to stem the reduction in consumption? The Chancellor thinks it is, and we should like to hear something about what has happened to the consumption of light wine since the duty was reduced. I should also like to know why no reduction has been made in the duty on heavy wines. The Chancellor said:
    "I cannot extend the scope of this concession to any wines other than those falling within the definition,"
    and he gave no reason why he could not. As the consumption has gone down more heavily than in the case of light wines, one would have thought, on the face of it, that a reduction of taxation was necessary in order to preserve the revenue. Again, why is there this prejudice against the jug and bottle department? Why do not wines imported in bottle, quite regardless of their strength, get the benefit of the reduced duty? I cannot think of any reason at all except one, and that is that the whole of this business is really a "Strachey Relief Fund," to get rid, in some way or other. of all that Algerian wine sitting in bond which was bought at the wrong price and about which we can hear so little because whenever we raise the subject we are told that it is against the public interest to disclose the facts. There is no doubt that, in buying this wine, the right hon. Gentleman out-kitchened the Kitchen Committee.
    5.15 p.m.
    It seems to me that there are three considerations which should prompt us to look very carefully at what the Chancellor is doing. The first is the one I have touched on, the question of revenue. Will the reduction, substantial as it is, in the duty on light wines be enough to keep up the consumption? Secondly, on the revenue question, if we tax heavy wines and bottle wines at this rate, will the consumption not continue to decrease very heavily, and, therefore, will not the revenue go down? That is the first revenue consideration.
    The second consideration which we should bear very much in mind is one

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    which the Chancellor himself mentioned, the question of trade within Western Union. There is no doubt that all the countries in Western Union, including Portugal, and particularly France and Italy, attach very great importance to their exports of wine which are extremely important for their economy. This is one of the ways in which we can stimulate freer trade within Western Union, and, therefore, there is an obligation upon us to do it. It would hardly be felt that we sincerely believed in Western Union if we did not arrange our taxation policy, as far as we could, to help our friends and Allies in those countries.
    The third consideration, which particularly applies to France, is this. Under little Marshall Aid, as I understand it, owing to the deficit in the French balance of payments, we are, in fact, financing them for nothing. If we buy more wine from them we, in fact, reduce France's adverse balance, and thereby reduce some of the credits we have to extend to her in view of her difficult position. If, therefore, we refuse to import wine from France, and if we say, as the Chancellor once said, that they have nothing we require, all we are doing is to give them money for nothing and to reduce our own revenue over here. That does not seem to me to be a very sensible thing to do.
    Before leaving this Clause, we should also like to have some explanation of Subsection (2), on the question of the Ottawa Agreements. It says:
    "If at any time the Treasury are satisfied that an increase … would not contravene any of the Ottawa Agreements …"
    I should like to know on whose representations the Treasury act. How do the Treasury become satisfied that these agreements are all right if they are not already satisfied by their study of these agreements? There may be some special reason, but I should like to know what it is.
    I cannot leave this subject without a brief reference to the Liberal Party's attitude on this matter. Its members are ready on their benches, keen to make their contribution, but it will be within the recollection of the House that on the Report stage of the Budget Resolution they voted against the reduction on the Wine Duties. Gladstone very much hoped to make this a wine-drinking
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    country, and Cobden's French Treaty of 1860 was a classic triumph which reduced duties on wines and stimulated our exports to France. Tariff reductions these days are very rare things. We had a statesmanlike action in the last Budget when the duty on prunes was reduced, but I can think of no other case except this, where a tariff has been reduced.
    What did the Liberals do on this great occasion? For the first time in history all nine of them went into the same Lobby to vote against the reduction in the duty and for the cause of trade restriction. I do not know why they did that. They might give as their reason that they objected to wine prices going down while food prices went up, but that cannot be the reason of their leader the right hon. and learned Member for Montgomery (Mr. C. Davies) because the whole theme of his speech was that subsidies ought to be reduced and food made more expensive. Therefore, they are attempting to punish the French because the price of food has not been further increased.
    The Liberals are always dilating on their special virtues, and I very much hope that next time they make their usual peroration on free trade they will add that on one of the few occasions when a step towards freer trade was being taken, they solidly voted against it. Returning to the main question, I hope that we may have answers to the financial points on the stimulation of trade, the Western Union point, and the Marshall aid point that, in fact, we should not have to pay for these wines anyway.
    Mr. Dodds-Parker: I should like to add to what my hon. Friend the Member for Flint (Mr. Birch) has said about the intention to stimulate a certain amount of trade between this country and Western Union, and in particular with the Empire. Before the war there was a differential between Empire wines and wines from France, which gave such an advantage to the Empire wines that they could find a ready market. I think hon. Members on both sides of the Committee will agree that throughout the war the Empire played the greatest part in producing wines which we in this country consumed, because the Empire was the only place where we could get wines, and therefore they built up a considerable output. When

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    the Chancellor or his predecessor decided to raise these duties, it was done without increasing the differential on the Imperial preferential rate.
    The Chancellor of the Exchequer (Sir Stafford Cripps): The hon. Gentleman is quite inaccurate. We increased it last year to a differential of 10s. on Empire wines.
    Mr. Dodds-Parker: On heavy wines, but I think the Chancellor will agree that on light wines——
    Sir S. Cripps: The vast majority of Empire wines come within the heavy category.
    Mr. Dodds-Parker: We happen to be discussing light wines. I hope the Chancellor will not draw one of his red herrings across the subject under discussion. We are discussing light wines on which the Imperial preference has remained the same as it was before the war, I believe. In spite of increases in duty, that differential remains the same, but the cost to the consumer is such that, the taste being what it is, the Empire wine is prejudiced. I cannot see how under the present system there is likely to be any encouragement to the wine-producing industries which have grown up in the Empire and which had considerable encouragement during the last 10 years or so. I ask the Chancellor, when considering these rates, to see whether it would be possible to increase the preferential rates and thus once more give the Imperial wines sufficient differential so that they can have a better market in this country.
    Lieut.-Commander Gurney Braithwaite: It is necessary to ask a few questions about this Clause because on this occasion we have had no introductory remarks from the Financial Secretary. We assume that the object of this proposal is not to steady the cost of living or to earn the gratitude of the working man. It seems to deal with rather another aspect of the revenue than that. I feel that my hon. Friend the Member for Flint (Mr. Birch) is probably right when he describes it as an "Algerian Clause." I am sorry that the Parliamentary Secretary to the Ministry of Food is no longer present, because I think she could have been helpful. We understand that the Minister of Food is still what is known in other trade circles as a "stale bull"
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    of very large quantities of Algerian wine which have been bought at the wrong price for which the taxpayer has had to "carry the can" back.
    Mr. W. J. Brown: Carry the cask back.
    Lieut.-Commander Braithwaite: I am obliged to the hon. Member. However, as opposed to Clause 2, let us move from the practical to the theoretical. There is all the difference in the world between the cost of beer and of wine, which in these days and at these prices has become largely a matter for epicures who, of course, eschew the Algerian imports of the Minister of Food. But if we come to the other aspect of the matter, surely we are dealing here with the same problem as that which we were discussing on the beer duty a few minutes ago—namely the problem of revenue. When the Chancellor of the Exchequer introduced his Budget in April we understood that he had two main reasons for reducing the duty on light wines imported in cask: that consumption had been falling off very sharply as in the case of beer and he hoped a reduction in duty would benefit the Exchequer, and that he hoped to assist our trade with France and with the wine producing countries in the Empire. Those were his main reasons as we understood them.
    So far as the first objective is concerned, the right hon. and learned Gentleman does not seem unduly hopeful, because he used these words:
    "If there were no counter-balancing rise in consumption, the initial effect of these reductions would be to reduce the revenue by £1 million a year, but I expect that the eventual loss will be much less than this."—[OFFICIAL REPORT, 6th April, 1949; Vol. 463, c. 2100.]
    But does he anticipate any gain? That did not appear to be the case when he addressed us on that occasion. It is worthy of remark how sharply these duties have risen since before the war when duties on foreign wines were 4s. a gallon for light wines and 8s. a gallon for heavy. These duties now stand at 25s. for light and 50s. for heavy, and one must also take into account 2s. 6d. a gallon additional for wines imported in bottle. The right hon. and learned Gentleman now seeks to reduce the duty on light wines imported in cask from 25s. to 13s., which obviously leaves a very wide margin between the light wines im-

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    ported in cask and any other kind. It is interesting to note that at present the consumption of heavy wines has fallen far more than the consumption of the others. For instance, port is as low as 30 per cent. of pre-war consumption, while the average for wines of all types is between 50 and 60 per cent.
    I do not think there is any doubt that this new concession is desirable. It will encourage trade with France and indeed with the Commonwealth. Although the amount of Commonwealth light wines imported is relatively small, I understand that some 90 per cent. of their export to us is imported in cask, and it would also help to build up the home bottling trade. Those seem to us on this side of the Committee to be the main advantages of the proposal. Before we pass this Clause, we should like to hear from the Government whether any gain is anticipated in the revenue from the steps which the Government are now taking.
    Mr. J. Hudson: I should like to say a few words on the subject of wine from the point of view of the arguments which were advanced by the Financial Secretary on the last Clause we discussed. I do not know whether he will say anything about the cost of living. The general belief of hon. Members opposite seems to be that this question cannot be related to the cost of living. Yet, if wine-drinking is justifiable, I do not know why it should not be related to the cost of living. I should like to know whether the Government assume that wine-drinking will always remain the privilege of the few—that is, on the assumption that wine-drinking is necessary.
    5.30 p.m.
    I have listened on more than one occasion to my hon. Friend the Member for Bilston (Mr. Nally)—not that I agree with him—who has said that he looks forward to the time when the working-classes will be connoisseurs of wine in the same way as the privileged classes whom hon. Members opposite represent. By State policy we are deliberately reducing the cost of wine in order to help France. How do we suppose we shall help France unless a lot more people drink wine? Or are we to assume that the small number of people who are drinking the wine will be the same num-
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    ber but that they will drink a great deal more? What justification could there be for a Labour Government to support that result of this action?
    If it were necessary for the right hon. and learned Gentleman to argue that there should be this cheapening of beer because the cost of living required it, then it is just as necessary that the same argument should be applied to wines. In fact, I do not know where the Front Bench are to stop now that they have let loose this cost-of-living argument. In view of the fact that there are so many people engaged in football pools, in a little while we shall be backing up the football pools in reducing or raising the tax—I do not know how their argument will run—on the basis of the cost of living. I want to tell the Chancellor of the Exchequer the sort of hole he is left in by the argument his Financial Secretary has been advancing.
    I sympathise with the Financial Secretary because he had nothing else to call in aid in view of his position, but I feel he has landed the Government in an even worse hole; and, as I have said all along, they have been in a hole from the beginning on the question of these taxes on alcoholic beverages. They have been in a hole all along through an attempt to associate what people can well do without, whether it be wine, beer or any other alcoholic beverage, with an argument concerning the cost of living. That argument is too sacred for Members on these benches to play with. We have built most of our great cases on the cost-of-living argument and on the necessity for a better standard to be provided for the people, because there was something involved in that argument, but to associate it with this question of alcoholic beverages is, in my opinion, a most deplorable mistake. I hope the Treasury will think again before they provide arguments of the sort to which we have had to listen.
    Mr. Spearman: I think the telling logic of the hon. Member for Ealing, West (Mr. J. Hudson), will be almost as effective as the admirable speech of my hon. Friend the Member for Flint (Mr. Birch). My hon. Friend made a plea to the Chancellor of the Exchequer, although perhaps the word "plea" is not one which one associates

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    with my hon. Friend's expressions, for they are always more of a robust than a gentle nature; he made a plea to the Chancellor that he should encourage the consumption of wines of the better qualities as well as of the cheaper qualities in this country because, after all, we are not paying for these imports from France with fresh exchange, as my hon. Friend said, but are Using up credits that otherwise we should have to give them. If that is the case, surely by encouraging wine in this country not only do we give pleasure, as my hon. Friend said—because, unlike the hon. Member for West Ealing, I consider it harmless and indeed admirable—but we also are increasing the revenue of the country.
    Thirdly—and this is a fresh point which I wish to make in support of my hon. Friend—we are surely mopping up purchasing power in this country; and "mopping up" is a very appropriate phrase. I would remind the Chancellor that it is not very long ago that he told the House that inflation was still an evil. He said:
    "Inflation is not an evil that, once checked, disappears: the threat remains, and we must be on our guard against it."—[OFFICIAL REPORT, 6th April, 1949: Vol. 463, c. 2077.]
    The Bulletin for Industry, published by the Economic Unit of the Treasury in June, 1949, states:
    "Consumer demand shows little sign of falling away. Total personal expenditure rose quarter by quarter last year to a record high level."
    If we can use up some of that purchasing power which is putting a strain on the economy of the country by threatening an inflationary situation; if we can use that up by buying goods from abroad without expenditure of further exchange, then surely we are doing these three things: giving pleasure to the people of the country, increasing the revenue of the country and diminishing the fear of inflation. On all accounts it would appear to be an admirable course to take to encourage the consumption of wine in this country.
    Captain Crookshank: I do not want to keep the Committee from the Financial Secretary for one minute, but I think he would like to know that we do not propose to divide the Committee against this Clause, because we voted with the Government on the subject at the Report stage. I think it is worth pointing out,
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    however, that when we had the Resolutions of the Committee to consider the other day there were Divisions, initiated by the Liberal Party, both on the proposed changes about beer and those about wine, but that none of the Liberals has been present during the whole of these Debates. Therefore, we have no idea why they put both us and the Government to the inconvenience of Divisions on that night, and I hope it will be noted as an act of irresponsibility on the part of one of the groups in this House.
    If, as I take it, we are dealing with the Clause from the purely budgetary point of view, the point is, as I understand it, that the present rate of tax has been so high that consumption has fallen and, therefore, the tax is defeating its own ends. So far as that purpose is concerned, I imagine that the figures produced by the Treasury show that the change is justifiable. I think it is of interest to the social student to note that it was a Socialist Chancellor of the Exchequer who made use of the words:
    "I hope that this will, in due course, bring about an increase in consumption.—-[OFFICIAL REPORT, 6th April, 1949; Vol. 463, c. 2092.]
    I put aside the arguments advanced by the hon. Member for West Ealing (Mr. J. Hudson), because his point of view is somewhat different from that of most hon. Members. It is interesting to find the point of view which I have mentioned put forward from those benches because it goes to destroy the theory that to drink wine is somehow the sin of wealth. It is not. In most countries, or at any rate in a great number of countries in the world, particularly in Europe, wine drinking is an ordinary custom of the country. It is a custom which has not been introduced here, although in point of fact the Romans produced wine a very long time ago and we still have relics of the places where they did it, but in modern times the drinking of wine, except, of course, the port and sherry trade in the public house, has been rather limited—and there are sweets, although nobody could call that wine. Perhaps I had better not describe it; it is not what, in his less austere days, the right hon. and learned Gentleman would have considered a nice glass of wine.
    If the custom of wine drinking spreads to any extent I think it will help to bring our people somewhat more into line

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    with those with whom they will be very much concerned in the Western Union of the future. In so far as this will help to increase trade, particularly if it comes to us as imports without our having to pay exports—and I understand a good deal of this is being charged up against old debts—then to that extent, as my hon. Friend the Member for Flint (Mr. Birch) pointed out, we shall be receiving something from a lot of countries from whom otherwise we might not receive anything.
    I agree, however, that I should have liked some explanation why the change has been made only in light wine. Why have we forgotten our oldest ally of all, Portugal, who will get nothing whatever from this Clause? I hope it is not because of the political prejudice of hon. Members opposite, because sherry comes from Spain, and no concession is being made to heavy wines. They must bear in mind that, of course, wines of that type have been very much developed during the war in our Dominions overseas. I am perfectly certain that very few gatherings in this Palace could have functioned in recent years had it not been for South African sherry. I should like to know why that difference has been made, particularly in view of the budgetary argument that, because there has been a great falling off in consumption there has been a falling off in revenue. The fall in consumption, down to 30 per cent. of the pre-war rate, has been greatest of all in heavy wines, and nothing has been done to rectify that. I hope that is not because of any form of prejudice. I do not see why it should be.
    However, to go back to the class of wines consumed in public houses, it is that type of wine rather than the light wines that are consumed at ordinary bars. I hope that the right hon. Gentleman has some explanation of that point. On the whole, it seems to us that, in view of the drop in revenue, and in view of the desire to help our European friends, he has acted on this occasion quite sensibly. There are many other things he might have done, but so far as he has gone he has, at any rate, not incurred our displeasure. For that reason we shall not divide the Committee. We live in hopes that we may have the reason given us by some member of the Liberal Party why they felt the way they did on the other occasion.
    Mr. Glenvil Hall: I am sure that the right hon. and gallant Gentleman will not expect me to deputise for the Liberal Party.
    Mr. Birch: The right hon. Gentleman does it admirably.
    Mr. Glenvil Hall: I can only deal with the reasons why my right hon. and learned Friend has inserted this Clause in this Bill. Perhaps, before I come to say briefly why a reduction is proposed I may clear out of the way a question put to me by the hon. Member for Flint (Mr. Birch), I think it was, who asked if I would explain why subsection (2) is where it is. All that subsection does is to recapitulate the provision of—I think it is Section 3—of the Ottawa Agreement of 1932, under which the preference for light wines amounting to 2s. per gallon, at present enjoyed by South Africa and Australia, would revert to one shilling if by any chance the Ottawa Agreement duties ceased to apply. That is the sole reason why that is here.
    Let me deal with why my right hon. and learned Friend has decided to ask the Committee to approve this reduction on light wines imported in cask. The reason—one of the main reasons—is that there has been a very substantial drop in the consumption of light wines since the middle of 1948. In the first half of 1948, 975,000 gallons were consumed, and in the second half of 1948 the number of gallons consumed was 430,000.
    Captain Crookshank: Withdrawn from bond.
    Mr. Glenvil Hall: Yes, but it went for consumption. How much was drunk it is impossible to say, but I understand that this type of wine does not keep very long, in any case; and I suppose that those who withdrew it from bond would not have withdrawn more than they felt would be consumed in an appreciable time. As a result, of course, our revenue fell accordingly, and, as my right hon. and learned Friend explained when he opened his Budget, in order to help South Africa, Australia, and our trade with France, this reduction has been made, and it is hoped that, as a result, there will be a revival of consumption.

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    5.45 p.m.
    One hon. Gentleman opposite asked me why nothing had been done to assist the heavier wines in order to help the Empire products. As my right hon. and learned Friend in an interjection reminded him, we did in our last Finance Act increase the preference margin from 4s. to 10s. a gallon, and, thereby, gave effect to the Geneva Agreement. The right hon. and gallant Gentleman asked me why we were doing nothing for heavy wines to help our old ally, Portugal. As a matter of fact, we have got an agreement with Portugal under which we do take a certain amount of her product, but it has to be limited, because it is quite impossible—and I am sure that the Committee will agree with me here when I say this—that we should pay gold for an unlimited supply of port; and, therefore, any change in the incidence of taxation would make no difference to the amount of port which does come in from Portugal at the present time. I think that covers the points that have been made.
    Mr. Birch: What about bottled wine?
    Mr. Glenvil Hall: Bottled wines are, of course, different. The wine that comes in, sparkling and still, in bottle is small indeed.
    Mr. Birch: No.
    Mr. Glenvil Hall: If the hon. Gentleman is speaking particularly of the lighter wines, and asking why they must come under this arrangement in cask, the short answer is that it surely makes no difference to the importer. They can come in; but it does help the British bottling industry to bottle the wines here. That is the situation. The more expensive wines can come in bottle, and they do come, I repeat, into a separate category. That being so, I believe that what my right hon. and learned Friend is doing here is reasonable in the circumstances, and that it will help, as has been said, Western Union and the Dominions. I am delighted to hear that the suggestion now being put forward is acceptable to the Opposition and that they are in agreement with my right hon. and learned Friend that this reduction should be made.
    I should like to add that already the trade has begun to implement the under-
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    taking it gave, namely, to sell wines of some grades at no more than 8s. I understand that the Civil Service Stores, for instance, have introduced a new wine, white Bordeaux, at 6s. 6d. a bottle, and there is one red Bordeaux, claret, available at 7s.; and Empire wines too, in some cases, have been reduced by 2s. 6d. a bottle. From the figures that I am thus able to give it does appear that the trade is playing its part and that wines are being reduced in price and made more available, and we hope that, as a result, those who previously felt that the price asked was too much will now be able to afford wine and help trade not only with South Africa and Australia but also with France.
    Mr. Spearman: Would the right hon. Gentleman allow me one question? Before he adopts this policy based on the fact, as he said, that it does not matter whether wine is imported in a barrel or bottle into this country, or whether or not it is bottled in France, will he take a little expert opinion on the subject? He will find that it makes a huge difference. A wine of the same chateau in the same year varies enormously in quality according to whether it is bottled one month or another. It appears that the right hon. Gentleman is advocating a policy based on extreme ignorance of the facts. I do ask if he will have the whole matter reconsidered in view of that.
    Viscount Hinchingbrooke: I do not intend to stand for very long between the Committee and the representative of the Liberal Party who has now hastened in to explain the attitude of his party towards the Resolution, but I think I ought to remark in passing that the Financial Secretary's contribution has been in line with his contribution on the previous Clause, on beer, in that he has given a number of financial explanations but has not really got down to the economic and social reasons behind the change the Chancellor is making. He has not made it clear why the Government have singled out light wines imported in cask, and why he has neglected bottled wines and the heavier wines from Spain and Portugal.
    The right hon. Gentleman said not a word about Spain. I suppose that is much too dangerous a subject for the Labour Party to touch. But ought we not to

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    restore and bring back to normal in peacetime our wine trade with Spain? Is there not some hope of getting a more liberal attitude on the part of Spain, so that we could agree to take their products in good and fair quantity? I should have thought that there was. I should like to know whether the Chancellor has had any consultation with the Foreign Office on the question of what could be done to help forward a liberal democratic régime, even in this light matter of taking one of Spain's principal exports. I do not believe any thought has been given to that subject.
    Why have bottled wines of the light variety been excluded from this concession? I should have thought that some members of the Government and of the party opposite, and some representatives of nationalised industries, would have been rather upset to find that in these days, when there is so much entertainment of foreigners, and one thing and another, by the Socialist Government and its representatives all over the country, that some concessions were not made in the importation of bottled wines. Of course, the French are just as anxious to send us their bottled wines as they are to send their cheap wines in cask. The Financial Secretary gave us no figures to show what has been the effect in the last few years of the Duty upon bottled wines. He has given us the figures for wines in cask and the fall that took place in 1948. He must also have a large array of figures for the importation of bottled wines, but those he has not given us.
    I suspect that there has been a very heavy drop in bottled wines, too. I also suspect that the proportion of cask to bottled wines sent by France to this country is very high in favour of the bottled wines. If so, that is further argument why, in order to bring the Western Union idea to fruition, we should pay attention to the claims of France in that respect. I therefore hope that the Chancellor will himself intervene, which he was unable to do on the previous Clause on beer because of the necessity to have a cup of tea, and tell us to what extent prejudice or politics enters into the giving of the minor concessions which he has sought to make to this great trade.
    Mr. Bowen: I had not intended intervening in this Debate, but
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    I have received so many cordial invitations to do so that I cannot resist them. No doubt the hon. Member for West Ealing (Mr. J. Hudson) would take the view that a Government should play the part of temperance advocate. I do not take that view. But I certainly do not think that any Government should take it upon themselves to be intemperance advocates; and I certainly do not think that any Government should take upon themselves as part of their deliberate policy the encouragement of the consumption of beer and of wines. I think that in that respect individual judgment is far better than Government guidance, and I feel that a deliberate policy which has as its background the desire that there should be an increase in the consumption of wine as a contribution towards the solution of our economic difficulties is not a healthy approach. If we really want to make a contribution towards solving our economic problems and towards the general happiness of our people, it will not be done by saying that among, particularly, the limited income groups there should be a greater absorption of income through the medium of greater expenditure on wine and beer. The Chancellor would be furthering the welfare of the country far better if he were ensuring that we had a wider variety of goods on which to spend money and more money to spend in that way. That is my reason for having no enthusiasm for this fresh development in Government policy, which is directed towards the deliberate encouragement of wine and beer consumption as part of our fiscal policy.
    Mr. Walter Fletcher: I should like to address myself to the difference between wines imported in cask and wines imported in bottles. The question of quality enters very considerably into this, and if the Chancellor is looking to increase revenue in future he must be certain that the wines imported under the new arrangement are of very good quality. After tasting some of the original Government imports I was reminded of the old Latin saying, in vino sanitas. Possibly, now that the choice is passing out of Government hands into that of private enterprise, we shall avoid that danger. But what of those classes of wines such as the Alsatian wines, and even the German Moselle and Rhine wines which traditionally come into this country in bottles and are greatly appre-

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    ciated? Will the Chancellor look again and make quite certain that he is not loading the dice against himself by giving too much of a concession to the light wines, which we all appreciate and like very much; will he make certain that he is not loading the dice somewhat heavily against the very good, sound and not expensive wines in bottles which used to come from an area with which we are trying to encourage trade with this country—the Palatinate wines, the Moselle, Rhine and Alsatian?
    Mr. Eccles: I thought that the Financial Secretary spoke much better about wines than he did about beer, because he did lay down a good sound principle. He said that the Government wanted to expand the consumption of wine, and that they wanted to get as much revenue as they could from wine. Very well then. On that principle have they gone far enough, and is this the right sort of arrangement of duties? I doubt that very much. I think that the preference shown for one kind of wine as against another is probably bad for the revenue, bad from the point of view of increasing the consumption of wine.
    All through our history Governments have interfered with the drinking habits of the people. My right hon. and gallant Friend the Member for Gainsborough (Captain Crookshank) pointed out how in Caesar's time some good wine was made in this country. The other day on looking at a catalogue I saw these words:
    "If William of Malmesbury is to be believed, Englishmen of the Middle Ages drank the wine of Gloucestershire as greatly as that of Burgundy and Bordeaux."
    Well, of course we can believe William of Malmesbury. I represent Malmesbury; they are very truthful people, and our William is always right. But we have changed our habits of drinking wine, and what we are now doing is reversing the Methuen Treaty of 1703, in which we gave a very big preference to port wine and put a very heavy duty on French wine. We are now reversing that, and we seem to be doing it as a by-product of the Minister of Food's foolish purchase of Algerian wine. I do not think that that is a sensible reason to upset the commercial relations between ourselves and a country like Portugal, or for that matter—and I stress this still more—with the Empire producers of heavy wines.
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    The Financial Secretary said the reason that the duty was being lowered on light wines was because consumption was going down. But the figures show that consumption of heavy wines is going down still more, and so that is not a good argument at all. My information is that the consumption of port is lower compared with pre-war than the consumption of light wine. I may be wrong, but that is my information.
    6.0 p.m.
    I was very interested when the Financial Secretary said that we should have to pay gold to Portugal for port wine. That would have been true earlier, but does he assert that it is true now? Is it not a fact that the Portuguese balance of trade has changed and it is now rather difficult to find sufficient means to provide her with current sterling? We ought to know the answer to that, because my Lisbon friends tell me the position is very different now. These people in Portugal who supplied us with port wine behaved very well during the war. I was there, and there was great pressure put on them by the Germans to sell them port wine because they wanted it on the Eastern front to keep warm their troops fighting the Russians. They did not sell the wine to Germany when they could have made a lot of money, and we ought to do something for them now.
    If the principle of the Government is to expand consumption of wines in order to get revenue, then why do not they do it over the whole field? It can only be because of class prejudice. It can only be that they do not like bottled wines because they think that the "swells" drink bottled wines. They have some idea that if the Civil Service Stores offer us some Bordeaux, it is all right. I think that is a very narrow point of view, especially in relation to France.
    I was in Paris last week, and business men were tumbling over each other to buy anything in sterling because the sterling trading rights scheme which we have with the French expires on 30th June. They were buying anything they could to use up the money we have given to the French until the end of the month. Why should we not have wine instead? It would be very much better for all the reasons put forward by my hon. Friend the Member for Flint (Mr. Birch). This is really a topsy-turvy affair. This

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    whole question of getting goods like wines from the Marshall countries, with whom we hope to draw much closer, as well as from Empire countries, should be thought out again. This is just tinkering with the matter in order to get the Minister of Food out of a difficulty.
    Mr. Boothby: I have been literally dragged to my feet by the acting leader of the Liberal Party. I should like to ask why the Government of this country should not encourage the drinking of wine. I suggest that it would contribute both to the happiness of our people and to their industrial efficiency if they could drink more wines.
    Mr. Bowen: I apologise if I did not make my point clear. To my mind, in the case of large numbers of people in this country, their surplus income, if they have any, could be far better spent than on wines and beer, and it is a mistaken policy on the part of the Government to encourage people with their present income problems to spend their money in these two directions.
    Mr. Boothby: I always thought that the Liberal Party meant what its name implied. I am very strongly in favour of letting people spend what money is left to them—and there is not much left to them these days—in any way they choose. If they choose to buy wines I do not see why they should not do so, or why the Liberal Party should tell them on what they are to spend their money.
    The reason for this reduction was given by the Financial Secretary. It is to increase the revenue. The law of diminishing returns has applied; the consumption of wine has gone down. The result is that the Chancellor of the Exchequer is not getting his revenue, and so he wants to get more, and the only way is to encourage a little more wine drinking in the country, from which everyone benefits. Scotland used to be a great claret drinking country, but that has ceased now to a marked extent. I think it is an unmitigated disaster, and it is a very bad thing from Scotland's point of view. I cannot understand why the Government have deliberately excluded wine in bottles. As my hon. Friend the Member for Chippenham (Mr. Eccles) has said, it is not only the "swells" who
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    drink wine in bottles. The working and middle classes, in the old days when we were living a more or less tolerable life, used to drink a good deal of wine. They used to buy wine cheaply and keep it. There was a day when there was hardly a farmhouse in Scotland where you could not get a good bottle of claret which had been bought cheaply and kept for 10 to 15 years. I think it is a great mistake for the Chancellor of the Exchequer to have reduced the duty on wines in casks only instead of applying it also to wines in bottles. I am sure that if he had done that it would have been a good thing for the people of the country and would have substantially increased the revenue.
    Mr. Hopkin Morris: The hon. Member for Chippenham (Mr. Eccles) pointed out that this country was a wine-drinking country prior to 1703. That is a very important fact to remember, because the taxation on wine has always followed our relationship with foreign countries, except in the case of Mr. Gladstone who reduced the taxation in order to encourage the country to be a wine-drinking country once more.
    Mr. Boothby: That was the real Liberal Party.
    Mr. Hopkin Morris: The duty was imposed in 1703. We had been at war with France and wanted to punish France by keeping out her wines.
    Mr. Boothby: Shame.
    Mr. Hopkin Morris: I am surprised that a Scottish Member should say that; because it was then that the Scottish whisky distilleries for the first time became a great trade. There is another more famous case if we go back a little earlier. It can be claimed that the British Navy itself rests upon the wine trade. If we had not imported wine in British bottoms from Spain in the reign of Edward III, the British Navy would never have been built. The interesting thing is that although duties are often imposed because of our relationship with foreign countries, they produce very unexpected results, which is what will happen now.
    Let us take the free trade position. When Bentham in 1830 advocated free trade, the Whig Party accepted the argument and asked why the duty on beer

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    should not be abolished; why, it was argued, should not a free run be given to the licensee to carry on his trade like a butcher and baker or any other tradesman? Parliament accepted the argument and passed an Act which became known as the "Free Beer Bill." In principle it was right, if the principle were only the principle of free trade. But the result was that in less than a year Parliament was compelled to repeal the Act because of what was happening in all the big towns in the country.
    The hon. Member for Ealing, West (Mr. J. Hudson) was quite right in his argument. Parliament has experimented in all kinds of ways in relation to this trade over the past century. There is no case for the reduction of the tax on wine. We may say that there is a case for it historically, and quote the British Navy, the defence of the country, and the opportunity to punish France; but what I wish to point out is that, from a commonsense point of view, we should not tax merely on the consideration of our feelings towards one country or another. We should not discriminate in this way. If we lower or raise a tax purely on a revenue basis, be it so. That is a revenue consideration.
    I agree with the argument of the hon. Member for Cardigan (Mr. Bowen). When the Government are controlling household expenditure, and planning us to a degree to which no Government have done hitherto, except in time of war, to make this discrimination now in favour of beer and wines is wrong. Leaving out the moral argument, the reduction should not be given in the case of these commodities. These are luxury things, and any discrimination in favour of them is wrong.
    Mr. Gallacher: I wish to say a couple of words prompted by the remarks of the hon. Member for East Aberdeen (Mr. Boothby). He said—and it is typical of the hypocrisy adopted on this question—that he thought that the Liberals, like himself, believed that the people should have the right——
    The Chairman (Major Milner): The hon. Member should not have used that word "hypocrisy." It is unparliamentary to accuse another hon. Member of
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    hypocrisy, and he must withdraw the word.
    Mr. Piratin: Further to that point, Major Milner——
    The Chairman: I have requested the hon. Member to withdraw that expression. It is unparliamentary, and should not be used. It is not a question for any other hon. Member.
    Mr. Gallacher: If you ask me to withdraw the expression "hypocrisy," I withdraw it; but it is the first time I knew that it was an unparliamentary expression. I always thought that the truth was acceptable in this House.
    Mr. Stanley: I do not intervene because the hon. Member for West Fife (Mr. Gallacher) used that expression, which he has naturally withdrawn at your request, Major Milner; but I think the Committee as a whole would like to know the exact limit of your Ruling. Am I never to say that the arguments adduced by hon. and right hon. Gentlemen opposite are hypocritical? And if that is all right, cannot I proceed further, and say that their whole policy is hypocrisy? If I am allowed to do neither, what can I say either about them or their policy?
    The Chairman: The right hon. Gentleman knows that there is a difference between an accusation against an individual and one addressed to a party. I understood that the hon. Member for West Fife had accused another hon. Member of being guilty of hypocrisy. If I was wrong, I am sorry, but I think I ought to say that it is not the custom of the House, nor is it Parliamentary, to make personal imputations as from one hon. Member to another. I agree they may be largely a question of degree and it must be left to the Chair to decide, but such imputations are objectionable in any case and unparliamentary in most cases according to our practice.
    6.15 p.m.
    Mr. Gallacher: I would not wish to make any personal imputation against the hon. Member for East Aberdeen, but I deplore the company he keeps. I said that the remark was typical of the kind of hypocrisy that is common to hon. Members on the other side of the Committee. At any rate, to get back to the point, what he said was that he always thought the Liberals believed, as he

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    believed, that the people should have the right to spend whatever money is left to them in any way they liked. Does he believe that? No, he does not, nor do hon. Members on the other side of the Committee. On this question of liquor, the hon. Member for West Ealing (Mr. J. Hudson) and myself consider it a form of dope. Can people spend their money on opium, another form of dope? Can they spend their money on cocaine, another form of dope? Let us come to something more practical. The ordinary workman can, if he wishes to drink, spend his money on a teapot or a coffee pot. But can he spend his money on a still? No—there is too much profit in that for hon. Members on the other side of the Committee. So he is not allowed to spend his money in any way he likes.
    Mr. Stanley: I intervene only for a moment, and I regret that I must bring the discussion down from the high moral level it has reached under the advocacy of the hon. Member for West Fife (Mr. Gallacher) of freedom of choice of narcotics of all kinds, and the explanation of the Liberal Party of why they now differ from Mr. Gladstone. I wish to bring the discussion down to what I think is one point of difference between the great majority of hon. Members in this Committee. We have already expressed, on behalf of my hon. and right hon. Friends, our general approval of the step which has been taken, but it is not explained to me why it has been necessary in the circumstances under which this reduction has been introduced, to confine it to wines imported in casks and exclude the bottled wines. We have not been told that cheap wine figures in the cost-of-living index. There has been no attempt to show that this concession is made as a concession to hard-hit people to enable them to bear the trials of life rather more easily. It has been put, and rightly put, on a purely financial basis.
    Here we have an article the consumption of which is falling and the revenue from which is therefore decreasing; and where a decrease of the revenue will, it is hoped, lead to an increase of consumption and to an increase of revenue. Added to that is the very cogent argument that here we have a product which, in terms of balance of payments, we can, so far as I can see, import free. It is not a
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    question that because we increase our imports of wine we have to increase our exports pro tanto. We get wine or nothing at all. Therefore, to be able to import something free to use up surplus purchasing power is an obvious economic asset.
    If that is the situation, then why is any price limit drawn at all, because that is what, in fact, is the object of excluding bottled wines? The revenue there can be made just as big. The only difference is that, on the whole, bottled wines are not only better, but more expensive than wines imported in casks. It is quite true that, on the whole, they are likely to be drunk more by the richer section of the population than by the poorer. But this reduction is not to give undue benefit to the poorer section of the community. If that was being looked for, it would be easy to find a number of objects which they would appreciate very much. The object is purely financial. Wine in bottle, sold to the rich man, will add just as much to the revenue, and mop up just as much purchasing power, as wine sold in a cask, which will be within the grasp of those within the smaller income group.
    I cannot understand the logic of excluding from this concession these more expensive types of wine, which would help the Government to achieve the economic aim they have in view. No explanation has been given. The assumption is, "We can only give this concession on the cheaper sort," but that is no use if it is based entirely on the question of a financial return. I hope the Chancellor will reconsider the possibility of extending this concession to wines in bottle as well as in casks. If, between now and Report, he is unable to make up his mind, I hope that on the next stage my hon. Friends will be able to give him an opportunity of coming to what I am sure will be a wise decision.
    Mr. Norman Smith: The right hon. Gentleman the Member for West Bristol (Mr. Stanley) has reinforced the argument of his hon. Friend the Member for Chippenham (Mr. Eccles) who, apparently, is quite unaware that powerful and palatable wines are still made in his own constituency, although not for the market. The omission of bottled wines from this Clause is another example of the remarkably good and wise statesmanship of this beneficent Labour

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    Government, to which the country owes so much. We have to consider the matter from the point of view of those who reap benefits. We want to promote good relations with France, and especially to keep her out of the Cominform. I am sure we can help France substantially in this way, and the Chancellor, from whose views I often dissent, is to be congratulated on excluding bottled wines.
    Mr. W. J. Brown: I find it rather difficult to follow the logic of some of the arguments which have been advanced today. I can understand the position of the hon. Member for West Ealing (Mr. J. Hudson). For many years he has been a strong and very effective attacker of the evils of drink, and he holds his point of view with such passionate sincerity that we always listen to him with great respect; but I should have thought that the logic of his position today would be that he desired to see the drink traffic prohibited altogether. If it were, we should neither be increasing nor diminishing taxes on beer or wine, or even leaving them as they are.
    As to the Government's position in this matter, I accept straight away the argument that their proposal is necessary in order to improve trade relations with countries we desire to help. I thought that argument was powerful and adequate in itself, and that no further argument was needed for the proposal, although I agree that if that argument be sound it applies with just as much force to heavy as well as light wines and anything else. The Chancellor has still to answer that particular point.
    I am concerned about the other argument used by the Government—that they propose a reduction deliberately in order to increase the consumption of wine. We ought to look at the considerations which are involved in this argument. The Chancellor says, "I shall reduce the tax on wine in this Budget so that you should drink more. "Suppose we do drink more—and here I shall not be able to count on support from the hon. Member for West Ealing. Suppose we fall short of requirements in this respect and, despite all the effort we can command in drinking wine, the revenue still falls short of its present point. The logic of that is that in the next Budget the Chancellor will say that there must
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    be a still further reduction in the duty on wine, and that wine drinkers must embark on the task of drinking still more wine so that the revenue may be increased.
    This has only to proceed long enough for wine drinkers to become incapable of assisting the Government any further. It looks as if the Chancellor is inviting us to copy the labours of Sisyphus. As fast as we push the ball up the hill it rolls down again, so that there is no hope whatever of achieving finality. If we are to apply this principle will the Government apply it elsewhere? If we have also to smoke as hard as we can to sustain the Government it seems that a quite intolerable burden is being put upon us; neither our pockets nor our constitutions can sustain the task which is implicit in the argument advanced by the Government today. What applies to wine and tobacco applies just as well to half a dozen other things.
    I disagree with the Liberal Party in this matter. The free trade argument is a dead as mutton, for the time being at any rate. That being so, we have to ask ourselves, not whether the proposal is in line with free trade theory, but whether it is a practical and wise step in the present disposition of world affairs. I think it is; I think it is enough for the Government to take their stand on that point, but if they withdraw from us the task which is to be imposed on us, I think they should find some justification for distinguishing between light and heavy wines.
    Mr. Pickthom: I wonder whether I might ask advice from the Treasury Bench on a matter of fact. There has been a good deal of argument dependent upon a comparison between French wines and, for instance, Portuguese wines. I am not quite sure what the present position is; does somebody on the Treasury Bench know? Is it a fact that you could not, until recently, buy port in Portugal and bring it to England; not because the duty was prohibitive on it but because there was an actual physical prohibition? You were actually forbidden to import wine from Portugal. Is it a fact that now that prohibition has been lifted and, if so, for how long or by what maximum number of pipes of port has it been lifted? I think the whole comparison is meaningless.

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    I am not asking the Financial Secretary to give the answer out of his head, so to speak, but the general point is clear enough, and we ought to have an answer to it. If the fact is that what controls the amount of port brought to this country is not the duty but a physical control, I think we ought not to part with this Clause until we have been told what are the Treasury's ukases in that matter at the moment and, secondly, what are the Chancellor's intentions. Until we know these things all the arguments about a comparison between France and Portugal in this matter are without meaning.
    While I am on my feet, and perhaps to enable the Financial Secretary to find an answer to that, unless he already knows it, may I put another point? If you wish to drink the best wine of any sort, you do not always necessarily go to the place where the wine is grown. Perhaps Burgundy is as good a place as any other for drinking burgundy, but it is at least arguable that Belgium is better. For historical reasons, into which I need not go now, it is easier to find the best burgundies in Belgium than in Burgundy. So, similarly, it has always been easier to find the best port in this country. Port is a highly artificial wine which has been only very gradually developed and evolved in order to suit the palates of East Anglian farmers and doctors. We find better port in this country than anywhere else in the world.
    6.30 p.m.
    We have been debating the subject of encouraging tourists to come to this country, and almost everyone who took part in the Debates has suggested that the most important factor consists in our improving our hotels and restaurants. I do not believe that a great State ought to encourage tourism. It ought to take tourism as a by-product and as a matter of course. I believe that we are making a mistake in going directly out for it, but this House has decided over and over again, and almost unanimously, to do that.
    What is the chance of having a large influx of visitors to this country so long as the drinking of the best wines is regarded as one of the gross forms of immorality, comparable only to the capacity for distinguishing between one kind of cheese and another? So long as
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    that remains the official and legislatively enforced view of this country, there cannot be any improvement in our cuisine or in our hotels, and there cannot be any successful tourism. I think that is a fair point to make and I hope that it may be considered.
    The point I rose to make. was to ask what controls the importation of wines from Portugal, and how it will be affected by the changes in the duties on heavy wines, whether or not they are bottled.
    Mr. Glenvil Hall: I can briefly answer the point put to me by the hon. Member for Cambridge University (Mr. Pick-thorn). As I understand the position, we have been making an annual agreement with Portugal. It is an overall agreement, within which we agree that so much of various commodities shall come to this country, including, of course, Portuguese wines.
    Mr. Pickthorn: Not "including, of course."
    Mr. Glenvil Hall: I say "of course" because that is part of the agreement, and because people here want to drink Portuguese wines.
    Mr. Pickthorn: The right hon. Gentleman said "of course." I am not trying to catch him out, but it is not of course that every year a part of the imports allocated from Portugal is in the form of wine. I do not think that is a matter of course. I inquired how it had been done in practice during the last year, and how it would be done in the future.
    Mr. Glenvil Hall: That depends upon the people who negotiate the agreement on the one side and what the Portuguese want to send us on the other. It depends also upon what the markets here think they can use. An agreement is made, and, so far as the Treasury are concerned, it is a global agreement because, unfortunately, exchange enters into it. Up to now gold has had to enter into the transaction, in spite of what was said by the hon. Member for Chippenham (Mr. Eccles).
    Mr. Pickthorn: And there has been no port.
    Mr. Glenvil Hall: Within the first four months of this year we have consumed 240,000 gallons of Portuguese wine.
    Mr. Pickthorn: For the first time.
    Mr. Glenvil Hall: I do not know, but I could go over the figures if the hon. Gentleman is interested in them. Naturally, I have not all the figures here. I think I have said enough to answer all the questions that the hon. Gentleman has put to me. What my right hon. and learned Friend has done here is to balance a number of factors. For revenue reasons it was impossible for him to extend this concession over the whole field of light as well as heavy wines. What he has done, and I think rightly, is to give relief where, in his view, and I hope in the view of the Committee, the greatest benefit will accrue to all concerned: to the Revenue, to the French and to South Africa and Australia. At the moment, the bottled wines, the light chateau-bottled kinds, are not showing any real diminution, as have other wines that have been imported in cask. The Committee will remember that I gave figures in an earlier speech on this matter. If the import of these brands of bottled wine, both light and heavy, is still keeping up and fortifying the revenue, there is every reason why my right hon. and learned Friend should concentrate upon wines coming in in cask. I think that statement answers some of the speeches which were made after I had made my earlier contribution to the Debate.
    Mr. C. Williams: I should like to ask the right hon. Gentleman one question. He has raised the very important matter of our trade with Portugal. It is essential, as my right hon. Friend who is leading the Opposition today is aware, for a place like Bristol to have an interest in trade with Portugal. I would not expect the Chancellor of the Exchequer, who also represents Bristol, to come sufficiently down to earth to know anything about the trade of Bristol. I ask for some information on this question of increasing the global amount of our trade with Portugal. That matter should be given very careful consideration during the next 12 months. It is essential for us to encourage that trade. Consultations of a very exciting character are going on between the Treasury and the Parliamentary Secretary to the Ministry of Food. I can only hope that they will spread to the Treasury officials and persuade them to give us a ruling on this Clause and to withdraw the tax as far as possible. I see that the Chancellor of the Exchequer is beginning to smile. I am sure that all of us want
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    him to get up and say that he will yield to the Opposition and make a concession in this matter.
    Question put, and agreed to.
    Clause ordered to stand part of the Bill.

    CLAUSE 5.—(SWEETS.)
    Mr. Turton: I beg to move, in page 3, line 38, after "charged," to insert:
    "in respect of sweets other than mead."
    The Chairman: It may be for the convenience of the Committee that the next Amendment, in the name of the hon. Member for Thirsk and Malton (Mr. Turton), in page 3, line 39, after "Act," to insert:
    "and in respect of mead at the rate of one shilling for every gallon,"
    should be discussed at the same time. Perhaps we might also include the proposed new Clause standing in the name of the same hon. Member and dealing with exemption of mead from Excise liquor licences.
    Mr. Turton: In the last Debate, my hon. Friend the Member for Chippenham (Mr. Eccles) talked about our being a wine-drinking country at a certain stage in our history. If we go back further into our history, we shall find that England was a mead-drinking country. The transformation about which the Financial Secretary to the Treasury spoke has now become complete. Owing to the very heavy duty on mead imposed by the Socialist Government, the commercial production of mead has, I am informed, completely stopped. The original duty was put on by Mr. Lloyd George in the famous Budget of 1910. It was a duty of 1s. per gallon, which was placed on mead and other sweets. That duty was raised to 1s. 6d. per gallon in 1928. The Socialist Government raised that duty from 1s. 6d. to 22s. 6d. per gallon, thereby completely killing that part of the agricultural industry that was producing the drink called mead.
    Now the Chancellor of the Exchequer is proposing to reduce the duty from 22s. 6d. to 10s. 6d. per gallon. I am told that that will not allow this industry to revive. It is quite impracticable for the bee keepers of this country to sell mead commercially if they have to pay a duty of 10s. 6d. a gallon and in addition take out a licence of five guineas for the production of mead.

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    It is true that, unlike many years ago, there is not a great desire to drink mead. I do not know what would be the views of the hon. Member for West Ealing (Mr. J. Hudson) on this point, whether he would agree that it would be better for people to drink mead, which is certainly not intoxicating, than to drink cider or some other drink which is regarded as teetotal. In my part of the country mead has been regarded more as a medicine than as a drink. It is used as a cure for rheumatism and gout.
    Mr. Rankin: Guinness is regarded as a medicine.
    Mr. Turton: It is likely that Scotland has that regard for Guinness, but I cannot think that the hon. Member for Tradeston (Mr. Rankin) has ever drunk mead if he compares it with Guinness, which is a very different drink.
    Mr. Rankin: I have drunk neither.
    Mr. Turton: The last time this matter was raised in the House of Commons was in 1937 when we were asking that the duty of 1s. 6d. should be removed. At that time Lord Simon was Chancellor of the Exchequer, and he gave an undertaking that he would reconsider it before his next Budget, but, unfortunately, by that time he was not Chancellor of the Exchequer but Lord Chancellor, and the matter was not pursued. I was asked to put down this Amendment by my county association of bee-keepers. Most hon. Members will find that they have a county association of bee-keepers who are very interested in the production of mead. My county association has some 5,000 members and I believe that there are 10,000 bee-keepers in Yorkshire, and all of them are anxious that bee-keeping shall be given this encouragement and that they shall not be prevented from producing mead. This is a small rural industry which I cannot believe the Chancellor wishes to discourage in this way.
    The real difficulty arises because mead is not like the other sweets referred to in the Clause, which are the rather noxious cordials which are composed of fruit and some slightly intoxicating fruit drinks. This is something quite different. It is the old English drink made from honey, and it is really only a liquid form of honey which has undergone a pro-
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    cess of fermentation. I was in some difficulty, Major Milner, as to whether I should produce a bottle for your inspection in the Chamber. I felt that it might be regarded as a missile and would therefore be out of Order, but I have provided myself with a bottle of mead outside the precincts of the Chamber so that the Chancellor of the Exchequer can either in the course of this Debate or after this Debate, partake of mead and satisfy himself whether it is a medicine or whether it is some form of intoxicating liquor.
    Mr. W. J. Brown: After the next Adjournment Debate.
    Mr. Turton: I cannot believe that the balance of the Budget will be unduly upset if the Chancellor accepts this Amendment. I hope that he will consider this matter and see whether he can relieve the bee-keepers of what they regard as an unjust imposition. The first time this matter was raised in the House of Commons it had a startling effect on the Chancellor of the Exchequer. When we first raised it, the Chancellor of the Exchequer gave an undertaking that he would reconsider the matter, and that Chancellor became Prime Minister in the course of the year. On the next occasion, which I mentioned earlier, the Chancellor of the Exchequer became the Lord Chancellor. I wonder what will happen to the present Chancellor of the Exchequer now that this Amendment has been raised, and whether he will be so sweetened by the mead or the mead argument that he will take some other office of profit under the Crown.
    I hope that the Chancellor will reconsider the matter of the taxation of mead, regarding it as a branch of agriculture which is being unfairly taxed. At my county show there were a few bottles of mead which the producers wished to sell commercially, but they could not do so. I believe that the Financial Secretary is trying to find out how many liquor licences have been taken out. However, at present the producers cannot sell it commercially because the taxation is so high; all they can do is to produce it for exhibition at these shows where it must not be sold but is merely drunk by the exhibitors. I want that to be changed. I do not believe that England would be harmed at all if we had more mead drinkers in the country.
    6.45 p.m.
    Mr. Douglas Marshall: I believe that the Financial Secretary will be the first to agree that this Amendment will neither steady nor stagger the cost of living index. The Committee will have noticed that the Minister of Agriculture is here and has taken an interest in this short Debate, no doubt fully realising the importance of the bee population in the countryside. The bee population plays a very important part in horticulture, and besides, from time to time it is necessary to see whether it is possible to build up certain light industries in different rural districts, and in this direction there may be a possibility.
    On the Second Reading of the Finance Bill, the Chancellor stated that he had removed certain forms of taxation because such very small amounts were involved that they were not worth while. I should like to know what revenue this tax has brought in during the last few years or even during the last 10 years. I believe we should find that the amount is negligible. If that is the case and the amount plays no part at all in the Budget, surely that makes the case of my hon. Friend the Member for Thirsk and Malton (Mr. Turton), because the taxation levied on this industry, as shown by the diminishing returns, has exterminated commercial practice. For those reasons, and primarily so that we may do what we can to raise the bee population, I trust that the Chancellor will approve the Amendment.
    Mr. C. Williams: My reason for entering into the argument is that, unfortunately, the hon. and learned Member for St. Ives (Mr. Beechman) is prevented by illness from being here, and I felt that the Treasury and the Minister of Agriculture would wish to know that at present a very interesting development is going on down by Penzance, in my hon. and learned Friend's constituency, where an effort is being made to establish a mead factory. Those who are running that factory are setting up an enormous number of beehives over the area. They wish to develop the beekeeping industry. That is a point which ought to be considered. As my hon. Friend the Member for Bodmin (Mr. D. Marshall) said, there can be little revenue in this. If the Government would remove this tax in order to encourage bee-
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    keeping, they would be doing something equivalent to earning dollars, because it would encourage the production of food in this country.
    Now may I ask the Minister of Agriculture to give us his help? Last Saturday I had the honour of entertaining a large and representative body of people who, on his behalf, are running in Cornwall a society whose purpose is to try to encourage cottage gardening industries and general garden produce. They had the most interesting sections in connection with honey and the keeping of bees, and I understand that the Ministry of Agriculture were responsible for that excellent work. Surely, if the right hon. Gentleman is expending money rightly in that way, it is only right that the Government should go a step further and encourage this industry which comes directly from honey production?
    I know that this is only a small matter and that it may not be one which appeals to the lofty brain of the Chancellor of the Exchequer. However, most of us in this country, who often work with our hands and have to deal with people who work with their hands, realise that in an industry such as this one it is the humble people who start such an industry who eventually make it into a large one. Whether it is shipping, mining or whatever it is, it is the small people who begin an industry which is built up later by other people to provide great schemes of employment—I see that there is a conference going on between the Leader of the House, the Patronage Secretary and the Minister of Agriculture. If I may have the courtesy of the attention of the Leader of the House for one moment, I would ask him for once to do something for the small man. I would also ask him to support his Minister of Agriculture in what the right hon. Gentleman is doing for honey production in this country and encourage that Minister to say, "I appeal to the Chancellor." If the Chancellor would make such a concession, everyone with a garden in this country would say, "Thank goodness that at last the Government have done something for rural England."
    Mr. Glenvil Hall: I must ask the Committee to reject this Amendment. [HON. MEMBERS: "Shame."] There is no reason why we should give this suggested prefer-

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    ence to mead over ordinary British wines. The proposal of my right hon. and learned Friend in the Clause is that the Excise Duties should be dropped from 22s. 6d. to 10s. 6d., which is a reduction of 12s. a gallon. That is a considerable reduction and, of itself, should help this infant industry which has been referred to with such eloquence by three hon. Members opposite this afternoon.
    The hon. Member for Thirsk and Malton (Mr. Turton) suggested that it was one way of helping the bee-keeper. That may be so, but the honey produced by bees can be used for purposes other than the making of mead, and there is an excellent market for all the honey which bee-keepers can produce. Therefore, on that ground there is no reason why we should give a special preference to this firm—Mead Makers, Limited—in order that the honey which bee-keepers are producing should be used properly. It is my information that the honey will be put to a good use as honey—possibly in the minds of many to a much better use—rather than that it should be made into a drink, either as mead or as sack or, as what I understand they propose to make also, mead-brandy.
    Mr. Turton: Will the right hon. Gentleman make it clear that this Amendment was put down at the request of the bee-keepers' association of Yorkshire? It has nothing to do with a firm.
    Mr. Glenvil Hall: That may well be, and nothing I have said would deny that fact which I and others heard the hon. Gentleman mention. I am only saying that there is at present, and so far as I know always will be, an outlet for the honey which is produced by the bees of the bee-keepers in the area represented by the hon. Gentleman. I agree that the loss of revenue is infinitesimal. At present little is produced. The amount actually manufactured by this firm is very small indeed. That being so, and as there is a use for the ingredients which they use, and as they are now getting in this Budget a reduction of 12s. a gallon, that in itself should be sufficient for them, and I ask the Committee to reject the Amendment.
    Mr. C. Williams: Before the right hon. Gentleman sits down, will he say to what
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    firm he keeps referring? Where is it? Is it in the North Country? I think the interest is wider than one firm.
    Mr. Glenvil Hall: I speak subject to correction, but my information is that there is one firm in Cornwall which is beginning to make mead of the type referred to, and that at the moment its output is extremely small.
    Mr. Williams: In other words, that firm is new and struggling. It is being helped in one way, but it is being attacked by the Chancellor as he so often attacks small people.
    Mr. Baldwin: I regret that the Financial Secretary is not more forthcoming with regard to this Amendment. When I saw the Chancellor discussing the matter with the Minister of Agriculture, I felt there was some hope that he would entertain the Amendment. Bee-keeping is much neglected in this country, and the Minister of Agriculture might well do everything he can to see that encouragement is given to cottage bee-keepers. If the cottagers would keep bees, they would have the whole range of the countryside from which to gather their harvest and for which they would pay no rent. In a small thing like this, it would assist if they were encouraged in making mead.
    With regard to what the Financial Secretary said about all the honey available being saleable in the form of honey, I once tried to make some mead, and I think I am right in saying that much of the honey which goes to its making is the unsealed honey which is not sufficiently ripened to be kept for the season. I hope, therefore, that the Chancellor will think again and will give some small concession in order to help a deserving industry.
    Mr. Peter Thorneycroft: Up to the present we have not had a satisfactory answer to the rather powerful arguments advanced from this side of the Committee. First, we ought to know what is the amount involved. I understood from the Financial Secretary that the amount involved is infinitesimal. Before the Government ask for this burden to be continued on this particular section of the community——
    Mr. Glenvil Hall Mr. Glenvil Hall rose——
    7.0 p.m.
    Mr. Thorneycroft: I have several other questions to ask yet—we ought to know what is the total amount involved. The next thing the right hon. Gentleman said was that only one small firm is engaged in the production of mead. That may be so, but why? Simply because this duty is placed upon the mead. I have no doubt that if my hon. Friend's suggestion were adopted, much more mead would be produced. It is true that many people prefer to eat honey as honey—I hope I do not incur the wrath of my hon. Friends by saying I should prefer to eat honey rather than to drink mead—but that does not apply to everybody. Beekeepers are entitled to make what products they can and to try to popularise them.
    Mr. Glenvil Hall: There is nothing to stop them.
    Mr. Thorneycroft: Of course, there is something to stop them. Whatever else we may disagree about it, it is common ground that the duty has in effect, for all practical purposes, killed the consumption of mead.
    The Chancellor of the Exchequer (Sir Stafford Cripps): There never was any.
    Mr. Thorneycroft: Of all the remarks that the right hon. and learned Gentleman has made, to say that nobody in this country ever drank mead is the most monstrous distortion of all.
    Sir S. Cripps: What I said was that the duty could not have killed it because at the time when the duty was imposed nobody drank it.
    Mr. Thorneycroft: To say that there was never any consumption of mead in Britain indicates an absence of that study of the history of the British people which I commend to the right hon. and learned Gentleman.
    I ask the Financial Secretary—who, after all, is trying to reply to the points which have been made—to tell us, before we pass to a Division or adopt whatever other course my hon. Friend advises, precisely what is the total amount involved. If it is infinitesimal, then for Heaven's sake do not let us kill this industry, but rather allow the people to produce the mead.
    Mr. D. Marshall: As the Financial Secretary does not appear to be replying,
    278
    I should like to put one further point to him. It is rather unlikely, one would assume, that during the Committee stage of the Bill the Chancellor will be over-reasonable on many of the matters placed before him. The Financial Secretary, however, has admitted that the amount of taxes collected in this industry is, to use his own word, "infinitesimal." In those circumstances, in order to try to prosper a light industry, is it not possible for the Financial Secretary to consult with the Chancellor at this very moment and to say that he will reconsider this matter between now and Report stage? That would be at least a reasonable way of treating the Amendment.
    Mr. Turton: Before the Financial Secretary replies, there is only one point I wish to make. The argument of the Government is that only one firm has taken out the five-guinea licence and is producing mead commercially. The evidence I put before the Committee is that the county bee-keepers' associations have asked that this duty shall be taken off so that they can all produce mead commercially. I confirm what was said by my hon. Friend the Member for Leominster (Mr. Baldwin) that honey used for mead is honey which is not saleable in other forms. In addition, some 10 years ago Women's Institutes throughout the country were making mead and asking me to raise this matter in the House of Commons so that they could be enabled to sell it commercially. That is the evidence I put before the Committee. I should have thought that the Chancellor of the Exchequer would not have been quite so careless of rural interests as he has shown himself to be this afternoon in not accepting the Amendment, and I very much regret his attitude.
    Mr. C. Williams: The Chancellor of the Exchequer must give an answer to this matter. The Financial Secretary tried to give it just now. I very much doubt whether the amount of duty comes to £100 or even anywhere near that figure. If the Financial Secretary knows the amount, I will give way to him, but he shakes his head one way or another or up and down, and does not seem to know. This is an absolute scandal, especially when Government money is being paid, very rightly, in developing bee-keeping. There is no doubt whatever that there is a demand for honey. The Government

    279
    are being very hard to the industry and we cannot expect, on the one hand, people to encourage the Minister of Agriculture in his righteous desire to stimulate rural production when, on the other hand, the Chancellor absolutely refuses to make a small concession which I do not think anyone could say amounts to £100.
    It is sheer, deliberate—I was about to say spite, but we can hardly accuse the Chancellor, who is always telling us how holy he is, of being spiteful—it is sheer lack of consideration from the Chancellor on a matter which certainly should be pressed to a Division. I hope that we shall go into the Division Lobby. If the Minister of Agriculture is honest, he is bound to come, as I know he will, into the Opposition Lobby in support of the Amendment and against the Government, who are trying in an underhand way to destroy their own work.
    Mr. Osbert Peake: During the speech of my hon. Friend the Member for Monmouth (Mr. P. Thorneycroft) the Financial Secretary kept nodding his head when my hon. Friend said that the Committee ought to know what was the yield of this duty. The right hon. Gentleman actually rose to his feet intending to intervene and give this vital piece of information to the Committee. Apparently he now has cold feet and has thought better of it or, possibly, has been restrained by his right hon. and learned Friend the Chancellor. I implore the right hon. Gentleman, who is the soul of courtesy in our Debates, to give this vital piece of information to the Committee to enable it to come to a reasonable decision upon its attitude to the Amendment.
    Question put, "That those words be there inserted."
    The Committee divided: Ayes, 141; Noes, 285.

    Division No. 166.]

    AYES

    [7.10 p.m.

    Agnew, Cmdr. P. G.

    Galbraith, T. G. D. (Hillhead)

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

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

    Gammans, L. D.

    Mott-Radclyffe, C. E.

    Assheton, Rt. Hon. R.

    Gridley, Sir A.

    Noble, Comdr. A. H. P.

    Astor, Hon. M.

    Grimston, R. V.

    Odey, G. W.

    Baldwin, A. E.

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

    O'Neill, Rt. Hon. Sir H.

    Birch, Nigel

    Harris, H. Wilson (Cambridge Univ.)

    Peake, Rt. Hon. O.

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

    Harvey, Air-Comdre, A. V.

    Peto, Brig. C. H. M.

    Boothby, R.

    Haughton, Colonel S. G. (Antrim)

    Pickthorn, K.

    Bower, N.

    Head, Brig. A. H.

    Poole, O. B. S. (Oswestry)

    Boyd-Carpenter, J. A.

    Hinchingbrooke, Viscount

    Price-White, Lt.-Col. D.

    Bracken, Rt. Hon. Brendan

    Hogg, Hon. Q.

    Raikes, H. V.

    Braithwaite, Lt.-Comdr. J. G.

    Hollis, M. C.

    Rayner, Brig. R.

    Bromley-Davenport, Lt.-Col. W.

    Hope, Lord J.

    Reed, Sir S. (Aylesbury)

    Brown, W. J. (Rugby)

    Howard, Hon. A.

    Renton, D.

    Buchan-Hepburn, P. G. T.

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

    Roberts, H. (Handsworth)

    Butcher, H. W.

    Hulbert, Wing-Cdr. N. J.

    Robinson, Roland (Blackpool, S.)

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

    Hutchison, Lt.-Cdr. Clark (Edin'gh, W.)

    Ropner, Col. L.

    Challen, C.

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

    Ross, Sir R. D. (Londonderry)

    Channon, H.

    Jeffreys, General Sir G.

    Sanderson, Sir F.

    Churchill, Rt. Hon. W. S.

    Jennings, R.

    Scott, Lord W.

    Clarke, Col. R. S.

    Keeling, E. H.

    Shepherd, W. S. (Bucklow)

    Clifton-Brown, Lt.-Col. G.

    Kendall, W. D.

    Smiles, Lt.-Col. Sir W.

    Conant, Maj. R. J. E.

    Lambert, Hon. G.

    Smithers, Sir W.

    Cooper-Key, E. M.

    Lancaster, Col. C. G.

    Spearman, A. C. M.

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

    Lennox-Boyd, A. T.

    Stanley, Rt. Hon. O.

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

    Lindsay, M. (Solihull)

    Stewart, J. Henderson (Fife, E.)

    Crosthwaite-Eyre, Col. O. E.

    Linstead, H. N.

    Stuart, Rt. Hon. J. (Moray)

    Crowder, Capt, John E.

    Lipson, D. L.

    Sutcliffe, H.

    Cuthbert, W. N.

    Lloyd, Selwyn (Wirral)

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

    De la Bère, R.

    Low, A. R. W.

    Teeling, William

    Dodds-Parker, A. D.

    Lucas-Tooth, Sir H.

    Thomas, Ivor (Keighley)

    Downer, P. W.

    Lyttelton, Rt. Hon. O.

    Thomas, J. P. L. (Hereford)

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

    McCorquodale, Rt. Hon. M. S.

    Thorneycroft, G. E. P. (Monmouth)

    Drayson, G. B.

    Mackeson, Brig. H. R.

    Thornton-Kemsley, C. N.

    Drewe, C.

    McKie, J. H. (Galloway)

    Touche, G. C.

    Duthie, W. S.

    Maclay, Hon. J. S.

    Turton, R. H.

    Eccles, D. M.

    Maclean, F. H. R. (Lancaster)

    Wakefield, Sir W. W.

    Eden, Rt. Hon. A.

    MacLeod, J.

    Walker-Smith, D.

    Elliot, Lieut.-Col. Rt. Hon. Walter

    Macmillan, Rt. Hon. Harold (Bromley)

    White, Sir D. (Fareham)

    Erroll, F. J.

    Macpherson, N. (Dumfries)

    White, J. B. (Canterbury)

    Fleming, Sqn.-Ldr. E. L.

    Maitland, Comdr. J. W.

    Williams, C. (Torquay)

    Fletcher, W. (Bury)

    Marples, A. E.

    Williams, Gerald (Tonbridge)

    Foster, J. G. (Northwich)

    Marshall, D. (Bodmin)

    Winterton, Rt. Hon. Earl

    Fox, Sir G.

    Marshall, S. H. (Sutton)

    York, C.

    Fraser, H. C. P. (Stone)

    Mellor, Sir J.

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

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

    Molson, A. H. E.

    Gage, C.

    Morris, Hopkin (Carmarthen)

    TELLERS FOR THE AYES:

    Galbraith, Cmdr. T. D. (Pollok)

    Morris-Jones, Sir H.

    Colonel Wheatley and

    Mr. Wingfield Digby.

    NOES

    Acland, Sir Richard

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

    Manning, C. (Camberwell, N.)

    Adams, Richard (Balham)

    Follick, M.

    Marquand, Rt. Hon. H. A.

    Albu, A. H.

    Foot, M. M.

    Mathers, Rt. Hon. George

    Allen, A. C. (Bosworth)

    Forman, J. C.

    Mellish, R. J.

    Alpass, J. H.

    Gallacher, W.

    Messer, F.

    Anderson, A. (Motherwell)

    Ganley, Mrs. C. S.

    Middleton, Mrs. L.

    Attewell, H. C.

    George, Lady M. Lloyd (Anglesey)

    Millington, Wing-Comdr. E. R.

    Austin, H. Lewis

    Gibbins, J.

    Mitchison, G. R.

    Awbery, S. S.

    Gilzean, A.

    Moody, A. S.

    Ayles, W. H.

    Glanville, J. E. (Consett)

    Morley, R.

    Ayrton Gould, Mrs. B.

    Gooch, E. G.

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

    Bacon, Miss A.

    Gordon-Walker, P. C.

    Morris, P. (Swansea, W.)

    Balfour, A.

    Granville, E. (Eye)

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

    Barstow, P. G.

    Grierson, E.

    Mort, D. L.

    Barton, C.

    Griffiths, D. (Rother Valley)

    Murray, J. D.

    Battley, J. R.

    Griffiths, W. D. (Moss Side)

    Nally, W.

    Bechervaise, A. E.

    Gruffydd, Prof. W. J.

    Naylor, T. E.

    Benson, G.

    Gunter, R. J.

    Neal, H. (Claycross)

    Berry, H.

    Hale, Leslie

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

    Beswick, F.

    Hall, Rt. Hon. Glenvil

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

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

    Hamilton, Lieut.-Col. R.

    Oldfield, W. H.

    Bing, G. H. C.

    Hardy, E. A.

    Oliver, G. H.

    Binns, J.

    Harrison, J.

    Orbach, M.

    Blackburn, A. R.

    Hastings, Dr. Somerville.

    Paget, R. T.

    Blenkinsop, A.

    Haworth, J.

    Paling, Rt. Hon. Wilfred (Wentworth)

    Blyton, W. R.

    Henderson, Rt. Hn. A. (Kingswinford)

    Paling,, Will T. (Dewsbury)

    Boardman, H.

    Herbison, Miss M.

    Palmer, A. M. F.

    Bottomley, A. G.

    Holman, P.

    Pargiter, G. A.

    Bowden, Fig. Offr. H. W.

    Holmes, H. E. (Hemsworth)

    Parkin, B. T.

    Bowen, R.

    Horabin, T. L.

    Paton, Mrs. F. (Rushcliffe)

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

    Houghton, A. L. N. D. (Sowerby)

    Paton, J. (Norwich)

    Braddock, T. (Mitcham)

    Hoy, J.

    Pearson, A.

    Bramall, E. A.

    Hubbard, T.

    Peart, T. F.

    Brook, D. (Halifax)

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

    Piratin, P.

    Brooks, T. J. (Rothwell)

    Hughes, Hector (Aberdeen, N.)

    Poole, Cecil (Lichfield)

    Broughton, Dr. A. D. D.

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

    Popplewell, E.

    Brown, T. J. (Ince)

    Hutchinson, H. L. (Rusholme)

    Porter, E. (Warrington)

    Bruce, Maj. D. W. T.

    Hynd, H. (Hackney, C.)

    Porter, G. (Leeds)

    Burden, T. W.

    Hynd, J. B. (Attercliffe)

    Price, M. Philips

    Burke, W. A.

    Irvine, A. J. (Liverpool)

    Proctor, W. T.

    Carmichael, James

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

    Pursey, Comdr. H.

    Castle, Mrs. B. A.

    Isaacs, Rt. Hon. G. A.

    Ranger, J.

    Champion, A. J.

    Janner, B.

    Rankin, J.

    Chetwynd, G. R.

    Jay, D. P. T.

    Rees-Williams, D. R.

    Cluse, W. S.

    Jeger, G. (Winchester)

    Reeves, J.

    Cobb, F. A.

    Jones, Rt. Hon. A. C. (Shipley)

    Reid, T. (Swindon)

    Cocks, F. S.

    Jones, D. T. (Hartlepool)

    Rhodes, H.

    Coldrick, W.

    Keenan, W.

    Richards, R.

    Collick, P.

    Kenyon, C.

    Ridealgh, Mrs. M.

    Collindridge, F.

    Key, Rt. Hon. C. W.

    Robens, A.

    Collins, V. J.

    Kinghorn, Sqn.-Ldr. E.

    Roberts, Goronwy (Caernarvonshire)

    Colman, Miss G. M.

    Kinley, J.

    Robertson, J. J. (Berwick)

    Cook, T. F.

    Kirby, B. V.

    Robinson, Kenneth (St. Pancras, N.)

    Cooper, G.

    Kirkwood, Rt. Hon. D.

    Rogers, G. H. R.

    Corlett, Dr. J.

    Lang, G.

    Ross, William (Kilmarnock)

    Cove, W. G.

    Lavers, S.

    Royle, C.

    Cripps Rt. Hon. Sir S.

    Lee, F. (Hulme)

    Scott-Elliot, W.

    Crossman, R. H. S.

    Lee, Miss J. (Cannock)

    Segal, Dr. S.

    Cullen, Mrs.

    Leonard, W.

    Shackleton, E. A. A.

    Daggar, G.

    Leslie, J. R.

    Sharp, Granville

    Daines, P.

    Levy, B. W.

    Shinwell, Rt. Hon. E.

    Dalton, Rt. Hon. H.

    Lewis, A. W. J. (Upton)

    Shurmer, P.

    Davies, Edward (Burslem)

    Lewis, J. (Bolton)

    Silkin, Rt. Hon. L.

    Davies, Ernest (Enfield)

    Lewis, T. (Southampton)

    Silverman, S. S. (Nelson)

    Davies, Harold (Leek)

    Lindgren, G. S.

    Simmons, C. J.

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

    Lipton, Lt.-Col. M.

    Skeffington, A. M.

    Davies, R. J. (Westhoughton)

    Logan, D. G.

    Skinnard, F. W.

    Davies, S. O. (Merthyr)

    Longden, F.

    Smith, C. (Colchester)

    Deer, G.

    Lyne, A. W.

    Smith, Ellis (Stoke)

    Delargy, H. J.

    McAdam, W.

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

    Dobbie, W.

    McAllister, G.

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

    Dodds, N. N.

    McEntee, V. La. T.

    Solley, L. J.

    Driberg, T. E. N.

    McGhee, H. G.

    Sorensen, R. W.

    Dugdale, J. (W. Bromwich)

    McGovern, J.

    Soskice, Rt. Hon. Sir Frank

    Dye, S.

    McKay, J. (Wallsend)

    Sparks, J. A.

    Edwards, W. J. (Whitechapel)

    McKinlay, A. S.

    Steele, T.

    Evans, Albert (Islington, W.)

    Maclean, N. (Govan)

    Stokes, R. R.

    Evans, E. (Lowestoft)

    McLeavy, F.

    Stubbs, A. E.

    Evans, John (Ogmore)

    MacPherson, Malcolm (Stirling)

    Sylvester, G. O.

    Evans, S. N. (Wednesbury)

    Mainwaring, W. H.

    Symonds, A. L.

    Fairhurst, F.

    Mallalieu, E. L. (Brigg)

    Taylor, H. B. (Mansfield)

    Farthing, W. J.

    Mallalieu, J. P. W. (Huddersfield)

    Taylor, R. J. (Morpeth)

    Fernyhough, E.

    Mann, Mrs. J.

    Taylor, Dr. S. (Barnet)

    282

    283

    Thomas, D. E. (Aberdare)

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

    Willey, O. G. (Cleveland)

    Thomas, George (Cardiff)

    Warbey, W. N.

    Williams, D. J. (Neath)

    Thomas, I. O. (Wrekin)

    Webb, M. (Bradford, C.)

    Williams, J. L. (Kelvingrove)

    Thurtle, Ernest

    Weitzman, D.

    Williams, Ronald (Wigan)

    Timmons, J.

    Wells, P. L. (Faversham)

    Williams, Rt. Hon. T. (Den Valtey)

    Titterington, M. F.

    Wells, W. T. (Walsall)

    Willis, E.

    Tolley, L.

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

    Wills, Mrs. E. A.

    Turner-Samuels, M.

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

    Wyatt, W.

    Ungoed-Thomas, L.

    Whiteley, Rt. Hon. W.

    Young, Sir R. (Newton)

    Vernon, Maj. W. F.

    Wigg, George

    Viant, S. P.

    Wilkes, L.

    TELLERS FOR THE NOES:

    Wadsworth, G.

    Wilkins, W. A.

    Mr. Joseph Henderson and

    Wallace, G. D. (Chislehurst)

    Willey, F. T. (Sunderland)

    Mr. Hannan.

    Question put, and agreed to.

    Clause ordered to stand part of the Bill.

    Clause 6.—(SUGAR.)
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    The Economic Secretary to the Treasury (Mr. Douglas Jay): As in the case of tea, this Clause simply provides for a straightforward bookkeeping operation by which we cancel out the duty, on the one hand, and the subsidy, on the other. The Clause gets rid of the duty on imported refined sugar wherever it comes from, by 11s. 8d. per cwt., which is equivalent to 1¼d. a lb., and it reduces the duty on unrefined sugar, molasses and glucose by the corresponding amounts. It also introduces corresponding reductions in the rates of duty on home-produced beet sugar, molasses and glucose. As in the case of tea, the preferential margins remain unchanged.
    The effect of the reductions on the Revenue is as follows: the duties on sugar, molasses, glucose and saccharin would, in 1949–50, have yielded, on the pre-Budget basis of calculation, a revenue of £39 million. The cost of the reduction in this year will be £22 million, which therefore brings the net revenue which we shall receive down to £17 million. In the case of tea duties it was suggested that this was not just a straightforward bookkeeping operation, as I suggested, but that there was something sinister behind it. I was asked, as I may be asked in the case of these duties, why we have chosen to do this in this year if there was no argument for doing it.
    It was a Government of which the right hon. Gentleman the Member for West Bristol (Mr. Stanley) was a Member which introduced the food subsidies, and which continued them year by year simultaneously with the retention of these duties. The longer that retention went on the stronger the argument became for clearing up the matter by a bookkeeping operation, and bringing to an end a
    284
    situation in which money was given out with one hand and raised with the other. It could perhaps have been argued in the war years that if we waited for a short period prices would fall and there would no longer be any need for the subsidies, and the rates of duty would again become operative. The Committee will agree that, with every year that went by, that argument became more academic. If we are asked why this has not been done before, the answer is that if one does something one must do it at some time, and whenever one does it it can be asked why it was not done previously. In all the circumstances we thought that this was the right year in which to do it. The only effect is that the subsidies are cancelled out, on the one hand, the duties disappear, on the other, and the preference margin remains the same.
    Lieut.-Commander Braithwaite: The Economic Secretary has explained to us the mind of the Government on this matter. He appeared to rest himself with some confidence on the fact that food subsidies were introduced by a previous Administration. It was the Budget introduced by the present Lord Simon in 1940 which first introduced food subsidies in the modified form in which they then operated. Their cost in that financial year was, I believe, £52 million—I speak from memory. That was during the war, and hon. Members who served in the war-time Parliament will remember how, during that period, in concentrating on matters very different from financial niceties, we sought, when Budgets and Finance Bills came before us, to dispose of them as rapidly as possible in order to free Ministers for more important tasks. That is why no effort was made to get a tidier arrangement.
    In 1945, the present Administration achieved power, and it has taken them four years to come to this book-keeping arrangement, as it has been called. I ask the Economic Secretary whether, if the time has now come for these adjustments,

    285
    the time has not come for a much wider and more sweeping adjustment even than this. Does it not really make nonsense to tax and subsidise a commodity at one and the same time? Surely anyone who wants to have a workable and operative system must realise that to tax the consumer of sugar on his consumption and then subsidise the price to him of the sugar to try to relieve him of his troubles can hardly be called straightforward bookkeeping or straightforward common sense.
    The Clause would have been discussed with more advantage by the Committee had we had the advantage of the presence of some hon. Members of the Liberal Party. I am sorry to see that their benches have again been evacuated because it was they who always sought to prevent home-grown sugar production by their violent opposition to anything that was done for the sugar beet industry. The Committee would proceed with much greater smoothness were those hon. Members to return, if only temporarily, to their seats of duty. Just as in the case of the last Amendment, when the Chancellor was resisting with such sternness an attempt to remove a very small duty from mead, we should have welcomed the presence and guidance of the Liberals, as it was the late Mr. David Lloyd George as he then was who imposed that duty, so we should like it even more now. Their absence throughout our proceedings, except for seven rather irrelevant minutes, has been lamentable.
    To return to the main contention, I ask whether it would not be simpler, at this time of day, if we are going into bookkeeping entries, to do it in a proper manner? Are we to go into the future taxing this commodity and then subsidising it at almost the same moment? That seems to me to make no kind of sense whatever. It is only the sort of operation that can be expected of a dying and damned Government.
    Mr. Erroll: I was glad to hear the explanation of the Economic Secretary because it gave us an opportunity of hearing his views on the difference between the subsidy and the duty. The point made in the case of the tea duty is equally applicable in the case of the sugar duty. The duty was intended to be a permanent feature, raising a certain amount for the Treasury each year; on
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    the other hand, the subsidy in the case of sugar, as in the case of tea, was originally intended merely as a temporary measure to stabilise the price of sugar or the price of tea. The book-keeping transaction, as it has been described, seeks to equate the temporary charge—the subsidy—with what should be a permanent aspect of the Revenue. It is a thoroughly false argument to say that it is merely a book-keeping transaction to waive what was a permanent device for collecting revenue merely because at the moment that revenue or some other revenue is used to keep down the price of sugar from its present temporary high level.
    The Economic Secretary went on to say that if something had to be done there had to be a time for doing it and that it might as well be done now as at any other time. I query whether it is appropriate to do it at all. If it is only a book-keeping transaction at present why not continue that book-keeping? We may very well see a return to the old low prices of sugar, when we shall be glad that we have the sugar duty as a source of revenue. Book-keeping for another year or two years would surely be a small effort in return for the value of retaining a duty which will not be onerous when sugar returns to its old prices. There is at the present time ample evidence to show that sugar prices are falling along with other commodity prices.
    There may have been some case for removing the duty two or three years ago when world prices seemed to be advancing indefinitely, but now that the tide is turning surely that is the one time when we should not start to make changes. Now is not the time to do a job which could be pretty well left undone altogether. I submit that it is quite disingenuous of the Economic Secretary to regard this as a simple book-keeping transaction, and it may well be a source of some embarrassment to some future administration, which having to collect revenue by all the means in its power, would find that this useful source of revenue, because it did not inflict hardship on anyone, has been thrown on one side as a mere book-keeping transaction.
    7.30 p.m.
    Mr. Birch: The Economic Secretary justified this Clause by an argument, which I should think was only worthy

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    of the Financial Secretary when he said that if we had to do anything we would have to do it at some time. That is one of those profound remarks with which we all agree, but the fact is that if we have to do it at some time, it does not necessarily mean that it is the right thing to do. If one has to commit murder one has to commit it at some time, but it does not necessarily follow that murder is a particularly good thing to do. We were left in some doubt when we were discussing the subject of tea what the real reason for these provisions were. In spite of the speech of the Economic Secretary, I am bound to say that I am still in some considerable doubt.
    The Economic Secretary said that it was absurd to raise revenue with one hand and pay it out with the other, and that it was being done to no purpose. He particularly said that what the Government had done was to cut down the duty to the largest possible extent consistent with maintaining Imperial preference. I can see an argument there, but I understand in the case of sugar the duty on the Colonial commodity is not eliminated. There is the duty on both foreign and Colonial sugar, and, therefore, in this case the argument of meeting so much duty does not apply in this case. We are still collecting with one hand and paying out with the other, which the hon. Gentleman said was a very foolish thing to do. I cannot see that that argument really applies here in any way.
    Secondly, I should like to raise the question of the savings of subsidies under this Clause. The Economic Secretary said that the saving would be £22 million. I think that I am correct in saying that an answer was given last Autumn to the effect that the sugar subsidy was then running at the rate of £22 million per annum, which indicates either that we are going to buy more sugar now, or under bulk purchase we are paying higher prices for it, because as I understand it, the world price of sugar has fallen. While we are on the question of prices, it is worth recording the Economic Secretary's remark on that when he abandoned hope that prices in this country would ever fall substantially at all. That is what I understood him to mean. If the hon. Gentleman reads tomorrow what he himself said, that is the conclusion to which he will come.
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    The Committee would be interested to hear upon what is the figure of £22 million savings based. The question of how much sugar is imported into this country is a very burning one, particularly now that hon. Gentlemen opposite are discussing the propriety of the action of the Minister of Food in derationing sweets. Clearly if there were more sugar imported, more molasses, more glucose and more beet sugar produced, his problems would be solved. Therefore, I think the country would be interested to know how that figure of £22 million is arrived at.
    Sugar has always been a great trouble in politics. It was Disraeli who remarked in one of his books that it seemed strange that a manufacture that charmed infancy and soothed old age should so frequently occasion political disaster. It may well be that if the Government do not import enough sugar they will produce a political disaster for themselves. I would end by saying that the Economic Secretary has not answered the point put to him by my right hon. Friend the Member for West Bristol (Mr. Stanley), because we are still paying out with the one hand and taking in with the other. I cannot help feeling it is rather a hypocritical—I understand that we can use that term as a general term—effort to reduce simply both sides of the Budget by a stroke of the pen without anything really happening at all, and thereby to represent to the country that expenditure is going down when nothing of the sort has occurred.
    Mr. Erroll: I was hoping for an answer to some of the points made in my remarks, especially as one of those points was so inadequately dealt with by the Economic Secretary himself. It would be disappointing if the Clause were to be passed without anything further being said.
    Mr. P. Thorneycroft: May I offer a few observations on this Clause before we part from it? The Committee would be very disappointed if we did not have a reply to the points which have been put. As I understand it, the proposal here is part of the general policy of the Chancellor of the Exchequer in dealing with the food subsidies. The object, which the right hon. and learned Gentleman has in mind and of which this Clause forms a part, was to call a halt in the steady rise of the cost of these food subsidies. I my-

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    self suggested from time to time that that was a very proper policy to pursue. I have always understood that food subsidies were part of the great social plan of the party opposite. Then they came to the conclusion that some halt ought to be called, and that if they did nothing about it, the total increase would be somewhere in the neighbourhood of £80 million. In order to meet the position they met two-thirds of the cost by increasing the price of food and one-third by what I now understand are called bookkeeping entries on tea and sugar.
    I have never quite understood how this change-over from taxation and the revision of taxation, on the one hand, and the scaling down of subsidies, on the other, really affects the position. It may tidy the ends, but it does not seem to make much difference to the general level of expenditure. The point to which we are entitled to have some answer is, what is the amount and what are the costs involved? I gather the figure is £22 million. Could we have some explanation as to how what appears to be an increase of £2 million has taken place? I dare say there is a perfectly good explanation. It may be we are going to import more sugar or that the costs of sugar are mounting. We ought to have an explanation from the Economic Secretary. It is a fair and proper point to put and one which is within the knowledge of the hon. Gentleman.
    The only other thing I wish to say is in regard to the remark of the Economic Secretary that one must dismiss the idea of any diminution in the general cost of sugar as something purely academic. That was rather a startling statement, which he perhaps might care to justify. If we are to regard all reductions in imported commodities of that kind as purely academic, the outlook would appear to be a little bleak. We ought not to come to a decision upon this Clause until we have had some specific answer on the material and substantial point put to the hon. Gentleman about the increased cost of £2 million.
    Mr. Jay: I will try to answer the questions that have been asked. First, I was asked why the cost has risen from £20 million, which I think was the figure given some time ago, to £22 million,
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    which is the estimated figure for this year. The answer is that consumption of sugar has risen this year as compared with last year. In the estimates on which we were working, it was expected to run at a higher rate this year. The hon. Member for Flint (Mr. Birch) asked whether we had reduced the duty to the greatest extent compatible with retaining the preference margin. That is substantially true——
    Mr. Birch: But the Government have not eliminated the duty on Colonial sugar.
    Mr. Jay: I am aware of that, but the Sugar Duty is more complicated than the duty on tea. It comprises a whole scale. Broadly, the reduction by 11s. 8d. a cwt. is the largest convenient round sum by which we can reduce the duty without affecting the preference margin. The hon. and gallant Member for Holderness (Lieut.-Commander Braithwaite) asked why we continued in any respect to levy taxes on the one hand and to pay subsidies on the other. He asked whether that was not a foolish procedure. I thought that largely he was answered by the hon. Member for Altrincham and Sale (Mr. Erroll), who objected to our performing this book-keeping or tidying-up operation. His criticism was that we ought to have continued this double operation on the ground that we might wish to raise revenue later on. On the other hand, I do not agree with his statement that because these duties were originally imposed as revenue duties, therefore there can be no case for reducing them. It may be that at some future date one would wish to raise revenue. Of course, it would be possible to raise the duty again if that were so. We do not wish to do that now because we do not wish to raise the cost of living.
    To show that that is perfectly possible, I might remind the hon. Member that it was his right hon. Friend the Leader of the Opposition who, in the case of tea, repealed the duty altogether in April,1929, no doubt in expectation of winning the General Election which followed a month later which expectation was disappointed. It was the Tory Government of 1932 which after a later General Election, reimposed that duty. That shows, amongst other things, that it is

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    possible to remove the duty and impose it if one wishes.
    Clause ordered to stand part of the Bill.

    Clause 7.—(MATCHES.)
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    7.45 p.m.
    Mr. Peake: We now come to a Clause which is of very great importance. It concerns a matter which the Chancellor of the Exchequer dealt with in a cursory and cavalier fashion during his Budget Speech on 6th April. I refer to the very steep, heavy and onerous increase which the Chancellor proposes in the Matches Duty. The increase in the rate of duty is no less than 65 per cent. We shall have to have from the Economic Secretary a much fuller explanation of this action than that which the Chancellor gave when he introduced his Budget. On that occasion the right hon. and learned Gentleman told the House:
    "Next I come to matches, where some increase in price is, in any event, necessary to meet the increased costs of production. The last rise in price was in 1940, since when, of course, there has been a very considerable increase in costs. The smallest practicable rise in price is ½d. a box, and this would be a good deal more than is required to cover these increased costs. I propose, therefore, to help and to absorb the difference in tax. The tax will be raised by 5s. 5d. a gross in the case of the ordinary box of 50 matches, with corresponding rates for other containers."—[OFFICIAL REPORT, 6th April, 1949; Vol. 463. c. 2102.]
    When the right hon. and learned Gentleman said that the smallest practicable increase in the price of a box of matches was ½d., he was saying that the smallest practicable increase per gross of boxes was 6s. The Chancellor is taking an extra 5s. 5d. per gross in duty and leaving 7d. only for the manufacturers, and maybe the distributors, to cover the increased costs to which the Chancellor referred. Precisely the same effect of providing an extra 7d. a gross for the manufacturers would have been reached by reducing both the Excise and the Customs duties by 7d. per gross of boxes. The present rate of Customs on the ordinary box of matches is at the rate of 9s. per gross. That is to be increased
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    to 14s. 5d. The Excise Duty is slightly lower, and that is to be increased from its present rate of 8s. 4d. to 13s. 9d.
    Exactly the same effect could have been produced, if all the Chancellor wished to do was to permit the manufacturers and distributors to obtain an additional 7d. per gross, by reducing the present rate of Customs duty from 9s. to 8s. 5d. and the Excise duty from 8s. 4d. to 7s. 9d. That concession would have cost the Chancellor something of the order of £500,000. But instead of that, the Chancellor is increasing the price of the ordinary box of matches from 1½d. to 2d., and in the course of a full year he will get an additional £5 million by the taxation of matches.
    It may be said that this is a small matter, that the ordinary housewife probably uses only one box of matches a week if she is economical and therefore, all that this will cost her is 52 halfpennies or 2s. 2d. a year; but, of course, there are many people who consume matches at a far higher rate. I am not a pipe smoker myself, but I am told that a pipe smoker can easily get through one, and sometimes two, boxes of matches in a day. It seems rather ridiculous to give special preference to old age pensioners with regard to the Tobacco Duty—to give the aged and poor people tobacco at what, in effect, are subsidised rates—if the Government take back a great part of the benefit by increasing the price of the matches upon which they depend for keeping their pipes burning.
    I therefore suggest that we ought to have some much fuller explanation from the Economic Secretary before the necessity of increasing by no less than 33 per cent. the price of this common and essential article, which has to be purchased week in and week out by every housewife and every person in the country, however small their means may be. It rather seems as if the Chancellor is determined to impose some additional burden upon everybody, and that he has only to see some simple necessity which the smallest people in the country are compelled to purchase week by week to come forward and place an additional duty upon it. I therefore hope that the Economic Secretary will give us much better reasons than we have had hitherto for adopting the method of taking an extra £5 million of taxation in this way, when he could have

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    achieved precisely the same object of giving some additional return to the producers of matches by a very small concession in his Budget.
    Mr. Gallacher: This question of matches, like that of whisky, may be described as a burning question, but there is another aspect of the matches question which has to be noted. The Economic Secretary, the Chancellor and the Government do not like matches, because good matches, like good workers, will strike when the occasion so demands, and, in the eyes of the Government at the present time, anybody or anything that strikes is very unpopular. That reminds me of the fact that there have been many references to the Liberal Party, but it should be noted that the Liberal Party is now working to rule since the refusal to take them on the Tory-Labour combination that is going to Europe.
    This duty on matches hits at the housewife lower-pain at the worker, and particularly the lower-paid worker. The housewife uses matches almost more than anybody else, and the pipe smoker uses matches, as the right hon. Gentleman opposite said, in considerable abundance. I myself am a pipe smoker, and I know the amount of matches I go through, and I also know the amount of duty which my friends have to pay on that account. I cannot understand why the Chancellor is making this duty bear so heavily on pipe smokers because the pipe has always been associated with peace and peaceful pursuits. It is entirely different from cigarettes, whisky and wild, wild women. Peace has always been the character of the pipe and of the pipe smoker.
    I smoke a pipe, and when I consider this tax and hear some of the things said about it, my mind goes away back nearly 40 years. In fact, when I listened to one of our earlier discussions, my mind went back 50 years to an old music-hall house which used to exist in Paisley. A couple of chaps came on and one said to the other "I haven't seen you for a long time; where have you been?" The other answered, "I have been to the North Pole." The first then asked him, "How are food prices up there?" and he got the reply, "Just the same as here; 3d. a pint." Threepence a pint reminds me that forty years ago I got an ounce of tobacco for 3d. with a box of matches thrown in.
    Mr. Selwyn Lloyd: Tory misrule.
    Mr. Gallacher: Oh, yes, and the match workers were getting nearly as much as they are getting now. [An HON. MEMBER: "Phossy jaw."] I remember quite well reading all the stories about phossy jaw, but that was a still earlier period.
    Now the price of a box of matches jumps up from 1½d. to 2d., and an hon. Member has already said that the Chancellor may think that this is only a very small matter—a halfpenny on a box. For a housewife using a box of matches a week, it is only a halfpenny per week and does not come to very much over the year, but I have had occasion in a previous discussion on these matters to draw attention to the old and very apt Scots saying that, many a mickle makes a muckle. A halfpenny here and there, 6d. in another place or 1s. on something else—they all add up and accumulate into what becomes a very heavy burden. In this particular matter of matches, as a pipe smoker and as one who uses a very considerable amount of matches, I ask the Economic Secretary to discuss the matter again with the Chancellor and see whether they cannot find some other way of assisting the manufacturers to meet the costs of production rather than by way of making an increase of this kind. I ask him very sincerely to withdraw this proposal.
    Mr. Eccles: The first question I want to ask the Economic Secretary is this: do matches enter into the index figure of the cost of living?
    Mr. Jay Mr. Jay indicated assent.
    Mr. Eccles: They do? I think that is very extraordinary. The Financial Secretary told us that the price of beer is being diminished in order to keep down the cost-of-living index figure, and yet, when we come to a later part of the Bill, we find this duty which raises the cost-of-living index figure. What is the common factor between these two? It is perfectly clear that both the diminution in the Beer Duty and the increase in the tax on matches are made solely for Treasury reasons. In the one case, the revenue was going to fall off because the price of beer was too high, and in the other, the Treasury said to the Chancellor, "Here is an article which is a necessity of life for every housewife, who has got

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    to buy one or two boxes per week, so why not impose an extra halfpenny per box? We can get another £5 million this way," and, with that, they put on the duty.
    Mr. Logan: It needs a good quality match to enable one to see the beer.
    Mr. Eccles: Well, perhaps the hon. Gentleman knows more about matches alongside beer than I do.
    Why do they want this £5 million at this particular time, when the cost of living has become a very serious question, and when it is of the greatest importance that anything which may give even the smallest push towards higher industrial costs should be avoided? It really seems that the Revenue is in a bad way. It must mean that the expenditure of the Government is so great that, even now, at the end of the boom, the Chancellor is scratching round so that, wherever he can find that any change in taxation can be made that promises to bring in very little more or will result in a very small drop in the source of revenue, a change has to be made. It is very fine Socialist planning; it is the first time we have had anything like it. This is a bad duty, and should not be put on at this time. There is no excuse at this particular moment in the trade cycle for raising the prices of the necessities of life. If it was absolutely necessary to get £5 million, it could have been got in another way.
    Personally, I think the whole thing is quite unnecessary. After all, the Minister of Food lost £9 million in trading in potatoes. The Government are only getting back 50 or 60 per cent. of the loss which the right hon. Gentleman made in one series of transactions, and they are getting it out of the people by putting up the price of matches. It is certain that with more careful administration they could have saved £5 million over and over again. For all these reasons, I consider this to be a bad duty, and I hope that we shall go into the Division Lobby against it.
    8.0 p.m.
    Mr. Piratin: I hope that some Labour Members on this side will also voice their opinion on this matter, for it is a fact that no one can honestly make out
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    a case for this increase either in the interest of the national economy or any other interest. It is for that reason that the right hon. Member for North Leeds (Mr. Peake) was able to quote at length that part of the Chancellor's Budget speech dealing with the question of matches. In that speech the Chancellor, unless he was speaking ironically—and we all have to be careful not to speak ironically because the OFFICIAL REPORT makes it look most awkward—tried to justify the increase on the basis of the increased cost of production. That was the only justification for it which he submitted on that occasion. Had he said that we were hard put to it for a few millions here and there, we would have listened to him on that occasion and subsequently, but he did not.
    I wholeheartedly support the argument put forward by the right hon. Member for North Leeds in regard to the way in which the Chancellor could have met the increase in the cost of production if that were genuinely the reason for the higher duty. But, obviously, the Chancellor and his advisers could just as easily have seen the method suggested by the right hon. Member as he or any other hon. Member could, and, therefore, we are forced to the conclusion that that was not his intention.
    I wish to raise a further point on this matter which has not been touched upon so far in this Debate and one which, of course, I do not expect hon. Members opposite to raise. It is the matter of profits. The firm of Bryant and May, of which everyone in this Committee and in the country has heard, made a profit of £785,000 for the year 1947–48 and paid a dividend of 16 per cent. free of tax. I am sure the Committee will be interested to know that for the previous year they only made a profit of £430,000. That means that they were able to increase their gross profit in one year by some £355,000. That is pretty good going and, in a way, confirms what the right hon. Gentleman the Minister of Health said in another capacity at the Labour Party Conference at Blackpool the other week—that private enterprise is doing very well under the Labour Government.
    Mr. Erroll: Could the hon. Gentleman inform the Committee whether those figures represent gross or net profit?
    Mr. Piratin: I said that they represented the gross profit and I also quoted the dividend of 16 per cent, free of tax which, as I said before, is not bad going for a firm like Bryant and May who are a well established concern and are no longer afraid of competition or of trading ups and downs. On that basis, therefore, when the Chancellor said that the cost of production had gone up, it may be that it was owing to some peculiar explanation of book-keeping. Quite frankly, I would like to know how it has, in view of the fact that this firm were able to increase their profits in one year by some 70 per cent. I have only taken the case of one firm, but I could no doubt cite others in the same way. I used the example of Bryant and May because theirs is a household name, and because that instance was sufficient for my purpose.
    I believe that the Chancellor ought to try to establish his case more firmly, and that is why I opened my remarks by saying that I hope some Labour Members will also have something to say about this matter. The purpose of this increased duty can be construed in no other way than to raise some £5 million more money, and it is to be raised by indirect taxation. As everyone knows, indirect taxation falls most heavily on the poorly paid. Reference has been made to pipe smokers. I, like the right hon. Gentleman opposite, do not smoke a pipe, or cigarettes for that matter. But it is the case that many old age pensioners smoke pipes and that the extra halfpenny a day, or whatever it may be, falls equally on them as on the people to whom a halfpenny means nothing.
    How can a Labour Chancellor of the Exchequer justify taxation of this kind, especially as in his Budget speech the right hon. and learned Gentleman said that, so far as revenue was concerned, we were not able to claim much one way or the other. In fact, one hon. Member on this side of the Chamber said that maybe we ought to have left well alone and left all taxes exactly as they were because the alterations made little or no difference to the Revenue. Had that been done, it would have saved many headaches, and I say in all sincerity that it might have saved many Labour seats—and Communist seats, too—at the elections which followed almost immediately. But it was
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    not my Chancellor who introduced this Budget. I say quite seriously that I add my voice to those who have already spoken, and hope that Labour Members will speak their minds on this matter. It is not one on which the Chief Whip is operating with any great energy, and, therefore, I hope that hon. Members on this side will say what they believe. I also hope that the Economic Secretary, on behalf of the Chancellor, will take steps to delete this Clause, and to forget all about it.
    Mr. Erroll: The tactics of the Communist Party are always strange and interesting. I am sure that no one expected today that we would receive from the hon. Member for Mile End (Mr. Piratin) the graceful tribute he paid to my right hon. Friend the Member for North Leeds (Mr. Peake) who opened the Debate on the Match Duty, and we certainly did not expect to hear from the hon. Member for West Fife (Mr. Gallacher) such glowing references to the old days of cheap goods and abundance under former Tory Governments. We were glad to be reminded that there was a time under Tory rule when one was given a box of matches when buying an ounce of tobacco which only cost threepence.
    Mr. Gallacher: I think it was the absent Liberals who were the rulers at that time.
    Mr. Erroll: The hon. Member did not make it plain which party was in power at the time; he said about 40 years ago, and I took it that he was referring to a period of Conservative government about that time. There must have been one about then. In addition to that, he was kind enough to put a stop to the references to phossy jaw made by a Labour Member below the Gangway by pointing out that that particular menace had been dealt with a long time before the occasion which the hon. Member had in mind. That menace had undoubtedly been overcome as the result of Factory Act legislation introduced by an earlier Conservative administration, and, therefore, we have cause to be grateful to Communist hon. Members tonight for what they have said about the party on this side of the Committee. I trust that in their new mood of willing co-operation they will bear with me while I deal for

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    a moment with the profits of Bryant and May.
    Mr. Piratin: It would be better if the hon. Gentleman would stick to the facts. I assume that he has read the Order Paper: if he has, he will have noticed that during the last few days there has been an Amendment down which we knew was not in Order, of course, but which indicated our policy on this matter long before the right hon. Member for North Leeds ever thought of it.
    Mr. Erroll: We had noticed the Amendment and we had also noticed that, as usual, it was out of Order. We do not really expect Communists to learn democratic procedure entirely.
    As to the profits of Bryant and May, it was noticeable that the hon. Member for Mile End was not prepared to say what was the actual figure of the dividend. He referred to the gross profit as a large figure of hundreds of thousands of pounds, and when he referred to the dividend he merely used a percentage. To have produced a proper comparison he should have given the figure for the gross profit and the actual figure for the total dividend distribution. Sixteen per cent. of the invested capital of a business may be a large or a very small dividend. One cannot possibly tell from the information supplied by the hon. Member. I would like to ask the hon. Member to tell us what the distribution of profit represented as a percentage of the capital actually employed in the business. I suggest it would be a very much more favourable figure. That is indeed the only true test. The figures quoted by the hon. Member are highly misleading and most tendentious, but very much what we would expect from him.
    The hon. Member for Mile End referred to the increase in profits. Is not that possibly a sign of improved efficiency in management? Is it not just possible that the company deserves its increased profits? In introducing this matter to the House, the Chancellor said that the match makers would probably be faced with the necessity for increasing the price of matches in any case. Naturally, while one deplores any price increases at present, I think it is most significant that there has been no price increase in matches since
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    the price control order for matches was introduced in 1940. To keep the price down to the 1940 level is a very creditable feat. The Minister of Transport, in addressing the railwaymen a few days ago, said that it was a fine thing that the railways had only put up their fares by 55 per cent. He forgot the match industry, as well as many other industries in the hands of private enterprise.
    Mr. Butcher: On a point of Order. I beg to move that candles be now brought in.
    Lieut.-Commander Braithwaite: And matches, too.
    Mr. Erroll: The fact that increased profits may have been earned will have been due to the drive to lower costs which the firm in question must have pursued. Faced with a controlled price for their matches, the only way in which they could maintain solvency was by more efficient methods of production and distribution. That those improvements were even more successful than they expected is shown by the increased profit, and reflects every credit on a firm which has done its best to supply matches to the public in this country for a very large number of years.
    In his speech the Chancellor referred, if my memory serves me right, to the difficulty of increasing the price of a commodity such as matches by a small amount, and said that the match makers did not require a full halfpenny extra but only, say, one-tenth of a penny extra on a box. We are up against the familiar difficulty nowadays of the comparatively coarse price steps involved in a number of every-day commodities. One sees that in a number of other commodities such as newspapers, where the price is so small that any advance would necessitate an increase out of all proportion to what is required. Surely, it would have been possible for the manufacturers to get round their difficulties by putting fewer matches in the box and thus have achieved that fineness of grading which the relative coarseness of our monetary system does not permit at that particular level. In that way the price could have been kept down and the Chancellor could not have scooped in another £5 million of duty which we on this side of the Committee regard as unjustifiable.

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    8.15 p.m.
    It is more than ever unfortunate that this duty should be coming along ruthlessly and callously, bumping up the price of matches, when the Committee on Resale Price Maintenance have issued an illuminating report demonstrating the difficulties in regard to the right prices for particular commodities and in making small variations in price. Whereas the price of 5¾d. for an article might result in a loss to the company, a price of 6d. may result in a wholly excessive profit. We have the same difficulty with matches. I do not think the committee's report refers specifically to matches, but all that they say applies with very great force to matches. It is most unfortunate that the Government should have missed or ignored altogether the opportunity of allowing a fine, carefully calculated price, which could have been initiated by the manufacturers, instead of going in for a much heavier price increase, the larger part of which the Government take for themselves. The figures that I have, and which are probably right, show that of the increased price of 6s. a gross the Chancellor takes 5s. 5d. and the industry only gets 7d. The Chancellor therefore takes a very big whack in this increase of a halfpenny a box.
    To tie this increased tax to the argument that the manufacturers have got to put up their price, and that therefore the increase must be a halfpenny because that is the smallest practicable step, is singularly disingenuous when, as I pointed out, there are several ways of getting round the difficulty. There are interesting suggestions in the report of the committee on Resale Price Maintenance. There is the expedient of putting fewer matches in a box, and there are methods of offering different discounts for matches bought in larger quantities. One can get fine graduations of price on a dozen boxes, and even finer graduations on a gross. Surely a Government who are so wedded to bulk purchasing should be quick to see the advantage of encouraging people to buy a dozen boxes at once instead of only one. All these methods have been thrown overboard and ignored in the Chancellor's callous lust for more millions wherever he can get them.
    Mr. Leslie Hale: I do not wish to follow in too great detail what has already been said by other speakers.
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    I am not greatly impressed by the economic contribution of the hon. Member for Altrincham and Sale (Mr. Erroll) who said that the important matter is the amount distributed from profits and not the amount of profits. According to that argument, a firm which made a million pounds profit in a year and decided not to make a dividend at all would be entitled to a subsidy from public money because for once they decided not to distribute a dividend. I was not greatly impressed with the argument of the hon. Member for West Fife (Mr. Gallacher) who I was surprised to find quoting pleasant platitudes for once. Although it may possibly be true mathematically that many a mickle makes a muckle, it would require two billion mickles to make a muckle of this particular projected expenditure, and would involve each individual in this country striking 250 boxes of matches a day. No doubt, that would mean full employment in the match industry——
    Mr. Gallacher: I remember when the sort of tobacco I am holding in my hand was 3d. and a box of matches was thrown in. Now the tobacco is 3s. 5d. and a box of matches costs 2d. That is both a mickle and a muckle.
    Mr. Hale: The matter which we are discussing at the moment is matches. Incidentally, I gather that the hon. Member was referring not to tobacco, but to shag.
    The hon. Member for Mile End (Mr. Piratin) is on much firmer ground when he says that this is an addition of £5 million to indirect taxation, and that we have to preserve a balance between direct and indirect taxation. Any increase in indirect taxation is one to which we should have regard. Nevertheless, I say quite frankly that when we are faced with the necessity of raising very large sums of money, then this is a tax which will not hurt anybody and really will not cause hardship to anybody; and to refer to it as callous and brutal and ruthless, as the hon. Member for Altrincham and Sale did, is really to make a mockery of the Committee's deliberations.
    I rise only to put one or two small questions on one point in particular in the argument of the hon. Member for Mile End (Mr. Piratin). In his Budget speech the Chancellor opened the subject by saying that there really was a necessity

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    for some increase in revenue for the match industry. He said it was because the price of their raw materials had gone up, although a good deal of the earlier part of his speech was devoted to the argument that the costs of raw materials generally were about to go down; and, as I understand it, the principal raw material of the match industry is timber, and cheap timber at that; and the whole of the indications at the moment are that the price of timber is about to go down. Thus they will not have the problem to face.
    That being so, like the hon. Member for Mile End I tried to turn up some of the relevant figures. Bryant and May, to whom the hon. Member for Mile End referred, are, I understand, a subsidiary of the British Match Corporation who actually paid a bonus dividend last year—a very small one, it is true—in addition to their ordinary dividend. They paid a dividend of 8¼ per cent. and a bonus of 1 per cent. They made quite a good profit, after paying all taxation—and heaven knows that is fairly heavy—of over £300,000.
    That seems to be a substantial sum and it is right, therefore, that we should ask the Financial Secretary what is the estimate of the sort of figure that will be available to this industry, what is the estimate of the amount they need and how has it been computed? We are told that the additional taxation will be 6s. per gross, that the amount to be taken by the Chancellor will be 5s. 5d. and that 7d. will be available for the industry and the retailer, although I imagine that the proportion returned to the retailer must be a very small one indeed. Thus we have something like 10 per cent. going to the industry. The amount for the Revenue is £5 million so presumably £500,000 is going to the match industry.
    Before we give Parliamentary sanction to what is virtually a gift of £500,000 to the industry we are entitled to have some evidence that there is need for it. I do not want for a moment to dispute, and I quite accept at once, the principle that where we are controlling prices, and where we are to some extent controlling supplies, industry has a right to make representations and to say, "This is a matter which is affecting us harmfully and hardly and we have a right to demand an increase
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    proportionate to the finance invested in the industry, to its turnover and so on." But so far no figures have been given, and all the figures I have been able to find indicate that the match industry seems to be in a singularly prosperous state. The shares of the British Match Corporation on 4th April, two days before the Budget, were quoted at 31s. 3d. to 33s. 3d.—rather lower than in 1945 but representing roughly the sort of figure that had prevailed over a long period. It seemed to be a pretty fair market value of their shares. Since then the shares have gone up by something like two or three shillings and now they are quoted at varying prices from 33s. 6d. to 35s. 6d.
    Before Parliament agrees to a matter of this kind we are entitled to be told the figures, the estimates of the additional burdens being placed on the industry, and the estimates of the additional amounts that will go to the industry. It is in order to elicit that information that I have spoken on this subject.
    Mr. P. Thorneycroft: I disagree with the first part of the speech of the hon. Member for Oldham (Mr. Hale) that this tax really will not hurt anyone at all. It is a tax on a necessity of life and there are plenty of people in this country—I do not know whether the hon. Member for Oldham is one—who find it extraordinarily difficult to balance their housekeeping accounts anyway. Any additional tax on any necessity of life is a burden.
    Mr. Hale: May I intervene to make one point quite clear? I happened to do a little bit of shopping this weekend and I can say that the weekly ration of matches from the grocer who has supplied my not unsubstantial house for the last five years has been one box a week. My wife is not well-off and she has made representations to me on her financial situation from time to time, but I say that the additional halfpenny will not be decisive.
    Mr. Thorneycroft: I compliment the hon. Member upon his housekeeping and upon his chancellor of the exchequer, but at the same time it cannot be gainsaid that there are many houses where they have more than one box of matches a week. This is a tax which, over the country as a whole, will yield a substantial amount—£5 million—on a

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    necessity, and we cannot dismiss that sort of thing lightly. These sums mount up very much.
    The other thing which the hon. Member said is one with which I agree. We shall certainly require—indeed, the whole Committee will require—a far more detailed account of what lies behind this than has been vouchsafed so far by the Chancellor of the Exchequer. As I understand it, the argument of the Government starts from the point at which the match industry said that their costs had risen by an amount which is equivalent to 7d. per gross. What I want to know is, what did the Chancellor do about that, what was his reaction to that statement and what did the Government do? Did they say, "We cannot have any price increase at all"? I thought the Chancellor of the Exchequer was against price increases. What suggestion did the Government themselves put forward? Did they consider, either by themselves or with the industry, the possibility of cutting the duty by 7d., because I should have thought that on the record of the match industry there was a very good case for that. Here was this industry which, with prices rising all round, had managed to hold its price steady over a very long period. No matter what the profits, everybody will agree that that is a good achievement. I should have thought the first reaction should be to help an industry like that to go on holding prices at the same level.
    Was that considered and, if it was, why was it turned down? I think the Committee and the people who buy matches are entitled to an answer to that question. If that was not acceptable, were any of the suggestions put forward by my hon. Friend the Member for Altrincham and Sale (Mr. Erroll) considered? I am quite sure that the match industry, faced with this problem, were not lightly going to put another halfpenny on every box of matches. Nobody does that with a commodity if it can be avoided, for there is competition to face. What other suggestions were considered? Were any other suggestions considered? I think we are entitled to know what those suggestions were and why they were turned down.
    It may be that there is a difficulty about reducing the number of matches in the box. I do not know. Obviously those
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    things must have been considered before the argument was brought forward that an increase of 7d. per gross had to be accepted. What were the increases in costs? Could we be told? Is it the price of timber or the labour costs, or what is it? I accept the Government's statement that there has been some increases in costs, but I think we should know what precisely they were. That is information which, I think, we ought to have.
    I am bound to say that the whole Government approach to this matter does rather make nonsense of the attitude of the Chancellor of the Exchequer about increases in prices. Here we have a case where there is an increase in price and in cost of quite a small amount. Instead of resisting it with all the weapons at his disposal, many of which have been mentioned today, the Chancellor appears to welcome it with open arms. There is not only an increase of 7d. a gross, but he puts another 5s. 5d. on as well; and then he puts up the cost of lighters as well in an attempt to be fair all round. In such circumstances, to say the Chancellor of the Exchequer is trying to depress prices and costs is utter hypocrisy. [Interruption.] Hypocrisy is a general term of abuse. As I understand it, we must accuse the whole Government—as one does, indeed, quite readily—but not any specific member of it. If we could have that much more detailed information as to what efforts were made to assist the people of this country by holding the prices of these matches down, of what suggestions were put forward to that end and why they were turned down, I think the Committee would be much better able to come to a decision on the matter.
    8.30 p.m.
    Mr. Solley: I think some hon. Members of the Committee may like to know the views of the Parliamentary group of Labour Independents. Those hon. Members on this side of the Committee who know, as they ought to know by heart the contents of "Let Us Face the Future" do not need to hear my speech, for they know what the views of our group are, namely, that this is an additional increase in the cost of living and, as such, must be opposed by all those who took seriously the promises upon which this Government were elected

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    in 1945. It seems to me that the only people who can get any satisfaction at all out of this increased cost of matches, and who will gain anything, are the shareholders in the match companies. I notice with considerable interest that the journal which certainly will be acceptable to hon. Members opposite, the "Stock Exchange Gazette," on 6th May this year—and it was a good tip apparently—said this:
    "The company"—
    that is, the British Match Corporation—
    "will obtain some benefit from the extra halfpenny on a box of matches in the Budget, and this aroused hopes of a more favourable dividend policy."
    It seems to me an extraordinary thing that a Socialist Chancellor of the Exchequer should apparently have as his main object the spreading of gladness and joy towards those who read and contribute to the "Stock Exchange Gazette," and the spreading of dismay to the working class people of this country through an additional burden which they have to bear.
    It seems more extraordinary when one examines the figures of profits of some of the companies. Reference has been made by my hon. Friend the Member for Oldham (Mr. Hale)—I hope he will allow me to call him my hon. Friend because we are still friendly in a Socialist way——
    Mr. Hale: Is this an attempt to compromise me?
    Mr. Solley: My hon. Friend mentioned some figures relating to the British Match Corporation. He gave round figures which, with no disrespect to him, seemed to me not to give an accurate picture of the profits of the Corporation. I should like to go into more detail. These are the official figures. In the year ending 30th April, 1948, the gross profits were £1,912,659. Incidentally, since the hon. Member for Monmouth (Mr. P. Thorneycroft) talked about the percentage of the gross profits of match companies compared with their capital, it is interesting to see that the capital of the British Match Corporation is £6,712,000. So it would appear that the gross profit is just under a third of the issued and total capital. The net profit after tax is £826,349, which is a pretty
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    substantial percentage of the issued capital. The amount which served the purpose of dividend was £493,498. I must confess that if I did not know the Chancellor of the Exchequer better—and we all agree, at all events, on one thing: that he is a man of honesty and integrity—I should have thought he was shedding crocodile tears about the cost of production which the British Match Corporation and similar corporations were meeting.
    We must face up to this problem, that in spite of the increase in the cost of production it is essential that that increase should not go towards increasing the profits still further, but that any increase of costs should be met out of existing profits. Indeed, if that policy were to be pursued, not only would it be unnecessary to have taxation of this kind but wages could be increased by taking a slice out of the profits of companies such as the British Match Corporation. It therefore seems quite clear that if hon. Members on this side of the Committee want to face up to their responsibilities, as I am sure most of them would like to do, they can do only one thing, and that is to voice an objection to this further increase in taxation which will be met mainly by the ordinary people of this country.
    I know it can be argued: "This is a small matter. It is only some £4 million or £5 million." But here we are dealing in Committee with these small matters item by item. I should be out of Order if I were to say that all these additional items added together make a total sum which could be avoided by a complete switch in our policy commitments. I am not at liberty to enlarge on that, but that is a complete answer to those who say: "We must have taxation. We must have this money. Four million pounds does not matter. The working-class can pay and the Stock Exchange can make hay while the sun shines." I sincerely hope that as a result of this Debate there will be a little sorrow and a little rain instead of sunshine in the Stock Exchange tomorrow.
    Mr. Jay: I am very glad to have this opportunity to explain the reasons why we made this increase in duty. In the first place, we were obviously in search of revenue; we had to have revenue in this Budget if we were to maintain the food subsidies, the health services, and all the

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    other services to which we are committed, and at the same time not relapse into a Budget deficit, for all the reasons with which the Committee is familiar. When we looked round to find possible sources of revenue we discovered that in the match industry the facts were roughly these. First, as the hon. Member for Altrincham and Sale (Mr. Erroll) said quite rightly, the price of matches had not risen since 1940, and were therefore at a comparatively very low level. Secondly, since before the war profits in the match industry had been going down. The hon. Member for Mile End (Mr. Piratin) and one or two others quoted some profit figures. I also have studied the profits of Bryant and May, Limited, and what those hon. Members did not say was that as far as Bryant and May, Limited, are concerned, on the basis of profits earned for dividend the figure had been going down fairly steadily ever since 1938, and the dividend paid had also been going down. I think we must remember that in order to get the figures in perspective.
    Next, a rise in the cost of materials and labour had also been going on fairly steadily. The hon. Member for Monmouth (Mr. P. Thorneycroft) asked what those costs were. They were almost all costs, which have risen substantially, in timber and in labour. Those rises in cost had reached the point at which there had to be some rise in price if the additional costs were to be covered. I can assure my hon. Friend the Member for Oldham (Mr. Hale) that the mere word of the match trade was not accepted for that. A very careful and rigorous examination of these figures of costs was made, and we were satisfied that the rise was genuine.
    Mr. Hale: The dividend in 1936 was 25 per cent. plus a bonus of about 18⅔ per cent. Surely my hon. Friend does not really suggest that it is in the public interest to maintain figures so high as that, and that that sort of thing ought to be permitted to continue?
    Mr. Jay: I did not say that that or any other figure of dividend should be maintained. I was merely stating the fact that the dividend of Bryant and May Limited had come down since 1938. There had been a simultaneous rise in costs, which had been examined and been established to be genuine. If there was
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    to be a rise in the price of matches there could not, as hon. Members have pointed out, in practice have been a rise of anything less than a halfpenny a box. Had there been a rise of a halfpenny a box and all the extra profit had gone to the manufacturers, they would have enjoyed an enormous extra profit.
    Mr. Piratin: On that point——
    Mr. Jay: I do not think I can give way just now. We were unwilling that an increase in profits of that size should accrue to the manufacturers. Therefore, we came to the conclusion that the best arrangement was that there should be an increase in the price of a halfpenny a box, which corresponds, as the right hon. Gentleman the Member for North Leeds (Mr. Peake) has pointed out, to 6s. a gross boxes, and that of that 6s. gross increase much the greater proportion should be paid into the Exchequer and only the very small fraction of 7d. out of that 6s. should accrue to the match manufacturers.
    Mr. Piratin: I am obliged to the hon. Gentleman for giving way. This is a very serious matter, in which the hon. Member for Oldham (Mr. Hale) and others will be interested. How did the Treasury decide that 7d. per gross boxes was the appropriate amount to provide for the match making firms in order to help them to meet the costs of production?
    Mr. Jay: I was just coming to that. We made an arrangement by which out of the 6s. the sum of 5s. 5d. would accrue to the Exchequer and only the small proportion of 7d. to the match manufacturers. That 7d. was the amount which it was estimated, after the very rigorous examination of the manufacturers' figures of which I have spoken, was necessary to cover the additional costs of production. That we verified to the best of our ability. That was how the figure of 7d. was arrived at.
    Mr. Pickthorn: It is not very helpful to the Committee for the hon. Gentleman to say "additional costs" unless we know the date of the basic line. Additional as compared with what date?
    Mr. Jay: Over the period in which the steep rise in costs had occurred. I could not give the hon. Member an exact figure

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    in years; but we came to the conclusion that that was the addition in costs which could justifiably have been covered.
    The hon. Member for Chippenham (Mr. Eccles) asked whether there was an inconsistency here between our policy in the case of matches and our policy in the case of beer. What he had forgotten was that one of the main reasons for selecting beer for a reduction in price, which he represented as being inconsistent with the rise in the price of matches, was that by making the reduction in duty we contrived that the contribution of £4 million should come from the brewers' profits towards the benefit of the consumer; and that could not have been achieved in any other way. That was one of the main purposes of that change. Whereas with matches, by making the increase in the duty, we have contrived that 5s. 5d. out of the 6s. should accrue to the Exchequer rather than to the manufacturers' profits.
    Mr. Eccles: Having listened to what the hon. Gentleman has just said, I should like to ask him whether he will now abandon the argument of the Financial Secretary that the reduction in the price of beer was made for the purpose of lowering the cost-of-living index?
    Mr. Pickthorn: Sitting on the barometer.
    Mr. Jay: Not at all. If I am not out of Order may I say the two are perfectly consistent. We wished to make a reduction in price and we wished a contribution to that reduction to come from the brewers' profits as well as from the Exchequer; therefore, the two are perfectly consistent. For all those reasons, in the case of matches we decided on the solution which is embodied in the Clause, which will achieve three results simultaneously. In the first case, it solves the problem that was confronting the trade, of increasing costs which had to be met somehow; second, it has secured for us an additional £4.6 million of revenue which had to be secured from some source or other; and, finally, it involves a rise in the price of a commodity which, as I say, has not risen at all since 1940 and which, as my hon. Friend the Member for Oldham rightly said, is, in all the circumstances, no considerable burden.
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    The right hon. Gentleman the Member for West Bristol (Mr. Stanley), who has shown a lot of interest today in the cost-of-living index, may be glad to know that this proposal affects the index to the extent of only 0.1 of one point. For all these reasons I must ask the Committee to reject the Amendment, and to oppose the new axis between the Tory Party, the Communist Party and the new Independent Party.
    8.45 p.m.
    Mr. Stanley: I sincerely regret that there has not been a greater attendance of Members on the Government benches to hear what the Economic Secretary to the Treasury has just said. The lesson which I hope Members opposite who are present will remember, and which they will do their best to make known among their less fortunate colleagues who are not here today, is not to trust the kind of figures which, until now, have been put out as their party propaganda. Here we have the hon. Member for Oldham (Mr. Hale), the hon. Member for Mile End (Mr. Piratin) and the hon. Member for Thurrock (Mr. Solley) providing, no doubt from wholly different sources, what appear to be the same figures, and quoting instances of what, I quite agree, would appear to a casual listener to be rather high profits.
    Mr. Solley: Would not the right hon. Gentleman agree that whatever the source from which the figures come one thing is certain, that as a result of the Budget, in which this tax was proposed, there has been an increase in the Stock Exchange prices of match companies shares?
    Mr. Stanley: Yes, I am quite sure that that has been the result, but I was about to point out that the hon. Members I have just named, have, with great sincerity, because they are trained to do it as part of their usual publicity, produced vast figures in an attempt to show that the companies concerned were making extravagant profits. I admit that the figures, which I heard for the first time, were impressive. We heard of the British Match Corporation making a gross profit of £1,900,000, with a net profit of £800,000 and being in a position, after contributing a substantial amount to reserve, to distribute a dividend of 16 to 17 per cent. which, on the face of it,

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    would appear to be wholly satisfactory and, some people might say, a result which, in the circumstances of today, was rather too satisfactory.
    But when the matter is properly examined by unbiased minds, intent only on arriving at the economic truth, what do we find? We find that this Corporation, which would appear to be doing so well, and which would appear to be the subject of the envy of many of us, is, in fact, almost in its last stages. Were it not for the fact that the Government, by this Clause, will enable this Corporation to have its proper share of another £500,000, no one could say what the future of the Corporation would be. That shows the very great danger of relying too much on the sort of figures of profit which have been quoted tonight. I have no doubt that what happened is that the Economic Secretary has been analysing these figures of profit and dividend on the right basis—the basis of capital employed in the Corporation rather than issued share capital. It is on that basis, a basis which has not yet been disclosed to us, that no doubt he has arrived at the conclusion that it is impossible to allow the British Match Corporation or any other match manufacturers to struggle on under the circumstances which they are facing today.
    That is a very valuable lesson and I hope it will sink in with hon. Members opposite; but valuable as the lesson is, it is hardly so valuable as to cost £5 million at the consumers' expense. Although we accept fully the hon. Gentleman's analysis of the statistical position of the match industry, we accept his conclusion that without this further addition it cannot be expected to combat the diverse circumstances by which it is faced, circumstances which, as far as we can make out, it was already facing in the year in which it made the profit which has been quoted by hon. Members. I did not gather that this was something new, something which had occurred in the last year and to which, therefore, the figures were not attributable. We accept all that, and that something has to be done to help the match industry in its difficulties, but could it not have been done at a much cheaper cost to the consumer? No real answer has been given as to whether, if the purpose was to enable the match industry to survive, it
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    would not have been cheaper to have done it by reducing the duty rather than by increasing it, and by allowing it by this reduction to reach the figure which was necessary.
    We are, of course, forced to the conclusion that, just as the Financial Secretary tried to find some humanitarian reason for the reduction in the price of beer, that it was helping the beer drinker and not increasing the revenue, so the Economic Secretary has to search for a humanitarian reason for the increase of this duty, which he says is to help the poor match industry and not to increase the revenue. Of course, the fact is that in both cases there are signs of the desperate search which the Treasury has got to make for revenue. So desperate was the search that in one case, in order to maintain consumption, revenue has got to be reduced and in another case, where necessities are concerned, people have got to pay more, and they arrive at the same result by an increase in the duty. It is a tragic commentary, but this is the situation at which we are arriving at the end of a trade cycle, and this situation is reached in the days when the revenue is more buoyant than it may well be within the next 12 months. It is because of that, and because we believe that the help to the match industry, which we do not dispute, could have been given in other ways and at much less cost to the consumer that we must oppose this Clause in the Division Lobby.
    Mr. Piratin: I want to make two further points. I am sorry to take up the time of the Committee, but I must say a word in reply to the speech of the Economic Secretary following a number of contributions from both sides of the Committee. The hon. Gentleman's reply was very unsatisfactory. First, I should like to put a question to him which I hope he can answer. Much play has been made of this suggestion that it is impossible, with a small article of this kind, to increase the price by a fraction of a halfpenny, the lowest unit recognised in our money, although in many stores they still have articles which include a farthing in the price. Be that as it may, the ordinary box of matches, which cost 1½d., is to cost 2d., but a box of Swan Vestas, which cost 3d., now go up to 4d. Surely if ½d. is the smallest unit, that kind of

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    match should have gone up from 3d. to 3½d.
    There is one further point I want to make. We have been told that the Chancellor hopes to get from this tax £5 million in a full year and £4.8 million in the current year. My computation is that if, of the 6s. increase per gross, 5s. 5d. is revenue and 7d. goes to the manufacturers, 7d. being roughly one-tenth of 5s. 5d., therefore the Inland Revenue gets £5 million and the manufacturers get £500,000. Hon. Members on this side of the Committee are entitled to ask whether the Minister is satisfied that the manufacturers of this commodity require as much as £500,000 to make up for the increased cost of manufacture.
    Mr. Hale: It is 5 per cent. interest upon £10 million.
    Mr. Piratin: I am not in a position to accept the figures which have been given to us, but the right hon. Member for West Bristol (Mr. Stanley) has told us that he is prepared to accept them, and he is entitled to do so. I refuse to believe that the people need to make a contribution of £500,000 to help the match manufacturers to make profits of the substantial kind that have been referred to. If the Economic Secretary would like to make some comment on this point, we shall be glad to hear him.
    Lieut.-Commander Braithwaite: I was surprised that the Economic Secretary did not attach more weight to the amount of disapproval which has been aroused in the Committee since we started to discuss the Clause. The opposition has been vocal in some quarters and silent in others over almost the entire Committee. First of all, we had the objection of the Communist Party. It is understandable, because they would naturally be allergic to increasing the cost of anything that is inflammatory. Then we had the hon. Member for Thurrock (Mr. Solley) achieving the state once claimed by the Financial Secretary as that of "sitting pritty." We had the silent disapproval of the Liberals and the only friend the Economic Secretary has had so far is the hon. Member for Oldham (Mr. Hale). I do not think even he would describe his support as wholehearted. He expressed his anxiety at the £500,000 which would go to the match manufacturers. His approval was confined to
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    the tax on the box of matches and he said there was nothing very much in that. His old-age pensioners will pay it, with the hon. Member's full approval.
    No one has dealt with the argument which was launched at the commencement of this discussion by my hon. Friend the Member for Chippenham (Mr. Eccles). The Financial Secretary to the Treasury earlier expressed the Governernment's objective as an endeavour to steady the cost of living. Matches are included in the cost-of-living index figure, and by this method their cost is being raised. There is no doubt about that. On these benches we quarrel most of all with the concluding words of the speech of the Economic Secretary. He ended by saying that this money had to be obtained. We deny that entirely. It is suggested that the old-age pensioners of Oldham have to be taxed on their matches in order to help to make good the £9 million loss upon the ridiculous machinations of the Minister of Food. Had Government administration been run with any efficiency at all, no increased taxation of any sort or kind would have been necessary in this Budget. To inflict upon the poorest people in the community, when they are fond of smoking, this additional impost will stink in the nostrils of the electorate when they get an opportunity of expressing their opinion.
    9.0 p.m.
    Mr. John Lewis Mr. John Lewis (Bolton) rose——
    Lieut.-Commander Braithwaite: Those were not my final remarks. I am glad, however, that they were impressive enough to make the hon. Member for Bolton (Mr. J. Lewis) rise in reverence. Very soon now hon. Gentlemen opposite will have to justify all these actions. Are they well satisfied that in supporting this tax they are supporting something which is essential to the proper conduct of the finances of the country? Do they really believe that this £5 million could not have been saved by reasonable economy and more efficient administration in one field or another? If they are not convinced of that, there is only one thing for them to do, including the hon. Member for Bolton, to whom we hope to listen in a minute or two, and that is to flee from the wrath to come by joining us in the Lobby in a few minutes' time and voting against this increase.
    Mr. J. Lewis: The hon. and gallant Gentleman the Member for Holderness (Lieut.-Commander Braithwaite) and the party which he supports have been a little over clever in the arguments they have advanced. In a sense they had the effect of cutting off the match manufacturer's nose to spite the Government's face. One thing which has been made clear is that the smallest practical denominator of increase per box of matches is a halfpenny. From that point of view, unless there had been some increase, it would not have been possible in any circumstances for an allowance for increased costs of production or materials to be made to the match maker. The right hon. Gentleman the Member for West Bristol (Mr. Stanley) hinted that he thought the Government might do it in some other way, but he did not say what he meant. Was he suggesting granting a subsidy to the match maker or was he suggesting that some other means should be adopted whereby the match makers could recover the cost of their material labour?
    Mr. Stanley: Would it not have been possible to reduce the excise duty by the equivalent of £500,000? Would not that have had the same effect for the manufacturer while having no effect on the price to the consumer?
    Mr. Lewis: That is the fundamental difference between those of us who sit on this side of the Committee and hon. Gentlemen opposite. Having regard to our programme of social services and taking into account the social needs of our people, we do not believe that it will be possible in the near future to reduce taxation. When putting forward the point of view of the Conservative Party regarding the reduction in the price of beer, the right hon. Gentleman said that the purpose was to increase consumption. He cannot have it both ways. If, when increased revenue is being obtained by the Government from this source the Government decide in their wisdom or otherwise, in accordance with the point of view expressed here today, that they should take into account the difficulties or the financial position of the match makers, it is a little unreasonable for the right hon. Gentleman to advance an argument that, whereas he feels the same way as the Government do about the economic position of the match producers, nevertheless he will go into the Lobby
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    to vote against their getting an increase of 7d. per gross.
    Hon. Members on this side of the Committee have referred to the £500,000 as if it were all going into the pockets of the producers. Out of that sum has to be paid Income Tax; if any part of that sum is distributed, 25 per cent. will have to be deducted from the distributed amount; and if any of what remains is placed to reserve, it will still be subject to taxation at 12½ per cent. In effect, it only means a proportion of the £500,000, for the Chancellor himself will retain a considerable part of it. It is not the slightest use the right hon. Gentleman protesting that, because in the interests of the consumer he feels that this revenue should not be increased, he is not at the same time dealing a deadly blow to the interests of the match makers. If the party opposite go into that Lobby and vote against this increase, it will be interpreted by the match industry as a gesture on the part of hon. Gentlemen opposite that they do not intend the industry to get any benefit from the Government proposals which were framed to take into account the increased cost of production.
    Mr. W. Fletcher: We have had an interesting but rather mixed lesson in economics. I heard an interjection from the hon. Member for Oldham (Mr. Hale) when we were discussing the point that the Economic Secretary put forward about the amount which it was carefully calculated, after deep research, was to compensate for the increased costs of material, etc. for the match industry. The hon. Member for Oldham interjected "Five per cent. on £10 million." What possible relationship is there between a calculation of 5 per cent. on £10 million and the paying to the match makers of something directly related to the increased cost of the products they are using in producing matches?
    Mr. Hale: If the hon. Member is asking me a question; I will give him the answer. If, as we have been told already, the companies are all making a profit, the answer is that it is an addition to their distributable surplus. Therefore it is right that we should answer the question put by one hon. Member opposite—what is the capital involved in the industry, what relationship does this bear? The

    319
    British Match Corporation has a total capital of £6 million. I assumed there were other companies in the industry, which would bring it up to £10 million. In other words, as far as I can judge, it means an addition of about 5 per cent. of available dividend.
    Mr. Fletcher: That is not what we were told. We were told by the Economic Secretary that the profits of the matchmaking companies had been declining steadily for a number of years, and also, of the capital of the British Match Corporation, we have been told at last from the Front Bench that £6 million represents only the original capital and does not take into account reserves.
    Leaving that point aside, we had from the Economic Secretary, possibly inadvertently, one great flash which showed us what is really going on in the minds of the Government; one flash in an otherwise considerable degree of obscurity. That was when he said that this was a cheap article and, because it was a cheap article, it was something that should be taxed. It showed the desperate straits into which the Government have come. Surely on their own ideals they should rejoice that an article of daily use to practically everybody in the country is cheap. Yet they are forced by the financial impasse into which their bad administration has driven them, to take an article which should go to everybody in the country at the lowest possible price and, just because it is cheap, immediately to clamp a tax on it. If there ever was an indication of the abandonment of the whole of the policy which they have put over to the country of making life easier, then the attraction to them to put a tax on this necessary article is the greatest give-away of the straits in which they find themselves.
    Mr. Harold Roberts: This Debate has been a most disquieting revelation of the state of the finances of this country. To think that the Government find it necessary to resort to this expedient for a small amount is an indication of the great gravity of our general situation. The Debate has been one of the most remarkable that I have heard. Of many points of interest, perhaps the most interesting was the vindication of "big business"
    320
    delivered by the hon. Gentleman who addressed us a few minutes ago. How often has one heard ignorant people talking about the large profit of this or that concern, quoting perhaps the gross profit and not looking carefully at the net profit. Again, ignorant people seem to think that the dividend is the important thing, whereas what is important is what is paid. Now we have learned that the half million is not really a half million, and that by the time Income Tax and other taxation is paid, and something is put to reserve, there is not much left.
    The terrible threat has been uttered to hon. Members on this side of the Committee that, if we dare to go into the Lobby in opposition to this duty, we are no friends of the match industry. With a General Election coming on, it is a terrible thing to have it said against us before an enraged electorate that we are no friends of Bryant and May, but we have got to face it. On the other hand, how cheering it is for hon. Members opposite to know that, when they go to the country, there will not be any question of their being low fellows who do not understand high finance. Not at all. There are Members on those benches who, on this subject, could give us lectures on high finance, reserves, the Profits Tax and so forth, with the best of them.
    I confess that I have never heard the Government benches in such a tangle. We learned this afternoon from the Financial Secretary that the cost of living is the important factor. This evening, we learn that this duty will involve an increase in the cost of living, though certainly only up to a decimal point. When it is said by hon. Members on this side that this is simply a Treasury device in a desperate search for revenue, there is grave shaking of heads. What it is except a search for revenue I have not yet discovered.
    Having got that discrepancy, we then have the speech of the Economic Secretary, who, one would have thought, would have been able to make for himself the points which had to be made by back benchers about the finances of the match industry. We have had figures bandied about bit by bit and here and there, but I have never yet heard what the actual capital employed in the business is, and the speech of the Economic Secretary seemed to me to make confusion rather

    321
    worse confounded. The fact is that this is the Nemesis of a great deal of loose talk and foggy thinking that has gone on for years, and now at last we are seeing where it leads. It leads, of course, to the Government becoming bogged in a hopeless morass of absurdities and contradictions.
    Mr. York: I have heard 11 Budgets, each one of which has imposed increases in taxation in one way or another, and I think it is about time that we saw some change in this procedure. Therefore, when one has the opportunity, as one has on this particular Finance Bill, of attacking various increases in taxes, it is one's duty to do so.
    I consider that this has been a particularly salutary Debate; indeed, the fact is that all the proceedings on the Finance Bill have been extremely salutary. We have had a very fine lesson from my hon. Friend the Member for Flint (Mr. Birch) on the question of profits in the motor industry, and we had a second lesson this evening from my right hon. Friend the Member for West Bristol (Mr. Stanley), from which one would have thought that all hon. Members opposite would now begin to realise that what they have been saying for the last 20 or 30 years was only moonshine, palpably and provably false.
    Still, we have a few old stalwarts left, perhaps now confined to the non-crypto "cryptos," such as the hon. Member for Thurrock (Mr. Solley), who still go on saying that prices can be reduced if profits are reduced. But on this occasion, we have a fine, powerful, and, indeed, a large body of support for these bloated capitalists from all over the Socialist benches, saying that that is all nonsense. We get a wonderful defence from the Economic Secretary of the so-called high profits of the match industry, and we get another stirring defence from the hon. Gentleman the junior Member for Bolton (Mr. J. Lewis). Perhaps one day we may get a little commonsense from the whole of the Labour movement, for that, indeed, would be a wonderful thing. But, of course, by then their day will have gone, and their place will be taken by the new "Wee Frees" who are already forming their ranks behind the Government Front Bench.
    322
    9.15 p.m.
    I feel that we have really come to a time when all increases in taxation must be opposed. It is monstrous that today we should be imposing a duty which is equivalent to about 5s. per family per year throughout the country, and that at a time when we know that the cost of living is rising rapidly. It is not only foolish, but quite wrong. I hope that my hon. Friends will take this matter to a Division because I believe it is entirely wrong to increase the cost of living, even though it is only by, say, a halfpenny a week, that is, if we are as fortunate as the hon. Member for Oldham (Mr. Hale) who only uses one box of matches a week. I, personally, find that quite an inadequate allowance. In my case, the extra cost involved would be more like three halfpence a week. I thought it was entirely against the general policy of the Government to increase the cost of living at all. I shall vote against this increased duty because I dislike this unholy alliance between the great capitalists and the Socialist Party. I also dislike the increase in the cost of living, and, above all, I dislike all increases in taxation.
    Mr. Selwyn Lloyd: I am so completely dissatisfied with the answer given by the Government that I must say a word or two to the Committee on this matter, even though I know that hon. Members are anxious to divide. The only friend which the Economic Secretary really had was the hon. Member for Oldham (Mr. Hale), and he was only friendly in half his speech. During his words of commendation, he said that this increase would really not hurt anybody. I cannot believe that to take £5 million out of the pockets of the people is not going to hurt anybody, because, if that is the case, it would be an argument for putting an extra £5 million tax on almost any commodity in daily use. That being so, I utterly reject the suggestion that £5 million extra taxation will not hurt anybody.
    The next argument which was considerably canvassed in the Committee was that relating to profits. The Chancellor cannot really be very surprised that hon. Members on his side of the Committee should get up and protest, because he really started the riot when he recently used the expression "Frightfully high profits" during his speech on the Second

    323
    Reading of the Finance Bill. I am quite convinced that the right hon. and learned Gentleman must since have regretted using those words. [HON. MEMBERS: "No."] Well, if he does not, he certainly should regret using them because it has led to the kind of speech which has been made in this Committee today by four or five hon. Members who have talked about the frightfully high profits of the match industry. When the Economic Secretary came to give the Committee the facts he said that the profits were not frightfully high in the match industry, and that, in fact, they have been diminishing over a period of years.
    Mr. Jay: I did not say that profits were not high. I merely said that they had come down.
    Mr. Selwyn Lloyd: Where are we getting to now? The whole case for this increased duty, as the Chancellor said in his Budget speech, is that he wished to help the match industry to recoup themselves for their increased costs. That was the sole purpose, because he thought it was equitable to give them half a million, and, in giving them that assistance, he was taking advantage of the opportunity to take £4,500,000 for himself. The primary cause for this increase was that the match industry needed assistance in these difficult circumstances. If we now hear that the profits of the match industry are high already, what is the need for this increased assistance to them? The Economic Secretary has completely given away such case as there was, just as the right hon. Gentleman the Financial Secretary gave away the case with regard to the Beer Duty. I took down his words. The right hon. and learned Gentleman the Chancellor of the Exchequer was not in the Chamber at the time, but the reason for reducing the Beer Duty was because the Chancellor wanted to reduce the cost-of-living index figure. Here we have the match duty. Does the Chancellor wish to reduce the cost-of-living index figure? If so, why take an extra £5 million out of the pockets of the people in this country?
    The Committee are left in a state of complete obscurity as to what the right hon. and learned Gentleman really wants
    324
    to do. I suggest that the Government have completely failed to give the Committee the facts to which we are entitled. What was the level of profits in the match industry? What were their costs? What were their datum years? How have their costs increased over the years? What alternative methods were there? I understand that the price of a box of 50 matches was 1½d. If the burden of putting 50 matches into a box could not be supported by the match industry, why not put in 48? With matches, owing to their smallness, that would be a very easy way of reducing the size of the product in accordance with the cost. It could not have been easier than that the match industry should put fewer matches into the boxes. Another way, as has been suggested, would have been to have reduced the duty to make up the 7d. However that may be, we have not any facts or figures to justify this step which the Government have taken. Therefore, I shall very gladly vote against this increased duty, knowing what in fact everybody else should know, that this is a part of the cost of Socialism.
    Mr. Pickthorn: Surely we ought to have an answer to the speech that has just been made. Surely the Chancellor cannot really think that he is treating the Committee decently in this matter. The whole Debate has been conducted upon the basis of partial figures given about the costs and the profits of the match producing firms. The most important details have been asked for repeatedly. We have asked repeatedly on what years is it that the comparison is made when we are told that, after an elaborate inquiry, the Treasury agrees that costs have gone up very considerably. That is, a perfectly fair question on a perfectly simple matter of fact, the answer to which I should have thought the Economic Secretary could hardly have come into the Chamber without having in his head and with which certainly he ought by now to have been provided. Surely the Chancellor cannot think it right that that question should not be answered. It is clearly relevant, and it clearly ought to be before us. Are we not to be given an answer upon that point.
    There is a second question of fact which I wish to put. I apologise if I

    325
    am mistaken; I put the question because I think I am helping the Economic Secretary. [Laughter.] That is quite serious. I do not debate unfairly; if I thought I was trying to catch him out I would put it in that way. He said that this additional halfpenny would put up the cost-of-living index by 0.1. Surely he must have got that wrong; it seems a surprisingly large amount. I think he must have meant.01. I am not sure whether you were in the Chair, Mr. Bowles, but he said 0.1 and what I think he meant to say was.01. We ought to be told which he meant.
    Mr. Jay Mr. Jay rose——
    Mr. Pickthorn: Let me finish my question and then it can be answered properly. As a supplement to that question, may I put this to him? On the subject of the Beer Duty we have been told that the essential reason—at one time it was essential but at another time it was only an incidental reason—was to keep down the cost-of-living index figure. My question is: how much is that going to affect the cost-of-living index? The penny off the pint of beer will affect the index figure by what? By 0.1 or by.01.
    or what? By more or by less than the halfpenny on the box of matches? That is clearly a relevant question—and it is simple, technically—which must have arisen in the course of the inquiry. It is not proper that the conscious rectitude of the Chancellor of the Exchequer should permit him to expect the Committee to decide a question of that sort without giving the Committee this kind of relevant information.
    Mr. Stanley: When the Economic Secretary was at one time asked to give an answer the right hon. and learned Gentleman indicated that he was prevented from doing so because another hon. Member was in possession of the House. Surely now that there is no hon. Member in possession of the House he will answer the question and particularly will clear up this little point about where the dot comes in.
    Mr. Jay: I should like to help the hon. Member over his difficulties with the 0.1. I said 0.1 and I meant 0.1.
    Question put, "That the Clause stand part of the Bill."
    The Committee divided: Ayes, 279; Noes, 136.

    Division No. 167.]

    AYES

    [9 30 p.m.

    Adams, Richard (Balham)

    Burke, W. A.

    Evans, E. (Lowestoft)

    Albu, A. H.

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

    Evans, John (Ogmore)

    Alexander, Rt. Hon. A. V.

    Callaghan, James

    Evans, S. N. (Wednesbury)

    Allen, A. C. (Bosworth)

    Carmichael, James

    Fairhurst, F.

    Alpass, J. H.

    Castle, Mrs. B. A.

    Farthing, W. J.

    Anderson, A. (Motherwell)

    Champion, A. J.

    Fernyhough, E.

    Attewell, H. C.

    Chetwynd, G. R.

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

    Awbery, S. S.

    Cluse, W. S.

    Foot, M. M.

    Ayles, W. H.

    Cobb, F. A.

    Forman, J. C.

    Ayrton Gould, Mrs. B.

    Cocks, F. S.

    Freeman, Peter (Newport)

    Bacon, Miss A.

    Coldrick, W.

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

    Baird, J.

    Collick, P.

    Ganley, Mrs. C. S.

    Balfour, A.

    Collindridge, F.

    Gibbins, J.

    Barnes, Rt. Hon. A. J.

    Collins, V. J.

    Gilzean, A.

    Barstow, P. G.

    Colman, Miss G. M.

    Glanville, J. E. (Consett)

    Barton, C.

    Comyns, Dr. L.

    Gooch, E. G.

    Battley, J. R.

    Cook, T. F.

    Gordon-Walker, P. C.

    Bechervaise, A. E.

    Corlett, Dr. J.

    Greenwood, A. W. J. (Heywood)

    Benson, G.

    Cove, W. G.

    Grey, C. F.

    Berry, H.

    Cripps, Rt. Hon. Sir S.

    Grierson, E.

    Beswick, F.

    Crossman, R. H. S.

    Griffiths, D. (Rother Valley)

    Bing, G. H. C.

    Cullen, Mrs.

    Griffiths, W. D. (Moss Side)

    Binns, J.

    Daggar, G.

    Gunter, R. J.

    Blackburn, A. R.

    Daines, P.

    Guy, W. H.

    Blenkinsop, A.

    Dalton, Rt. Hon. H.

    Haire, John E. (Wycombe)

    Blyton, W. R.

    Davies, Edward (Burslem)

    Hale, Leslie

    Boardman, H.

    Davies, Ernest (Enfield)

    Hall, Rt. Hon. Glenvil

    Bottomley, A. G.

    Davies, Harold (Leek)

    Hamilton, Lieut.-Col. R.

    Bowden, Flg. Offr. H. W.

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

    Hannan, W. (Maryhill)

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

    Davies, R. J. (Westhoughton)

    Hardy, E. A.

    Braddock, T. (Mitcham)

    Deer, G.

    Harris, H. Wilson (Cambridge Univ.)

    Bramall, E. A.

    Delargy, H. J.

    Harrison, J.

    Brook, D. (Halifax)

    Dobbie, W.

    Hastings, Dr. Somerville.

    Brooks, T. J. (Rothwell)

    Dodds, N. N.

    Haworth, J.

    Broughton, Dr. A. D. D.

    Donovan, T.

    Henderson, Rt. Hn. A. (Kingswinford)

    Brown, T. J. (Ince)

    Dye, S.

    Henderson, Joseph (Ardwick)

    Bruce, Maj. D. W. T.

    Edwards, W. J. (Whitechapel)

    Herbison, Miss M.

    Burden, T. W.

    Evans, Albert (Islington, W.)

    Hoiman, P.

    Holmes, H. E. (Hemsworth)

    Mellish, R. J.

    Simmons, C. J.

    Houghton, A. L. N. D. (Sowerby)

    Messer, F.

    Skeffington, A. M.

    Hoy, J.

    Middleton, Mrs. L.

    Skinnard, F. W.

    Hubbard, T.

    Millington, Wing-Comdr. E. R.

    Smith, C. (Colchester)

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

    Mitchison, G. R.

    Smith, Ellis (Stoke)

    Hughes, Hector (Aberdeen, N.)

    Moody, A. S.

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

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

    Morley, R.

    Sorensen, R. W.

    Hutchinson, H. L. (Rusholme)

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

    Soskice, Rt. Hon. Sir Frank

    Hynd, J. B. (Attercliffe)

    Morris, P. (Swansea, W.)

    Sparks, J. A.

    Irvine, A. J. (Liverpool)

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

    Steele, T.

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

    Mort, D. L.

    Stokes, R. R.

    Janner, B.

    Murray, J. D.

    Stubbs, A. E.

    Jay, D. P. T.

    Naylor, T. E.

    Swingler, S.

    Jeger, G. (Winchester)

    Neal, H. (Claycross)

    Sylvester, G. O.

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

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

    Symonds, A. L.

    Jones, Rt. Hon. A. C. (Shipley)

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

    Taylor, H. B. (Mansfield)

    Jones, D. T. (Hartlepool)

    Oldfield, W. H.

    Taylor, R. J. (Morpeth)

    Jones, P. Asterley (Hitchin)

    Oliver, G. H.

    Taylor, Dr. S. (Barnet)

    Keenan, W.

    Orbach, M.

    Thomas, D. E. (Aberdare)

    Kenyon, C.

    Paget, R. T.

    Thomas, George (Cardiff)

    King, E. M.

    Paling, Rt. Hon. Wilfred (Wentworth)

    Thomas, I. O. (Wrekin)

    Kinghorn, Sqn.-Ldr. E.

    Paling, Will T. (Dewsbury)

    Thurtle, Ernest

    Kinley, J.

    Palmer, A. M. F.

    Titterington, M. F.

    Kirby, B. V.

    Pargiter, G. A.

    Tolley, L.

    Kirkwood, Rt. Hon. D.

    Parkin, B. T.

    Tomlinson, Rt. Hon. G.

    Lang, G.

    Paton, Mrs. F. (Rushcliffe)

    Turner-Samuels, M.

    Lavers, S.

    Paton, J. (Norwich)

    Ungoed-Thomas, L.

    Lee, F. (Hulme)

    Pearson, A.

    Vernon, Maj. W. F.

    Lee, Miss J. (Cannock)

    Peart, T. F.

    Viant, S. P.

    Leonard, W.

    Poole, Cecil (Lichfield)

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

    Leslie, J. R.

    Popplewell, E.

    Webb, M. (Bradford, C.)

    Levy, B. W.

    Porter, E. (Warrington)

    Weitzman, D.

    Lewis, A. W. J. (Upton)

    Porter, G. (Leeds)

    Wells, P. L. (Faversham)

    Lewis, J. (Botton)

    Price, M. Philips

    Wells, W. T. (Walsall)

    Lewis, T. (Southampton)

    Pursey, Comdr. H.

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

    Lindgren, G. S.

    Randall, H. E.

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

    Lipton, Lt.-Col. M.

    Ranger, J.

    Whiteley, Rt. Hon. W.

    Longden, F.

    Rankin, J.

    Wigg, George

    Lyne, A. W.

    Reeves, J.

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

    McAdam, W.

    Reid, T. (Swindon)

    Wilkes, L.

    McAllister, G.

    Rhodes, H.

    Wilkins, W. A.

    McEntee, V. La. T.

    Richards, R.

    Willey, F. T. (Sunderland)

    McGhee, H. G.

    Ridealgh, Mrs. M.

    Willey, O. G. (Cleveland)

    McGovern, J.

    Robens, A.

    Williams, D. J. (Neath)

    McKay, J. (Wallsend)

    Roberts, Goronwy (Caernarvonshire)

    Williams, J. L. (Kelvingrove)

    McKinlay, A. S.

    Robertson, J. J. (Berwick)

    Williams, Ronald (Wigan)

    Maclean, N. (Govan)

    Robinson, Kenneth (St. Pancras, N.)

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

    McLeavy, F.

    Rogers, G. H. R.

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

    MacPherson, Malcolm (Stirling)

    Ross, William (Kilmarnock)

    Williams, W. R. (Heston)

    Mainwaring, W. H.

    Royle, C.

    Willis, E.

    Mallalieu, E. L. (Brigg)

    Segal, Dr. S.

    Wills, Mrs. E. A.

    Mallalieu, J. P. W. (Huddersfield)

    Shackleton, E. A. A.

    Wyatt, W.

    Mann, Mrs. J.

    Sharp, Granville

    Young, Sir R. (Newton)

    Manning, C. (Camberwell, N.)

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

    Marquand Rt. Hon. H. A.

    Shurmer, P.

    TELLERS FOR THE AYES:

    Mathers, Rt. Hon. George

    Silverman, S. S. (Nelson)

    Mr. Snow and

    Mr. George Wallace.

    NOES

    Agnew, Cmdr P. G.

    Cuthbert, W. N.

    Haughton, Colonel S. G. (Antrim)

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

    Davidson, Viscountess

    Head, Brig. A. H.

    Assheton, Rt. Hon. R.

    Dodds-Parker, A. D.

    Hinchingbrooke, Viscount

    Astor, Hon. M.

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

    Hogg, Hon. Q.

    Beamish, Maj. T. V. H.

    Drayson, G. B.

    Hollis, M. C.

    Birch, Nigel

    Drewe, C.

    Hope, Lord J.

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

    Duthie, W. S.

    Howard, Hon. A.

    Boothby, R.

    Eccles, D. M.

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

    Bowen, R.

    Erroll, F. J.

    Hutchison, Lt.-Cdr Clark (Edin'gh, W.)

    Bower, N.

    Fleming, Sqn.-Ldr. E. L.

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

    Boyd-Carpenter, J. A.

    Fletcher, W. (Bury)

    Jeffreys, General Sir G.

    Braithwaite, Lt.-Comdr. J. G.

    Foster, J. G. (Northwich)

    Jennings, R.

    Bromley-Davenport, Lt-Col. W.

    Fox, Sir G.

    Keeling, E. H.

    Brown, W. J. (Rugby)

    Fraser, H. C. P. (Stone)

    Kendall, W. D.

    Buchan-Hepburn, P. G. T.

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

    Lambert, Hon. G.

    Butcher, H. W.

    Gage, C.

    Lancaster, Col. C. G.

    Carson, E.

    Galbraith, Cmdr. T. D. (Pollok)

    Lennox-Boyd, A. T.

    Channon, H.

    Galbraith, T. G. D. (Hillhead)

    Lindsay, M. (Solihull)

    Clarke, Col. R. S.

    George, Lady M. Lloyd (Anglesey)

    Linstead, H. N.

    Clifton-Brown, Lt.-Col. G.

    Gridley, Sir A.

    Lipson, D. L.

    Conant, Maj. R. J. E.

    Grimston, R. V.

    Lloyd, Selwyn (Wirral)

    Cooper-Key, E. M.

    Hannon, Sir P. (Moseley)

    Low, A. R. W.

    Corbett, Lieut.-Col U. (Ludlow)

    Hare, Hon. J. H. (Woodbridge)

    Lucas, Major Sir J.

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

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

    Lucas-Tooth, Sir H.

    Crosthwaite-Eyre, Col. O. E.

    Harvey, Air-Comdre. A. V.

    MacAndrew, Col. Sir C.

    328

    329

    MacDonald, Sir M. (Inverness)

    Price-White, Lt.-Col. D.

    Thorneycroft, G. E. P. (Monmouth)

    McKie, J. H. (Galloway)

    Raikes, H. V.

    Thornton-Kemsley, C. N.

    Maclay, Hon. J. S.

    Rayner, Brig. R.

    Turton, R. H.

    Maclean, F. H. R. (Lancaster)

    Reed, Sir S. (Aylesbury)

    Wadsworth, G.

    Macpherson, N. (Dumfries)

    Renton, D.

    Wakefield, Sir W. W.

    Maitland, Comdr. J. W.

    Roberts, Emrys (Merioneth)

    Walkden, E.

    Marshall, D. (Bodmin)

    Roberts, H. (Handsworth)

    Walker-Smith, D.

    Marshall, S. H. (Sutton)

    Robinson, Roland (Blackpool, S.)

    Ward, Hon. G. R.

    Mellor, Sir J.

    Ropner, Col. L.

    Webbe, Sir H. (Abbey)

    Morris, Hopkin (Carmarthen)

    Ross, Sir R. D. (Londonderry)

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

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

    Sanderson, Sir F.

    White, Sir D. (Fareham)

    Mott-Radclyffe, C. E.

    Scott, Lord W.

    White, J. B. (Canterbury)

    Noble, Comdr. A. H. P.

    Smiles, Lt.-Col. Sir W.

    Williams, C. (Torquay)

    Odey, G. W.

    Spearman, A. C. M.

    Williams, Gerald (Tonbridge)

    O'Neill, Rt. Hon. Sir H.

    Stanley, Rt. Hon. O.

    Willoughby de Eresby, Lord

    Orr-Ewing, I. L.

    Stewart, J. Henderson (Fife, E.)

    York, C.

    Peake, Rt. Hon. O.

    Stoddart-Scott, Col. M.

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

    Peto, Brig. C. H. M.

    Stuart, Rt. Hon. J. (Moray)

    Pickthorn, K.

    Sutcliffe, H.

    TELLERS FOR THE NOES:

    Ponsonby, Col. C. E.

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

    Brigadier Mackeson and

    Poole, O. B. S. (Oswestry)

    Teeling, William

    Mr. Wingfield Digby.

    Prescott, Stanley

    Thomas, Ivor (Keighley)

    Clause 8.—(MECHANICAL LIGHTERS.)
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    Mr. Birch: I think it can be said that the case against this Clause is even stronger than the case against the preceding Clause. There clearly was a certain argument on the question of costs to manufacturers of matches, but it seems to me that to put up the tax on mechanical lighters to the extent to which this Clause does is an outstanding example of the doctrine implicity believed in by all hon. Members opposite—the doctrine of equal misery. The Financial Secretary is determined that it shall always cost the same amount, however, it is done, to burn the Chancellor of the Exchequer in effigy. That is the first argument I want to put up, and I really can see no particular reason, even if the tax on matches is put up, why there should be this very steep increase in the tax upon mechanical lighters.
    The second point I want to make is on subsection (3), which imposes a large increase in the tax on gas lighters, which I understand are mechanical devices permanently attached to gas fires. I do not know what is the object of this—whether it is to save tinder or to cut down the supplies of nationalised gas—but it seems a very retrograde step that an article like a mechanical lighter on a gas fire should have the tax put up to such an extent.
    The third point I want to make is the high level of tax in comparison with the initial cost of the lighter. Nothing is so dangerous as to have an Excise duty amounting to many times the cost of the article, because if that is done a premium is put on evasion. I understand that a
    330
    number of lighters can be manufactured at 1s. 9d. apiece. Under the Clause the tax goes up to 6s. apiece. Therefore, as against the cost of production of 1s. 9d., we have a tax of 6s. and the retail price coming out at 10s. 6d. That is a dangerous thing in principle and is liable to cause abuse. It illustrates once again how we are steadily getting beyond the limits of taxable capacity in all the taxes imposed under this Budget.
    My final point is on the question of the size of the bond for the purpose of Excise duty. With a lighter which is manufactured for 1s. 9d. and on which the tax is 6s., if the Customs and Excise pursue their usual policy the size of the bond relative to the cost of the article may be extremely high and, therefore, may tax the working capital of firms engaged in making lighters. I should like to hear from the Financial Secretary or the Economic Secretary—one of the heavenly twins—what policy they intend to pursue in that respect.
    Mr. Erroll: The increase of tax is particularly serious on the cheaper lighters. Now that the tax as proposed in the Bill is going up to such an extent, there is a real case for differentiating between the cheaper and the more expensive lighters, particularly in the case of those mechanical lighters to which my hon. Friend the Member for Flint (Mr. Birch) referred—the lighters attached to gas cookers and gas fires—because they are essentially part of the appliance. They are not mobile like a box of matches; they cannot be used to light anything but the article to which they are permanently attached. There is certainly a strong case here for differential rates of duty.

    331
    In any event, the principle of raising the tax on the lighter merely because the tax is raised on matches is wrong, because it is the articles which the lighters consume rather than the lighters themselves which should be taxed. The lighter is not expendable as the box of matches is expendable. The lighter is rather the capital exquipment of the person who wishes to create a flame; it consumes petrol and lighter flints. The proper course would be, not to tax the lighter so exorbitantly, if taxes there must be, but to tax the flints which are consumed in proportion to which matches would otherwise be consumed.
    The tax as it stands, therefore, is too high. It should provide for differentiation between the various categories of mechanical lighters. There are more and more categories now that the industry has expanded and diversified itself. The tax should not be levied on the capital equipment of the lighter but rather on the consumable elements which go to make up the lighter.
    9.45 p.m.
    Sir Wavell Wakefield: I hope the Government will reconsider the duty which is being imposed upon these lighters. A constituent of mine has written to me stating that he will be put out of business by the increased duty. The Committee will recollect that last year there was a great increase in the tax on metal furniture, which resulted in manufacturers of such furniture being put out of business and being unable to compete in a promising export trade. That is what will happen in this case unless this matter is reconsidered. The export trade which was being done will no longer be able to be done because there will be no substantial home trade to support it. A constituent of mine wrote a few days ago:
    "I have discharged the whole of my factory staff with the exception of a skilled maintenance staff."
    That has been done because of the heavy duty which is being imposed on these lighters. That, as in the case of matches, is another step in increasing the cost of living, which the Chancellor and other Government spokesmen have said repeatedly they will do all in their power to reduce. It seems that the words of Ministers are exactly the opposite of their actions.
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    I should like to quote from another letter which constituents of mine sent to the Government:
    "We have been manufacturing a lighter for the popular market, i.e., within the means of the working man. Our price, wholesale, is 1s. 9d. each, plus 2s. 6d. Excise duty, so that the lighter retailed at 6s. 6d. Now, with this duty, this article cannot be retailed under 10s. 6d., which puts it beyond the means of the public for whom we cater. It has been suggested by the Mechanical Lighter Association that lighters retailing at 10s. 6d. or under should be subject to only 2s. 6d. duty as formally, and that they should be marketed as a utility article and so marked. This would enable people in the lower income groups to continue to buy an article, which can no longer be classed as a luxury, at a price which they can afford."
    I think that is a reasonable and sensible proposal, and I hope the Government will so amend the Clause that the cost of living in respect of this article will not be increased, and that manufacturers will be able to continue in business and our export trade will not be destroyed. As it is, overseas markets are now being lost because of the competition of cheap Austrian, German and Japanese lighters. If we are to compete in overseas markets against such products, then there must be a large turnover at home. This duty will kill this large turnover, and I hope the Government will reconsider this matter.
    Mr. Gerald Williams: I agree with my hon. Friend the Member for Flint (Mr. Birch) in thinking that this duty is more iniquitous than the raising of the duty on matches by 33 per cent. It means that the price of the cheap lighters, to which my hon. Friend the Member for St. Marylebone (Sir W. Wakefield) referred, and which cannot be sold at less than 10s. 6d., is increased by nearly 100 per cent. The tax on the cheap lighter is almost as bad as the tax on whisky, but unfortunately the taste for mechanical lighters is not so substantial as the taste for whisky, which means that mechanical lighters will possibly die out altogether, because people will not be prepared to pay 10s. for an article which only costs 1s. 6d. or 2s. to make. Again, if we have not got a healthy home market on which manufacturers can be assured of a big sale at home then we are going to spoil our export market, which is so vital at the present time.
    There is another point altogether, Lighters are probably cheaper to use than

    333
    matches. As we heard earlier this evening, a pipe smoker spends on matches probably 1d. a day, if not 2d. I have no brief for lighters myself. I find that mine usually will not work, it may be my own fault, but it is a great shame if people in this country who cannot afford matches are not to be allowed cheap lighters as a substitute.
    There is also a Customs duty of 7s. on lighters. That makes the cost of imported lighters so high that people without big means can scarcely afford to use them. On the other hand, the 7s. only gives 6d. preference on the more expensive lighters made at home, which is not sufficient when we have to compete with the cheap labour of Germany, Austria and other places. There is no doubt at all that the manufacturers are going to be very severely hit over this big rise in taxes. The Economic Secretary considered that.01 per cent. was a very paltry addition to the cost of living, but to a heavy smoker who spends even only ½d. a day it is going to be 15s. a year, which is more than one per cent. of some people's income. It is the poorer classes who are going to be hit and the smoker is already paying a high duty on tobacco. There will be an increase in the cost of living and there may be more demand for wages. It is only a small item, but it is one of many, and in my opinion it is a thoroughly bad tax.
    Colonel Haughton: As a non-smoker perhaps I may be able to approach this particular matter from an impersonal and dispassionate point of view, but in addition to that I should like to approach it from an angle from which I do not think it has been tackled up to the present. During the time I have been privileged to serve in this House I have heard condemnation by the different parties of the practice of eliminating the work of the inventor or of the research worker by big monopolies, which wish to preserve their form of manufacture. On each and every occasion the various parties have paid lip service to the idea of encouraging inventors and research workers.
    It seems to me that invention has been at work and produced a lighter as cheap as 1s. 9d., and it is completely wrong that a cheap article of that sort should be assessed for Excise Duty at 6s. From the point of view of the encouragement
    334
    of invention I cannot help believing that this is a thoroughly bad tax, because no one with the present knowledge of the way in which lighters work will be able to avoid paying this tax by making one for himself. It seems wrong that an article which can be manufactured for 1s. 9d. should bear a tax of 6s. Because of that fact, I shall vote against the Clause.
    Mr. A. R. W. Low: I would add my word to this protest. I have already indicated to the Financial Secretary the case of a constituent of mine who manufactures mechanical lighters and who sees himself and his workpeople being thrown out of work because he will be unable to sell his lighters at the high price which he will have to charge following the passing of this Clause. We are penalising men who are making mechanical contrivances which assist the housewife and the smoker. Why do the Government slavishly follow their practice in regard to matches by adding so much taxation to the duty on mechanical lighters?
    I compute that of the cost of a 2d. box of matches, slightly more than half can be credited to taxation. In the case of mechanical lighters, which will now cost 10s., very much more than half will be due to taxation. These matters are getting wholly out of balance. I would ask the Chancellor to reconsider this matter. He must have had many protests. My hon. Friend the Member for St. Marylebone (Sir W. Wakefield) has quoted a letter from a constituent. Many other hon. Members must have raised similar cases with the Government of people who are making mechanical lighters, have established their position in the home market and have a flourishing export trade, and who will be thrown completely out of business. I again ask the Government to reconsider this matter.
    Mr. Frederic Harris: I wish to stress the point of view of the manufacturer. The Government too often seem to ignore completely the export trade by spoiling the home market and putting the home manufacturer into increased difficulty. This is a very serious point. Surely the Government have some statistics of the amount of export trade being carried on today in mechanical lighters. Travelling abroad, I have

    335
    formed the opinion that a fair amount of export trade is being done by manufacturers in this industry. They have established good contacts and good markets, and they have the prospect of good trade abroad. The Government must fully understand that by imposing this extra taxation they will be cutting down the rate of production by as much as 30 per cent. or 40 per cent. In any branch of manufacture that percentage would make it almost impossible to obtain a satisfactory export market.
    Would the Government please give us some definite information of the amount of export trade which is being obtained and would they tell us whether they have any statistics about the estimated result of the increased taxation which we are now being asked to impose upon these lighters? My opinion is that some manufacturers will be entirely put out of business. The Government must understand a fact which is far too often ignored, that we cannot have an export trade unless we have a healthy home trade to support it. It cannot be supported financially. I hope the Government will give us definite information about what this trade means in relation to our exports. Have they looked into it seriously from the manufacturers' point of view and found out whether it means that the manufacturers of mechanical lighters will be put out of business in obtaining export markets because of the increased taxation? It is a very serious matter indeed.
    10.0 p.m.
    Mr. C. Williams: [Interruption.] I thank hon. Gentlemen opposite for the welcome they give to the opportunity of learning something.
    Mr. Cecil Poole: How right the hon. Member is.
    Mr. Williams: I quite agree—almost invariably. I want to emphasise what was said by the hon. and gallant Member for Antrim (Colonel Haughton). When a tax is unduly and unfairly high, as this tax has become in comparison with the tax on other forms of goods except matches, it inevitably invites some form of evasion. I have never maintained that people who used to evade very high duties—smugglers—were anything like as bad as some of the professions which exist today, but on this occasion I believe
    336
    that we are asking for trouble. These devices can very easily be made out of cartridge cases by reasonable mechanics, and I have no doubt that a number of hon. and right hon. Gentlemen opposite might be able to make adequate lighters of their own. [An HON. MEMBER: "They might not light."] If they were made by some hon. Members they might not light, but if they were made by many of the Tories in the country they would light and go on working.
    What am I to say to constituents of mine who approach me about this? They will say to me, "Here is a grossly unfair tax. Are we to make our own lighters or not?" I shall certainly say, "For goodness' sake, use your ingenuity as a private individual and make your own lighter." If I give that advice, am I subject to the administration of the Attorney-General? I do not necessarily want to know the answer to that at the moment. The Chancellor of the Exchequer would be wise if he followed the advice given again and again by members of his party that where the tax is 200 or 300 times the cost of the manufactured article, the tax is liable to kill itself in that people will refuse to buy the article, knowing that it is grossly overtaxed. From the Revenue point of view, it would probably be wise for the Chancellor to drop this altogether. I do not think that any harm would be done by not increasing this tax and keeping it at a level which is already very high but not so high as to invite evasion.
    Mr. Jay: May I first assure the hon. Member for Altrincham and Sale (Mr. Erroll), who expressed anxiety about the domestic gas lighters affixed to gas fires, that lighters which are permanently attached to gas cookers and not portable lighters are not subject to tax at all. The object of this increase in duty is perfectly simple. These lighters are competitive with matches, and this duty was imposed originally to countervail the duty on matches. Because the two trades are undoubtedly competitive, they have always moved proportionately together.
    Colonel Haughton: Is it then the object to eliminate competition in this way?
    Mr. Jay: The purpose of both changes in tax is to ensure fair competition between the two trades and to see that the Government, by imposing the tax. do

    337
    not discriminate against either the one trade or the other. As a matter of fact, on the general assumption that each lighter takes the place of not less than two gross boxes of matches, which is the accepted assumption, the duty we are now imposing gives, if anything, a slight advantage to the lighter trade over matches. The proportion is worked out in this way: that on the retail price the rise in the normal cost of the lighter will be between 30 per cent. and 35 per cent. The rise in the case of matches is from 1½d. to 2d., which is 33⅓ per cent. Therefore the rise in the retail price in the ordinary case will be just about proportionate. That is the method by which the changes in these two duties have normally been compared, and we think that is the proper criterion to follow in this case.
    Mr. Low: Would the hon. Gentleman say what price lighter he is taking when he says that the rise is only about 30 per cent.?
    Mr. Jay: Taking the lighter selling at present at 10s. to 12s. That is the method by which these two duties have normally been compared, and if we were not making this increase we should be discriminating unfairly against the match trade.
    Sir W. Wakefield: I gave the hon. Gentleman evidence that by putting on this duty he was killing the mechanical lighter business. How, therefore, can there be competition if the business is to be killed? I suggest that the Chancellor should reconsider this in order to get competition, because there will not be any if the Government kill one side of the business.
    Captain Crookshank: I am not impressed by the reply of the Economic Secretary, and I do not suppose he thought I would be. However, the fact remains that this is only the first stage of the Finance Bill, and there will obviously be another opportunity for discussing it. Therefore there is another opportunity for the right hon. and learned Gentleman the Chancellor to reconsider the matter in the light of what has been said. It seems to me that the case instanced by my hon. Friend the Member for St. Marylebone (Sir W. Wakefield) about his constituent is overwhelming for reconsideration. The Government's view,
    338
    apparently, is that the purpose of raising the duty on lighters is because, in the past, it has always moved up proportionately to any increase in the duty on matches. They are, therefore, adopting the old rule of what has happened in the past, but we are constantly surprised at hearing that from hon. and right hon. Gentlemen opposite, quite irrespective of the circumstances.
    If hon. Members will cast their minds back to the previous argument, the reason the Matches Duty was put up was to safeguard the position of the match manufacturers, and, because the Matches Duty had to be put up in order to provide a safeguard to protect the position of the match manufacturers, therefore the duty on mechanical lighters has also to be put up in order to keep the fixed proportion. Therefore, the unfortunate person who in the past has been used—I say "used" advisedly, because many of these things go wrong and it is a question of buying more than one in a lifetime—the person who has been used to buying a cheap mechanical lighter will now find that he has to pay an enhanced price for it in order to make sure that the profits of the match manufacturers are upheld by a Socialist Government.
    It is really a ludicrous position. I am sure that the Government have drifted into this position one step after another, and this is the ridiculous end-up. I hope the Government will reconsider the matter, first of all, from the point of view of the manufacturers of cheap lighters. There may be a case to be argued for a differential rate between the cheaper and the more expensive lighters, between the ordinary sort of lighter which my hon. Friend the Member for Torquay (Mr. C. Williams) says his friends could make and the gold-mounted one which one sees in expensive shops in Bond Street. There may be a case for a differential rate on the value of the lighters themselves, but I hope the Chancellor will consider the case of the manufacturer of the cheap article, because this increase is a very high increase in that range.
    The second matter which I want the Chancellor to consider is that, while the duty is at the comparatively low level at which it stands now, the difference between the Customs and Excise is 1s., and, under this proposal, the difference will still be 1s., though everybody knows

    339
    that the difference of 1s. as between 6s. and 7s. is a much less protective duty than was previously the case. I hope the Chancellor will also look into that point to see whether he is not throwing the balance in favour of the imported article, because of the duty remaining at the same level of 1s. as between one article and another.
    I do not think we can take the matter very much further tonight, because the whole weight of the argument has been against the Government and so many examples have been put forward that I am perfectly certain that between now and the Report stage this matter will have to be reconsidered. It is quite true—and I admit it—that previously the rates on matches and lighters have gone up proportionately, but as we raise the price of one article as high as we are doing on
    this occasion with mechanical lighters, I am not at all sure that the case of the need for absolute proportionate differentiation still stands, and I hope the Government will carefully take into account what has been said here today and also the representations which I am certain they must have received since the Bill was introduced. This only shows once again the great disadvantage of not having this sort of Debate on the Report stage of the Budget Resolutions so that the case could have been made and could have been considered before the introduction of the Bill, instead of being compressed into the very short time between now and the further stages of the Bill.
    Question put, "That the Clause stand part of the Bill."
    The Committee divided: Ayes, 286; Noes, 139.

    Division No. 168.]

    AYES

    [10.15 p.m.

    Albu, A. H.

    Comyns, Dr. L.

    Hale, Leslie

    Alexander, Rt. Hon. A. V.

    Cook, T. F.

    Hall, Rt. Hon. Glenvil

    Allen, A. C. (Bosworth)

    Corlett, Dr. J.

    Hamilton, Lieut.-Col. R.

    Alpass, J. H.

    Cove, W. G.

    Hannan, W. (Maryhill)

    Anderson, A. (Motherwell)

    Cripps, Rt. Hon. Sir S.

    Hardy, E. A.

    Attewell, H. C.

    Crossman, R. H. S.

    Harrison, J.

    Austin, H. Lewis

    Cullen, Mrs.

    Hastings, Dr. Somerville.

    Awbery, S. S.

    Daggar, G.

    Haworth, J.

    Ayrton Gould, Mrs. B.

    Daines, P.

    Henderson, Rt. Hn. A. (Kingswinford)

    Bacon, Miss A.

    Dalton, Rt. Hon. H.

    Henderson, Joseph (Ardwick)

    Baird, J.

    Davies, Edward (Burslem)

    Herbison, Miss M.

    Balfour, A.

    Davies, Ernest (Enfield)

    Holmes, H. E. (Hemsworth)

    Barnes, Rt. Hon. A. J.

    Davies, Harold (Leek)

    Horabin, T. L.

    Barstow, P. G.

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

    Houghton, A. L. N. D. (Sowerby)

    Barton, C.

    Davies, R. J. (Westhoughton)

    Hoy, J.

    Bechervaise, A. E.

    Davies, S. O. (Merthyr)

    Hubbard, T.

    Benson, G.

    Deer, G.

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

    Berry, H.

    Delargy, H. J.

    Hughes, Hector (Aberdeen, N.)

    Beswick, F.

    Dobbie, W.

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

    Bing, G. H. C.

    Dodds, N. N.

    Hutchinson, H. L. (Rusholme)

    Binns, J.

    Donovan, T.

    Hynd, J. B. (Attercliffe)

    Blackburn, A. R.

    Driberg, T. E. N.

    Irvine, A. J. (Liverpool)

    Blenkinsop, A.

    Dugdale, J. (W. Bromwich)

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

    Blyton, W. R.

    Dye, S.

    Janner, B.

    Bottomley, A. G.

    Evans, Albert (Islington, W.)

    Jay, D. P. T.

    Bowden, Fig. Offr. H. W.

    Evans, John (Ogmore)

    Jeger, G. (Winchester)

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

    Evans, S. N. (Wednesbury)

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

    Braddock, T. (Mitcham)

    Fairhurst, F.

    Jones, Rt. Hon. A. C. (Shipley)

    Bramall, E. A.

    Fernyhough, E.

    Jones, D. T. (Hartlepool)

    Brook, D. (Halifax)

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

    Jones, P. Asterley (Hitchin)

    Brooks, T. J. (Rothwell)

    Follick, M.

    Keenan, W.

    Broughton, Dr. A. D. D.

    Foot, M. M.

    Kenyon, C.

    Brown, T. J. (Ince)

    Forman, J. C.

    King, E. M.

    Bruce, Maj. D. W. T.

    Fraser, T. (Hamilton)

    Kinley, J.

    Burden, T. W.

    Freeman, Peter (Newport)

    Kirby, B. V.

    Burke, W. A.

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

    Kirkwood, Rt. Hon. D.

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

    Ganley, Mrs. C. S.

    Lang, G.

    Callaghan, James

    Gibbins, J.

    Lavers, S.

    Carmichael, James

    Gilzean, A.

    Lee, F. (Hulme)

    Castle, Mrs. B. A.

    Glanville, J. E. (Consett)

    Lee, Miss J. (Cannock)

    Chamberlain, R. A.

    Gooch, E. G.

    Leonard, W.

    Champion, A. J.

    Gordon-Walker, P. C.

    Leslie, J. R.

    Chetwynd, G. R.

    Greenwood, A. W. J. (Heywood)

    Levy, B. W.

    Cobb, F. A.

    Grey, C. F.

    Lewis, A. W. J. (Upton)

    Cooks, F. S.

    Grierson, E.

    Lewis, J. (Bolton)

    Coldrick, W.

    Griffiths, D. (Rother Valley)

    Lewis, T. (Southampton)

    Collick, P.

    Griffiths, W. D. (Moss Side)

    Lindgren, G. S.

    Collindridge, F.

    Gunter, R. J.

    Lipton, Lt.-Col. M.

    Collins, V. J.

    Guy, W. H.

    Logan, D. G.

    Colman, Miss G. M.

    Haire, John E. (Wycombe)

    Longden, F.

    Lyne, A. W.

    Pearson, A.

    Swingler, S.

    McAdam, W.

    Peart, T. F.

    Sylvester, G. O.

    McAllister, G.

    Platts-Mills, J. F. F.

    Symonds, A. L.

    McEntee, V. La. T.

    Poole, Cecil (Lichfield)

    Taylor, H. B. (Mansfield)

    McGhee, H. G.

    Porter, E. (Warrington)

    Taylor, R. J. (Morpeth)

    McGovern, J.

    Porter, G. (Leeds)

    Taylor, Dr. S. (Barnet)

    McKay, J. (Wallsend)

    Price, M. Philips

    Thomas, D. E. (Aberdare)

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

    Pritt, D. N.

    Thomas, George (Cardiff)

    McKinlay, A. S.

    Proctor, W. T.

    Thomas, I. O. (Wrekin)

    Maclean, N. (Govan)

    Pursey, Comdr. H.

    Thurtle, Ennest

    McLeavy, F.

    Randall, H. E.

    Timmons, J.

    MacPherson, Malcolm (Stirling)

    Ranger, J.

    Titterington, M. F.

    Mallalieu, E. L. (Brigg)

    Rankin, J.

    Tolley, L.

    Mallalieu, J. P. W. (Huddersfield)

    Reid, T. (Swindon)

    Tomlinson, Rt. Hon. G.

    Mann, Mrs. J.

    Rhodes, H.

    Ungoed-Thomas, L.

    Manning, C. (Camberwell, N.)

    Richards, R.

    Vernon, Maj. W. F.

    Marquand, Rt. Hon. H. A.

    Ridealgh, Mrs. M.

    Viant, S. P.

    Mathers, Rt. Hon. George

    Robens, A.

    Wallace, G. D. (Chislehurst)

    Mellish, R. J.

    Roberts, Goronwy (Caernarvonshire)

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

    Messer, F.

    Robertson, J. J. (Berwick)

    Warbey, W. N.

    Middleton, Mrs. L.

    Robinson, Kenneth (St. Pancras, N.)

    Webb, M. (Bradford, C.)

    Mitchison, G. R.

    Rogers, G. H. R.

    Weitzman, D.

    Monslow, W.

    Ross, William (Kilmarnock)

    Wells, P. L. (Faversham)

    Morley, R.

    Royle, C.

    Wells, W. T. (Walsall)

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

    Scott-Elliot, W.

    West, D. G.

    Morris, P. (Swansea, W.)

    Segal, Dr. S.

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

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

    Shackleton, E. A. A.

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

    Mort, D. L.

    Sharp, Granville

    Whiteley, Rt. Hon. W.

    Murray, J. D.

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

    Wigg, George

    Nally, W.

    Shurmer, P.

    Wilkes, L.

    Neal, H. (Claycross)

    Silverman, S. S. (Nelson)

    Wilkins, W. A.

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

    Simmons, C. J.

    Willey, F. T. (Sunderland)

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

    Skeffington, A. M.

    Willey, O. G. (Cleveland)

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

    Skinnard, F. W.

    Williams, D. J. (Neath)

    Oldfield, W. H.

    Smith, C. (Colchester)

    Williams, J. L. (Kelvingrove)

    Oliver, G. H.

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

    Williams, Ronald (Wigan)

    Orbach, M.

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

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

    Paget, R. T.

    Snow, J. W.

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

    Paling, Rt. Hon. Wilfred (Wentworth)

    Sorensen, R. W.

    Williams, W. R. (Heston)

    Paling, Will T. (Dewsbury)

    Soskice, Rt. Hon. Sir Frank

    Willis, E.

    Palmer, A. M. F.

    Sparks, J. A.

    Wills, Mrs. E. A.

    Pargiter, G. A.

    Steele, T.

    Wyatt, W.

    Parker, J.

    Stewart, Michael (Fulham, E.)

    Young, Sir R. (Newton)

    Parkin, B. T.

    Stokes, R. R.

    Paton, Mrs. F. (Rushcliffe)

    Stross, Dr. B.

    TELLERS FOR THE AYES:

    Paton, J. (Norwich)

    Stubbs, A. E.

    Mr. Popplewell and

    Mr. Richard Adams.

    NOES

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

    Fleming, Sqn.-Ldr. E. L.

    Lipson, D. L.

    Assheton, Rt. Hon. R.

    Fletcher, W. (Bury)

    Lloyd, Selwyn (Wirral)

    Astor, Hon. M.

    Foster, J. G. (Northwich)

    Low, A. R. W.

    Baldwin, A. E.

    Fraser, H. C. P. (Stone)

    Lucas, Major Sir J.

    Beamish, Maj. T. V. H.

    Fraser, Sir I. (Lonsdale)

    Lucas-Tooth, Sir H.

    Birch, Nigel

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

    MacAndrew, Col. Sir C.

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

    Gage, C.

    MacDonald, Sir M. (Inverness)

    Boothby, R.

    Galbraith, Cmdr. T. D. (Pollok)

    McKie, J. H. (Galloway)

    Bowen, R.

    Galbraith, T. G. D. (Hillhead)

    Maclay, Hon. J. S.

    Bower, N.

    Gammans, L. D.

    Maclean, F. H. R. (Lancaster)

    Boyd-Carpenter, J. A.

    Gates, Maj. E. E.

    Macpherson, N. (Dumfries)

    Braithwaite, Lt.-Comdr. J. G.

    George, Lady M. Lloyd (Anglesey)

    Maitland, Comdr. J. W.

    Bromley-Davenport. Lt.-Col. W.

    Gridley, Sir A.

    Marshall, D. (Bodmin)

    Brown, W. J. (Rugby)

    Grimston, R. V.

    Marshall, S. H. (Sutton)

    Buchan-Hepburn, P. G. T.

    Hannon, Sir P. (Moseley)

    Mellor, Sir J.

    Butcher, H. W.

    Hare, Hon. J. H. (Woodbridge)

    Morris, Hopkin (Carmarthen)

    Carson, E.

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

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

    Channon, H.

    Harvey, Air-Comdre. A. V.

    Mott-Radclyffe, C. E.

    Clarke, Col. R. S.

    Haughton, Colonel S. G. (Antrim)

    Neven-Spence, Sir B.

    Clifton-Brown, Lt.-Col. G.

    Head, Brig. A. H.

    Noble, Comdr. A. H. P.

    Conant, Maj. R. J. E.

    Hinchingbrooke, Viscount

    Nutting, Anthony

    Cooper-Key, E. M.

    Hogg, Hon. Q.

    Odey, G. W.

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

    Hollis, M. C.

    Orr-Ewing, I. L.

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

    Hope, Lord J.

    Osborne, C.

    Crosthwaite-Eyre, Col. O. E.

    Howard, Hon. A.

    Peake, Rt. Hon. O.

    Cuthbert, W. N.

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

    Peto, Brig. C. H. M.

    Davidson, Viscountess

    Hutchison, Lt-Cdr. Clark (Edin'gh, W.)

    Ponsonby, Col. C. E.

    De la Bère, R.

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

    Poole, O. B. S. (Oswestry)

    Digby, Simon Wingfield

    Jeffreys, General Sir G.

    Prescott, Stanley

    Dodds-Parker, A. D.

    Jennings, R.

    Price-White, Lt.-Col. D.

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

    Keeling, E. H.

    Raikes, H. V.

    Drayson, G. B.

    Lambert, Hon. G.

    Rayner, Brig. R.

    Drewe, C.

    Lancaster, Col. C. G.

    Reed, Sir S. (Aylesbury)

    Duthie, W. S.

    Lennox-Boyd, A. T.

    Renton, D.

    Eccles, D. M.

    Lindsay, M. (Solihull)

    Roberts, Emrys (Merioneth)

    Erroll, F. J.

    Linstead, H. N.

    Roberts, H. (Handsworth)

    342

    343

    Robinson, Roland (Blackpool, S.)

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

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

    Ropner, Col. L.

    Teeling, William

    White, Sir D. (Fareham)

    Ross, Sir R. D. (Londonderry)

    Thomas, Ivor (Keighley)

    White, J. B. (Canterbury)

    Sanderson, Sir F.

    Thorneycroft, G. E. P. (Monmouth)

    Williams, C. (Torquay)

    Scott, Lord W.

    Thornton-Kemsley, C. N.

    Williams, Gerald (Tonbridge)

    Smiles, Lt.-Col. Sir W.

    Touche, G. C.

    Willoughby de Eresby, Lord

    Spearman, A. C. M.

    Turton, R. H.

    York, C.

    Stanley, Rt. Hon. O.

    Wadsworth, G.

    Stewart, J. Henderson (Fife, E.)

    Wakefield, Sir W. W.

    TELLERS FOR THE NOES:

    Stoddart-Scott, Col. M.

    Walker-Smith, D.

    Commander Agnew and

    Stuart, Rt. Hon. J. (Moray)

    Ward, Hon. G. R.

    Brigadier Mackeson.

    Sutcliffe, H.

    Webbe, Sir H. (Abbey)

    Clause 9.—(EXTENSION OF RELIEF FROM ENTERTAINMENTS DUTY FOR RURAL ENTERTAINMENTS.)
    Mr. Niall Macpherson: I beg to move, in page 5, line 25, to leave out "words," to the end of subsection (1), and to insert:
    "'and (b)' of the words 'or (b) that the entertainment is held in a borough, urban district or parish defined as above with a population not exceeding six hundred and forty to the square mile and.'"
    This Amendment differs from the previous Amendments on the Order Paper in that it is not clear on the face of it. Indeed, I gather from one film journal which has been brought to my attention that in their view it is not clear at all and it does not appear to them to have any meaning. However that may be, I may say that the Treasury have had an opportunity of looking at it and, while they may not have found the drafting perfect, at any rate they have found the Amendment comprehensible. It cannot be understood simply by reference to the Finance Bill we have before us. One must also refer to the Finance Act of 1948.
    In one sentence, the purpose of the Amendment is to exempt from Entertainments Duty entertainments in buildings which are situated in boroughs of a population of not more than 2,000, or where the population does not exceed 64 to the square mile, whether or not the seating capacity of those buildings exceeds 400. The present position, as the House will be aware, is that exemption is given so long as the Commissioners are satisfied on two points: first, on the point regarding population—that is to say, that the building in which the entertainments are given is situated in a small borough with a population not exceeding 2,000 or, alternatively, in a district or parish with a population not exceeding 64 to the square mile; and secondly, that the seating capacity does not exceed 400.
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    The Clause we are now discussing alters that so as to substitute for the provision regarding the population not exceeding 64 to the square mile a provision that the population shall not exceed 640 to the square mile. The Amendment itself substitutes for the two legs, so to speak, for the two conditions—the population condition and the seating capacity condition—two alternative conditions. It says either that exemption from Entertainments Duty can be given if the previous Section as it exists in the Finance Act of 1948—that is, a borough of 2,000 or a population of 64 to the square mile—is satisfied, whether or not the seating capacity exceeds 400; and there is a second condition which is in line with what the Chancellor is now proposing, that is to say a small borough with a population not exceeding 2,000, and a district or parish with a population not exceeding 640 to the square mile, and a seating capacity not exceeding 400.
    The reason for putting down this Amendment is that there are in a number of areas, where the population is thin, halls which were built at a time when the population was a good deal more dense. [Laughter.] I am not referring to the mental capacity of the population but to the numbers. The right hon. and learned Member for Montgomery (Mr. C. Davies) quoted a case in his own constituency last year. There is a very much more remarkable case in my constituency where, during the First World War, a very big population was built up, where a hall was constructed to cater for that population and where the population has now sunk to less than one-tenth of what it was previously. That will not necessarily always be the case. There must be many cases where village halls have been built with a view to various forms of entertainment which are really out of proportion, so far as seating capacity is concerned, to the density of the population of the areas in which they are situated.

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    10.30 p.m.
    I know that the Commissioners have interpreted the present regulations very reasonably, but there are certain circumstances in which it might have been desirable for a seating capacity of more than 400 to be provided in a hall where the seating capacity is normally limited to 400. One knows that in rural areas there are rural festivities of a special local character at which almost the whole population will attend at one time, in which case, if there is a big hall, it would be normal to seat to the very maximum capacity of that hall. So far as I can see, if that happened only once in a year the proprietor of the hall, whether the town or a private person, would be debarred from obtaining this exemption from Entertainments Duty. It seems to me that that is quite wrong and not in keeping with the purpose of the Act. In areas where the population is very thin, or in small boroughs with a population of less than 2,000, this condition that the seating capacity of the hall should not exceed 400 should not apply.
    Mr. Selwyn Lloyd: On a point of Order, Major Milner. The hon. Member for Dumfries (Mr. N. Macpherson) raised one aspect of the possible extension of the exemption of rural entertainments. Some of my hon. Friends and I wish to raise another aspect of the matter. I wonder whether it would be convenient to the Committee, and perhaps save time, if the whole matter were dealt with on this Amendment.
    The Chairman: If the matter the hon. and learned Member wishes to raise is relevant, let it by all means be dealt with now.
    Mr. Selwyn Lloyd: The point I want to raise is rather different from that of the hon. Member for Dumfries. It deals with entertainment in what are really rural parishes in urban districts. The purpose of the original exemption, I gather, was to foster the community spirit in rural areas. It so happens that some districts which are rural cannot qualify for this exemption because they happen to be within the area of an urban district. I have had correspondence with the Financial Secretary about this matter during the last year, and he said that under the terms of Section 17 of the Finance Act of last year it was quite impossible for this to be done. He said
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    the matter was to be reviewed. As we are now reviewing it and the Government have made, I admit, a certain concession so far as population is concerned, this seems to be the time to raise that matter also.
    The sort of example I want to give is a specific one—the village of Willaston, eight miles from Chester and nine miles from Birkenhead. It is essentially a rural area. Transport facilities are not good. There is a scanty bus service and a very irregular train service. The population is under 1,800. It has a village institute which holds 200 and a church hall which holds 300. But it happens to be in the local government area of Neston Urban District Council. Neston is another small place about 2½ to three miles away which has no particular relation to it geographically but happens to have been put in the same urban area. Neston Urban District consists of 9,341 acres and has a population of 9,492.
    The new test which this Clause sets up is that if the population is under one to the acre, then even in urban districts the sort of place about which I am talking can qualify for exemption, provided that the village hall does not hold more than 400. I admit that in the original Act of last year the population had to be one to ten acres, or not exceeding 2,000; but I submit that if the purpose of the right hon. and learned Gentleman really is to help rural areas in which there are no real amenities—and this village is 10 miles from a centre of population, has no cinema, and depends upon entertainments in the village hall or the church hall—that is the sort of place which the Chancellor intended to help by the original exemption.
    There are two ways in which it could be done. It would be possible for the right hon. and learned Gentleman to go further than the concession which he has made this year; but I imagine that if he were to do that, it would bring within the ambit of the exemption a certain number of places which really are urban areas. The other way in which it seems that the right hon. and learned Gentleman could help the sort of place of which I am speaking is not to restrict the definition of a rural parish to the definition given in the Local Government Act, 1933, which means that it must be a parish in a rural district, but to take in this case the register of population, namely, the

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    register of population for the village of Willaston, and in such cases to give the exemption. The matter is one of some difficulty, but I believe it was the intention of the Government, and that it will be the desire of Members in all parts of the Committee, to help the sort of place of which I am speaking. I hope the right hon. and learned Gentleman will give consideration to this matter when he is considering the matter which has been raised by my hon. Friend.
    Mr. M. Philips Price: I wish to raise another point in connection with this matter, as you, Major Milner, are allowing us a certain latitude. It is connected with the Amendment, but it is not quite the same matter. In my constituency there is a number of small mining communities which are in rural areas, but which will just fail to benefit under this provision. There is one with a cinema capacity of only 50 over the limit, and the population is just more than 2,000. It has a population not of 640 to the square mile, but of just under 700. I know that the line must be drawn somewhere; I know that there are administrative difficulties; but in this case the district will have to pay the full rate.
    It appears to me that it might be possible to arrange a graduated scale. Could not one, in a case like that, levy a duty somewhat less than the full figure, though with not too great a difference? I do not know whether it is possible to do that in the present Bill, but I hope that if it cannot be done now, it may be arranged in the next Budget. The present provision leaves out a whole lot of districts, particularly in mining areas, where this exemption is needed. We are grateful for this concession, which will enable rural areas to benefit, and will make it possible for village institutes to get cinema shows of the educational kind. There are other cases like the one I have mentioned which I hope can be considered.
    Viscountess Davidson: I should like to support the plea of the hon. and learned Member for Wirral (Mr. Selwyn Lloyd). More than two years ago I approached the Chancellor of the Exchequer with regard to village cinema clubs and
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    sent him detailed accounts which had been kept by these small clubs. As the Chancellor is aware, most of them are run by small people, with little financial background; many of them are ex-Service men and with the tax they find it impossible to make the venture pay. They do not ask or expect large profits, but they must make ends meet, and if I may be allowed to quote one account sent to me, and passed on to the Chancellor, when the tax was deducted there was a loss of 19s. 8d. after paying £2 for the hire of a hall and £8 6s. for hire of the film. We all know how difficult it is to persuade people to stay on the land, and to succeed we must see that they have some of the amenities which are available in the towns. These village cinemas are of enormous importance to the villages, and are run, as I have said, by small people.
    The Chancellor was very sympathetic when I approached him; I have had many courteous replies from him, and he promised that he would look into the whole matter before his next Budget. The next Budget came, and he made certain concessions, but the proposals did not cover those villages which came just within an urban boundary. Many of my villages do not benefit, as the population is included in the population of the parent town. I took the matter up again with the Chancellor and again he was most sympathetic; and again he said he would consider the matter in the Budget. But I am sorry to say the problem still remains. I should like, if I may, to read one letter which I received. It reads:
    "We approached the collector of Customs and Excise at Northampton, but he refused a certificate on the grounds that Bedmond is part of the village of Abbots Langley, with a population exceeding 2,000. We would say that, while this is substantially correct, the village of Bedmond is some way from Abbots Langley, that the hall was built by the village, is run and used by the inhabitants for usual village community purposes, etc., and has a seating capacity of 150; the population of the village is about 600 and it comes somewhat hardly upon them that they should have to bear the taxes. You will appreciate that all functions held for the benefit of the inhabitants, bearing in mind that they are almost solely of the working classes, have to be very moderately priced; in consequence of which, in many cases, the venture shows a loss."
    I can repeat that that is the experience in very many of the villages in my constituency, and I ask the Chancellor whether some means cannot be found so

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    that they may also benefit from the tax exemption.
    Commander Maitland: The difficulties with which we are concerned have been very well expressed in the Debate we have had on this matter, which is of very deep concern to the rural people. We want the country-people to have an opportunity to see cinema shows as much as they can. I fully sympathise with the difficulty of devising a correct formula, but there is really a very proper case for looking into the whole formula again. The hon. Member for Forest of Dean (Mr. Philips Price) and the noble Lady the Member for Hemel Hempstead (Viscountess Davidson) have given cases of anomalies. I sent the Chancellor a case the other day where I thought there was a complete anomaly. It concerned a small district, just going over, by a hundred, I think, the permitted figure. This man gave details of all his shows for a considerable time. There was no doubt that he was making a loss and he said he would probably have to shut down, which would mean that the people in that district would be deprived of a cinema.
    10.45 p.m.
    On the other hand, I should like to give an example of something of the other side of the picture. It is of a district by the sea which has a large influx of summer visitors and which probably is quite reasonably prosperous. In that particular case, because it has a large hinterland geographically, it is able to claim exemption. That creates a sense of injustice in the minds of those men who are just not able to meet such a tax. I think there is a case for the right hon. and learned Gentleman looking into the whole formula.
    Mr. C. Williams: I want on this Clause to put what is possibly a rather different angle from that which has been put on some of the Clauses we dealt with earlier in the day, because I have had a considerable amount of correspondence——
    Mr. McKie: On a point of Order. I desired to raise another point on the Clause, but I have refrained from doing so when the Committee are discussing an Amendment which is on a comparatively narrow point. The hon. Member is now discussing the Clause.
    The Chairman: We are, of course, discussing an Amendment. There has been a tendency to widen the discussion and within limits that is permissible on the clear understanding that we do not have another Debate on the Question "That the Clause stand part of the Bill."
    Mr. McKie: I take it we are now in Order in discussing other points which arise on the Clause?
    The Chairman: Yes, within limits, as I have said.
    Mr. Williams: I have no wish to controvert the position so far as Order is concerned, but I wish to comment on this Amendment and for a very short time to express some sympathy with the Clause itself. There has been a great deal of correspondence between myself and the Treasury on this matter. I have also been into this matter in previous Debates and quite honestly, I think that on this occasion the Treasury and the Chancellor of the Exchequer have tried to meet a very difficult position. There are immense complications, as has been shown by those hon. Members who have spoken. There are a large number of marginal cases as regards the size of the towns and the size of the halls, and matters of that kind. There are other marginal points as far as actual entertainment is concerned.
    I use this occasion not only to thank the Treasury for what they are doing, but to try to ease out this matter so as to help the rural population and encourage people to stay in the rural areas as much as possible. I also hope that in the rural areas, and in some of the comparatively large towns which come just outside, there will be encouragement of amateur theatricals, which very largely take place in these local halls. I believe that the Financial Secretary and others are looking at this matter with care and consideration and with a desire to help. May we have some assurance that between now and next year, he will go into a large number of borderline cases with that same sympathy which I think both sides of the Committee have shown with a view to helping? If he gives that assurance, I am sure I shall be forgiven for praising the worst Government that ever was for having provided a few bright things.
    Mr. McKie: I also share the desire of my hon. Friend to congratulate the Government on what they have done on this occasion. I quite agree that in extending the scope of the relief in the way proposed the Government are doing quite a big thing for some of the smaller local authorities. I should like to point out, however, that although it is sought to give great relief to many forms of entertainment, nothing is done for one particular form of rural entertainment. Until now I was afraid to catch your eye, Major Milner, because I feared that the points I wished to make were outside the scope of discussion on this Amendment. Now you have given certain latitude on the understanding that hon. Members do not seek to prolong the Debate on the Motion that the Clause stand part of the Bill.
    About the only form of rural entertainment which will have no relief under this Clause will be the gymkhana. This entertainment was provided by local authorities largely at the express invitation of the National Government of 1942, and as the Clause now stands it obtains absolutely no form of relief. The same rate of duty has to be paid as is levied at Ascot, Goodwood or Sandown Park. I am not disparaging those institutions. I was at Ascot last week and enjoyed it, but I should strongly object to having to pay admission to a rural gymkhana at the same rate as to the Royal enclosure at Ascot or the club stand at Goodwood or Sandown.
    Some hon. Members opposite may say that those great race meetings exist solely for gambling, but that charge cannot be made against rural gymkhanas: they exist solely for sport and they have provided a great deal of innocent entertainment for people whose lives are lived, in the main, without a great deal in the way of amusement. Gymkhanas played a great part during the war in promoting the objects of the holidays-at-home campaign and were continued after the war. They are organised by people who give their services freely. As the Clause is now drafted, it would be impossible for the Chancellor of the Exchequer to do anything about them. There have been many pleas to the Treasury in recent weeks and months on this point, and when another Finance Bill is presented to the House, if by any stroke of ill-luck this Government are still in power, I hope
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    they will be generous when the time comes.
    Sir S. Cripps: Perhaps I might deal first with the last point raised. So far as the gymkhana is concerned, that is in quite a different category from what we are speaking of here. We are speaking here of the hall in which a village has its own entertainment. A gymkhana often draws thousands of people from the whole countryside around and is quite a different proposition.
    It is clear that the difficulty which arises, as one would expect, is over the various marginal cases. Every case we have had cited this evening has been a case in which there are a few more people or the building is just a bit larger, or whatever the circumstance might be. Whatever the limit, that is going to happen. It is obvious that if we put the limit at 740 to the square mile, we should get cases in which there were 741. That would be bad luck, and we can do nothing about it. I promised last year that we would keep this matter under review and that we would carefully investigate all the cases to see whether if some amendment was required, it could be introduced to cover the majority of cases.
    So far as the Cinematograph Exhibitors Association are concerned—and this, of course, does not cover all the cases, but a good many of them—they have put forward the view that this has worked very well and has given welcome relief in a great number of cases. We have actually had about 70 complaints during the year. About 40 related to cases where the population of rural parishes exceeded the statutory limit of 2,000, and most of the remaining 30 cases concerned urban districts and municipal boroughs in England and Wales, and comparable areas in Scotland, whose population also exceeded the statutory limit of 2,000.
    There were a few cases where the question arose as to the application of the seating capacity of 400, and I think it has been possible to deal with all those cases administratively. In fact, the case of Gretna, mentioned by the hon. Member in moving the Amendment can, I hope, be dealt with administratively, too. The question as to whether it might be required, or deemed advisable to use it for more than 400 people in any area is a question which can be debated when it arises, but it can per-

    353
    fectly well have a seating capacity limited to 400, in which case it will fall within the class with a satisfactory result.
    Therefore, the only really outstanding cases were those in regard to population density, and we have dealt with that matter by increasing the density ten times, from 64 to 640 to the square mile, and it does seem to us that, although we appreciate that there are difficulties, we have substantially covered those rural—truly rural—cases which exist and with which this was intended to deal. It would he quite impracticable to have a sliding list, as the hon. Member for the Forest of Dean (Mr. Phillips Price) suggested, with different taxes according to the number of seats in the cinema. Quite obviously it is not an administrative matter to go through the cinemas and tax according to Beatings. It would not only be impossible administratively: it would give a quite nonsensical result, as one might have a small cinema in a densely-populated area paying less tax whereas a larger cinema in a less densely-populated area would pay a higher charge which it could not afford. That is not a true criterion.
    Therefore, I suggest to the Committee that it should rest content with what we have done, which I think is a first-class job for the rural areas; and, much as we regret it, we must leave the marginal districts untouched by this concession because there must be a limit to what we can do and I think that with 640 to the square mile we really have reached that limit.
    Mr. N. Macpherson: I am in a certain difficulty here because of the width of the discussion which has taken place on my Amendment. I would like to say that I think hon. Members on this side of the Committee do recognise the special interest that the right hon. and learned Gentleman has taken in this question, and so far as the narrower scope of my own Amendment is concerned, I am quite prepared to accept his suggestion and see how it will work. Subject to any action that any other hon. Member may seek to take on the Question that the Clause stand part of the Bill, I shall be prepared to ask leave to withdraw my Amendment.
    11.0 p.m.
    Mr. Selwyn Lloyd: May I ask the right hon. and learned Gentleman, as he
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    was good enough last year to say that he would not close his mind to future change, if he will also say now that he will cause the matter to be watched carefully during the coming 12 months, so that he may be able to bring within the ambit of the relief further marginal cases?
    Sir S. Cripps: We shall certainly watch matters, because I am anxious to do the job we have set out to do, but of course I can give no promise.
    Mr. N. Macpherson: I beg to ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.
    Clause ordered to stand part of the Bill.

    Clause 10.—(POOL BETTING DUTY.)
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    Mr. Glenvil Hall: It has been thought that it might be of benefit to the Committee if I opened the discussion, in which I know quite a number of Members wish to take part, by making a short statement as to what it is that my right hon. and learned Friend desires to do by this Clause. What this Clause does is to increase from 20 per cent. to 30 per cent. the excise duty on football and other pool betting. Normally and almost exclusively I think the discussion tonight will centre round the duty on football pools.
    This increase from 20 per cent. to 30 per cent. equals something just over a penny in the shilling, and although to many people that would not be a very great increase it has, as the Committee know, aroused in certain circles a great deal of feeling. This duty was first imposed in November, 1947, when 10 per cent. was put upon pools, particularly football pools. At that time I am sure all Members will remember there was general agreement that this was the right and proper thing to do. My recollection is that nowhere in the Committee or the House at that time was any voice raised against the suggestion that football pools should bear some share of the very heavy taxation which the population now has to bear.
    The football pool promoters at that time did not object. I think, for one reason, they felt it gave them a status which they otherwise might not have

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    enjoyed, and also I think that they realised the strength of the feeling, both in the House and in the country, on this matter. In April, 1948, my right hon. and learned Friend increased the 10 per cent. duty by another 10 per cent., making it 20 per cent. The industry—because that is what it calls itself—stood up well to this increased imposition. It took it almost undisturbed; there was no wide scale attempt to rouse public opinion, and as far as I know few Members received letters protesting against the increase to 20 per cent. When my right hon. and learned Friend, in opening his Budget statement last April, announced that he intended to raise the percentage to 30 per cent. there was little or no comment in the discussions that followed in this House. Nor at that time was there very much said in the Press or among the public on the increase.
    It was not until the Football Pool Promoters' Association embarked on an extensive campaign that protests in any considerable number began to be received by Members of the House. I make that point because I think it is important. It is said that the pool promoters have circularised something like 10 million of their clients—or, as they call them, investors—urging them to write to their M.Ps. That must have been a rather expensive proceeding as regards paper, staff and postage. Although, of course, they had every right to make this attempt to influence public opinion, we should note in passing that it is not as spontaneous as some protests which have reached Members of Parliament in the past have been. It was not until it was organised on a big scale, and at pretty considerable expense, that these letters began to arrive. How many letters have been received it is very difficult to say. There is an Amendment on the Order Paper by the hon. Member for Brighton (Mr. Teeling) and if I am to believe what one of the Sunday newspapers tells me, although he has 137,371 electors, he has received only two letters of protest about the pools.
    Mr. William Teeling: I am glad the right hon. Gentleman has read this paper. I only saw it myself yesterday. I have had over 300 letters, and they were sent to my private address—not to the House of Commons.
    Mr. Glenvil Hall: I assumed, as the newspapers would lead us to believe, that the information was received from the hon. Gentleman. I am glad to have had that correction from him. I think it would not be over-stating it if I said that if it is true that many millions have been circularised and given every opportunity to write to their Members of Parliament, the response by these investors has been very small. There has not been the overwhelming response which the Pool Promoters' Association must have hoped for. It has certainly not frightened the punters very much, because in spite of the fact that the Secretary of the Association informed them, and the world, that this extra taxation was virtually the last straw, and that the ultimate effect might be to put an end to the football pools, it is obvious that the great body of people written to do not believe it, or else they are not perturbed by the thought that the football pools might shortly be going out of existence because of the extra taxation my right hon. and learned Friend seeks to levy.
    We should be just to the football pools. It is very difficult to decide how much tax the pools can bear, and whether the 30 per cent., which my right hon. and learned Friend thinks not unreasonable, is fair to the pools. It is rather difficult to know just how much money is there. We can only deal in totals, and we know from what we have been told that the expenses of the larger ones, at any rate, are at least 20 per cent. of what comes in.
    The first point which they make, and one which a very representative delegation which I saw at the Treasury not long ago made, is that this is an unfair discrimination against the pools. They pointed out—and I notice that in the publicity which they have issued they make the point again—that they are being unfairly penalised as compared with the greyhound racing totalisator. They suggest that because of the fact that the original duty imposed on the greyhound race tracks where totalisators were in existence was only 10 per cent. and that 10 per cent. has not been changed since it was imposed, whereas the 10 per cent. on the football pools has been increased by stages to the present 30 per cent. What I think the football pool promoters forget, and what those who up to now have accepted their propaganda forget,

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    is that the 10 per cent. which applies to the greyhound racing totalisator applies to all the relaying of bets and winnings, race after race throughout the evening, whereas with the football pool bet, or investment as it is called, it is one investment and not more than one.
    Mr. Walkden: I am not defending the football pools, but that does not apply to the starting price, the ordinary S.P. bet, on the dog tracks. I think that is a fair point.
    Mr. Glenvil Hall: That may be; there are various ways of laying odds and making bets.
    Mr. Drayson: Will the right hon. Gentleman say whether a man who bets 2s. five times a night should be treated in the same way as a man who bets 10s. once a week?
    Mr. Glenvil Hall: I um making the point—and I think it is a fair point—that those who go to greyhound race meetings normally do not confine their betting to one race and one only; they bet throughout the evening, particularly if they are winning. The 10 per cent. is not a once-and-for-all duty; it applies every time they turn their money over on race after race. Therefore, it is not strictly comparable for the football pools to point to the greyhound totalisator and say that they are being unfairly penalised by comparison with those who go to the greyhound race tracks.
    It is the same with the Bookmakers' Licence Duty. There, as the Committee will remember, the duty is graduated according to the enclosure and the duty that is now levied was based on an estimate of the bookmaker's turnover, taking about 25 representative courses. The bookmakers will tell us that the incidence of this tax upon them has had the effect of driving many of them off the race track altogether. I mention these facts in order to remind the Committee that it is in no sense true that my right hon. and learned Friend has penalised football pools and has favoured either the bookmakers, through the new Licence Duty, or the greyhound totalisator.
    There is a Royal Commission now sitting and the question which has been asked is: why did not my right hon. and learned Friend wait before he added this 10 per cent. in order to see what the
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    outcome of that Commission might be? That is a fair point, but my right hon. and learned Friend, as I think he explained earlier in the Debates we have had since he opened his Budget, felt that the football pools could bear this extra 10 per cent. and that it would not be unfair from what we knew of the way the investor had stood up to the previous impositions that had been made upon him.
    11.15 p.m.
    That being so, as it is essential to raise revenue from every proper quarter, he felt that the extra 10 per cent. was reasonable and that there was no reason why he should wait until the Royal Commission reported. He said, and I think rightly, that consideration of other improvements in the betting tax must await the report of the Royal Commission on the general matter of betting and gambling, and meanwhile the right and proper thing to do was to increase by 10 per cent. the tax on football pools. It would have been wrong for him to have imposed extra taxation in other directions, perhaps on articles used by the housewife in the home or on other articles essential to the life of the community, when he had this source open to him from which, so far as he knew, the extra money could be justly taken.
    Another point made is that, in addition to this imposition of 30 per cent., the investor, before he makes his bet, has to lay out money in postage for his coupons and poundage on the postal order he sends. That, the promoters tell us, is an extra tax on those who invest in their pools. What the football pool promoters forget is that when an individual goes to the dog track it almost always costs him a considerable fare to get there and back. [HON. MEMBERS: "He walks back."] If in the agitation which they are carrying on the pool promoters are going to assert that the postage and poundage and cost of coupons puts them at an additional disadvantage as compared with greyhound racing, it is not unfair to say that where that costs only 4½d. or 6d. at the most, it nearly always costs those who go to greyhound race tracks more in fare to take them there and back.
    Whether that argument is a valid one or not, I think the plain fact is that if the punter is unsuccessful—and the vast majority of them must be—it makes no difference to him whether part of the

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    stake goes to the Exchequer or not. Once he has sent his shilling, two shillings, five shillings or whatever his stake may be, if his guess has not been the right one, it is immaterial to him what happens to the money that he sent. I am sure that a very large number of them are delighted to think that when they do lose, not all of it goes into the pockets of the pool promoters and that the Exchequer is extracting at any rate 30 per cent. of it. If an investor is fortunate enough to win, as investors sometimes are, and to win a large sum for a very small stake, he is so delighted at winning that he does not grudge——
    Mr. Drayson: Do I understand the Financial Secretary to be of the opinion that if an investor or client of a football pool makes a wrong forecast and gets no return, the two shillings goes to the promoter?
    Mr. Glenvil Hall: I did not say anything of the sort. It is computed that something like £650 million was spent on gambling in 1948. If hon. Members will bear that in mind and then look at the Expenditure and Revenue Account in the Financial Statement they will see what an enormous sum this is compared with what is spent on social services and in other directions by the State. About £60 million to £61 million of that total is spent yearly on football pools. The total yield of the duties which my right hon. and learned Friend put upon betting of one kind and another was, in 1948–49, nearly £23,500,000, and if the Committee agree, as I hope they will, that the 30 per cent. suggested by this Clause is not unreasonable, he will be taking this year something like £28,500,000. That sum, the Committee may be interested to be reminded, is made up of £18 million to £18,500,000 from the football pools, £7,500,000 from the totalisators, and about £2,500,000 from the bookmakers.
    That is a very large sum, and, so far as I know, the vast majority of the people of this country, whether they are or are not interested in gambling, feel that at this time, when taxation is necessarily so high, when Purchase Tax running into many millions of pounds is levied, when there are very heavy duties on tobacco, beer and other things, betting should bear its share of the burden. Compared with
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    what is raised in other directions, I am sure that the Committee, on reflection, will realise that £28,500,000 is not excessive, and that £18 million to £18,500,000 from the football pools, which are now taking more than £60 million from the public in investments, is not unreasonable, and is a proposal to which they should agree, in spite of the pressure which might be brought to bear upon them to reject the Clause.
    Mr. Stanley: I congratulate the Financial Secretary upon one thing, and that is his acceptance that all the arguments—as he so intelligently says, whether valid or not—put forward by the Treasury will have convinced all his listeners that he himself must be quite guiltless of any form of gambling in the past. In fact, he appears to have as little knowledge of gambling as I gather most of the members of the Royal Commission possess. I am very glad that, when referring to the campaign organised by the pool promoters, as he was entitled to do, the right hon. Gentleman started by saying that they had a perfect right to indulge in this form of propaganda. So they have.
    There has been, I think, a good deal of rather hysterical talk about the immorality of the attempt by this particular interest to put pressure upon Members of Parliament. As all those who have been Members of the House for some years know, that sort of thing has been going on for many years. It has come from many quarters. It has not only come from these particular people, who may have a great deal of money at their command and may be unpopular with certain sections of the House. I, personally, had a great many more letters, and a great deal more pressure was put upon me, for the abolition of blood sports than over this question of football pools; but I never heard any Member opposite say how immoral it was that there should be such a campaign for the abolition of blood sports.
    Mr. Paget: Is not the distinction that these people are not using their own money, that the cost of this campaign is being borne by the investors, that it is expenses being taken out of the investors' pockets?
    Mr. Stanley: How does the hon. and learned Member know? We were told

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    that this would not be accepted as expenses by the Inland Revenue Department.
    Mr. Paget: It is just taken out of the investor's money; it is not left to his discretion.
    Mr. Stanley: The fact is that hon. Members know this kind of propaganda campaign. They know just how much weight to attach to it, and the ordinary hon. Member is not very much affected one way or the other. Quite frankly, of this present campaign I would say that it is, in my opinion, the clumsiest that I have ever known. There is usually some desire to make it appear that the letters are spontaneous, but in this case the promoters have gone out of their way to tell us that they are not spontaneous and how much money it is costing to run the campaign. I am not affected one way or the other by this campaign, and certainly shall not be stampeded to agreeing with the promoters; nor, however indignant one may be at the use of the private addresses of hon. Members—a wholly undesirable phenomenon—we should not allow that to affect the equity of the case so far as the investor in the pool is concerned.
    I accept whole-heartedly the assumption that, in the very difficult financial situation in which we are, taxation on gambling should and must play as large a part as State taxation on any other form of pastime in which we may choose to indulge. One may believe that gambling, in itself, is immoral; I do not believe it to be so, any more than drinking, smoking, or going to the cinema is immoral. Each of these four, if taken in excess, may have bad individual or moral effects; but the man who chooses gambling as his pastime must expect to contribute to the national revenue. He should, I think, feel under an obligation to do so, just as the man who chooses smoking, drinking, or going to the cinema. I think, therefore, there is general agreement that gambling should contribute its share, and there can be no complaint on the part of the gambler that he is called upon to provide his fair share of what the nation now needs.
    11.30 p.m.
    Therefore, with regard to the particular tax which we are now discussing, we have to answer only two questions. First,
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    is it fair? If I may, I will deal now, not with the fairness as between one form of gambling and another, important as that question is and much as I want to deal with it later in my speech, but with the question of this particular tax on this particular form of gambling compared with the rate of taxation levied upon the other pastimes—the man who has his glass of beer, the man who has his packet of cigarettes, or the man who goes to the cinema. I think that, if hon. Members will look at the proportion that taxation plays in the price of their cigarettes, beer, whisky or even of their visits to the cinema, they will feel that, heavy as is the burden now placed upon the investor in the pools, it is still lighter in proportion than that which is borne by these other forms of amusement.
    The second point is this: is this addition so great that in fact it will kill the goose that is going to lay the golden egg? Is the effect of this so heavy that the pool investor is going to say the odds against him are now so great, that the speculation is not worthwhile, and that pools investment is going to drop off? Really, I think the Financial Secretary is almost too innocent to live. After all, when a person loses his money, he does not mind whether some of it is going to the State; but the point is, of course, that when the person wins his money, he is going to win much less because of the 30 per cent. which the State is taking off.
    Although people who want a "flutter" do not use the precise mathematical calculations which no doubt the Chancellor of the Exchequer would use if he does, or perhaps when he does, apply his mind to the science of gambling, yet they say "We have a pretty fair idea that the odds are so great against us that it is not worth going on." The right hon. Gentleman has really made an assertion that because pool betting was able to take a 20 per cent. tax, there is no reason why it should not take a 30 per cent. tax. I should like to have heard from him any indication as to whether, in fact, as a result of the announcement in the Finance Bill, there has been a substantial falling off in pool betting.
    Mr. Glenvil Hall: Perhaps I can answer that point now if the right hon. Gentleman would like me so to do. Of course, the season came to an end very

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    shortly after the announcement in the Budget, and it is rather early days to say; but it is our view, so far as we can judge, that the pools have stood up very well to the suggested increase of another 10 per cent. They certainly stood up to it, and there seems to be no diminution after the increase from 10 per cent. to 20 per cent.
    Mr. Stanley: The right hon. Gentleman has certainly not been very definite. Of course, there is no doubt there has been some falling off—it was the general experience last year—in all forms of gambling and therefore some falling off would be expected in the pools; but it is a pity we are not able to have any more definite information as to what the effect has been.
    Now, if the matter stood there and there alone, I must say, speaking for myself, that in the difficult position in which we are, and granted that we cannot now discuss the alternative to all these petty methods of raising a few millions here and there which we have been discussing this afternoon and evening, I would have to say that I should not think that the pool investor was being unfairly treated as compared with the cigarette smoker and that I should not feel it right to exempt him from this contribution to our national necessity.
    One important point remains—a point over which the Financial Secretary slid rapidly. It is the question of fairness as between one form of gambling and another. That is, I confess, the point which really troubles me, feeling as I do about the general question of taxation of gambling. I must also confess that the anxiety which I feel has not been removed in the least by anything said by the right hon. Gentleman. I recognise that, if you decide it by comparison with the cigarette smoker or drinker, this 30 per cent. is fair, but merely to say that the man who bets on a racecourse or invests on a greyhound tote ought to pay more than he is doing, would not theoretically help the man we are actually discussing. It is all right in theory, and is perfectly true in theory, but what people want to know is that they are being fairly treated as compared with others.
    I am certain that the greater part of the feeling which exists against this increased taxation does not lie in the
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    amount of the taxation itself, but in the feeling that this particular form of gambling is being singled out for discriminatory treatment—is being singled out not because it is more immoral than any other form, or a greater social evil, but because it happens to be the easiest form of gambling to tax. It is no use the right hon. Gentleman pretending that that feeling does not exist: it exists very strongly. Nor is it any good pretending that the sort of argument he used this evening is going to remove the anxiety.
    In fact, some of the figures which he gave with regard to gambling made the position, I think, even worse. I have mislaid my notes at the moment, but the figures he gave were, I think, that £650 million were spent on gambling in 1948. Of the £650 million, £60 million were pool betting, and the £60 million of pool betting will pay us, I understand, £18 million in tax. That leaves £590 million to other forms of betting which are going to pay us £10 million in tax. It is pretty difficult, in view of those figures, to persuade the people whose form of gambling happens to be pool investment, that they are being fairly treated as compared with the people who bet on racecourses or invest in the totalisator on a greyhound course.
    I do not think there is very much in the argument used by the right hon. Gentleman about a "once-for-all" payment here, compared with the tote. So far is I know, quite a number of people who go to greyhound meetings bet on every race. There are quite a number who send in more than one coupon; they have to pay on each betting transaction they make, just as in greyhound racing everyone pays on each betting transaction he makes, whether on one race or five. I do not think that is enough to explain the difference between the 10 per cent. in one case and the 30 per cent. in the other.
    Mr. Fernyhough: Is not the case rather different when one takes into consideration the fact that on the racecourse and the dog track a person has to pay a tax before he can make a bet, as part of the admission cost?
    Mr. Stanley: I think that really is different, because it is the Entertainments Duty one pays for the entertainment, whether one gambles or not. We are

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    discussing the extra tax for gambling. Although I am not prepared to oppose this tax, I am very sorry that the right hon. Gentleman did not find it possible to wait until we had the report of the Royal Commission on Gambling before he acted. [An HON. MEMBER: "Tax them all."]—I agree. If you are to raise money from gambling, let it be raised fairly from all those who gamble, in a way which leaves no feeling of unfair treatment among any section. It was for that purpose that the Royal Commission was set up. It was set up very late. It was pointed out to right hon. Gentlemen opposite, not only on the last Budget but on the Budget before, that there was a feeling of discrimination which could only be removed by the treatment of the problem of gambling as a whole. It is most unfortunate that it took them so long to set up the Royal Commission. It will be more unfortunate if they do not give the impression that they will accept the report as a matter of urgency, and that they are prepared to act on the report when it is received.
    Many of us have seen a good many Royal Commissions. We know perfectly well that, in the words of ray right hon. Friend the Leader of the Opposition a Royal Commission can either be a sofa or a springboard. It can be set up either to delay something that the Government do not want to touch or it can be set up to enable the Government to do something which they are really anxious to tackle. We want to know in which category does this Royal Commission fall.
    The delay in setting it up does not give us much hope that the Government really want to tackle this problem, but I must say that the acquiescence of myself and my hon. Friends in this tax must be dependent on our feeling that the problem is now to be tackled as a whole, that we are to be enabled to see whether there is discrimination between one form of gambling and another and, if there is, that it will be cleared up, so that there may be fair and equal treatment all round. Much as I feel that this Clause should be allowed to pass, it can only be on the condition that the right hon. Gentleman assures us that there is a real desire on the part of the Government to tackle this problem as a whole and that we shall not be called upon another year to pass once again a tax which may be
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    discriminatory as between one class of gambler and another.
    11.45 p.m.
    Mr. Haworth: I must agree with every word that the right hon. Gentleman the Member for West Bristol (Mr. Stanley) has said and for that reason I shall not weary the Committee with a number of the arguments which I had prepared. I am more than pleased to find that no attempt is to be made to try to make party capital out of this campaign which is being waged—but the blame rests on the Chancellor of the Exchequer for a good deal of the agitation being waged by the pool promoters at the present time.
    In his introduction to the Budget he said:
    "I first take another look at the football pools, which seem to have been completely undisturbed by the existing 20 per cent. tax. I do not think they will be any more disturbed if that tax is raised to 30 per cent."—[OFFICIAL REPORT, 6th April, 1949; Vol. 463, c. 2102]
    If any hon. Gentleman were interested in football pools and read the words of the Chancellor, I imagine he would take them as an invitation to create a good deal of disturbance. My view is that a lot of the disturbance that has been created is not so much against the 30 per cent. tax as a preliminary measure against a 40 per cent. tax. For logically, if they do not create a disturbance the Chancellor next year is going to come forward and say that as there was no trouble about the 30 per cent. tax why not go to 40 per cent.?
    Then there is the letter in "The Times" of today from Mr. E. Holland Hughes, Secretary of the Football Pools Promoters' Association, containing a report of an interview with the Financial Secretary. If hon. Members will read that letter they will see that it contains an invitation, as it were, to the promoters to embark on an agitation. Again, the Financial Secretary is, in fact, saying: "You have been so quiet about this that we have no feeling that we are doing anything you do not like." That is an invitation to try to kick up a row if they want this rake's progress of increasing taxation on football pools to stop.
    I have received 782 letters on this subject, sent to my private address.

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    In my constituency I have two of the largest football pool factories or offices in the country. [HON. MEMBERS: "Oh!"] I do not know what all that is about, for because of those letters, if there is a Division tonight. I am going into the Government Lobby in favour of this tax. I have tried to examine the situation as dispassionately as possible, and I have one or two criticisms. The first, as I have said, is of the Chancellor of the Exchequer. He is lacking in psychology on this as on a number of other things [Interruption]. Those cheers will not continue.
    The argument from these investors or punters that they are going to suffer leaves me quite cold. I see no great hardship when a man contributes a shilling if he gets £100 instead of £200. Of all the taxes we are discussing in this Finance Bill this can be said to create the least hardship to anybody, because, after all, if people win, they win considerably more than they have staked. There is no need to worry about that side of it.
    There is another type of letter which I hope every Member will ignore—the blackmailing letter. It leaves me cold. It says: "I have been a life-long member of the Labour Party but if you do not rescind this tax you will never get my vote again," or the one which says: "I am a member of the Tory party, and if you do rescind this tax you will get my vote." The only way one feels about that kind of person is this. Whether he holds Socialist or Conservative views if he is prepared to subordinate all his political convictions, and say he will vote one way or another because of a tax on football pools, he is not worthy of consideration by any Member of Parliament. That is why I am so glad that the right hon. Gentleman the Member for Bristol West (Mr. Stanley) in taking that point of view, is not prepared to be influenced, or to make political capital out of it.
    The majority of the letters I have received have come from poor little girls who work in these factories. The right hon. Gentleman spoke of this campaign as being a worthy and normal one. I want to tell him that it has not been conducted in a worthy way. In many cases they have frightened these little girls. I have scores among these 700 letters implying—and in some cases stating definitely—that they have been told that
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    they will lose their jobs if this tax is to continue. We have been trying to find out from the right hon. Gentleman if there is any diminution in the amount of money invested in these competitions. I do not think there will be much falling away. There may be a little, but very little. It is wrong of the pools promoters to frighten these girls in the way they have done into writing these letters, and leaving them to think that they will lose their jobs. I do not think they will, but I will come back to that point later, because I represent an area where we have a lot of unemployment, and if that is going to be intensified through the Government's fiscal policy, we shall want some assurance about what they are going to do. I began to smell a rat when I received five letters with blank sheets of paper. I suppose it is bound to happen that in a large number somebody will "blow the gaff." I received one letter which said:
    "I am writing this letter under pressure. I am a pool clerk, and you will know what I mean. The procedure is to ask the employees to write. The following morning the supervisors come round and ask us if we have written to our M.P. I said 'Yes,' because I am"—
    she mentions her age, which I am not going to read in case it identifies the person, and she goes on to mention family details which could identify her. I do not want the girl identified, but I am prepared to show the letter to anybody. It goes on:
    "I have to work, and you will understand how difficult it would be for me to get a job, and I feel sure there would be a type of victimisation that one would not be able to compete with. Hence the letter, to clear my conscience. I do not criticise the tax. On the other hand, I think the Government is doing a fine job under great difficulty. I would be glad to work at something more useful, and would be very much happier if the pools were closed and taken over for production of some sort. I feel badly about not signing my name, but I am in no position to take a chance. Wishing you the best of luck …"
    And so on. That, I suggest, is a letter straight from the heart, from somebody who has felt subject to this intimidation from the pool promoters. I think it is an unworthy campaign. It has been waged in an unworthy way. The promoters had every reason to wage it, they had no alternative to doing so, but they should have done it in a proper way and not involved their employees in the way

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    they have done, and caused them pain and trouble and anxiety. My final word is on the point that we have to satisfy these people that they are not being discriminated against because this is an easy form of taxation. There is that feeling in the minds of investors in these football pools. I hope that the Committee will report quickly, and that action will be taken quickly after that to satisfy these people, and everybody else that we are trying to be fair and tax all forms of gambling, and not merely this one because it is easier to tax than the rest.
    Mr. William Teeling: I must confess that I felt a little bit sorry for the Financial Secretary this evening, for the Chancellor of the Exchequer rose and went away at the very moment this Clause was brought forward. I think none of us feels that it is the Financial Secretary who is in any way responsible for the Clause. It is rather bad luck that he should be landed in the position of having to try to defend it.
    In his first few words the right hon. Gentleman pointed out that I have an Amendment on the Order Paper to leave out Clause 10. That Amendment was put down before Whitsun and, therefore, quite a time before this circularisation started. I feel I can appeal to everyone to approach this matter in the same way as that in which I approach it, being in no way influenced by the circularisation. I have many constituents in Brighton who are fairly closely connected with the Football Pools Association, who know a great deal about it and who explained the problem to me at the start. Since then I have been away, like many other people—not at Blackpool but outside the country—and that is why I did not receive these letters which were sent to my private address. I can assure the hon. Member for Walton (Mr. Haworth) that I have received over 300 letters. There are no pools factories or organisations in Brighton, connected with the pools industry, so far as I know, and to my mind the letters sent——
    Mr. John Hynd: Were those 300 letters from the hon. Member's own constituency?
    Mr. Teeling: With the exception of one, which was from someone who had
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    left the constituency. Judging from the large number I receive on other subjects, on the whole, the letters were more detailed and showed common sense and a greater interest in the subject than many I have previously received.
    So much for the actual reception of the letters. I appeal to everyone to look at this matter outside politics altogether. I have had discussions with some members of the Football Pools' Association and I understand that one of the main reasons for this circularisation was that interview which took place with the Financial Secretary, to which he has already referred. I gather—and he will no doubt correct me if I am wrong—that when he was spoken to, he said he had not fully realised all the points they were putting forward and he suggested that those points might be put forward in Parliament. Furthermore, he said that as far as he could see there was no strong resentment because of the increase of the duty. I understand that he also said that the Treasury would in no way resent it if the pools' promotors tried to show the Government that there was such resentment, since they themselves had received many hundreds, if not thousands, of letters on the subject and the Treasury had not.
    Mr. Glenvil Hall: May I put that right? What they wanted us to do was to withdraw the duty straightaway. I told them it was quite impossible for my right hon. and learned Friend to do that. They asked what courses were open to them and I said, "The course open to any other elector, and that is to see your M.P., and if you can find anyone in the House sufficiently interested, get him to raise it when we deal with the Finance Bill."
    Mr. Teeling: In that case we cannot be very angry with the Association for starting this campaign.
    Mr. Glenvil Hall: That is a very different thing from what actually happened, namely the circularisation of 10 million people asking them to write to their M.P. at his private address. That is a very different thing and at no time did I suggest that to them.
    Mr. Teeling: I cannot entirely agree with the right hon. Gentleman on the point and it will no doubt be left to others to say what they feel on the

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    matter. I think the pools were perfectly justified in what they did in this connection.
    12 m.
    With regard to the question of circularising to our private addresses, it affects me rather more than most, because I do not happen to have a domestic servant to open the door for me at my flat in Brighton. I keep my name out of the directory, and I have done my level best to try to hide my existence there. Of course, this flood of pools letters to an address they did not know before, has already brought more than one letter saying I am going to be called upon if I do not do this or that. Another point is that these letters were sent to private addresses because the House was not sitting. In the old days I was connected with the B.B.C. From the point of view of fan mail, we always considered that one letter was the equivalent of 100 people who could not be bothered writing. I have had 300 letters and I know of members who have had 20 or 30 and others who have had 300 and 400. It is wrong to say there is no feeling about it. To my mind it is not entirely a feeling organised by the pools promoters.
    There are two things we want to find out: whether it is an unfair tax and whether it is likely to eliminate the football pools altogether. In regard to unfairness, I am surprised that the right hon. Gentleman, in mentioning the different forms of betting that could be taxed, left out completely, fixed price betting. And why must we have this imposition straight away, without waiting until the Royal Commission has reported?
    We have to look back to the days when the present Chancellor of the Duchy of Lancaster was Chancellor of the Exchequer when he had discussions on this subject with the Pools Association. At that time various methods were suggested to him by which the tax could be levied. I believe he himself suggested that the best thing would be some kind of stamp duty or special postal order, but the Pools Association said it would be easier and better if the money was paid as usual and the tax taken out and passed on straight away by the pools. That method was agreed to by the Treasury. To the ordinary person it looked as if he had nothing to do with it at all and that the tax came out of
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    the pools themselves. But if they had to pay stamp duty or buy special postal orders, they would have realised what the tax was. I instance this as proof that the Pools Association wanted to help.
    The original proposal discussed privately was a tax of 6 per cent. When brought in, the tax was 10 per cent., and in six months' time it rose to 20 per cent. Now it is 30 per cent.—all within 18 months. That is pretty quick going. We are told that there is no proof of diminution. I have referred to fixed price betting, which is the main rival of the pools at the present moment. Two years ago, I believe the figures for both forms of betting were something the same. Today, the returns of the fixed price betting people is something like 55 as against 31 for the football pools promoters.
    It will, perhaps, not be easy to prove that everything has switched over from the football pools, but it is quite likely that that is the case, because there is no tax on these fixed betting people. Therefore, everything that goes into their concerns, barring expenses, comes back to the investors. That makes it more than likely that that is where the money will be going. All we know at present is that with regard to the racing pools which are now operating, the drop is already something like 25 per cent. in the number of people who are taking them up. We cannot yet tell what is going to happen in the coming winter for football pools.
    People are paying twopence halfpenny for postage stamps, three halfpence as poundage for postal orders, and the extra halfpenny which they have to pay as an entrance fee. The halfpenny, incidentally, goes against the paper supplied, and does not go to the pool promoters. About 1 million people are paying one shilling, and between 2 or 3 million people, two shillings. The rest pay more. Add this 4½d. to that and it makes a very large sum to pay out before anything happens. From the shilling, sixpence has to go as to about 20 per cent. in expenses, and now as to 30 per cent. in taxation. It seems fairly logical that if other organisations are working forms of betting which do not charge, and have not got to charge such sums, that, bit by bit, people will drift to them from the football pools. It may be said that they have not done so. But I imagine that they probably

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    have from the fact that the pools are paying out less than these fixed price betting people whereas they were paying the same amount a year or a year and a half ago.
    Mr. S. N. Evans: The hon. Member has made an interesting and important statement. I wonder if he could tell us whence he gets his figures and the comparison with the fixed price betting.
    Mr. Teeling: From the Pools Association. I cannot say whether they are accurate or not. But my point is that the Royal Commission will be entitled to ask questions about these matters, and to cross-question all the different firms as to their accuracy. Therefore, it would seem fair to wait until the Royal Commission has decided on these particular points before we put on a tax which is probably going to kill these pools.
    Mr. James Glanville: Will the hon. Member use his influence to persuade the pool promoters to issue a balance sheet to every investor?
    Mr. Teeling: The question is whether this tax is going to kill these pools or not. At present I understand that the figures I have been given, based on a direct mail business, taken over the last two years from 1st July, 1946, to 31st August, 1948—since the figures for the last football season are not in an exact form and cannot be got out yet—are, taking the stake as 100 per cent.—deducted from each stake in expenses—no more and no less than 15·7 per cent. These are split up under the headings of postages, 3·3 per cent; wages and National Insurance 9·9 per cent.; poundage, ·2 per cent.; printing and stationery, ·6 per cent.; advertising, including declaration of dividends, 1·1 per cent. Light, heating, rent, rates, telephones, insurance and other office expenses, account for ·2 per cent., and sundries, such as repairs, travelling, transport, staff welfare and office cleaners, ·4 per cent. That leaves the promoters the commission to which they are entitled by their regulations, at a rate of 5 per cent.; but I understand—and it is their own statement—that this is not more than 2·2 per cent.
    Mr. Nally Mr. Nally (Bilston) rose——
    Mr. Teeling: I will give way in a moment, but I want to give the Committee the total of the figures I have. Adding this promoters' commission to the 15·7 per cent., we have 17·9 per cent. total expenditure, leaving 82·1 per cent. for the winners and the tax. I understand that the Treasury accepts the arrangements as satisfactory in that they are receiving the actual tax necessary; and all these figures are signed by accountants—and, I would add, accountants of distinct reputation. If, of course, it is said, as it may well be said, that the 2·2 per cent. which goes as commission represents an enormous sum of money—[HON. MEMBERS: "How much?"] That is not the point; I do not know how much, but the argument at present is whether or not it is fair to increase the duty by a further 10 per cent. from 20 to 30 per cent. If it is to be increased by that amount, everybody says rather airily, "Oh, well, it can come from the percentage on the pools' commission taken by the Association." But how can one make 2½ per cent. cover 10 per cent.?—no matter how much they make—the sum is immaterial. It is the percentage that matters and it is obviously not a possibility to make 10 per cent. out of 2–2 per cent. Already 21 of the lesser pools, not members of the Association, have gone out of business on the 20 per cent. levy, and are likely to be joined by others; no less than two of the pools belonging to the Association are making no profit at all and are likely to go out during this coming year—[Interruption.] Hon. Members seem to think that is not so, but these are facts.
    We have the Royal Commission coming on, and if these are wrong figures, there will be every opportunity for them to be shown up. It is quite unfair that this point should be decided before the Royal Commission meets. These are the two main points which I should like to stress. I will not go into the possibility of what could be done with this money if it did not go in tax; whether, as in Finland and Sweden, it should go to football fields and so on. But one point I would mention for the camel's back is being overloaded is that, in advertising in the Press, football pools have to pay 20 to 25 per cent. more than any other organisation at all merely because the pools are supposed to be so wealthy; and that is also why the Chancellor is

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    supposed to find it so easy to raise the tax.
    It cannot go on for ever, and it may be that, although the Treasury hope to get this extra £6 million, they will not get it. Football pools are seriously thinking, I understand, of going into the fixed betting field and giving up football pools as such, adding a bonus on certain occasions. They would not do this if they thought they could carry on. But if they themselves are starting to go out, then the Chancellor is going to lose his £6 million. Lastly, why spend so much time criticising these pool promoters for the colossal amounts they make for themselves because every penny they make each year has tax and super-tax added to it, and presumably if it is properly looked after by the income tax authorities, they cannot get more than their £5,000.
    12.15 a.m.
    Mr. Nally: I have ventured on many occasions to occupy the House, probably too much so, on this matter of football pools, and I hope I may have the indulgence of the Committee in saying a word tonight. I do not think anyone can complain of the reasonable way in which the right hon. Gentleman who led for the Opposition in this matter, opened the Debate. I think they were reasonable points which he made and it certainly is a strong case when he argues that, because of simplicity, it would appear on the surface that football pool betting is being subjected to an imposition that does not apply to other forms of gambling in quite the same way and with quite the same impact. I am happy to have his assurance that, in due course, when the Labour Government are returned in 1950 and when, shortly after that time, they begin to tackle the big gambling winnings other than those of the football pools, the right hon. Gentleman will be in our midst to give us his support. He really has no case, however, in rebuking the Government about the delay in appointing a Royal Commission.
    I remember that in the House over three years ago, I pressed the Prime Minister to appoint a Royal Commission, and indeed another hon. Member had done so before—and, as far as I can recollect, there was no support from hon. Members opposite. Something
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    like two years ago, I put down a Motion on the Order Paper demanding that the Government should set up a Royal Commission, or some other convenient form of inquiry into the whole of the facts of gambling. Again, although 140 or 150 Members on this side signed that Motion for a Royal Commission in effect, the right hon. Gentleman's name was not amongst its supporters. It is no good his pretending that either the Opposition or he wanted a Royal Commission at that time. If they had, they would have been helping to support the course we adopted.
    Mr. Osborne: Some months before the hon. Member put down his Motion for a Royal Commission, I had the Adjournment of the House and I wound up my speech by pleading with the Government to go into all the facts so that the House should know them. The hon. Member that night did not support me.
    Mr. Nally: The hon. Member's recollection of the circumstances is not accurate. Now, the hon. Member for Brighton (Mr. Teeling) obviously needs some education—I say this without offence, I hope—as to the reason he received 300 letters. What has interested many of us since this campaign of the pool promoters started has been the extraordinary disparity as between the constituencies. In one constituency a Member receives 30–45 letters and in the next constituency the Member will have 200–250. The explanation is simple. It all depends on how well the canvassers and the collecting touts of some of the big pools in the particular constituency are organised. Where there is a constituency having a number of people employed as commission agents by the pools and those agents have grown accustomed to going from door to door collecting money during the season, these same agents have been around to the same doors persuading people to write letters.
    As a consequence, it depends to some extent whether or not the commission agents in the area take concerted action to back up their bosses or not. In cases where they have not so decided, or where there are not enough to get together, there is a small number of letters. In a place like Brighton that sort of commission activity does take place. In the pin-table saloons there are people—

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    I say it with no offence to the hon. Member for Brighton—who act as part-time workers for some of the football pool promoters. As a consequence, there has been a fairly large number of letters to Members in these constituencies.
    I cannot understand why the figures advanced by the hon. Member for Brighton, which have some force, have not been presented before this by the football pool promoters. Why were they not embodied in the circular which they sent out to 10 million people? Surely, it should have been an easy matter to translate the percentages he gave, which on the face of it seem impressive, into terms of hard cash? How many of the names that figured on the expenses sheet figure among the proprietors? How much of the percentage of takings devoted by various firms to expenses, in point of fact goes to identical names at the receiving end? There is nothing to prevent a promoter—I give purely a hypothetical case—from paying three or four of his relatives as head of the postal department, or supervisor of stamps or welfare, or what have you, any salary he likes and expenses which are not part of the 2.2 per cent. rake off. If the promoters had a strong case, they would put all this into facts and figures.
    It is suggested that among the large pools—the big boys of the industry who will have something like £25 million or £30 million to play with even after the increased taxation—one or two will go out of existence as a result of this increased tax. But tie-ups exist. In the case of a large pool there might be, and indeed is, a subsidiary which is in the same bunch. It may well be technically advantageous for the big pool promoter concerned to close down his subsidiary. He still has the mailing list and can still circularise the customers of the pool he has closed down. I anticipate that that sort of thing will be done, and we have to face up to it.
    I know that this House is jealous when an hon. Member seems to take advantage of the privilege we have, to say in this House, freely and frankly, what we believe to be the truth, although we may know that because of the law of libel or slander we could not do so outside. Therefore, an hon. Member must be extremely careful before he uses the protection which this House affords him
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    to make allegations. I ask the House to accept my word that I make the statements I am about to make because I believe them to be true and because they are known by many people apart from myself to be true.
    One of the remarkable things is the way in which the Press has been more anti-pool than it was anti-brewery. The explanation is simple. We have discovered in journalism—and journalism did not generally discover this until the last 18 months or two years—that these big football pool firms—not all, but a number of the big pool firms—corrupt what they touch not only in the field of our general life in this country, but in the field of journalism. This is what has been happening: the football pool firms have discovered that, although it is not possible to get all the advertising space they want, to some it is of great advantage in their business to exploit the mumbo-jumbo of mathematics in what is known as permutation tips and tables. There are people in some newspaper offices whose job it is to publish neat little tables pointing out that if one puts his 1s., 2s., and Xs. in a certain way he stands a better chance of winning. It. has been the ambition of many pool promoters to get their names used in these features, so that one gets permutation tables with the phrase that "So-and-so coupons offer a very excellent chance in the use of the following permutation," and there then follows the elaborate little tables.
    Bribes have been paid by some of the pool promoters to many of the people responsible for writing those permutation tips in order to get the pool name in the paper. There is scarcely a newspaperman in Fleet Street who does not know it. The "Daily Express" and the "Sunday Express" are papers I detest—I think the whole Beaverbrook outfit is poisonous—but I am bound to say that they were the first newspaper organisation to detect the dangers and issue an instruction that in future the individual names of football pool firms should not be given in any advice or guidance given in its columns to pool punters. The first newspaper group to recognise the dangers and to forbid it was the "Express" group. Then the people in charge of Odhams Press controlling the Sunday newspaper

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    "The People" saw the dangers and restricted the permutation tips that could be given to 5s. value. The Committee may not be prepared to accept my word, so let me give the exact words that the news editor of a national newspaper used to me:
    "I know that people have received tips in cash or kind for publicity that they have managed to get for football pool firms."
    A sports writer on another national daily whose name is quite well-known to many in this House told me that he has been convinced that ever since the Unity Pool broke up in 1946 sums of money have been given to the person doing their permutation tips in his paper by the firms whose names he was able to introduce into his feature. One can give the names of the two biggest charlatans in this business. One is Bernard Ward and the other is Jack Boulder. These men have worked out quite an elaborate racket involving large sums of money and a close financial tie-up with the pools for publicity purposes. In addition——
    Mr. McGovern: May I ask if it is in Order to go into wholesale allegations in a Debate of this kind without giving names and substantiating them in some way? I am not interested here in the points of this Debate but I certainly object very strongly to the line along which it has been progressing.
    The Deputy-Chairman: I was considering the matter when the hon. Member raised his point of Order. The Debate is, of course, on the question of Clause 10 standing part of the Bill. I think the hon. Member for Bilston (Mr. Nally) must relate his remarks more closely to that, although we could have, and have had already, some discussion allowed by my predecessor and myself as to the methods adopted in first of all trying to organise the opinion of Members in this House. I think the hon. Member should be more careful before he goes too far lest he might seem to be taking advantage of that protection which he referred to in his opening remarks.
    Mr. Nally: The point I was going to make was that on the expense sheets of the football pool firms there are many items, of which I propose to give a few minor examples, which do represent the
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    way in which expenses could be saved and the punters benefited. I introduce the following quotation because it happens to be taken from the "World's Press News" of 29th April, 1948. It stated:
    "There was a pleasant gathering of advertising men and newspaper executives given by Shermans Pools Ltd. last week. Mr. Sherman proved a pleasant and affable host and made his guests feel fully at home. If all present had not been pool winners at one time or another they probably felt as if they had been, with the fare which was provided."
    That was almost on the eve of the Lynskey Tribunal, when we knew something of the matters involved before that Tribunal.
    12.30 a.m.
    The Deputy-Chairman: I think the hon. Gentleman is really going much too far now in his remarks. He may refer to expenses which he can indicate should be reduced, but he cannot go into the whole matter of the football pools and now on to the Lynskey Tribunal.
    Mr. Nally: On the very eve of that Tribunal the Shermans ran a most expensive party at which they persuaded a leading newspaper editor to acclaim one of them as the best of hosts, a fact that was duly reported in the "World's Press News." I would invite the attention of the Royal Commission, and indeed the Chancellor of the Exchequer, to the expenses in connection with the suites which the football pool promoters have had in the big hotels in London since Unity Pools broke up in 1946. The expenses on these and similar things reach fantastic levels.
    There is a criticism to be made on this tax against the Chancellor of the Exchequer. It is that while he is taking—rightly so—and is content to take, 30 per cent. in taxation, he is offering no protection whatever to the punter who is involved. This is not only a small man business; the amount of individual bets vary enormously. I have already referred to what I regard as and know to be some gross abuses in the handling of this high-powered publicity in relation to permutations. Look at the results. These are cases which have come to my notice in the past 18 months, about which I feel strongly, and all of which were reported in the Press. Case "A" concerns an insurance branch manager living within a

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    few miles of one of the leading pools. His financial circumstances could have been ascertained by any one of the investigating officers the pools employ. He was earning quite a good salary, and began to bet modestly. The accounts I am quoting from are straight reports from coroners' inquests. This man betted slightly, and then was attracted by permutations.
    The Deputy-Chairman: I am sorry again to interrupt the hon. Gentleman but I do not think that personal anecdotes of that kind can be relevant to the question whether this tax should be increased or not.
    Mr. Nally: This particular man——
    The Deputy-Chairman: I have already told the hon. Gentleman he cannot go along that line further. He must relate his remarks much more closely to the issue whether this tax should be increased or not. He cannot discuss the merits, the morality or immorality, of the pools system, under this Clause.
    Mr. Nally: In each of the cases I was going to cite money had been stolen, men committed suicide, the promoters reaped the benefit and so did the tax collector.
    The Deputy-Chairman: I have asked the hon. Gentleman three or four times to relate his remarks to the Clause. He must not pursue that line further.
    Mr. Nally: I have no doubt, as I ventured to say to the House in 1947 in a late night Debate, when I was accused of having "a bee in my bonnet" about the football pools, that although it is true they do not represent the main form of gambling yet, examining them in relation to commercial life, journalism and general financial policy, under their present management and control, they are a corrupt influence. The 30 per cent. tax, I believe, is gradually leading Parliament and any Chancellor of the Exchequer—no matter who he may be—to recognise the fact that, once having begun on the path of taxation of the pools, which I believe to be the right path, we have no logical defence against going further and placing the whole of betting under State control, so that the whole proceeds may accrue to the State and the punter may be properly protected.
    Mr. Teeling: The hon. Member talked a lot about Shermans pools. Is it not true that Shermans pools do not belong to the pools association, which covers about 90 per cent. of the respectable pools?
    Mr. Nally: If I had time I would explain the circumstances in which the then Football Pool Promoters Association decided to expel Shermans. Then they got frightened and decided rightly, that we would use the expulsion politically. Accordingly, they simply dissolved the Association and reformed it without Shermans—
    The Deputy-Chairman: I am sorry, but the hon. Gentleman did not refer to it, and he would not have been in Order if he had done so.
    Mr. Harold Roberts: I heard with great interest the letter that was read by the hon. Member for Walton (Mr. Haworth) from a young lady, but he dropped his voice a little at the end, and I think he said the letter was unsigned. Am I right?
    Mr. Haworth: Yes.
    Mr. Roberts: Thank you. I did not want to proceed on a wrong assumption. This is typical of the spirit surrounding this discussion. The hon. Member, arguing whether we should or should not agree to this impost, reads to us allegations by this girl, whose identity is concealed and whose letter was not signed. We are to base our discussion on an anonymous letter. It is followed by charges of extreme gravity made against pool promoters as a body, amounting to charges of systematic fraud. Most of us who move about the world have heard a good many stories of that kind, with nods, whispers and innuendoes. These considerations are all irrelevant. If it is true that the pool promoters are acting selfishly in sending out these circulars, let us remember that their living depends on their rake-off, or commission, which varies with the turnover of the pools. They think the turnover will suffer if this tax goes through. By itself, this is strong proof that the reasoning of the right hon. Gentleman who spoke first on this side is sound, and that discrimination is sought to be exercised by the Treasury against one class of the sporting public.

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    I have had a good many letters from my constituents. No doubt some of them were inspired by the pool promoters; many of those who wrote were stirred into action, I expect, by the circulars they received; but that by and large they were genuine expressions of the feeling of those who sent them, I have no doubt whatever. I have been convinced by my right hon. Friend the Member for West Bristol (Mr. Stanley) that the pools' investors are being treated with grave injustice. I was so convinced before I came here today and heard him and I informed the constituents who had complained to me that I proposed to vote against this impost. That is still my resolve, because if an attempt is made to impose a duty or a charge which is unfair to those who have to pay it and I do not vote against it whenever I can, then I am failing in my duty.
    One hon. Member opposite said he would welcome an opportunity of voting for this duty. Very well; let the issue be fairly joined and if, in his opinion, it is right to do this, let him so vote. But I say, let us try as far as we can to consider the duty on its merits as a trebling within 18 months of an impost, which was small to begin with and was put on a section of the sporting population because it is easy to collect. There is no regard to equity between these and other classes. It is imposed pending a Report from a Royal Commission and is supported by arguments containing the gravest prejudice. They are not directed to the morals or the standing of those who have to bear this duty, but to another body whom we are not concerned to defend and who may be the greatest scoundrels unhanged but who are not the people against whom this duty is being directed.
    Mr. Symonds: I feel that most, if not all, of the difficulties and doubts which have arisen tonight on this subject could very easily be dispelled if the pool promoters would give the public a few facts on which to go, instead of talking vaguely in percentages. One's dislike of this campaign is not because of any kill-joy attitude, and I would not consider I had any right in any way to try to prevent anyone who wished to do so from indulging in a flutter or gambling of any kind. I am convinced that any attempt to suppress gambling by law
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    would fail. It is not a question of adopting any high moral tone in this issue.
    My real objection to this campaign and the reason why I support the Chancellor's proposal is that I object to my constituents being led up the garden path by a very high-powered and expensive agitation organised by people who refuse to give the public those very facts on which alone a proper assessment of the position can be made. If we look back, we see that this duty was proposed as long ago as 6th April, but there was no excitement anywhere at all until about a couple of weeks ago when this expensive campaign started. Since then we have had a campaign which I can only describe as one of hypocrisy, humbug and deception—hypocrisy because there has been a pretence that this agitation is in the interests of the ordinary working man who has his weekly flutter, and a pretence that these pool promoters are public benefactors who are performing a public service at great inconvenience and expense to themselves.
    12.45 a.m.
    Actually their secrecy about the profits they are making gives a pretty good indication that they are on to something they find very good and do not want to lose. That is why I think this agitation is hypocritical; it is humbug because it is pretended that this will be the end of the pools. We are a gambling nation and these pools promoters know that the ordinary man in the street would not like to be deprived of the chance of his weekly flutter. But in making the suggestion that this would be the end of the pools they have not made the slightest attempt to provide any evidence. They might have given figures to show that the change from 20 to 30 per cent. is hitting them, but there has been no effort to show that. There is simply this play on fear and a complete silence about the actual facts.
    I say it has been a deceptive campaign because we have had a good deal of sob stuff designed to conceal the fact that no real figures are being made available. It is impossible for the public to assess the value of this agitation without these facts. The right hon. Member for West Bristol (Mr. Stanley) said that we ought not to say that this was in any way an immoral campaign. He cited the blood sports agitation as a parallel. The essential difference between the two campaigns

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    is this. With blood sports, it was simply a moral issue; with pools, we have an agitation carried on by people with a direct, selfish personal interest to protect. We also have this attempt at what almost amounts to intimidation, though it has had somewhat the reverse of the effect expected. I should like to quote one letter I have received:
    "As exhorted, I am writing to my M.P. about the enclosed."
    The writer encloses one of the advertisements.
    "I hope you will do what you can to bring about an increase to a 50 per cent. tax. These people are parasites. The country cannot afford them. The labour they employ should be engaged productively, as I am sure you will agree."
    I am sure the pool promoters would not like that letter to come out. I am not saying that it is representative, but it shows there are people who are not being led up the garden by this agitation. Fortunately, I am not one of those who have had a large number of these letters. My total amounts to only 20.
    Lord John Hope: What exactly does the hon. Member mean when he uses the word, "intimidation"?
    Mr. Symonds: I said, "almost intimidation," meaning the attempt to incite mass pressure on individual members of this House, not to form their own judgments on the evidence available to them, but to take a course of action as a result of a greater or lesser degree of pressure. That is what I meant.
    I put a Question to the Chancellor of the Exchequer yesterday about this matter of the expenses of this campaign, the postage for which alone, I imagine, must come to about £40,000. I asked whether or not this would be reckoned as a business expense for Income Tax purposes. The Chancellor said that it would not. But as I see it, that is not to say that the pool promoters themselves, whether or not they can charge it for costs, will not in the end get the money for themselves directly out of the punters. When one considers this matter of pools finance, one finds it a great mystery. What are considered to be expenses, and how are they calculated? And what actual amounts of profit are being taken each week? Nobody knows.
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    It is suggested by the promoters that approximately 20 per cent. is deducted for expenses and commission according to the rules of the Football Pool Promoters' Association. In other words, they themselves, in their own association, decide what shall be regarded as expenses and what amount shall go to profit. But there is no clear indication of the division between the two.
    Despite the fact that they have been invited, have been challenged, to produce balance sheets, they steadfastly refuse to do so. I suggest that the onus is really upon them. If they consider that this tax is going to cripple their activities, they should "come clean" and produce evidence of the financial set-up of their industry. If they think that the Chancellor of the Exchequer is being too harsh, let them publish their balance sheets for the past few years, showing exactly their takings and expenses before and after the increases of tax from 10 to 20 per cent., and so on. If they refuse steadfastly to publish any such balance sheets, the only conclusion which I, for one, can come to is that they feel that were all the financial facts known to the general public, the general public might take a very different view from that which they are taking at the moment.
    Mr. Frederic Harris: I gather that the whole of the hon. Member's point is the publication of balance sheets. But surely the revenue authorities have full access to the whole of the balance sheets. To whom does the hon. Member wish to see these balance sheets shown? Does he suggest that every member of the public should see them?
    Mr. Symonds: I see no reason why the promoters should be so shy about letting every member of the public know exactly how much money they are making each week. Unless they are prepared to do so one can only assume that they have, from their point of view, very good reasons for continuing the secrecy. I would suggest that the sooner the Royal Commission on Gambling calls for full financial statements from these pools the better.
    Mr. Raikes: I do not propose at this stage of the night to make a long speech on this subject. It is, after all, a comparatively simple

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    question. I agree with the right hon. Member for West Bristol (Mr. Stanley) that gambling or betting is one of those entertainments which has to bear a part of the taxation of the nation. I agree also with another hon. Member who said that no Member of Parliament ought to be intimidated by letters from persons stating that they had been life-long Conservatives, or life-long Socialists, but were now going to consider their vote in regard to what the hon. Member did. I have received about 400 letters, but there has been no intimidation in that way.
    It does appear to me, and I know it appears to many hon. Members on all sides of the Committee, that it is not satisfactory that this particular form of betting should be singled out as being apart from other forms of betting for a tax of this nature. I listened to the Financial Secretary very carefully, and he did not really endeavour to meet this point. He should have met the point by comparing like with like, but he merely talked of the 10 per cent. tax on greyhound tracks. Why should there be that complete difference between pool betting outside the course and taxless fixed price betting with bookmakers? No hon. Member has suggested, and I do not think that any hon. Member would so suggest, that pool betting is a particularly evil form of betting. I think it is the most harmless sport, in which pretty humble people enjoy a shilling or two shillings a week, rather than going in for backing a winner on the course.
    It is not the sort of betting which ruins homes or brings the misery which other forms of betting might bring; but there is a differentiation of taxation, which, in my view, has not been considered carefully by the Government at present. The pools have carried a 10 per cent. tax, and then 20 per cent. So it is asked, why not 30 per cent.? There is always a point where one faces the danger of diminishing returns. The Association of Pool promoters kicked up no "shindy" over the 10 per cent. or the 20 per cent. tax, but now we have this suggestion of a 30 per cent. tax.
    I do not think I am being very controversial when I say that any sort of agitation which provides a large number of letters for hon. Members is almost always organised and that such organisation is
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    quite legitimate. I agree with my right hon. Friend the Member for West Bristol that the use of the private addresses of hon. Members rather than the House of Commons was foolish, but what we have to ask ourselves is, "Was it improper agitation?" I confess that my letters were rather more diverse letters than one normally gets when receiving a lot. One had a whole lot of rather differently expressed views, and I must admit that they were some of the most interesting I have read. There is no doubt that they were the kind of letter written by the individual; and by an individual who was sufficiently interested to write in his own words.
    Mr. Haworth: The hon. Gentleman represents a Liverpool constituency, and would he not say that more than half of his letters were from employees in the pool industry?
    Mr. Raikes: I should think that about 5 per cent. were from those employees.
    Mr. Haworth Mr. Haworth indicated dissent.
    1.0 a.m.
    Mr. Raikes: The hon. Member need not shake his head at me. After all, I do read my own letters just as he reads his. I agree that the percentage of one's letters from persons actually employed in the pools would be very much larger in those constituencies where they are employed than in most of the other constituencies.
    It is suggested that the Pool Promoters Association has got no real fear of the pools business falling off sufficiently seriously to create unemployment. I should like just for a moment to consider whether that case is unreasonable or not. It is probably not unreasonable that clients of the Football Pools Association should in the first instance write to the Association and say, "What are you going to do?" instead of writing to Members of Parliament. We are told that racing pools are already 25 per cent. down on 1948. They say, and I think there must be something in that, that the applications for football coupons for the next pool season are very, very much lower than they normally expect at this time of year. There has been a drastic reduction. I am inclined to think, with my very limited knowledge of this, that if the Association thought they would get away with the tax comfortably and continue to get people to go

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    in for the pools, they would be inclined to "play ball' with the Government of the day like other firms of big business.
    If on the other hand, the result of this is going to be that the pools business goes right down, we are going to be faced with far more important things than the woes of pool promoters. Some people are going to drop this particular form of entertainment because they are being unfairly treated over taxation. These are the type who may be persuaded to go over to a bookmaker who is going to give them fixed price betting. There is also a vast army of people who go in for pools who would never dream of making a bet or gambling otherwise. But if they think that their amusement is so heavily taxed that it is not worth while doing, they will not continue.
    That means not only that a certain amount of business will be lost but that in areas such as the Member for Walton (Mr. Haworth) represents, which I represent, and which the hon. Member for Liverpool Exchange (Mrs. Braddock) represents, we are going to be faced with a degree of unemployment amongst those at present engaged in pools. It is easy to take a respectable view and say it is much better for them to be employed in more productive industry, that it would be very much better to have them out of the pools. That may be the answer where we have full employment.
    But on the Merseyside we have never seen full employment—even today with Marshall Aid and everything else. I say frankly that the absorption of a good deal of female labour and that of a number of disabled men on Merseyside has been a blessing to the community at a very difficult time, whether one likes the pool promoters or not. I am disturbed by the idea that reduction and possible termination of pools may make necessary an increase in unemployment among persons who theoretically can be absorbed elsewhere but in fact go out on the street. For those reasons I hope that even at this late stage this tax might be reconsidered and at any rate kept in some sort of order compared with other forms of taxation on betting.
    Mrs. Braddock: I appreciate that it is rather late to be taking part in a discussion of this sort, but I represent an area which perhaps
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    employs more pools clerks and others associated with pools than any other. The main office of the biggest pool in the country is in my constituency. There are so many people of the ordinary type who are able to do pools work living in the constituency that as soon as I began to receive letters, numbering between 400 and 500, I was compelled as the representative to take notice and make some inquiries as to what the position actually was. I discovered that the first tax on pools was suggested by the former Chancellor of the Exchequer. Not knowing how to deal with the position himself he had interviewed the Pool Promoters' Association and they very kindly gave him the solution of how easily to put a tax on pools. They had no objection of any sort to the fact that they were going to be taxed. In fact, they offered assistance and suggested the easiest method whereby the tax could be put on them.
    Their suggestion was adopted and a 10 per cent. tax was put on in 1947. In 1948 it was automatically increased to 20 per cent. It has been stated, correctly, that no objection was taken and that there was no agitation when the 20 per cent. tax was imposed. That was mainly because they felt that the country, being in the state it was in, was entitled to the tax. When the next Budget came along the suggestion was 30 per cent. and the pools people began to want to know what was going to happen and applied to see the Chancellor of the Exchequer. He was away and the representatives of the Pools Promoters' Association were met by the Financial Secretary to the Treasury. They asked him what was the situation and why the extra tax was being imposed—why there was discrimination in taxation between pools and other forms of betting. I understand that they were told by the Financial Secretary: "It is quite all right; 20 per cent. was put on and nothing was said; if there is any agitation or objection in the country there is one way to deal with it."
    Mr. Glenvil Hall: May I correct that impression? That is not what happened. What happened was that they came to the Treasury, as many delegations do, and I informed them that the Chancellor of the Exchequer had imposed this tax because in his view it was the proper thing to do. So naive were they in these

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    matters that they imagined that they had only to come here and put the point to the Chancellor of the Exchequer and he would withdraw the tax immediately. I had to point out that that could not be done, that the matter would come before the House, and that if they desired to make representations they could do what others did and go to their Members of Parliament and ask them to raise the matter when the Committee stage was reached.
    Mrs. Braddock: I feel that the Financial Secretary to the Treasury may have a guilty conscience. I am told that the Treasury said that they had no evidence of any agitation or dissension among those people who were investors in the pools, that the Treasury would welcome any discussion and that the way to deal with the business was to have it raised on the Floor of the House. If they did make an agitation and did take steps to see that it was adequately expressed on the Floor of the House of Commons, nothing would be held against them for that action by the Treasury.
    In perfectly good faith, I am empowered to say that there is no suggestion at all, no intention at all, and no desire at all on the part of the football pool promoters in any way to lead an agitation against the Government. [An HON. MEMBER: "Nonsense."] That may be one feeling, but I am just as much entitled to express an opinion as anyone else is entitled to say "Nonsense." If any section of the community is invited by the Treasury to show that there is an agitation against the application of a certain increased tax, the only way to do it is for those people directly affected to express some opinion, and if that is going to be called in any circumstances an attack on the Government, then we shall have to look at the matter of attacks on the Government very carefully.
    There is another aspect of this matter. In an area such as I represent we are bound to look at the question of whether any alteration in a tax is going to increase unemployment. We have to face the fact that a perfectly legitimate industry in an area of deep depression is employing practically 16,000 people who are earning good wages in fairly good conditions. In fact the conditions cannot be equalled by other employers in the
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    area, who object to the high rates of pay offered because they cannot attract work-people from that industry into their own. We have to face the possibility of creating additional unemployment to the 21,000 steady unemployed in the Liverpool area. There are still over 3,000 women in the Liverpool area unemployed, and it is all very well to say that the people employed by the football pools should be employed elsewhere, but we have no right to prevent them being employed while not being able to offer them alternative or better employment inside or just outside the area. That is one of the difficulties of the situation in the Liverpool area. Here is an industry employing so many people that any steps that may be taken to reduce the number must be of great concern to those of us who represent divisions in the area.
    1.15 a.m.
    It is said that this tax comes out of the pool promoters. It does not. It will not affect the pool promoters one extra halfpenny. What happens is that the more money goes into taxation from the pool promoters the less goes into the pool to divide among those who win, so that if it is a question of taxation for the purpose of putting the pools out of operation it is not actually doing that; it is preventing the people who like to bet.
    I do not think I have ever filled in a pools coupon in my life. I do not go to races, I do not drink, and I do not smoke, so the Financial Secretary to the Treasury does not get much out of me—[AN HON. MEMBER: "What do you do?"]—I do not think that would be relevant to the discussion.
    The ordinary British man and woman likes to gamble in some way—and there are over 1,000,000 of them whose bet on the pools does not exceed a shilling and there are over 2,000,000 whose bet does not exceed 2s., so a very big percentage of those we are discussing now, as this is quite legal, are people who are entitled to do their betting on the pools in the way they desire. As there are, I understand, 9 to 10 million people in the country who fill in pools coupons for the various organisations, and as a person does that because he expects to win something additionally—hope springs eternal—then, if the odds come down to

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    such an extent that is not worth the expenditure, obviously that person looks for some more remunerative method of betting. We shall never stop the British people from having a bet on certain things.
    A reduction in the number of people paying into pools means that there must be a reduction in the staff that is used to deal with pools operations generally, and it automatically means, if it is consistent, an increase of 10 per cent. on each bet. That will eventually mean that people will not take out pools coupons and eventually the industry will gradually be reduced. If we were discussing shutting down the pools I would make a different speech, but we are not discussing that. We must be realists and face the position as it is. I say quite definitely, that so long as pool betting is legal, people are entitled to take part in it. They have no objection to paying tax, but the agitation that has been created is definitely for the purpose of ensuring that there will be no further increase of high taxation periodically until the Commission have reported and a decision has been taken about what is to happen about gambling generally.
    For these reasons I made special inquiries. I have gone into the letters I received, most of them from constituents, some from pools employees. Suggestions were made in the Liverpool area that there has been intimidation. The organised labour and trade union movement expressed an opinion about it—that they would deplore any pools organisation or any employer putting pressure on employees to do something they did not desire to do. If there comes to the notice of the labour organisation in Liverpool any individual case where there has been pressure or victimisation of any employee who has refused to sign, that will be a matter for individual concern. I believe that the pools people took the step they did take at the invitation of the Treasury, and I do not think we ought to be too dogmatic about the position they have adopted.
    Viscount Hinchingbrooke: The hon. Lady has made a forceful speech, which I am delighted to say I agreed with as to every word. I only hope that what she said at the beginning about the agitation in this affair, got under the thin skin of the hon. Member for Cambridge
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    (Mr. Symonds) and the hon. Member for Walton (Mr. Haworth), who seem to have forgotten the past of the party to which they belong, which was one of consistent, sustained agitation for 50 years. Fortunately we have had the admission from the Financial Secretary that he is the author of the campaign.
    Mr. Glenvil Hall: The noble Lord as usual is up to form. He has had a golden path through life, he has never needed to look for a house or a job, or to search for money, but one thing he still has to look for, and that is manners.
    Viscount Hinchingbrooke: I have noticed that the Financial Secretary has been out once or twice tonight, and I hoped he was looking for fortification to make remarks on the Debate rather more interesting and informative than those which have just fallen from his lips. He is clearly the author of the campaign. He frankly avows that he instructed the representatives of the Pool Promoters' Association who went to see him at the Treasury that they were within their right in seeking the assistance of Members of Parliament on the Committee stage of the Finance Bill. I agree with my hon. Friend the hon. Member for Wavertree (Mr. Raikes) in saying that, so far as the letters that have been written are concerned, they are all of a more detailed, instructive, individual and informative character than anything I have experienced in this or the previous Parliament. I have one which I propose to read at the end because it accurately reflects my views, not only on this situation but on the general policy of the Government.
    I object on four grounds to the increase of this tax. First, because of the fact that the Royal Commission is sitting. Do the Government propose after this decision to increase the duty next year, to readjust the duty on other forms of gambling and betting in order to bring them into line? Then, afterwards, will they look again at the pool promoters to provide some further duty, and then again readjust it to make for fairness all round? If so, what is the purpose of the Royal Commission? We appoint a Royal Commission in order to leave the field quiet and clear to be properly explored by responsible men in public life who can take evidence from all the bodies concerned. I have never before

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    heard of a case where a Royal Commission has been appointed and immediately thereupon the Government have plunged about in the field which it was supposed had been left to those people to investigate. I deplore the fact that so soon after the appointment of the Royal Commission the Government should have come along with this increased duty.
    Secondly, I object because of the very unfair comparison it is now possible to establish between this duty and other forms of duty. The Financial Secretary himself gave the figures and they were repeated by my right hon. Friend the Member for West Bristol (Mr. Stanley). A total of £650 million is spent on gambling. A total of £61 million is spent on the pools. Altogether £18 million is taken out of the pools in taxation, as against £28½ million taken in all taxes on gambling. If the ratio were correct the sum of £2.8 million only should be taken in taxation from the pools. What it is now proposed to take is, therefore, 6½ times too much. That seems to be a clear reason for complaint against this new duty.
    Thirdly, I deplore that at this time there should be any increase in taxation at all in any part of the financial structure. As I said on the Second Reading of the Finance Bill, this is a time when we should reduce taxation all round. We shall have further opportunities for saying that tomorrow. More particularly is it vicious to carry through this very serious extension of indirect taxation. What is to prevent the Chancellor of the Exchequer from year to year and time to time seizing upon some aspect of public policy which he dislikes and taxing it almost out of existence? Last year it was the Capital Levy. This year his venom has descended on the pools. Next year it may be to prevent firms making maces for city livery companies or wigs for barristers or canopies for African chiefs. One does not know what he may descend upon with this new principle of indirect taxation. It is deplorable both to support an extension of indirect taxation on this scale and to extend taxation on any scale at all.
    1.30 a.m.
    Finally, I am genuinely impressed with the letters I have received from my con-
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    stituents. Why should we not be? Why should it be held by hon. Members opposite that when there are these campaigns hon. Members should instantly react against them? Are we not here as representatives of our constituents? Are we not ready to receive their representations at all times and give effect to them when we think they are wise and just? I act tonight on the number of letters I have received and particularly on this one, a short extract from which I propose to read:
    "The football pools are the working man's weekend hobby, not to be placed in the same category as, for instance, daily tote betting, which is not taxed. Surely the working man is paying enough now in taxation either direct or indirect, and so far we have not seriously objected to a 10 per cent. taxation on the pools, or even the last increase bringing it up to 20 per cent., but the proposed 30 per cent. increase is far too much. After all, the average pools fan only speculates with a very few shillings each week and certainly does not regard his speculation as being just a gamble but an interesting form of entertainment, a test of skill, his knowledge of football as opposed to that of the newspaper 'experts.' That he has to pay a few shillings each week is just incidental, and an added fillip to his weekend relaxation, which is, I suppose, something Stafford Cripps has never experienced and therefore neither understands nor appreciates. The country needs our services desperately enough."
    This is an ex-service man.
    "We are half starved, taxed almost out of existence, yet are still expected to give our best efforts and work, work, work. We cannot have a drink, smoke, dance or see a film without paying a tax. Stop the upward trend of taxation and give us a chance."
    Mr. Kinley: My contribution, which I will make as brief as I can, will differ somewhat from those which have gone before. I start from the basis that my bag of letters of protest contained 1,000 letters, due to the fact that two of the largest pools firms have centres in Bootle. It is of interest to note that of the thousand letters I have received, 950 were from pools employees and were sent to me because the writers were pools employees and for no other reason. The firms supplied the envelopes, paper and stamps. The hon. Member for Walton (Mr. Haworth) said earlier that he had had envelopes sent to him containing plain paper. I received eight of those—the firm's envelope, the firm's stamp and the firm's plain paper. But they had to be sent apparently, and we are bound to judge from the evidence that comes to us.

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    Of the 950 letters from pools employees, 50 came from divisions which surround Bottle division. Every Liverpool division supplied me with one or more letters of protest and addressed me as "my local representative."—instructions from the firms to their employees, all apparently drilled in the same way. The right hon. and learned Member for West Derby (Sir D. Maxwell Fyfe) will be pleased to know that three of his constitutents sent letters of protest against the increase of 10 per cent. Why? If any protest were to be made, surely he would do it much more ably and effectively than I could. But they are employees of a pools firm and instructions were given that they should send letters in a certain form.
    "I call upon you as my local representative."
    That gives us a clue as to how the whole thing has been arranged. As I have said, I have had only 50 letters of protest which were not sent by pool employees. I have a dozen letters sent by people protesting against the protest. I have four which denounce the whole idea of pools, and whose writers would do away with them.
    Here, in lighter vein, is an illustration of how badly the pools firms, or those who acted for them, did their coaching. Here are two letters on a firm's notepaper which came in the firm's envelopes. The first one reads,
    "Sir,—I am strongly against any further increase in tax on football pools as I think the working man's pleasure is already too heavy."
    Here is another letter, from another part of Bootle, which reads,
    "Sir,—I am strongly against any further increase in tax on football pools as I think the working man's pleasure is already too heavy."
    Exactly identical wording. One of them comes from one particular firm, because that firm uses green ink. So that can be traced. Another interesting sidelight on the campaign arises out of a circular sent by the firms to their regular "fans." I am not going to give the man's name, as he proposes to continue his "fanning" with the firm, and it may be better that they should not know who sent me this letter. It reads,
    "Dear Sir—I have received a letter from X pools—"
    He gives the name in his letter, but I am
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    not being paid to advertise them, so I will not give it.
    "—on the tax subject. I am a modest gambler on the pools—between five shillings and ten shillings every week—and I feel that the tax should be increased by a further 10 per cent., making 40 per cent. I also think that every dividend of £20,000 should pay 25 per cent. tax straight away. I enclose in this letter the circulars I have received from the firm."
    The other thing I want to mention is that of the 900 employees of those firms, nine out of every 10 write for precisely the same reason—because they are employed by the firms, they want to retain their employment, and they have been convinced by their employers, or those who speak for the employers who have deliberately deceived them, that this 10 per cent. extra tax is going to smash the pools and put them out of business. I do not think there is a pool promoter who is stupid enough to believe that this additional 10 per cent. will have any material effect upon his pools business. What does it mean? A man who, for a shilling, or 1s. 6d., or 2s. 6d. stake last season landed £10,000 as a prize, if able to repeat the performance, will get £9,000. What sort of fool is he who will suggest that a man will throw it up because he can get only £9,000 for his 2s. 6d.
    Mr. Sidney Marshall: I do not blame him.
    Mr. Kinley: If the lucky man of last season who got £20,000 gets only £18,000 this year, that does not mean he will give up gambling. That is the effect which the additional 10 per cent. will have on the winners. To the losers it does not matter how much is put on because their money is "dead" in any case.
    There has been this deliberate and persistent campaign by the employers of these women and girls to fill their minds with the conviction that the imposition of this additional 10 per cent. is going to smash the pools and throw them out of work; and there need be no reminder that unemployment on Merseyside and in Bootle is high enough already. They asked me, therefore, not to take any action which might tend to increase that unemployment. That is their case. It is despicable conduct on the part of the pool promoters and if there is for any reason to be a Division on this matter I shall support the Government, hoping

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    that the pool promoters will learn that such conduct is despicable in every respect.
    Mr. Osborne: The only reason why I am intervening this morning at such an hour is because I raised this question in February, 1947, and I wish to remind the Committee of certain points germane to this discussion which I raised then but which Government supporters refused to face. Can the pools stand this 30 per cent. tax? I do not think that there is an hon. Member on either side who would be against this tax if it were proven that the pools could legitimately pay it; but this Debate is taking place completely in the dark, financially. We have no idea what the figures are or what the resources of the pools may be. I blame, first of all, the Government itself, and then I blame the pool promoters. The Financial Secretary said in his opening remarks that it was difficult to know how much money is available and, therefore, whether the 30 per cent. could be borne or not.
    That is the difficulty which we have to face. But it is his own Government which is responsible for that because, asked to get these very facts, the Government refused to do so. The right hon. Gentleman said that, so far as the Chancellor knows, the money is there to be taxed; but the pool promoters say it is not. Neither the Government nor the pool promoters have given the evidence, which must be in existence, upon which we can come to a reasonable and proper decision. We are debating this rather important point without knowing the real facts.
    1.45 a.m.
    When the hon. Member for Bilston (Mr. Nally) chided my right hon. Friend the hon. Member for West Bristol (Mr. Stanley), for not supporting him late in 1947, my retort is this. When I raised the matter on 12th February, 1947, I finished in this way, and if the Government had acceded to my request that evening we should not have been in this position tonight. This is what I asked the Government to do:
    "I plead that an investigation into the pools should be made, so that we could get to know the whole of the facts, and then the House would be in a position to demand action."—[OFFICIAL REPORT, 12th February, 1947; Vol. 433, c. 492–3.]
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    The Socialist Minister who answered for the Government gave this extraordinary reply for a party holding their views and responsible for their actions:
    "It would be an intolerable imposition and a restriction on the rights of the individual."
    I never heard such nonsense coming from a party who has taken away almost every liberty we have got. What he was afraid of is what, I suspect, some hon. Members in all corners of this Committee are afraid of tonight, and that is losing votes. When I had finished my plea that night, I was warned by hon. Members opposite that it would cost me my seat. Well, I do not think that is true.
    I say it is this Government which is partly responsible for the position we are in of not knowing the facts. Just to digress one moment. The hon. Member for Liverpool, Exchange (Mrs. Braddock), put forward the very natural plea of an hon. Member who may face greatly added unemployment in her division by saying, "If you do smash the pools, my people will face enormously increased unemployment and that, among old people who are now employed doing this work."
    I gave an example two-and-a-quarter years ago in the Liverpool area where a rayon company had lost in one week over 260 clerks to a football pool office just down the road. The hon. Lady says that they get better wages in the football pools. Of course they do. There is no competition. They have not to sell their wares anywhere else. The rayon makers have to sell their product in Canada and America and in competition with people all over the world, but the pool promoters can take out of the pool just as much as they like. This is the important point. Not only did I say that the people who were employed there—the 75,000 who were fully employed in the pools—were required at the time in the textile industry, but I placed before the hon. Lady this alternative, that it was a case of more clothes and more food——
    Mr. Carmichael: On a point of Order. Are we discussing whether people should be engaged in the cotton industry or in the pools, or are we discussing whether tax should be 20 per cent. or 30 per cent.? I raise the point because on a recent occasion, when we were discussing the cinema tax on the cinema quota, the Ruling from the

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    Chair was that one might either discuss the 40 per cent. quota or the 45 per cent. quota but nothing else. I do ask, because it has been going on all night, how far Members are permitted in this Debate to roam all over the field and ignore entirely the question of 20 per cent. tax or 30 per cent. tax.
    The Deputy-Chairman: The hon. Gentleman may have noticed that I was engaged in conversation and was not listening to the hon. Gentleman. Therefore I cannot say whether he was out of Order or not. The Motion before the Committee is, "That the Clause stand part of the Bill," and I gather from an interruption which the hon. Member made earlier that he was going to refer to the fact that he opposed the tax on pools some two years ago.
    Air-Commodore Harvey: Further to that point of Order. The hon. Member for the Liverpool Exchange (Mrs. Braddock) pointed out that there might be unemployment in her division. Surely it is in Order for my hon. Friend to point out what would be the effects in another industry?
    The Deputy-Chairman: I should not have thought so. We shall see how the hon. Member proceeds.
    Mr. Osborne: I am much obliged, Mr. Bowles. If the hon. Member on the other side of the line had been in the House and listened to the Debate I do not think he would have made such a foolish and irrelevant intervention.
    Mr. Carmichael: If an hon. Member raises a point of Order, surely he is entitled not to be spoken of in a disparaging manner by another hon. Member? I think it is extremely unfair.
    Mr. Osborne: I am grateful to you, Mr. Bowles, and will not labour the point. The intervention was much below what we usually expect from Scotsmen. The hon. Member for the Liverpool Echange Division was making the legitimate claim that if this tax is increased from 20 to 30 per cent. there is a danger that in her division unemployment will be seriously increased. I think that is fair. She was saying that in her division the pools, taxed at 20 per cent., were now able to pay much better wages than were paid by other employers in the same area. Our retort was that the pool promoters
    402
    can take from pool subscriptions just as much as they like. There is no control over them; no one knows how much they do take. I appeal for the information on which we can judge the case.
    Mr. Tolley: If that argument holds good, they can afford to pay 10 per cent. additional tax.
    Mr. Osborne: I am merely pleading that we should have all the information available. It is rather a pity that the Government refused my request two and a half years ago for this information. They did so because they were frightened of it.
    What the Committee should have from the pool promoters is the figures upon which we can judge whether they can legitimately pay the extra 10 per cent. We ought to know their gross receipts for five years, how much they have paid away in expenses—and legitimate expenses—and we ought to have a column showing how much they have kept for themselves and how much they have sent back. If we know that, we shall be in a position to judge whether they can afford to pay this 10 per cent. I have a shrewd idea that they can pay it on their heads—and scarcely miss it. We could have had this information two-and-a-half years ago if the Socialist Minister who replied had had any political courage at all.
    The best pools say that they run on 20 per cent. expenses. The less well-organised pools—I said this in my speech and it was never contradicted—take as much as 50 per cent. and some as much as 70 per cent. There are certain businesses whose activities are controlled by the Government which are not allowed to take more than 5 per cent. gross on their activities. We have to run our businesses on a 5 per cent. margin and yet the pool promoters say they cannot do it on a 20 per cent. margin. I should like to run some of my businesses on a 20 per cent. margin. I am not arguing whether betting through the pools is right or wrong, is justified or otherwise. All I am urging is that we ought to have full information.
    I have received fewer than 20 letters as a result of this agitation and only half of them came from my own constituency. Some, it is true, represent several punters, a much better word than "investors." One represented 14 people out

    403
    of one small village. They were protesting against this extra 10 per cent. because they were convinced that it was going to stop their pool betting. They feel that the rich man's gambling comes off cheaper than the poor man's betting and they feel it is an injustice. I urge that until we have all the relevant facts we cannot satisfy the working man that he is getting a square deal—[Interruption]—Hon. Members can jeer as hard as they like, but it is through their own folly that we are debating this tonight.
    Mr. Keenan: The pool promoters made an awfully big mistake. They should have concentrated on educating Members of the House as to what takes place in football pools—and a lot of them do not know. A lot of information has been given about the pools. There has, however, been a great deal of nonsense talked about the amount that is kept in commission. I believe the pool promoters themselves have admitted that they have kept 5 per cent. [HON. MEMBERS: "No."] A few months ago a number of people in the Pool Promoters' Association came to see a group of us. They told us that they kept 5 per cent. and they said that 20 per cent. was the total for commission and working costs of running the pool. I think that is in the literature they sent out.
    As the new tax is 30 per cent., the total outgoing is at least 50 per cent. of the amount subscribed and therefore only 50 per cent. will be available for dividend. The football pools have some knowledge of the value of staking and they expect a return. The reason why pools have developed over the last 25 or 26 years in paying the dividends they have paid is because of the fact that they did give better results on fixed rates than the bookmakers before them gave. Anybody who knows anything about pool betting knows that odds are, on the average, much higher than those offered by any bookmaker.
    2.0 a.m.
    I want to remind the Committee that we are dealing with something which is an important factor in the lives of the people of the country, as about half of the adult population indulge in this form of betting. We cannot afford to ignore that fact. The football pools have been
    404
    selected for a vicious tax and the others have been left alone. If gambling in one form or another can stand a tax of 30 per cent., as I believe it can and should, then what about the other forms? The right hon. Member for West Bristol (Mr. Stanley) dealt in a very generous way with gambling. He knows something about the sport of kings, and I must say he showed some knowledge of that by the generous way he dealt with betting as a whole. But what about the totalisator? Last year the totalisator on the racecourses actually turned over £26,254,614. If the totalisators had had to pay the 20 per cent. tax imposed on the football pools last year it would have cost £5,250,922. If the Chancellor of the Exchequer is worried about getting £6 million, here is one way of getting £5 million of it right away by equalising the tax on betting.
    Mr. Frederic Harris: Does the hon. Gentleman not realise that if that were done, people would not put money on the tote at all?
    Mr. Keenan: That is the argument of the football pool promoters. It is as good an argument for them as it is for the totalisators. Last year on the Finance Bill I did grumble a little about this, and I said that the pool promoters were entitled to some protection from the Government. I meant that there should be some control and some knowledge of the finances of the pools. We have to remember that there are 12 football pool companies collecting 5 per cent. for the purpose of running the pools. This amounts to £3 million, which is too much. It was suggested by those who criticised the taxation on football pools and the exclusion of other betting that there was some arrangement by which 10 per cent. was devoted to horse-breeding. I followed that up last year. I tried to get from the Board of Trade what was the value of our exports in bloodstock. The Board of Trade could not tell me.
    The Deputy-Chairman: I am sorry, but this has nothing to do with the Clause in question.
    Mr. Keenan: That is so, Mr. Bowles, I am sorry. But I want to suggest that there is much more justification for taxing not only the totalisator but the bookies as well as the others. I am

    405
    prepared to agree with what was said by the right hon. Member for West Bristol, that there should be no increase of any taxation on betting while the Commission is sitting. There is another point I want to emphasise. There is not, so far as I have been able to sense the feeling of the House, any appreciation of the fact that there are about 10 million people outside who invest in pools and get a kick out of it. I have always been a pool fan myself. I still shall be, in spite of the 30 per cent. tax. Football pool betting is the least vicious form of gambling. It has taken the place of betting in the back entries and in the works with the bookmakers. I bet that the most popular broadcast in the week, from September to April, is at half-past five on Saturdays.
    The Deputy-Chairman: The hon. Gentleman is going very much too wide.
    Mr. Keenan: The average amount spent on pool betting is 40s. for the 42 weeks in which there is pool betting. In addition, the competitor will pay 14s. in postage and poundage. Everyone who indulges in pool betting pays about £2 14s. a year, which means that the 10 per cent. will increase that about 16s. 8d. That is in excess of what he should pay, and I hope there will be further consideration of this taxation.
    Mr. Glenvil Hall: We have been discussing this matter for several hours and there are further Clauses which we have to dispose of before we separate. [Interruption.] I wondered whether I might conceivably help the Committee to come to a decision on this Clause by replying quite briefly to the one or two main points which have been made.
    First, we are debating whether the duty on football pools should be increased from 20 per cent. to 30 per cent. That is what we are now deciding. It is not a question of whether the pools are desirable or not, whether they are moral or immoral, whether the paper, materials and personnel engaged in what is called this industry are productively employed or not. All those are points upon which most of us have views, and some have very strong views, one way or the other. But we are not debating that subject. We are here deciding, during the Committee stage of the Bill, whether it is right and proper of my right hon. and learned
    406
    Friend to increase the duty on football pools from 20 to 30 per cent.
    What I tried to say in the observations which I offered to the Committee earlier in the proceedings was that, so far as the 20 per cent. is concerned, we have quite definite evidence that it was not crippling to the pools. So far as the extra 10 per cent. is concerned it is quite obvious that it is impossible at this stage to say whether it will, as the pools assert, cripple them and perhaps put them out of existence or whether they will find it quite easy to carry, as was the original 10 per cent. and the 20 per cent. There is not yet sufficient evidence to show.
    Air-Commodore Harvey: If that is the case, would it not be better to wait for the next Budget before increasing the duty?
    Mr. Glenvil Hall: The answer to that, of course, is that we should be in the same dilemma then. It is normally towards the end of the football season, so it would be quite impossible between the opening of the Budget and the passing of the Finance Bill to have any evidence worth going on as to whether the extra 10 per cent. was or was not crippling the football pools.
    I want to be perfectly fair to the Committee—I tried to indicate this earlier—for so far as the 20 per cent. is concerned the evidence is pretty conclusive that the pools could stand it and stand it easily. That being the case, there is no reason why they should not pay it. What we have to prove now, if we can, is that they can also bear the extra 10 per cent. We have no final evidence on that for the reasons which I have given to the Committee. We are hamstrung in this matter to a certain extent, as the hon. Member for Louth (Mr. Osborne) indicated, by insufficient knowledge. We know that roughly something like £60 million goes into the football pools and the promoters indicate to us that at least 20 per cent.—they go so far as to say even more—is eaten up in expenses. We do not know how much, in fact, of this £60 million, when the expenses, commission, Excise Duty and the rest are taken out, actually reaches the public by way of prizes of one sort or another, either large or small.
    Mr. Drayson: Why has the right hon. Gentleman not got that information? The

    407
    Income Tax Authority, the Treasury, over which he has a certain amount of control, are able to ask for any figures they want. They must have seen representative balance sheets of one of these companies, if not all.
    Mr. Glenvil Hall: The hon. Member will learn by experience, but it is nearly time—he has been in the House some years now——
    Mr. Buchan-Hepburn: Why not answer the question?
    2.15 a.m.
    Mr. Glenvil Hall: I am about to answer it, but I shall answer it in my own way. The hon. Member should know that Income Tax information is quite confidential as between the individual and the Inland Revenue. I have no right, and I do not intend to attempt to assume the right, to go to the Inland Revenue and demand from them the Income Tax returns that are made by the pools promoters.
    I think the main criticism that has been made to which I should attempt to reply has been that because other forms of gambling—namely, totalisators, particularly greyhound racing totalisators—pay less in the way of excise duty, therefore it is wrong to tax football pools 30 per cent. I could not accept that as axiomatic for a moment. It is the general rule surely in taxation that where taxation has to be raised it is not wrong to levy it from such sources as are available. To say that because the greyhound racing tracks pay only 10 per cent. and the bookmakers something approximating to
    the same percentage, therefore the football pools should pay no more, would be tantamount to saying that tobacco and tea and other commodities essential to the life of the community should all be taxed at the same rate. Of course, that could not be accepted for a moment.
    I want the Committee to realise that this tax is a legitimate form of taxation and if this amount were not raised in this way, it would have to be raised in some other way, possibly—indeed, I might say, definitely—from a more deserving section of the community. I was asked by the hon. Member for West Bristol (Mr. Stanley) whether it would be possible for the Government to speed up the work of the Royal Commission, which has now begun to sit, and to expedite their report. Of course, I could not give an undertaking in that direction. The Royal Commission will meet and will produce their report in their own good time; but I should like to express the hope, on behalf of the Government and of most members of the Committee, that the Royal Commission will expedite their work and that at no distant date the report will be ready. I think I can promise the House that when that report comes into the hands of the Government, the Government will be willing to consider it and, if necessary, to act on it with speed.
    The Parliamentary Secretary to the Treasury (Mr. Whiteley)rose in his place, and claimed to move, "That the Question be now put."
    Question put, "That the Question be now put."
    The Committee divided: Ayes, 186; Noes, 59.

    Division No. 169.]

    AYES

    [2.21 a.m.

    Adams, Richard (Balham)

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

    Dobbie, W.

    Albu, A. H.

    Callaghan, James

    Dodds, N. N.

    Alexander, Rt. Hon. A. V.

    Carmichael, James

    Driberg, T. E. N.

    Anderson, A. (Motherwell)

    Castle, Mrs. B. A.

    Dugdale, J. (W. Bromwich)

    Attewell, H. C.

    Champion, A. J.

    Evans, Albert (Islington, W.)

    Austin, H. Lewis

    Chetwynd, G. R.

    Evans, S. N. (Wednesbury)

    Bacon, Miss A.

    Cocks, F. S.

    Fairhurst, F.

    Baird, J.

    Collindridge, F.

    Fernyhough, E.

    Barton., C.

    Collins, V. J.

    Field, Capt. W. J.

    Bechervaise, A. E.

    Comyns, Dr. L.

    Foot, M. M.

    Beswick, F.

    Cook, T. F.

    Forman, J. C.

    Bing, G. H. C.

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

    Fraser, T. (Hamilton)

    Blenkinsop, A.

    Corlett, Dr. J.

    Freeman, Peter (Newport)

    Blyton, W. R.

    Crossman, R. H. S.

    Ganley, Mrs. C. S.

    Bowden, Flg. Offr. H. W.

    Cullen, Mrs.

    Gibbins, J.

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

    Dalton, Rt. Hon. H.

    Gibson, C. W.

    Braddock, T. (Mitcham)

    Davies, Edward (Burslem)

    Gilzean, A.

    Bramall, E. A.

    Davies, Ernest (Enfield)

    Glanville, J. E. (Consett)

    Brook, D. (Halifax)

    Davies, Harold (Leek)

    Greenwood, A. W. J. (Heywood)

    Broughton, Dr. A. D. D.

    Deer, G.

    Grey, C. F.

    Bruce, Major D. W. T.

    Delargy, H. J.

    Griffiths, D. (Rother Valley)

    Griffiths, W. D. (Moss Side)

    McKay, J. (Wallsend)

    Simmons, C. J.

    Gunter, R. J.

    McKinlay, A. S.

    Skeffington, A. M.

    Guy, W. H.

    McLeavy, F.

    Smith, C. (Colchester)

    Haire, John E. (Wycombe)

    MacPherson, Malcolm (Stirling)

    Snow, J. W.

    Hall, Rt. Hon. Glenvil

    Mallalieu, J. P. W. (Huddersfield)

    Sorensen, R. W.

    Hamilton, Lieut.-Col. R.

    Middleton, Mrs. L.

    Steele, T.

    Hannan, W. (Maryhill)

    Millington, Wing-Comdr. E. R.

    Stewart, Michael (Fulham, E.)

    Hardman, D. R.

    Mitchison, G. R.

    Stokes, R. R.

    Hardy, E. A.

    Monslow, W.

    Stross, Dr. B.

    Hastings, Dr. Somerville

    Moody, A. S.

    Stubbs, A. E.

    Haworth, J.

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

    Sylvester, G. O.

    Henderson, Joseph (Ardwick)

    Morris, P. (Swansea, W.)

    Symonds, A. L.

    Holman, P.

    Nally, W.

    Taylor, R. J. (Morpeth)

    Holmes, H. E. (Hemsworth)

    Neal, H. (Claycross)

    Taylor, Dr. S. (Barnet)

    Horabin, T. L.

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

    Thomas, George (Cardiff)

    Houghton, A. L. N. D. (Sowerby)

    Oliver, G. H.

    Thomas, I. O. (Wrekin)

    Hoy, J.

    Orbach, M.

    Timmons, J.

    Hubbard, T.

    Paget, R. T.

    Titterington, M. F.

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

    Paling, Will T. (Dewsbury)

    Tolley, L.

    Hughes, Hector (Aberdeen, N.)

    Palmer, A. M. F.

    Ungoed-Thomas, L.

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

    Pargiter, G. A.

    Wallace, G. D. (Chislehurst)

    Hutchinson, H. L. (Rusholme)

    Parkin, B. T.

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

    Hynd, J. B. (Attercliffe)

    Paton, J. (Norwich)

    Warbey, W. N.

    Irvine, A. J. (Liverpool)

    Peart, T. F.

    Webb, M. (Bradford, C.)

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

    Popplewell, E.

    Wells, P. L. (Faversham)

    Jay, D. P. T.

    Porter, G. (Leeds)

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

    Jeger, G. (Winchester)

    Pritt, D. N.

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

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

    Randall, H. E.

    Whiteley, Rt. Hon. W.

    Jones, D. T. (Hartlepool)

    Ranger, J.

    Wilkes, L.

    Jones, P. Asterley (Hitchin)

    Rankin, J.

    Willey, F. T. (Sunderland)

    Keenan, W.

    Rhodes, H.

    Willey, O. G. (Cleveland)

    Kenyon, C.

    Ridealgh, Mrs. M.

    Williams, D. J. (Neath)

    Kinley, J.

    Roberts, Goronwy (Caernarvonshire)

    Williams, J. L. (Kelvingrove)

    Lavers, S.

    Robertson, J. J. (Berwick)

    Williams, Ronald (Wigan)

    Lee, F. (Hulme)

    Robinson, Kenneth (St. Pancras, N.)

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

    Leonard, W.

    Rogers, G. H. R.

    Williams, W. R. (Heston)

    Levy, B. W.

    Ross, William (Kilmarnock)

    Willis, E.

    Lewis, A. W. J. (Upton)

    Royle, C.

    Wills, Mrs. E. A.

    Lewis, J. (Bolton)

    Shackleton, E. A. A.

    Wilmot, Rt. Hon. J.

    Longden, F.

    Sharp, Granville

    McGovern, J.

    Shurmer, P.

    TELLERS FOR THE AYES:

    Mack, J. D.

    Silverman, S. S. (Nelson)

    Mr. Pearson and Mr. Wilkins.

    NOES

    Agnew, Cmdr. P. G.

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

    Prescott, Stanley

    Birch, Nigel

    Gage, C.

    Price-White, Lt.-Col. D.

    Bowen, R.

    Galbraith, T. G. D. (Hillhead)

    Raikes, H. V.

    Braithwaite, Lt.-Comdr. J. G.

    Gates, Maj. E. E.

    Renton, D.

    Bromley-Davenport, Lt-Col. W.

    Hannon, Sir P. (Moseley)

    Roberts, Emrys (Merioneth)

    Buchan-Hepburn, P. G. T.

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

    Roberts, H. (Handsworth)

    Butcher, H. W.

    Harvey, Air-Comdre. A. V.

    Roberts, P. G. (Ecclesall)

    Carson, E.

    Hinchingbrooke, Viscount

    Roberts, W. (Cumberland, N.)

    Channon, H.

    Hollis, M. C.

    Robinson, Roland (Blackpool, S.)

    Clarke, Col. R. S.

    Hope, Lord J.

    Stanley, Rt. Hon. O.

    Conant, Maj. R. J. E.

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

    Stoddart-Scott, Col. M.

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

    Lloyd, Selwyn (Wirral)

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

    Crowder, Capt, John E.

    Low, A. R. W.

    Teeling, William

    Cuthbert, W. N.

    McKie, J. H. (Galloway)

    Thornton-Kemsley, C. N.

    De la Bère, R.

    Macpherson, N. (Dumfries)

    Wadsworth, G.

    Digby, Simon Wingfield

    Marples, A. E.

    Wakefield, Sir W. W.

    Drayson, G. B.

    Marshall, S. H. (Sutton)

    Williams, C. (Torquay)

    Drewe, C.

    Mellor, Sir J.

    Duthie, W. S.

    Odey, G. W.

    TELLERS FOR THE NOES:

    Erroll, F. J.

    Orr-Ewing, I. L.

    Brigadier Mackeson and

    Fox, Sir G.

    Osborne, C.

    Colonel Wheatley.

    Question put accordingly, "That the Clause stand part of the Bill."
    The Committee divided: Ayes, 188; Noes, 24.

    Division No. 170.]

    AYES

    [2.27 a.m.

    Adams, Richard (Balham)

    Bing, G. H. C.

    Callaghan, James

    Albu, A. H.

    Blenkinsop, A.

    Carmichael, James

    Alexander, Rt. Hon. A. V.

    Blyton, W. R.

    Castle, Mrs. B. A.

    Anderson, A. (Motherwell)

    Bowden, Fig. Offr. H. W.

    Champion, A. J.

    Attewell, H. C.

    Bowen, R.

    Chetwynd, G. R.

    Austin, H. Lewis

    Braddock, T. (Mitcham)

    Cocks, F. S.

    Bacon, Miss A.

    Bramall, E. A.

    Collindridge, F.

    Baird, J.

    Brook, D. (Halifax)

    Collins, V. J.

    Barton, C.

    Broughton, Dr. A. D. D.

    Comyns, Dr. L.

    Bechervaise, A. E.

    Bruce, Maj. D. W. T.

    Cook, T. F.

    Beswick, F.

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

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

    Corlett, Dr. J.

    Hutchinson, H. L. (Rusholme)

    Roberts, W. (Cumberland, N.)

    Crossman, R. H. S.

    Hynd, J. B. (Attercliffe)

    Robertson, J. J. (Berwick)

    Cullen, Mrs.

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

    Robinson, Kenneth (St. Pancras, N.)

    Dalton, Rt. Hon. H.

    Jay, D. P. T.

    Rogers, G. H. R.

    Davies, Edward (Burslem)

    Jeger, G. (Winchester)

    Ross, William (Kilmarnock)

    Davies, Ernest (Enfield)

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

    Royle, C.

    Davies, Harold (Leek)

    Jones, D. T. (Hartlepool)

    Shackleton, E. A. A.

    Deer, G.

    Jones, P. Asterley (Hitchin)

    Sharp, Granville

    Delargy, H. J.

    Kenyon, C.

    Shurmer, P.

    Dobbie, W.

    Kinley, J.

    Silverman, S. S. (Nelson)

    Dodds, N. N.

    Lavers, S.

    Simmons, C. J.

    Driberg, T. E. N.

    Lee, F. (Hulme)

    Skeffington, A. M.

    Dugdale, J. (W. Bromwich)

    Leonard, W.

    Smith, C. (Colchester)

    Evans, Albert (Islington, W.)

    Levy, B. W.

    Snow, J. W.

    Evans, S. N. (Wednesbury)

    Lewis, A. W. J. (Upton)

    Sorensen, R. W.

    Fairhurst, F.

    Lewis, J. (Bolton)

    Steele, T.

    Fernyhough, E.

    Longden, F.

    Stewart, Michael (Fulham, E.)

    Field, Capt. W. J.

    McGovern, J.

    Stokes, R. R.

    Foot, M. M.

    Mack, J. D.

    Stross, Dr. B.

    Forman, J. C.

    McKay, J. (Wallsend)

    Stubbs, A. E.

    Fraser, T. (Hamilton)

    McKinlay, A. S.

    Sylvester, G. O.

    Freeman, Peter (Newport)

    McLeavy, F.

    Symonds, A. L.

    Gage, C.

    MacPherson, Malcolm (Stirling)

    Taylor, R. J. (Morpeth)

    Ganley, Mrs. C. S.

    Mallalieu, J. P. W. (Huddersfield)

    Taylor, Dr. S. (Barnet)

    Gibbins, J.

    Middleton, Mrs. L.

    Thomas, George (Cardiff)

    Gibson, C. W.

    Millington, Wing-Comdr. E. R.

    Thomas, I. O. (Wrekin

    Gilzean, A.

    Mitchison, G. R.

    Timmons, J.

    Glanville, J. E. (Consett)

    Monslow, W.

    Titterington, M. F.

    Greenwood, A. W. J. (Heywood)

    Moody, A. S.

    Tolley, L.

    Grey, C. F.

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

    Ungoed-Thomas, L.

    Griffiths, D. (Rother Valley)

    Morris, P. (Swansea, W.)

    Wallace, G. D. (Chislehurst)

    Griffiths, W. D. (Moss Side)

    Nally, W.

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

    Gunter, R. J.

    Neal, H. (Claycross)

    Warbey, W. N.

    Guy, W. H.

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

    Webb, M. (Bradford, C.)

    Haire, John E. (Wycombe)

    Oliver, G. H.

    Wells, P. L. (Faversham)

    Hall, Rt. Hon. Glenvil

    Orbach, M.

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

    Hamilton, Lieut.-Col. R.

    Paget, R. T.

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

    Hannan, W. (Maryhill)

    Paling, Will T. (Dewsbury)

    Whiteley, Rt. Hon. W.

    Hardman, D. R.

    Palmer, A. M. F.

    Wilkes, L.

    Hardy, E. A.

    Pargiter, G. A.

    Willey, F. T. (Sunderland)

    Hastings, Dr. Somerville.

    Parkin, B. T.

    Willey, O. G. (Cleveland)

    Haworth, J.

    Paton, J. (Norwich)

    Williams, D. J. (Neath)

    Henderson, Joseph (Ardwick)

    Peart, T. F.

    Williams, J. L. (Kelvingrove)

    Hollis, M. C.

    Popplewell, E.

    Williams, Ronald (Wigan)

    Holman, P.

    Porter, G. (Leeds)

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

    Holmes, H. E. (Hemsworth)

    Pritt, D. K.

    Williams, W. R. (Heston)

    Horabin, T. L.

    Randall, H. E.

    Willis, E.

    Haughton, A. L. N. D. (Sowerby)

    Ranger, J.

    Wills, Mrs. E. A.

    Hoy, J.

    Rankin, J.

    Wilmot, Rt. Hon. J.

    Hubbard, T.

    Rhodes, H.

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

    Ridealgh, Mrs. M.

    TELLERS FOR THE AYES:

    Hughes, Hector (Aberdeen, N.)

    Roberts, Emrys (Merioneth)

    Mr. Pearson and Mr. Wilkins.

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

    Roberts, Goronwy (Caernarvonshire)

    NOES

    Butcher, H. W.

    Harvey, Air-Comdre. A. V.

    Stoddart-Scott, Col. M.

    Carson, E.

    McKie, J. H. (Galloway)

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

    Channon, H.

    Macpherson, N. (Dumfries)

    Teeling, William

    De la Bère, R.

    Marshall, S. H. (Sutton)

    Wadsworth, G.

    Drayson, G. B.

    Odey, G. W.

    Wakefield, Sir W. W.

    Duthie, W. S.

    Prescott, Stanley

    Williams, C. (Torquay)

    Fox, Sir G.

    Price-White, Lt.-Col. D.

    Hannon, Sir P. (Moseley)

    Raikes, H. V.

    TELLERS FOR THE NOES:

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

    Robinson, Roland (Blackpool, S.)

    Sir John Mellor and

    Mr. Harold Roberts.

    Resolution agreed to.

    Clause 11.—(ABOLITION OF EXCISE DUTIES ON LICENCES FOR APPRAISERS, AUCTIONEERS, HOUSE AGENTS AND PLATE DEALERS.)
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    Mr. Butcher: I do not wish to detain the Committee at this hour of the morning, but I should like an explanation why in June, 1949, we are repealing a portion of an Act—and here I refer to the last enactment
    412
    referred to in Part I of the Eleventh Schedule—which was passed earlier in the Session. I should be grateful if the Minister would explain how the Solicitors and Public Notaries Act, 1949, can possibly be affected in a Finance Act arranging for the abolition of excise duties on appraisers, auctioneers and plate dealers.
    Mr. C. Williams: There has been a perfectly polite request to the Treasury, and I feel that the Treasury should be anxious to answer.
    Mr. Glenvil Hall: I think the Committee will recollect that the Chancellor of the Exchequer indicated during his Budget statement that he proposed to sweep away a lot of old stamp duties of one kind or another. Among those which he proposed to abolish were those dealing with excise licences and duties on appraisers, auctioneers, house agents and plate dealers. This Clause, in association with the Eleventh Schedule, deals with the matter. If the hon. Member for Torquay (Mr. C. Williams) has any particular point to raise, perhaps it would be more appropriate to deal with it when we reach the Schedule. Generally, what we are doing is taking powers to abolish those duties.
    Mr. Butcher: I am reasonableness itself, and appreciate the courtesy which the Financial Secretary has shown, but I am bound to enter some protest against the position in which the Committee finds itself. It is unusual on the first day of the Committee stage of the Finance Bill that the Committee should be without the advantage of the presence of the Chancellor of the Exchequer. Surely during the proceedings upon an important Measure, we are entitled to have the attendance of one of the Law Officers of the Crown. Their absence should not go unremarked and unrebuked.
    Mr. C. Williams: I congratulate the Financial Secretary on having given an answer, but I have no doubt that his answer does not reply to any single one of the questions put by my hon. Friend the Member for Holland with Boston (Mr. Butcher). As I am a very reasonable person, and as the Financial Secretary has suggested that this matter should be raised on the Eleventh Schedule, I hope that by that time he will have looked up the question-book and will be able to answer then. If not, I feel sure it would be as easy to deal with it on the Report stage of the Bill.
    Clause ordered to stand part of the Bill.

    Clause 12.—(TRANSFER OF DUTIES ON CERTAIN EXCISE LICENCES TO COUNTY COUNCILS.)
    Mr. Jay: I beg to move, in page 6, line 30, to leave out from "section," to "shall," in line 32, and to insert:
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    "for the purposes of the Hawkers Act, 1888, or the Pawnbrokers Act, 1872."
    The purpose of this Amendment, together with the Amendment to page 6, line 35, is to clear up a point which emerged on further examination of subsection (3) of this Clause. Clause 12 provides for transferring to county councils the duties of licences for hawkers, moneylenders, pawnbrokers and refreshment housekeepers. Under subsection (3) of this Clause it is provided that the licences are to remain in force for one year instead of expiring, as they did previously, on fixed dates; and therefore, a trader taking out a licence for the first time would, under the subsection as it now stands, have to take out a first licence for one year instead of for the period to the next fixed date.
    The effect of this Amendment is that in the case of moneylenders and refreshment house keepers the licences will continue to run from fixed dates instead of running for a year from the date when they are taken out. We have made this change because we saw on re-examination that the Clause in the form in which it had been introduced would have imposed charge on the subject, so far as moneylenders and refreshment house keepers were concerned, because it is possible that the holder of a full-year licence under the new system might conceivably die during the course of the year. It could be argued that if he did die during that period he would have to pay a larger sum than he would have done—
    Mr. Stanley: He surely could not then have been in any position to pay anything?
    Mr. Jay: That may be so; but he would have paid when alive a larger sum than he would have done under the present system. For that technical reason, it was held, I believe correctly, that this provision imposed a charge on the subject, and as we did not include in the Budget a resolution empowering us to do this, subsection (3) was technically out of Order. This amendment simply deletes that part of the subsection; it does not, in fact, cause any major inconvenience because it is not proposed to transfer licence duties to local authorities before April next, and so there will be time to deal with this matter in the future.
    2.45 a.m.
    Mr. Stanley: This rather technical point appears to leave the taxpayer in a slightly better position but I did not quite understand the force of the hon. Gentleman's final remark. He said that as the transfer to the local authorities does not take place until April there will be time to deal with this matter. Does he mean that it is the intention of the Government in next year's Bill to re-introduce this Clause as it was, after first having taken the precaution of a Ways and Means Resolution?
    Mr. Jay: What I meant to imply was that it would be open to us to do so if we wished.
    Amendment agreed to.
    Further Amendment made: In page 6, line 35, leave out from "time," to the end of line 44.—[Mr. Jay.]
    Clause, as amended, ordered to stand part of the Bill.

    Clause 13.—(CONTINUATION OF RELIEF FOR VEHICLES FITTED WITH TOWING CONTRIVANCES.)
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    Mr. David Renton: There is a rather curious drafting point on this Clause. The Clause provides that Section 10 of the Finance Act, 1943, is made permanent. I had always understood that nothing that was ever done in this Parliament could be made permanent. We are always dependent on the wishes of those following after, and I have never previously seen it stated in any Act of Parliament that any provision should be made permanent. It seems quite unnecessary for us to use such language in this case.
    I do not know whether I am going to have the unusual privilege of the Parliamentary Secretary to the Ministry of Transport replying to this point. [An HON. MEMBER: "Why not?"] Indeed, why not? The only point is that the question which I am raising has nothing to do with transport, although the Clause itself relates to transport. I am raising a much more general point of drafting upon which, with all respect to the Parliamentary Secretary, I should have thought the Financial Secretary would be able to speak perhaps with a greater weight of
    416
    authority. If we look at the words in brackets in this Clause we find that Section 10 of the Finance Act is terminable by Order in Council. If we were merely to say that Section 10 of the Finance Act shall not be terminable by Order in Council we should have achieved the object of the Clause, without stating something which appears to be in itself ridiculous; that is to say, that we are making something permanent which we cannot do and are not intending to do. May we have an explanation on this point?
    The Parliamentary Secretary to the Ministry of Transport (Mr. James Callaghan): This Clause has been fathered on to me because my Ministry is responsible for the substance of it, but, as the hon. Gentleman knows, the language is often that of Jacob although the hand is the hand of Esau. I will carry back the point he has made—he has frequently made points of substance in the past in relation to drafting matters—and see whether the wording is accurate in this particular case. As to the substance of the Clause, I gather that he raises no objection to it.
    Mr. Renton: I concede at once that the substance of the Clause is perfectly sound. It is sensible, and I have no quarrel with it.
    Mr. Callaghan: In that case, I hope the Committee will be prepared to give us the Clause on the understanding that we will look at the drafting of it.
    Mr. Stanley: I am sure the Committee will accept the offer of the Parliamentary Secretary to look at this matter again between now and Report, and if necessary make the alteration. But I would call attention to the rather curious doctrine that he enunciated, that a Minister may take responsibility for the substance of a Clause but apparently no responsibility whatever for the drafting. That is a novel doctrine to me. I always understood that a Minister who accepted responsibility for a Clause accepted responsibility for the matter as well as the manner. I hope that at this late hour the Committee will pass this slight slip sub silentio, but that the hon. Member will not regard that as any acquiescence in the doctrine that any Minister can say to the House of Commons "I have

    417
    to answer for this Clause, but I am not responsible for the drafting, and I cannot answer any question about it."
    Mr. Callaghan: I am obliged to the right hon. Gentleman for the courteous way he put that point. I hope I said nothing—and I believe he will see in the OFFICIAL REPORT the day after tomorrow that I said nothing—to detract from the responsibility of the Minister for the Clause in any way. There are special officers who advise the Minister on drafting, but the Minister takes full responsibility for the matter and the substance of the Clause.
    Mr. Butcher: I appreciate what the Parliamentary Secretary said about the great knowledge of my hon. Friend the Member for Huntingdon (Mr. Renton) on these matters, but the Parliamentary Secretary should not be saddled with this kind of thing at this time in the morning. The Finance Bill is introduced by the Chancellor of the Exchequer, himself a great lawyer, and the Committee ought to have also the advantage of the attendance of two Law Officers. For a matter of this great importance to be left to a private Member is a peculiar manner for the Committee to transact its business.
    Mr. C. Williams: I think that one of us should support what has been said about the extraordinary wording of this Clause. However, it is not necessary to say any more because we have an assurance, more or less, of what the Government are going to do. As to the extraordinary speech of the Parliamentary Secretary to the Ministry of Transport, whatever the OFFICIAL REPORT may say the day after tomorrow, it did seem to most of us that he was talking in the sense of dual responsibility. The Section referred to in this Clause is something which a good many of us have been trying to make permanent for a long while.
    418
    The concession was made in 1943, and it is only fair to say that many of us welcome this Clause for its practical effect.
    Clause ordered to stand part of the Bill.
    Committee report Progress; to sit again this day.

NATIONAL HEALTH SERVICE (AMENDMENT) [MONEY]
Resolution reported:
"That, for the purposes of any Act of the present Session to amend the National Health Service Act, 1946, and the National Health Service (Scotland) Act, 1947, and otherwise to amend the law in relation to services provided under the said Acts, it is expedient to authorise—

(a) the payment out of moneys provided by Parliament—

(i) of compensation, in certain cases, to members of medical partnerships, being compensation additional to the compensation payable under section thirty-six of the National Health Service Act, 1946, and section thirty-seven of the National Health Service (Scotland) Act, 1947;

(ii) of remuneration and allowances to the members of any arbitration committee appointed under the said Act of the present Session and of the expenses of any such committee; and

(iii) of any increase attributable to the passing of the said Act of the present Session in any grants or sums payable under any other enactment out of moneys provided by Parliament;

(b) the payment into the Exchequer of any sums received by the Minister of Health or Secretary of State under the said Act of the present Session."

Resolved, "That this House do now adjourn."—[Mr. R. J. Taylor.]
Adjourned accordingly at Five Minutes to Three o'Clock a.m.