Commons Sitting of 18 April 1950

Preamble
The House—after the Adjournment on 6th April, 1950, for the Easter Recess—met at Half-past Two o'Clock.
PRAYERS
[Mr. SPEAKER in the Chair]

MEMBER SWORN
The following Member took and subscribed the Oath:
Lieut-Colonel William Henry Kingsmill, for Yeovil.

NEW WRIT
For the Borough of Brighouse and Spenborough in the room of Frederick Arthur Cobb, esquire, deceased.—[Mr. Whiteley.]
ORAL ANSWERS TO QUESTIONS
  TOWN AND COUNTRY PLANNING

    Central Land Board (Forms)
    Sir John Mellorasked the Minister of Town and Country Planning how many Forms L.39 have been sent to owners of property by the Central Land Board; how many have been withdrawn; why they were sent; and why withdrawn.
    The Minister of Town and Country Planning (Mr. Dalton): One hundred thousand and eighty-three, of which less than 300, sent in error, were withdrawn. The forms were sent to owners of single dwelling houses to ascertain whether their claims to compensation were admissible.
    Sir J. Mellor: Is the right hon. Gentleman aware that it required a new form —R6/82—to withdraw these forms, will he agree that the issue of these forms caused a number of claimants to answer questions which were optional under Form S.1, and in the circumstances will he give an assurance that the information which they gave will not be used to their disadvantage?
    Mr. Dalton: No information is ever used to anybody's disadvantage in this held. The percentage affected is remarkably small—less than 300 out of 100,083 —and will surprise the hon. Member by its smallness. It is less than one-third of 1 per cent.
    Mr. Derek Walker-Smith: Does the Minister not realise that there is great indignation about these forms and that many people feel that they are now being compelled to make a valuation which they chose not to make on Form S.1 and thereby forfeited the contribution for their professional fees?
    Mr. Dalton: I have no evidence of that.
    Sir J. Mellor: In view of the unsatisfactory nature of the answer to this Question, I propose to raise the matter on the Adjournment.

    Historic Buildings (Surveys)
    Mr. Turtonasked the Minister of Town and Country Planning how many officials are engaged on preparing surveys under Section 30 of the Town and Country Planning Act, 1947; and what is the estimated cost of this work in the year 1950–51.
    Mr. Dalton: Twenty-four, and about £13,000.
    Mr. Turton: Will the right hon. Gentleman investigate this work and see whether it cannot be done more economically and with less inconvenience to local authorities?
    Mr. Dalton: This work is the scheduling of buildings of special architectural and historical merit and, I am told, is going forward very well. There is, in fact, a staff reduction taking place which was agreed by my predecessor and was confirmed by me; the numbers will be shortly reduced to about 15. I am satisfied that they are doing their work very well.

    Development Charge
    Mr. Hugh Fraserasked the Minister of Town and Country Planning why, when the development charges to be paid on houses built on one of Stafford's municipal housing estates are £18 per house, the development charges on houses of almost similar size and construction built by private enterprise run sometimes as high as £210.
    Mr. Dalton: The value of a piece of land, with permission to build a house on it, naturally varies with the situation of the plot and the expenditure necessary on the site, but if the hon. Member will let me have details about the Stafford sites, I will ask the Central Land Board for a report.
    Mr. Gammansasked the Minister of Town and Country Planning when he proposes to make an announcement regarding the composition of the committee to investigate complaints against the operation of the development charge under the Town and Country Planning Act; if the committee is to meet in public; and what procedure should be adopted by anyone who wishes to lay evidence before the committee.
    Mr. Dalton: I do not propose to set up a committee, but as I informed the hon.
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    Member for Maidstone (Mr. Bossom) on 28th March, I have asked the Chairman of the Central Land Board to report to me on possible administrative improvements.
    Mr. Gammans: Will the right hon. Gentleman answer that part of my Question as to what procedure should be adopted by any person who feels he has a grievance against the operation of this charge?
    Mr. Dalton: He should communicate with his Member of Parliament.
    Mr. Bossom: Could the right hon. Gentleman yet issue any form of words which would give some indication of how these amounts are arrived at?
    Mr. Dalton: I think it would be easy to issue such a form of words, but it would not be the first time it had been done.
    Captain Waterhouse: Would it not be better to repeal the whole of this miserable Measure?
    Mr. Dalton: No, Sir. I seem to remember that the present party in Opposition supported the Bill when it was going through Parliament.

    Crawley Development Corporation
    Earl Wintertonasked the Minister of Town and Country Planning if he is aware that the Horsham Rural District Council, at its meeting on 22nd February last, passed a resolution to the effect that he should appoint two members from the local authorities, which have been closely associated with the Crawley Development Corporation since its inception, as members of that Corporation; and if he proposes to take action to that effect.
    Mr. Dalton: The answer to the first part of the Question is "Yes, Sir," and, if the council care to submit names to me, I shall be glad to consider them.
    Earl Winterton: Is the right hon. Gentleman aware that Sussex County Council, in addition to the rural district council, feel they have been treated with lack of consideration in this matter? Will the right hon. Gentleman go very carefully into the whole circumstances in view of the need for improving relations between local authorities and development corporations?
    Mr. Dalton: That is most important, and I am most anxious that these arrangements should always be cordial and harmonious. I think both sides gain by that. I am most anxious that there should be a fair proportion of local government representatives on the corporations, and I will be glad to receive their suggestions.

    Grass-Drying Plants
    Mr. Turtonasked the Minister of Town and Country Planning to what extent it is the policy of his Department to refuse permission for the establishment of grass-drying plants in farms which are in or adjacent to villages.
    Mr. Dalton: I wish to put the minimum of restrictions on the erection of farm buildings, including those required to house grass-drying plants.
    Mr. Turton: What is the Minister doing to carry out his wishes in this matter? Is he aware that the planning authorities are refusing permission for the establishment of these grass driers and will he take action?
    Mr. Dalton: No, I have no evidence that refusal is taking place, but if the hon. Member will send particulars I will, of course, look into them.

    Rebuilding, Liverpool
    Mr. Bevinsasked the Minister of Town and Country Planning to what extent the proposed limitation on capital investment in the building of shops and commercial premises will affect the rebuilding of the bombed central area of Liverpool.
    Mr. Dalton: This matter is now under consideration as regards the central areas of this and other war-damaged cities.
    Mr. Bevins: Will the right hon. Gentleman take into account the fact that Liverpool is not only a heavily-bombed city, but is also near a development area?
    Mr. Dalton: Yes, Sir.

    Rights of Way (Pamphlet)
    Mr. Keelingasked the Minister of Town and Country Planning whether he will issue, for the guidance of parish councils and others, information about rights of way in language less difficult to comprehend than that of the National Parks and Access to the Countryside Act.
    Mr. Dalton: A pamphlet on this subject has already been issued for the information of all local authorities, including parish councils. I am sending the hon. Member a copy.
    Mr. Keeling: Is the right hon. Gentleman aware that the pamphlet is taking a very long time to reach parish councils and has not reached them?
    Mr. Dalton: I am not sure whether the hon. Gentleman is aware that the Parish Councils Association have stated that the pamphlet is excellent and all they needed. I do not know whether he is also aware that it was issued to the parish councils on 21st February.
    Mr. Keeling: It has not reached many of them.

    Land Development (Applications)
    Mrs. Middletonasked the Minister of Town and Country Planning how many applications to develop land received by the Central Land Board have fallen into abeyance.
    Mr. Dalton: I regret that this information is not available.
    Mrs. Middleton: Is my right hon. Friend aware that land is being offered for development purposes far in excess of existing use value and will he inquire into the matter to see what can be done and inquire particularly to see whether local authorities can give help by purchasing land by compulsory acquisition where development is necessary?
    Mr. Dalton: I am very anxious that there should be no exploitation through charges being made in excess of use value. I have that very much in mind and a number of cases are under study now.

    District Valuers
    Brigadier Clarkeasked the Minister of Town and Country Planning if he will consider making it optional for local authorities to use the services of the district valuer in connection with the acquisition of land under the Town and Country Planning Act.
    Mr. Dalton: The regulations now in force since 26th January require, as a condition of grant to local authorities, that the latter should use the services of the district valuer.
    Brigadier Clarke: Will the right hon. Gentleman say why cities cannot use their own valuers?
    Mr. Dalton: I gather we may have a Debate on this matter in a few days' time. I received a deputation the other day from a number of local authorities who put their views before me and I gather we may have a Debate next week. Perhaps in that case I had better reserve my observations.

    Welwyn Garden City
    Mr. John Grimstonasked the Minister of Town and Country Planning why half the loss, amounting to £6,904, for the half-year ended 31st March, 1949, on the revenue account of Welwyn Garden City Development Corporation has been capitalised instead of being left as a balance on revenue account.
    Mr. Dalton: The Corporation was established to provide a capital asset in the shape of a new town, and I regard it as proper that the balance of expenditure on general revenue account not covered by grant, should be treated as having been incurred in securing such an asset.
    Mr. Grimston: Will the right hon. Gentleman examine the amounts which made up the total and see whether he does not think that there has been some watering of capital in the first six months of the Corporation's existence?
    Mr. Dalton: I do not think so. I have taken advice on the matter and I think the hon. Member will agree it is purely a matter of accountancy and presentation. I will look at it again, but I am, so far, satisfied on the point.
    Sir Herbert Williams: Is the right hon. Gentleman aware that these corporations borrow money from the Treasury for the purpose of paying interest to the Treasury on the money they originally borrowed?
    Mr. Dalton: It is not quite so simple as that.

    New Towns (Land Acquisition)
    Mr. Braineasked the Minister of Town and Country Planning (1) whether he will use his powers to permit persons whose freehold land and property are acquired by new town develop-
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    ment corporations to be given an equivalent freehold plot in exchange and compensation sufficient to replace their property:
    (2) if, in view of the declared policy of ultimately taking over all freeholds in the area designated for the new town of Basildon and the dissatisfaction which this is causing, he will leave in possession of their freehold rights all freeholders whose land and buildings will remain unaffected by the development of that town.
    Mr. Dalton: I have already reaffirmed my predecessor's promise not to acquire property at Basildon before it is needed for actual development, but, where acquisition takes place, I cannot undertake to provide an equivalent freehold plot in exchange.
    Mr. Braine: Is the Minister aware that the chairman of the development corporation has stated categorically that the policy of the Government is ultimately to take over all freeholds in the area? Is he also aware that the population of 17,500 makes is unique among new towns and that most of them are freeholders, and these people object? They consider there is no moral justification for having—
    Mr. Speaker: Supplementary questions are not the occasion for speeches.
    Mr. Braine: Will the Minister, therefore, consider using his special powers under the Act to safeguard freehold rights in the area designated?
    Mr. Dalton: I think the freehold rights are completely safeguarded until the time comes for actual development by the undertaking to which I have referred. This area, I must assure the hon. Member, is more in need of decent planning, clean-Mg up and bringing up to date than any other area to which we are bringing a new town.
    Mr. Geoffrey Hutchinson: Is the right hon. Gentleman aware that he is being most unjust to owner-occupiers under this provision?
    Mr. Dalton: I do not think so.
    Mr. Braine: Is the right hon. Gentleman aware that it is no more satisfaction to a man to be told he will be robbed in 10 years than to be told he will be

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    robbed tomorrow? In view of the unsatisfactory nature of the answer, I beg to give notice that I will raise the matter again.

    Site, Colchester(Purchase Order)
    Mr. Brainasked the Minister of Town and Country Planning whether he is aware of the action of the Central Land Board in compulsorily acquiring a building site at Colchester for £25 on behalf of a man who had already been refused the site by its owner; and whether he will prevent the Board using such sweeping powers to dispossess owners in this manner in the future.
    Mr. Dalton: A compulsory purchase order for this piece of land has just been made. The owners may lodge an objection within the statutory period of three weeks, in which case there will be a public inquiry. As this order will come before me for confirmation, I cannot at this stage make any comment.

    Advertisement Hoarding, Pinner
    Mr. Norman Bowerasked the Minister of Town and Country Planning if he is aware that both the Middlesex County Council and the Harrow Urban District Council have unanimously protested against permission being granted for the erection of an advertisement hoarding at the corner of Bridge Street and Chapel Lane, Pinner, on the grounds that it constitutes both an eyesore and a danger to traffic; why he has overruled their objections; and if he will now reconsider his decision.
    Mr. Dalton: I have received no official protest from either of the local authorities about this, but it is always open to them to submit for my confirmation a draft order requiring a discontinuance of the use of the site for advertising. I would consider such an order in the light of any fresh evidence they can produce.

  NATIONAL INSURANCE

    Industrial Diseases(Chronic Sufferers)
    Mr. Leslie Haleasked the Minister of National Insurance whether she is aware of the hardship that is caused to
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    many chronic sufferers from industrial disease who fail to establish their claim owing to technical reasons under the provisions of the Workmen's Compensation Acts; and what provisions can be made in such cases.
    The Minister of National Insurance (Dr. Edith Summerskill): The particular time limits to which I think my hon. Friend is referring have been removed so far as cases arising under the Industrial Injuries Act are concerned, but I have no power to modify the provisions of the Workmen's Compensation Acts to bring them into line. I do not think that any question of hardship can arise as the people concerned will be covered by other provisions of the Social Security Scheme.
    Mr. Hale: Will my right hon. Friend bear in mind that if she has no power to deal with it under existing legislation, she always has power to initiate new legislation? Will she also bear in mind the more limited but very serious cases of persons who suffer from a recurrence of disease after 5th July, 1948, and are debarred from compensation under either Measure?
    Dr. Summerskill: I think my hon. Friend has in mind two cases which, I agree, have certain sad features, but he will agree with me that when a new scheme is introduced there are bound to be certain people whose benefits are governed by the old scheme and who cannot be brought into the new scheme because that would introduce new anomalies.

    Retirement Pensions
    Mr. Leslie Haleasked the Minister of National Insurance what is the amount of actuarial value computed on the basis of normal expectation of life of a full retirement pension payable to an adult male worker under the National Insurance Act on retirement at 65; and the actuarial value computed on the same basis for an adult worker who retires at the age of 70.
    Dr. Summerskill: By full retirement pensions I assume by hon. Friend means a pension of 26s. for which a man can qualify at 65 and a pension of 36s. for which a man reaching 70 after June, 1953, can qualify at that age. The actuarial value of the former is £670 and of the latter £750.

    Aged People (Housing)
    Mr. Stanley Prescottasked the Minister of National Insurance what discussions she has had with the Minister of Health regarding the erection by local authorities of special housing accommodation for the aged.
    Dr. Summerskill: I am constantly in touch on matters of common interest with my right hon. Friend, the Minister of Health. But I do not think there is any need for me to make special representations to him about a matter of the importance of which he is fully seized.
    Mr. Prescott: As presumably both the right hon. Lady and the Minister of Health have the interests of the old age pensioners at heart, would it not be of benefit to institute such discussions?
    Dr. Summerskill: I would remind the hon. Member that the powers which my right hon. Friend exercises, and to which I referred, are conferred by Part III of the National Assistance Act, and concern the administration of the local authorities. Therefore, the matter does not come within my province.

    Assistance
    Mr. Prescottasked the Minister of National Insurance what representations she has received from the National Federation of Old Age Pensioners' Associations subsequent to the recent amendment of assistance benefits.
    Dr. Summerskill: I have received a letter from one of the regions of the Federation, to which I shall soon reply.
    Mr. Prescott: Could the right hon. Lady tell the House briefly what was the effect of that letter?
    Dr. Summerskill: Certainly; they wished to have the basic scales increased.
    Mr. Prescott: Is the right hon. Lady aware that the real distress now being suffered by old age pensioners results from the perpetual increase in the cost of living? Is she further aware that the matter will not be remedied while the present Government are in power?
    Dr. Summerskill: The hon. Member has forgotten that a proposal to increase the National Assistance scales was announced recently, and these old age pensioners, numbering 750,000, will be able to apply for the new scales.

    Contributions (Prisoners)
    Mr. George Jegerasked the Minister of National Insurance whether arrangements have yet been made for prisoners in gaol to maintain their insurance contributions.
    Dr. Summerskill: On admission to prison, insured persons are advised that they may pay contributions themselves or may arrange for someone to pay on their behalf or may pay retrospectively on discharge. The time limits to be prescribed for retrospective payment are still under consideration, but I intend that they should be as generous as possible.
    Mr. Jeger: Will my right hon. Friend bear in mind that it is desirable that these young people in prison should not be penalised and have to pay two penalties for an offence by being debarred from the benefits which would come to them were they allowed to pay their contributions during their period in prison? I hope that my right hon. Friend will make arrangements to that effect.
    Dr. Summerskill: I fully agree with my hon. Friend. As I said in my answer, I intend that those men who wish to retrieve their position shall be able to do so.

    Reciprocal Arrangements
    Mr. F. Longdenasked the Minister of National Insurance with which foreign countries Britain has made such reciprocal arrangements as provide insurance benefits for our nationals in those countries; and what information she has as to the kinds and degrees of the benefits, as well as the conditions of contributions, in comparison with those for foreigners in this country.
    Dr. Summerskill: The only reciprocal arrangement so far made with a foreign country for providing insurance benefits for British nationals in that country is with France. Negotiations are proceeding with a number of other countries. For this purpose information about the matters referred to in the last part of the Question is obtained as a matter of course.

    Pensioners (Cost of Living)
    Brigadier Clarkeasked the Minister of Pensions if he is aware that the increase in the prices of butter and bacon will now make it almost impossible for

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    old-age pensioners to buy these commodities; and what he proposes to do about it.
    Dr. Summerskill: I have been asked to reply. I would refer the hon. Member to the statements made by myself and my right hon. Friend, the Minister of Food on 4th and 5th April, respectively.
    Brigadier Clarke: Does the Minister realise that the cost of living has been going up ever since the Socialist Party came into power, and that these poor people cannot afford to go on living with the cost of living going up all the time? There was a penny before Christmas, a halfpenny now; what is it going to be after today?

  EMPLOYMENT

    Bank Employees (Union)
    Mr. H. Hyndasked the Minister of Labour if he can now give the result of his further efforts to reach agreement with the Banque Belge pour l'Etranger on the question of recognition of the National Union of Bank Employees as representing the majority of their staff.
    The Minister of Labour (Mr. Isaacs): Since my hon. Friend's previous Question on this subject, I have had correspondence with the bank, which I am considering. At the moment, I am not able to say whether there is any further action which I can usefully take.
    Mr. Godfrey Nicholson: Is there any way in which the right hon. Gentleman can see that foreign concerns in this country give conditions of employment comparable to those of British concerns?
    Mr. Isaacs: I do not think that question arises. So far as I am aware, the question in this case is not one of wages and conditions but of recognition of the trade union membership of the staff.

    Factory Inspectorate
    Mr. A. Edward Daviesasked the Minister of Labour how far the present factory inspectorate falls below the proper establishment; what is the commencing salary; and whether he is satisfied that the conditions are good enough to attract the right type of candidate in sufficient numbers to maintain
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    an adequate supervision of industrial undertakings.
    Mr. Isaacs: There are at present 51 vacancies on the establishment of the factory inspectorate. Commencing salaries vary according to age, area and qualifications. I will send my hon. Friend details of the rates of pay. Steps are being taken to bring the attractions of a career in the inspectorate more widely to notice. I am not satisfied that it is necessary at present to vary the conditions of employment.
    Mr. Edward Davies: Is this not a difficulty of long standing, which would seem to show that there is something wrong with the conditions, and will my right hon. Friend have them looked at again?
    Mr. Isaacs: No, Sir. I have looked at these conditions, and they comply with the general Civil Service conditions for comparable ranks. The manning of the inspectorate has been more difficult since the war than before.

    Ex-Service Men (Training)
    Major Legge-Bourkeasked the Minister of Labour why assistance by his Department to ex-Regular Service men in training in business or trades on their leaving His Majesty's Forces depends upon the private means of the officers and men concerned; and if he will end this means test at an early date.
    Mr. Isaacs: This is not the practice in the case of men taking vocational training for skilled trades. In the case of business training, maintenance grants are payable, where necessary, in order to provide broadly the reasonable requirements and standard of living to which the applicant is accustomed. For this purpose, as in the case of other comparable resettlement schemes, other income, including the pensions and retired pay payable in a large number of cases, is one of the factors taken into account. I see no justification for altering these arrangements. In all cases the training is provided free.
    Major Legge-Bourke: Does not the right hon. Gentleman realise that in pamphlet P.L.309 issued by his Ministry last year, it is quite clearly stated that the object of the scheme is to ensure that those men and women who serve a period of Regular service in His Majesty's

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    Forces should have short courses of training with a view to assisting them to obtain posts? If that is necessary, why should the men and women who have helped themselves and saved up a little be penalised compared with those who have not done so?
    Mr. Isaacs: The hon. and gallant Member is under a misapprehension. As I have previously made clear to the hon. Member for Blackpool, North (Mr. Low), savings are not taken into account. If the hon. and gallant Member will look at my answer, he will see that we wish to maintain the requirements and standards of living to which the applicant is accustomed. As applicants are in various walks of life, we cannot have a fixed rate, otherwise we should be over-generous to some and under-generous to others. Each application is considered on its merits.

    Disabled Persons (Oldham)
    Mr. Leslie Haleasked the Minister of Labour whether he is prepared to request the Disabled Persons Employment Corporation to make provisions from the Remploy centre in Glodwick Road, Oldham, for the provision of work for those disabled persons in Oldham and in Chadderton, whose disability confines them to their homes.
    Mr. Isaacs: Remploy Limited, will be considering the introduction of home workers' schemes in any district where it is practicable. They have so far established such schemes in connection with nine of their factories. I understand that it may be some time before it is possible to introduce such arrangements at Oldham.
    Mr. Hale: Would my right hon. Friend bear in mind there are a large number of disabled persons in Oldham still registered as totally unemployed, many being confined to their homes? This is a magnificent scheme which my right hon. Friend has provided in Oldham, for which we are grateful. The scheme is working very well, but will my right hon. Friend have a word with me to see whether he cannot step it up in Oldham, where it is so important?
    Mr. Isaacs: I should be glad to have a word with my hon. Friend. The problem is whether the kind of work done in the
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    Remploy factory is such as to lend itself to out-working schemes—in this case it is woodwork and upholstery. Where the work is not suitable, we have to look around for some alternative. We now have some 200 out-workers employed in the country, and it is the Corporation's intention that such work shall continue.

    Shipbuilding and Engineering (Wage Claim)
    Mr. Prescottasked the Minister of Labour whether he has any statement to make on the recent decision of the Confederation of Shipbuilding and Engineering Unions to seek the opinion of their members by ballot as to whether to strike or submit their claim for a wage increase to the National Arbitration Tribunal.
    Mr. Isaacs: Yes, Sir. But as the answer is long and involved I will, with permission, circulate it in the OFFICIAL REPORT.
    Mr. Prescott: Is it a fact that the proposed ballot would contravene the provisions of the National Arbitration Order, and if that be so, can the Minister say whether the Government are taking any steps in that respect?
    Mr. Isaacs: May I confine myself to the second part of that supplementary question, and assure the hon. Member that we are in very close touch with the parties? We have had contact with them all the time and are still in contact with them, and we hope to be able to avert any trouble.
    Following is the answer:
    Neither of the parties has reported this dispute to me but I have felt obliged, as a matter of public interest, to draw the attention of the executive of the Confederation of Shipbuilding and Engineering Trade Unions to certain issues raised by the terms of the ballot. The alternatives presented to the voting members imply that there is a choice between strike action and reporting a dispute to the National Arbitration Tribunal, whereas in fact under the Conditions of Employment and National Arbitration Orders strikes and lockouts are in general prohibited unless and until a dispute has been reported to me in writing and I have failed to take action prescribed under the Orders. Moreover, the reference of any dispute to the National Arbitration Tribunal is a matter for me and is not left

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    to the choice of either party; in certain circumstances there may be other steps that I could take if they seemed expedient and desirable. The Executive of the Confederation have explained that the terms of the ballot were decided under the Confederation rules but each union is at liberty to send an explanatory note to its membership participating in the ballot. In illy view, in a matter of this importance, affecting as it does a very large group of our workpeople, it is essential that there should be no room for misunderstanding as to the law and I have pointed out to the trade unions their responsibility to their membership in this regard.
    I also took advantage of these discussions to ascertain both from the Engineering Employers' Federation and the Confederation the position that had been reached in the negotiations for a new wages structure for the engineering industry. The House will recall that a Court of Inquiry, whose Report dated 25th August, 1948, was laid before this House, recommended that the parties should re-open negotiations on this subject. It seemed to me desirable in the light of this recommendation to see whether even at this stage any steps could usefully be taken to assist the parties to reach some mutually satisfactory agreement on this subject. I found that although the discussions have not so far yielded any satisfactory result, the matter is still open for negotiation. The employers, however, state that they are not in a position to resume discussions while the claim for a £1 a week increase is a live issue.
    I regret that the harmony that usually characterises these great and important industries should he disturbed, particularly at the present critical time in our economic situation. I am keeping a close watch on developments and I need hardly say that I shall he ready at any time to do what I can to assist the parties in arriving at a proper solution to their problems.

  NATIONAL SERVICE (AGRICULTURAL WORKERS)
  Mr. G. Jegerasked the Minister of Labour what action is taken to verify applications for Service deferment on
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  grounds of alleged employment in agriculture.
  Mr. Isaacs: When a man registers under the National Service Acts as an agricultural worker, his employer is asked to confirm in writing that he is employed in the occupation stated. If the man entered agricultural employment less than three months before the date he was due to register, special inquiry is made.
  Mr. Jeger: Is my right hon. Friend aware that there is considerable feeling in the countryside that a number of the young sons of farmers are being registered as agricultural workers when the time they give to that employment is a bare minimum? Will my right hon. Friend get his local committees to take up the matter with the county agricultural committees in the case of sons of farmers?
  Mr. Isaacs: In all such cases we use the services of the county agricultural committee. We take every possible step to see that no one unfairly evades his duty of service.
  Lieut.-Commander Gurney Braithwaite: Has the Minister any evidence that these young men are either "cossetted" or "feather-bedded "?

  SCOTLAND

    Nurses' Salaries
    Lieut.-Commander Clark Hutchisonasked the Secretary of State for Scotland why the salaries and conditions of service of health visitors, domiciliary midwives and domiciliary nurses have been excluded from the consideration of the Whitley Council dealing with salaries in the nursing profession; and what action he intends to take to deal with the claims of the members of these excluded branches of this profession.
    The Secretary of State for Scotland (Mr. McNeil): Salaries and, conditions of service of these categories of nurses are not excluded from the consideration of the Whitley Council. As stated in reply to the hon. Member for Aberdeenshire West (Mr. Spence) on 28th March last, a claim for salary increases has been rejected by the management side of the Council and is now awaiting arbitration by the Industrial Court.
    Mr. Macdonald: What steps is the right hon. Gentleman taking to increase the salaries of those nurses above the rank of ward sister to prevent the anomalies which are now occurring in the nursing profession in Scotland?
    Mr. McNeil: Those salaries are being considered by the appropriate methods.

    Burghs (Development)
    Mr. Henderson Stewartasked the Secretary of State for Scotland if he has considered the resolution passed by the Convention of Royal Burghs on 4th April last to the effect that the development of existing burghs was in the national interest to a degree not less than the creation of new towns; and if he will make a statement on the matter.
    Mr. McNeil: Yes, Sir. I fully recognise that the national interest can be. served by the development of existing communities as well as by the creation of new towns. Various burghs and other communities in Scotland are being expanded in pursuance of the Government's policy to secure a better distribution of population and industry and this policy will be continued.
    Mr. Stewart: Has the right hon. Gentleman met representatives of the Convention to discuss this special point, and will he recognise the view of the representatives, which is very widely held in Scotland?
    Mr. McNeil: I have already noted the resolution passed by the Convention and, as usual, I shall be accessible for any representations upon it.

    Roads, Crofter Counties (Grant)
    Lord Malcolm Douglas-Hamiltonasked the Secretary of State for Scotland whether he will, despite the financial stringency, consider a larger annual grant for road making and improvement in the seven crofter counties, in view of the urgent need for this basic facility throughout the whole Highland area.
    Mr. McNeil: I regret that I cannot consider any increase on the amount of £120,000 included in the Estimates for the current year for public works under the provisions of the Congested Districts
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    (Scotland) Act, 1897. The existing provision, however, enables greater progress to be made with works of this character than was made before the war when the highest provision in any year was £30,000.
    Lord Malcolm Douglas-Hamilton: Does the right hon. Gentleman realise that the amount proposed is not enough to cover the more urgent needs of the Isle of Skye, let alone the seven crofter counties, and cannot he do something about taking seriously the problem of roads in the Highlands? Could not he take steps, for example, to see that some of the money from the Road Fund is available for this purpose?
    Mr. McNeil: I quite understand that there are conflicting priorities in this area, but I cannot accept the suggestion that the problem is not being taken seriously. I repeat that this is four times more than was voted in any year before the war.
    Mr. John MacLeod: Does the right hon. Gentleman realise that it is impossible for any district council to put its roads in order so that they may be taken over by county councils; that there are 200 communities without any roads at all in the Highlands, and that very special treatment must be given to the Highland region?
    Mr. McNeil: I agree that this is a special problem and special provision, not perhaps as much as anyone would like, but special provision, has been made for this situation.
    Sir David Robertson: Is the right hon. Gentleman aware that the roads in Sutherland are in a disgraceful condition and that there are many unemployed road workers; and would not it be better to put them to work rather than to keep them on the dole?
    Mr. McNeil: I know the roads of Sutherland intimately and love them as much as, no doubt, does the hon. Gentleman. If he has any practical proposition to offer, I shall be glad to listen.
    Mr. Emrys Hughes: Will the Minister give an assurance that no special privileges will be given to reactionary local authorities who have neglected their responsibilities in the past?

    Housing Estates, Glasgow (Schools)
    Commander Galbraithasked the Secretary of State for Scotland (1) what is the present school population in Glasgow Corporation's housing schemes at Priesthill, Househillwood and Pollok, respectively; and what school accommodation has been provided in these three areas;
    (2) what is the estimated cost of conveying schoolchildren from Priesthill, Pollok and Househillwood to schools in other parts of the City of Glasgow during the present financial year; and the estimated cost for the year 1950–51;
    (3) what plans he has to provide permanent school accommodation in the Priesthill, Pollok and Househillwood areas; what number of primary and secondary schools he anticipates will be required; when he intends that building should commence; and when he anticipates that it will be completed.
    Mr. McNeil: The present school population is about 2,300 at Priesthill, 900 at Househillwood, and 4,700 at Pollok, and the number of school places in these areas is 3,210. All secondary pupils and the primary pupils for whom places are not yet available are attending schools in other parts of Glasgow. The cost of transport is at present about £25,000 per annum, and is expected to remain at this figure during the new financial year.
    Three temporary buildings are at present being put up. The Glasgow education authority, who are primarily responsible for providing the necessary schools, estimate that in addition, when housing is completed, nine primary and three secondary schools will be needed. Of these, one primary school has already been started and one secondary school will be started soon, and I hope that it will be possible for the authority to begin at least three more of the primary schools and one more secondary school in 1950. The main buildings will be of traditional construction; the primary schools will take about 21 months to finish, the secondary school three years. Some will have prefabricated annexes which should be ready before the end of this year.
    Commander Galbraith: Can the right hon. Gentleman explain how it comes about that when there is housing provided for a population of over 30,000 and
    22
    a school population of over 8,000, the proper number of schools was not provided at the same time?
    Mr. McNeil: As the hon. and gallant Gentleman knows, there is a dual responsibility on this subject. However, I am not really concerned to try to find who was blameworthy. I am concerned to co-operate with the local authorities in trying to redress the unbalance to which the hon. and gallant Gentleman has quite properly drawn attention.
    Commander Galbraith: In effect, is not it a deplorable example of the lack of planning by a Socialist local authority who have been in power for a number of years?
    Mr. McNeil: I remember the hon. and gallant Gentleman had a very prominent place in that local authority on which he now throws the blame.

  BRITISH ARMY

    Women Officers' Titles
    Mr. Deedesasked the Secretary of State for War what are the administrative reasons for the recent change in women officers' titles.
    The Secretary of State for War (Mr. Strachey): The recent change whereby male rank titles were extended to women officers serving in the Army was made primarily in the interests of administrative simplicity.
    Mr. Deedes: Can the right hon. Gentleman say whether the women's organisations themselves sought this change, and is he aware that it has caused some resentment among serving officers as tending to make not only the women but the Army also look a trifle ridiculous?
    Mr. Strachey: No, Sir. I think the change meets the wishes and views of the women officers concerned.

    Pay Offices (Clerks)
    Lieut.-Commander Clark Hutchisonasked the Secretary of State for War (1) if he is aware that the replacement of civilian clerks by National Service men in Army pay offices is leading to unemployment among these temporary civil servants; and if he will reconsider the decision to employ young soldiers on this type of work;
    (2) if he is aware that the employment of successive batches of National Service men in Army pay offices makes continuity of work in these offices difficult and is detrimental to efficiency. and if he will stop this practice.
    Mr. Strachey: Soldiers must be employed in Army pay offices in this country in order to provide trained staff for pay offices overseas. Enough National Service men are employed to make good the shortage of Regular soldiers and to produce a trained military reserve to meet the requirements of the Pay Services on mobilisation. The rundown of work and the reorganisation of pay offices make it inevitable that some temporary clerks should become redundant.
    National Service men are employed in pay offices according to a phased programme and are fully trained before taking up full duties in an office. The accounting system now being introduced is designed to allow for the employment of National Service men and I am satisfied that their employment is not detrimental to efficiency.
    Lieut.-Commander Hutchison: Has the Minister received any representation from the Civil Service Clerical Association on this matter-about efficiency?
    Mr. Strachey: No, Sir.
    Mr. A. R. W. Low: Surely the right hon. Gentleman will agree that this is a complete waste of the use of National Service men. If he wants trained men on mobilisation, he could get them by taking them from civilian firms where a lot of men have been doing this sort of thing. Is it not a complete waste of the Services of National Service men?
    Mr. Strachey: I should have thought it was wise to provide a certain limited number of National Service men trained in this work for use immediately on mobilisation.
    Mr. Molson: Are the men selected for this particular sedentary job, medically unfit for any other active service?
    Mr. Strachey: Not necessarily, but I think it is right that a certain number of men suitable for this type of work should be se used.

    Vehicles (Reconditioning)
    Major Legge-Bourkeasked the Secretary of State for War what expenditure will be incurred by his Department in the current financial year for reconditioning Service vehicles; and what steps he is taking to overcome the criticisms of the Select Committee on Estimates on this type of expenditure during the financial year 1949–50.
    Mr. Strachey: Provision has been made in Army Estimates 1950–51 for the expenditure of some £10 million on the reconditioning and normal repair of wheeled vehicles. The recommendations of the Select Committee on Estimates are being considered by my Department and a report will be made to the Committee in the near future.
    Major Legge-Bourke: In view of the fact that the figure estimated for this year for the Army is about the same as last year, will not the right hon. Gentleman speed up the consideration of this report and review the whole policy of reconditioning wheeled vehicles, which is what the Committee recommended?
    Mr. Strachey: We could, of course, cease to recondition wheeled vehicles, but that would mean very heavy purchases of new vehicles, to which there are great objections.

    Troopships (Conditions)
    Major Tufton Beamishasked the Secretary of State for War what complaints have been received regarding the accommodation and conditions generally in the s.s. "Empire Test," s.s. "Eastern Prince" and s.s. "Empress of Australia," trooping to the Middle East; what is the average number of persons accommodated in each cabin; and whether he is aware that trooping conditions in these ships are worse than were trooping conditions between the wars.
    Mr. Strachey: The number of complaints regarding the accommodation and conditions on these vessels is very small compared with the number of passengers carried and in most cases they concern matters which can be rectified during the voyage. The average number of berths per cabin is, in the "Empire Test" 4.4, in the "Eastern Prince" (now renamed "Empire Medway ") 5.5, and in the "Empress of Australia" 7. The shipping

    25
    position since the war has necessitated the continued employment of these vessels and other troopships which were part of the war-time fleet. They have been considerably improved, but they are scheduled to be withdrawn from service as soon as possible.
    Major Beamish: May I ask the Minister not to judge conditions by the small number of complaints he has received, bearing in mind the normal Service procedure? Is he aware that trooping conditions before the war could have been much improved but they are far worse now than they were then, and will he look most carefully into this question?
    Mr. Strachey: I would not agree with the last part of the hon. and gallant Gentleman's statement. The solution is to get into service the new troopships which are fitted to quite a new standard. Some are coming into service, and we hope to have all troopships on this new standard within the next two or three years.
    Brigadier Head: Is the right hon. Gentleman aware that the retention in service of these out-of-date troopships is a very poor introduction to foreign service for young National Service men posted overseas?
    Mr. Strachey: Yes, Sir. That is why we are bringing these new ships into use.
    Mr. Mott-Radclyffe: Will the Minister explain exactly what.5 of a berth means in actual practice?
    Mr. Strachey: Evidently the hon. Member is not familiar with the conception of an average.

    Accommodation (Canal Zone)
    Major Beamishasked the Secretary of State for War how many single other ranks are living in tents in the Canal Zone; and what percentage this is of the total other ranks strength in that area.
    Mr. Strachey: I have called for this information and will circulate an answer in the OFFICIAL REPORT.
    Major Beamish: Can the right hon. Gentleman say why it takes so long to get this information? Have the wireless and telephone broken down? Is not this information readily available as soon as he asks for it?
    Mr. Strachey: The hon. Gentleman's Question appeared on the Order Paper only on Saturday, and I do not think it an unreasonable delay.
    Major Beamishasked the Secretary of State for War whether he is now in a position to state how many married officers or other ranks in the Canal Zone who wish for a married quarter have not been allotted one; and what is the average time that these families have been waiting for a quarter.
    Mr. Strachey: There are 470 officers and 993 other ranks in the Canal Zone who wish for a married quarter and have not yet been allotted one. The average time that these families have been waiting is rather more than a year. We are providing at least 300 more temporary married quarters in the Canal Zone during this financial year.

  COUNCIL FOR WALES
  Mr. George Thomasasked the Prime Minister what subjects he has submitted for the consideration of the Advisory Council for Wales; and whether he will seek their opinion on the subject of a capital city for Wales.
  The Prime Minister (Mr. Attlee): It is for the Council for Wales and Monmouthshire to settle their own agenda, and while I do not exclude the possibility of the Government wishing to ask their advice on specific subjects in special circumstances, we have not so far found it necessary to do so, and it is, I am sure, better that as a general rule the initiative should come from them. One of their main duties is to secure that the Government are adequately informed of the impact of Government activities on the life of the people of Wales and Monmouthshire, and they are the best judges of the priority which they should give to different topics. It is open to the Council to express views on the Subject Of a capital city for Wales, but I do not propose to suggest that they should single it out for special consideration.
  Mr. Thomas: Did I understand the Prime Minister to say in the last part of his reply that he was not making representations to the Council?
  The Prime Minister: No, I am not making representations.
  Mr. Thomas: In view of the representations that have been made to the Government in very reasonable form, and the inability of the Government to reach a decision on this matter, will he now refer it to the representatives of Wales themselves?
  The Prime Minister: I am not quite clear to which matter the hon. Member is referring.

  WAR PENSIONS AND ALLOWANCES
  Sir Ian Fraserasked the Prime Minister whether he will now appoint a Select Committee or other similar inquiry to consider war pensions and allowances.
  The Prime Minister: Full information as to the war pension provisions and the many improvements that have been made in recent years has been made available to hon. Members, and the Government are not persuaded that any inquiry is necessary.
  Sir I. Fraser: Does the right hon. Gentleman agree that a committee of Members of all parties, looking into this matter in the quiet of a committee room, would undoubtedly discover that His Majesty's recent Government in many respects did well for ex-Service men and women, but that there is still much to be done, and does he not think that the Members of this House and the public would like to feel that after a second major war a full review of the whole situation has taken place?
  The Prime Minister: There is, as the hon. Member knows, a Central Advisory Committee which meets frequently. In addition to leading members of ex-Service men's organisations, there are upon it hon. Members of all parties in this House, including, I think, the hon. Member for Morecambe and Lonsdale (Sir. I. Fraser). There is no subject upon which the Government are more fully provided with information than this one. Therefore, I do not think that it is necessary to set up a special committee.
  Sir I. Fraser: But is the Prime Minister aware that the Central Advisory Committee does not publish its agenda or its minutes; and would not great goodwill be brought about if this matter could be dealt with in the manner I have suggested.
  The Prime Minister: No. I think the matter would be better ventilated and debated in this House if it is desired to ventilate it. There is very full information on this matter.

  PUBLIC SERVICE (SECURITY)
  Sir Waldron Smithersasked the Prime Minister if he will appoint a Minister with Cabinet rank as Minister of Cold War Defence, to be responsible for matters of security affecting the public service.
  The Prime Minister: No, Sir.
  Sir W. Smithers: Is the Prime Minister aware that if he does not do something quickly and effectively to stop Communist infiltration, we shall be forced to the conclusion either that he does not mean business, that he does not realise the danger, or that he is afraid of the fellow-travellers who sit behind him?
  The Prime Minister: I am afraid 1 can never be sure what conclusions the hon. Member will draw from anything.
  Sir W. Smithers: I should have said "beside him" as well.

  OPENCAST MINING
  Mr. Nabarroasked the Prime Minister whether he will establish a committee, of which the Minister of Fuel and Power, the Minister of Agriculture, the Minister of Town and Country Planning, and the Minister of Works would be members, for the purpose of preventing opencast coal mining upon good agricultural land and in areas of special scenic beauty.
  The Prime Minister: It is not the normal practice to announce the existence or the composition of particular committees of the Cabinet, but I can assure the hon. Member that all the Ministers concerned are fully consulted on the points referred to in his Question before any scheme is approved.
  Mr. Nabarro: Is the Prime Minister aware that the existing machinery for defining areas suitable for opencast coal mining is both complicated and cumbersome, and generally results in areas of

  29
  high agricultural productive value being taken for that purpose, together with areas of special scenic beauty, and what steps will he take to abate this disaster?
  The Prime Minister: I do not think so. There is adequate consideration given now. Of course, what we are suffering from is neglect in the past when nothing was done about this.
  Mr. Turton: Is the Prime Minister aware that there is general concern about the waste of good agricultural land for opencast coal mining, and that the present system is not working properly? Will the right hon. Gentleman reconsider the matter in order to ensure that good agricultural land is not taken for this purpose.
  The Prime Minister: I do not think that the hon. Member is correct.

  MINISTERS (DATE OF APPOINTMENT)
  Sir H. Williamsasked the Prime Minister whether he is aware that Statutory Instrument No. 297 of 1950 was signed by the Minister of National Insurance in that capacity seven days before her acceptance of that office; and whether he will take stops to avoid a recurrence of such an incident.
  The Prime Minister: The hon. Member is, I am afraid, under a misapprehension. The ceremony of kissing of hands, to which I assume he refers, is the traditional manner in which a subject returns thanks for and acknowledges at His Majesty's convenience an honour or favour conferred upon him. It has no significance in relation to the acceptance of the ministerial office in question. If acceptance of the office is necessary to constitute an effective appointment-and this is a matter of considerable doubt acceptance in fact took place before the signature of the Statutory Instrument referred to by the hon. Member.
  Sir H. Williams: In what way does the date become known on which a Minister is effectively appointed?
  The Prime Minister: In this case the Minister took the oath of office required under the Promissory Oaths Act before the Lord President on 2nd March. On 28th February formal approval was given. The Statutory Instrument was
  30
  signed on 7th March. The Minister's audience by the King was held on 15th March. There was nothing done here which was not in the ordinary course of events.
  Sir H. Williams: Is not the Prime Minister aware that the authoritative publication on this matter, Halsbury's "Laws of England," commits itself to the statement that the acceptance of office is indicated by the kissing of the King's hand, and is he aware, therefore, that his statement today is in complete conflict with that authoritative document?
  The Prime Minister: I am afraid I do not know that particular document, but I have consulted the highest authorities on this matter. The hon. Gentleman is entirely wrong on the matter of kissing hands. He is confusing that with what happens in connection with certain offices when there is the handing over of the seals.

  NATIONAL FINANCE

    Empire Tobacco (Duty)
    Mr. Russellasked the Chancellor of the Exchequer what rate of duty ad valorem would have to be charged on Empire tobacco to bring in the same amount of revenue as the present specific Duty.
    The Financial Secretary to the Treasury (Mr. Douglas Jay): On the basis of current conditions the present specific Duty is equivalent to about 164 times the import value. But there are variable factors which introduce a considerable amount of uncertainty into the comparison.
    Mr. Russell: Does not the hon. Gentleman think that a monstrously high rate to put on an Empire product, and will he consider having it reduced?
    Mr. Jay: I am afraid I cannot anticipate this afternoon's Business.

    Income Tax
    Mr. Hollisasked the Chancellor of the Exchequer whether, under his regulations, if an author arranges that money due to him for literary work for a foreign company is paid not to him but to a

    31
    recognised British charity, he is then liable for Income Tax and Surtax on that money.
    Mr. Jay: Yes, Sir.
    Mr. Hollis: Is the hon Gentleman aware that if an author assigns the rights of a work to a charity, he is, apparently, not liable for Surtax? Is there a valid reason why there should be a distinction between the two different transactions?
    Mr. Jay: I gather from the hon. Gentleman's Question that in this case the money was due to the writer in question for literary work. In that case he is liable for tax whatever he desires to do with the money.
    Mr. Hollis: The Question was specific. It asked whether, if an author allows money due to him from a foreign company to be paid instead to a recognised British charity-in which case he never sees the money himself-he is liable for Income Tax and Surtax on that money?
    Mr. Jay: It depends on the precise arrangement by which he does it.
    Mr. Godfrey Nicholson: Is it not a fact that when somebody is paid to broadcast over the B.B.C., he can ask for the fee due to him to be paid to a charity, in which case the person concerned is not liable for tax?
    Mr. Jay: That is another question.
    Mr. Boyd-Carpenterasked the Chancellor of the Exchequer why the Pay-As-You-Earn liability of a number of employees of a Surbiton firm, particulars of which have been sent to him, has been raised notwithstanding that their pay remains the same.
    Mr. Jay: I have written to the hon. Member.
    Mr. Boyd-Carpenter: Is the hon. Gentleman aware that his letter does nothing except disclose a practice under which the Inland Revenue raise a man's tax liability in an attempt to obtain the return of an Income Tax return form; and is it not a fact that in this particular case drastic action was taken without any inquiry being made as to whether the taxpayer had received the demand at all?
    Mr. Jay: That is not what my letter says at all. It says that unless, after
    32
    repeated reminders, the taxpayer makes the necessary claims, it is not possible to allow them.
    Mr. Boyd-Carpenter: Is it not a fact that in this case no inquiry was made whether the demand form had been received before this drastic action was taken?
    Mr. Jay: In this case repeated reminders were sent, and therefore I think it reasonable to assume that they were received.
    Mr. Boyd-Carpenter: Oh, no.
    Mr. Errollasked the Chancellor of the Exchequer how awards to mine rescue squads are treated for Income Tax purposes under his regulations.
    Mr. Jay: Payments received by mine rescue workers are liable to tax as remuneration of their employment.

    Pound (Purchasing Power)
    Mr. G. Thomasasked the Chancellor of the Exchequer if he will give the purchasing value of the pound in each of the years since 1938 up to the present time.
    The Minister of State for Economic Affairs (Mr. Gaitskell): As the reply contains a number of figures, I will, with permission, circulate it in the OFFICIAL REPORT.
    Following is the reply:
    Taking the purchasing power of the pound as 100 in 1938, the figures for each of the years since, and at the latest avail? able date, are as follow: 1938, 100; 1939, 97; 1940, 83; 1941, 75 1942, 70; 1943, 68; 1944, 67; 1945, 65; 1946, 63; 1947, 59; 1948, 55; 1949, 54; February, 1950, 52.

    War Damage Repairs (Mecklenberg Square)
    Mr. Donnellyasked the Chancellor of the Exchequer what has been the total amount of payments made in respect of war damage repairs in Mecklenberg Square, including the amount paid on houses subsequently demolished.
    Mr. Jay: The War Damage Commission tell me that about £27,000 has been paid by way of cost of works payments

    33
    for the repair of houses in Mecklenberg Square. For those houses which were destroyed only value payments were made.
    Mr. Donnelly: Will my hon. Friend take steps to bring these figures to the notice of the Ministry of Town and Country Planning before action is taken to proceed with the present proposals for the conversion of Mecklenberg Square to its new purpose?
    Mr. Jay: Certainly.

    Property Acquisition (Compensation)
    Mr. Geoffrey Hutchinsonasked the Chancellor of the Exchequer whether he is aware that in the case of certain dwelling houses in Romford Road and New North Road, Dagenham, occupied by their owners, and recently acquired compulsorily by the London County Council, particulars of which have been supplied to him, the assessment of compensation payable to the owners will exclude any value attributable to vacant possession; and what steps he is taking to remedy this injustice.
    Mr. Jay: Parliament decided, in considering the Town and Country Planning Act, 1947, that public authorities should not be compelled to pay inflated prices attributable to vacant possession. There is no action which I can take in the particular cases to which the hon. Member refers.
    Mr. Hutchinson: Does not the hon. Gentleman recognise how unfairly this Section of the Act is operating in the case of these owner-occupiers? Surely, in the circumstances, some action ought to be taken, particularly as this Section of the Act does not appear to have been adequately considered in the House of Commons?
    Mr. Jay: This decision was made by Parliament after debate in 1947, and we cannot act now except in accordance with the law.
    Mr. Hutchinson: In view of the unsatisfactory nature of the reply, I beg to give notice that I propose to raise this matter on the Adjournment at the earliest opportunity.

    Historic Buildings (Committee's Report)
    Mr. Keelingasked the Chancellor of the Exchequer whether he has received the report of the Gowers Committee on buildings of outstanding historic or architectural interest; and when it will be published.
    Mr. Douglas Jay: My right hon. and learned Friend has received this report, and will make a statement about publication in due course.
    Mr. Keeling: Can the hon. Gentleman say whether it is intended to postpone publication of the report until the Government's views can be announced?
    Mr. Jay: That is now being considered.

  GOVERNMENT DEPARTMENTS

    Redundancy (Ex-Service Men)
    Mr. Ecclesasked the Chancellor of the Exchequer whether he will now reconsider the rule of "last in, first out," when making redundancies in Government establishments, since this application penalises ex-Service men and introduces a test which is not based on, efficiency.
    Mr. Douglas Jay: The order of discharge of temporary staff on redundancy is governed by National Whitley Council agreements which make special provision for ex-Service men and women, and provide for the discharge out of turn of those found unable to carry out the duties of their grade with due efficiency. I do not consider that these agreements require revision.
    Mr. Eccles: Does the hon. Gentleman consider it fair, as actually happens now, that an ex-Service man should lose his job simply because he was away fighting and citizens of Eire were taken on first? Does the Financial Secretary think that the management or directorate of a Government Department can build up an efficient force if this is to be the test of redundancy?
    Mr. Jay: The facts are not quite as the hon. Gentleman states them. In applying the principle of "first in, last out," the ex-Service people of the 1939–45 war may count the whole of their service towards their seniority provided they

    35
    joined the Civil Service within three months of leaving the Forces.
    Mr. Vane: Will the hon. Gentleman say whether this same principle of "last in, first out" applies also to Parliamentary Secretaries?
    Mr. Alport: With regard to entitlement, in considering length of service within Government service, can service before 1939 be counted by an ex-Regular soldier in considering his status with regard to redundancy?

    Officials (Power of Entry)
    Mr. Remnantasked the Financial Secretary to the Treasury what are the limited category of cases where officials have power to carry out inspections and investigations in private homes, not used for business purposes, without a search warrant; how many officials have such power, and for what purposes.
    Mr. Jay: Nine hundred and ninety-three War Damage Commission assessors have power to enter to assess claims on the Commission. One thousand four hundred and nine Inland Revenue valuers have power to enter to value property for Death Duties, for claims on the Development Fund and for development charges. This Department has also recently taken over rating valuation work from local authorities, and an additional 1,124 officials are now employed in its Rating Valuation Branch. These officials have power to enter to value property for rating purposes. I regret that my reply to the hon. Member for Worcestershire, South (Mr. De la Bere) on 6th April omitted this last class of officials from the category entitled to enter private homes. Since I gave that reply, I have also learned that, in the case of civil aviation, these powers are only granted on exceptional occasions, to individual officials, and, so far, this has never been done.
    Mr. Remnant: Will the hon. Gentleman be good enough to undertake to make further inquiry with a view to finding out whether all these powers are still necessary?
    Mr. Jay: I will certainly make that inquiry.
    Mr. Leslie Hale: Will my hon. Friend take this opportunity of making it clear that the means test officer, whose inspections and investigations were so much feared in the past by His Majesty's loyal citizens, is no longer in operation?
    Mr. Jay: That is so.

  TERRITORIAL ARMY (PERMANENT STAFF)
  Mr. Lowasked the Secretary of State for War on what basis Regular officers and permanent staff are at present allocated to units of the Territorial Army; and when their number will be increased.
  Mr. Strachey: At present, a limited number of Regular field officers are appointed, in accordance with Territorial Army permanent staff scales, to command major units where no suitable Territorial Army officer is available, or to act as second-in-command, in special cases where the unit is newly formed, or converted from another arm or where subunits are widely dispersed. In addition, appointments for adjutants and for quarter-masters are all filled by full-time officers, the majority of whom are Regular officers. The scale for permanent staff other ranks and civilians depends upon the type of unit and the number of subunits. New permanent staff scales, which are likely to give a substantial increase, are being prepared. I hope they will be ready shortly and I will place a copy of them in the Library of the House. They will provide a Regular field officer for every major unit in the Territorial Army.
  Mr. Low: Is the right hon. Gentleman satisfied that there will be enough members of the Regular Army to fill the places when this comes into operation?
  Mr. Strachey: There are enough, of course, but whether there are enough to fulfil these and other duties is another matter.
  Mr. Lowasked the Secretary of State for War how many Regular officers and other ranks are at present serving with units of the Territorial Army; and how many it is estimated these numbers will be on 31st March, 1951.
  Mr. Strachey: On 28th February, 1950, 1,483 Regular officers and 3,714 Regular other ranks were serving with units of the

  37
  Territorial Army. Until the new permanent staff scales now in preparation have been implemented, it will not be possible to estimate the numbers on 31st March, 1951.

  ARMY PAY OFFICES (MECHANICAL ACCOUNTING)
  Brigadier Medlicottasked the Secretary of State for War to what extent the records in Army pay offices are now kept by mechanical means.
  Mr. Strachey: Soldiers' accounts held by Army pay offices in the United Kingdom are maintained by accounting machines. The machine system of accounting is being extended to Army pay offices overseas, most of which at present maintain soldiers' accounts by hand.

  NEW MEMBER SWORN
  The Right Honourable Sir Frank Soskice, K.C., for Sheffield, Neepsend.
ORDERS OF THE DAY
  WAYS AND MEANS
  Considered in Committee.

  BUDGET PROPOSALS AND ECONOMIC SURVEY
  3.33 p.m.
  The Chancellor of the Exchequer (Sir Stafford Cripps): We have now settled into the custom of dealing with the Economic Survey and the Budget together, and I propose therefore to follow the same pattern as I have followed before, by dealing first with the Economic Survey and the general economic situation before coming to the details of our finances and of my Budget proposals.
  We have, I think, achieved in recent years a very large measure of agreement in this country that the Government-whatever its complexion-must accept responsibility for the general economic health of the whole community. That is a revolution in economic thinking and in Government responsibility, a revolution so complete that it is often entirely overlooked. As to the objective of economic health and the responsibility of Parliament, I imagine that there will be no difference in this Committee. Upon the symptoms by which that health may be judged we may not agree; upon the ways of achieving that health there is no doubt that the two sides of the Committee take widely different views.

  DEMOCRATIC PLANNING
  There has been a very marked tendency in the Press, in its review of the economic situation following upon the publication of the Economic Survey, to comment to the effect that the Survey for 1950 marks the abandonment of all attempts to plan our economy. That is, perhaps, a somewhat peculiar complaint by those who profess to be opposed to planning. It has always been difficult to explain, especially to those who did not wish to understand, the real object and the limitations of democratic planning. In two earlier documents this has been explained at some length, in the 1947 Survey and the long-term programme, and on numerous occasions in speeches. I must, however, in view of the obvious continued misunderstanding, try to explain the position once again.
  Democratic planning has for its objective to combine a free democracy with a planned economy. That synthesis is not an easy one, though I believe it is absolutely vital to the continuance of democratic freedom in the world. We are out after something a great deal more important than a good piece of planning machinery or even than a particular way of organising our industries and services. Our aim is to create a Happy Country in which there is equality of opportunity, and not too great a disparity of personal incomes, and in which every man and woman can feel that they are welcomed and have a full part to play and are invited to take their share in the democratic control of their country's economy.
  It is basic to that kind of life that there should be full employment and full participation by the workers in the industrial life of the community. How particular planning operations are carried out or how particular industries are organised is only important in so far as such matters are essential steps in attaining the goal at which we aim. It is not possible any more than it is desirable in such a democratically planned economy, to use the violent compulsions that are appropriate to totalitarian planning. Nor would it be sensible to attempt to decide from the centre all the details of production and distribution. Such day-to-day decisions must obviously be made by individual undertakings within the broad framework of national policy laid down by the Government.
  It follows, therefore, from these two reasons—the democratic nature of our planning and the necessity for avoiding over-centralisation—that while we dan and must use some financial and physical controls, yet a great part of the direction and control of the economy must be accomplished by agreement, persuasion, consultation and other free democratic methods. While therefore we can forecast what is likely to happen or map the possibilities offered for achievement, it is not possible to lay down a rigid target and say that it will be achieved, since in many cases there can be no democratic method of making sure of that achievement. That is not a failure of planning, but a recognition of the fact that there must be limitations to the capacity of a democracy to force the
  40
  implementation of any economic plan which it lays down.
  Some controls are acceptable to a democracy—rationng is a good example —and we have in fact been able, by controls, to prevent many undesirable economic results which would in these post-war years have militated against the achievement of our aims. Some positive controls, too, have been and can be used, especially in the area of public expenditure, such for instance as the building of factories in the development areas.
  Indeed, the Budget itself can be described as the most important control and as the most powerful instrument for influencing economic policy which is available to the Government. During the last Parliament its influence was brought strongly to bear against inflation, by reducing the excess purchasing power in our economy. We have thus been able, while maintaining full employment, to stimulate rapidly the development of our export trade and thereby tc help towards a solution of our balance of payments problem. Our very considerable success proves indeed the value and efficacy of our budgetary planning.
  What has been so remarkable over the last three or four years is that so many people of every section of the population and of all shades of political opinion have played their part in the organised voluntary effort to achieve the economic goals set out in the Surveys. Because of this combination of moderate controls democratically accepted by the nation and the people's willingness to follow voluntarily the directions set out, we have in fact succeeded in a large measure—I would say a very large measure—in keeping to the difficult path of economic progress that we have planned in this postwar period. The Economic Survey for 1950 shows the degree of our success in 1949 in following that road and indicates how we can proceed a further stage in the same right direction.

  EXTERNAL ECONOMIC SITUATION
  The year 1949 was certainly not a dull year from the economic point of view. It was marked, indeed, by that summer crisis, which generally seems to occur somewhere in the world over something, but which this time was in a form that particularly affected the relation between the sterling and the dollar areas and

  41
  which led to the drastic decision to devalue sterling. The first quarter of 1949 showed the general recovery in our external finances as continuing. Let me here warn the Committee that there is a seasonal tendency for the first quarter)l the year to appear somewhat overpromising. We achieved a small surplus in our overseas payments, and our reserves of gold and dollars actually showed a small increase.
  What happened after that first quarter up till devaluation is well known to the Committee, and was fully debated in the House at the time of devaluation. A decline in the dollar receipts of the sterling area and an increase in its outgoings led to a heavy draft upon our depleted reserves, and this, in turn, intensified the development of those speculative movements which had already been engendered by the most damaging gossip that had been rife as to the possible devaluation of sterling.
  We had, of course, before we decided to devalue weighed very carefully the likely effects upon our economy of that devaluation, and now, after six months' experience, we can say that, so far as we can at present judge, events have moved rather more favourably for us than we then anticipated. This is due to a complex of causes including, I believe, the inherent soundness of our own economy and the fact that the world is convinced that we are prepared to take the most drastic steps to guard the strength of sterling and its use as a basis for a wide area of multilateral trade throughout the world.
  Since September last our exports have recovered sharply, and preliminary information indicates that the volume in the first quarter of this year was nearly 10 per cent. above that of the first quarter of last year. We are at the moment in overall balance-indeed, almost certainly in overall surplus-with the rest of the world, and, as was clear from the figures I gave the House a few days ago, we have made a satisfactory beginning to the recovery of our gold and dollar reserves.
  When we look forward to the rest of 1950 it is difficult and hazardous to make any forecast. We do not yet know what will happen as regards Marshall Aid for 1950–51, and we have not yet seen the end of the changes brought about by devaluation. The evidence of the first quarter of
  42
  the year, however, tends to show that our exports are expanding in a satisfactory way and that our export prices are still fully competitive over a wide range of goods. But we must remember that both Germany and Japan are coming back into the international markets and that, even apart from that fact, competition is likely to intensify in the coming months. This should bring home to us the very great importance of doing all we can nationally and internationally to maintain the expansion of world markets, for any general contraction is bound to have a particularly adverse effect upon our world-wide trade.
  We have estimated that our receipts from visible exports may reach £2.000 million for the year 1950, some £200 million more than in 1949. On the invisible items of the balance of payments we expect a distinct improvement, in particular with respect to oil, shipping and tourist earnings.
  So far as imports are concerned, we have, of course, suffered a serious worsening of the terms of trade since devaluation; if we denote those terms of trade in 1947 by the index number 100, then between September, 1949, and the present time they have moved against us from 98 to 108. We hope that we have now seen the full extent of the rise in import prices, but prediction is most difficult in this field as it depends on so many factors over which we can have no control at all. The most important is, of course, the level of business activity in the United States, but we are also affected by the level at which farm prices are there maintained. We expect, however, despite the difficulties to be in a position to obtain the necessary raw materials for our expanded production.
  So far as food supplies are concerned, 1949 showed a marked improvement over earlier years and, on the whole, we were able to keep down import prices. There are far fewer shortages in the shops today, and the volume of the ration has now risen in a number of commodities. The outlook is not unfavourable, despite our difficult negotiations with the Argentine.
  Taking the picture of our external economic position as a whole, we hope during 1950 to convert an overall deficit of about £70 million into an overall surplus of about £50 million. I would here stress to the Committee the importance

  43
  of our being in a position to earn an overall surplus. Marshall Aid, which has been and is such an immense help to us, is declining and will disappear at latest in 1952; our Canadian credits will also be exhausted in the near future. Not only so, but from 1951 the question of the service of the American and Canadian debts will confront us. We must also have available some surplus to assist in Commonwealth and in colonial development. Over and above all this it is essential for us—as I shall show in a moment—to increase our gold reserves.

  GOLD AND DOLLAR POSITION
  So far I have for the most part been dealing with the United Kingdom overseas balance of payments, but I must now turn to what is the concern of the whole sterling area; that is, the balance of gold and dollar payments arising out of the transactions of the whole sterling area with the rest of the world. This matter is dealt with rather more fully in the Economic Survey this year, as there has been a tendency, I think, to misunderstand and confuse the relation between our own overseas balance of trade and the dollar balance of the sterling area as a whole.
  The main purpose of our overseas economic policy is, of course, to eliminate the dollar deficit in the sterling area's accounts. I gave the House the figures for the dollar transactions a day or two ago. These showed a small surplus for the quarter which is the result of, I think, a most creditable performance by both this country and the other countries of the sterling area.
  There is one item amongst those transactions to which I should like to refer. At the request of the Newfoundland Government we repaid the balance of nine million dollars outstanding from the interest-free loan of 12,300.000 dollars which they made to us during the war. I cannot let this occasion pass without expressing once again, I am sure on behalf of everyone in this Committee and in this country, our most grateful thanks for that very present help in our time of trouble.
  The small dollar surplus which we earned in the first quarter of this year is the result of a number of temporary factors, including the after-effects of
  44
  devaluation, as well as of some more permanent factors. One of the very important influences is the strong buying by the United States of primary products from the sterling area. I must, therefore, warn the Committee and the country against relying too much upon the continuance of this favourable trend, but let me also bring to their notice that, if and when less favourable results appear, it will not mean that all our affairs have gone radically wrong. We must expect some variations, but if external circumstances continue' as they are today there is no reason why we should anticipate any dangerous change for the worse in our situation.
  There is no doubt that a major element in our improved position is the reduction of the expenditure of dollars which we have brought about both upon visible and invisible imports. Since 1948 we have secured economies in dollar expenditure by the United Kingdom alone at the rate of 900 million dollars a year, reducing the annual rate of dollar expenditure to 2,000 million from 2,900 million in 1948. The Colonies and the sterling countries of the Commonwealth have also made very large economies and we hope that these will be continued. They have to some extent been made possible by the United Kingdom's ability to supply at fully competitive prices a greater quantity and larger range of their needs in imports. All this is a real and a continuing gain to our balance of payments. It means that the inescapable commitments upon our gold and dollar reserves for primary necessities have been and are still being steadily reduced.
  There is another aspect of this matter no less important, and that is the saving that we have been able to make, since devaluation, in marginal gold payments. As the Committee knows there are a number of countries, such as Belgium and Switzerland, to whom we have had to make balancing gold or dollar payments from time to time over the past few years, mainly in respect of purchases from them by ourselves or other countries of the sterling area. Since devaluation, owing to our better competitive position, we have been able to replace these payments to a very large extent by exports to those countries of sterling area goods, thus saving the drain upon our gold reserves.
  On the side of dollar-earning, the progress of United Kingdom exports has not

  45
  been quite so marked. We are gradually expanding our sales to the United States and Canada, and to the other American account countries, the importance of whose trade must not be overlooked. In this task I would like to commend very highly the contribution of the Dollar Exports Board, under the most effective leadership of Sir Cecil Weir. We have, I am glad to say, now reached the point where the increased volume of United Kingdom dollar sales is earning us dollars in excess of the rate of dollar-earning immediately before devaluation.
  But, of course, the biggest element of dollar-earning by the sterling area is in respect of the income from the sales to the dollar area of such primary commodities as rubber, wool, jute, tin, cocoa and so on. Experience shows—as indeed one would expect—,that very large fluctuations indeed take place in these sales from month to month, apart altogether from their seasonal character. In recent months, these sales have been at a high level, but they might at any time fall off temporarily, if there were a weakening of internal demand in the dollar area. That is one reason why a decrease in our dollar spending is so essential to bettering our payments position because that is a regular and controllable saving, whereas the dollar-earning of the sterling area is much more uncertain and is not, of course, within our power to determine.
  This brings me to a consideration of our reserves. At 1,984 million dollars they are a little bigger than a year ago, but they are still considerably below what they were at the beginning of the Marshall. Plan in March, 1948—which was itself a wholly inadequate level compared with our needs or our pre-war position when, making adjustments for the relative values of money, they were, in effect, four to five times as great as at present. Indeed, the changes in our reserves which took place last summer and led to such a drastic step as devaluation would have probably been very little noticed by world opinion if we had then had our pre-war volume of reserve. There was, in fact, as many will remember, between March, 1938, and March, 1939, a fall of £241 million sterling or over 1,000 million dollars in our gold reserve which we were able to handle quite comfortably and without any effect upon the external value of the £.
  It is the smallness of our reserves much more than the unavoidable degree of
  46
  fluctuation in our earnings that is now our real trouble. That is why we must build up those reserves in every way we can so as to have more in hand to meet the quite normal and inevitable fluctuations in the dollar income of the sterling area that we shall encounter when Marshall Aid comes to the end in 1952.
  One very encouraging feature in this situation is the almost universal recognition now given to the fact that this problem of the dollar gap is not one for the debtor countries only. Recent speeches by Mr. St. Laurent and Mr. Howe in Canada and by Mr. Acheson and Mr. Hoffman and others in the United States have emphasised strongly the need for open markets in the dollar countries if there is to be a real chance of bringing the overseas payments between the dollar area and the rest of the world into balance. I am sure, too, that we must all be greatly encouraged by the appointment by the President of the United States of Mr. Gordon Gray as a special adviser for the very purpose of examining and advising upon this situation.
  We shall continue to concert measures with the Commonwealth, with our European neighbours in O.E.E.C., and with our Canadian and American friends to bring about a solution to this problem of the dollar gap. Continuous action by all the peoples concerned is certainly called for, since the solution of this economic problem is absolutely fundamental to the security of world democracy and to the survival of Western European civilisation.

  EUROPEAN ECONOMIC CO-OPERATION
  The Organisation for European Economic Co-operation has, I think, made quite remarkable progress over the last year, and in that we have played our full part. It is no simple task to lay the foundation in statistical and economic services and organisation for a close and friendly co-operation between 17 countries, with the most widely varying political and economic outlook, many of whom have been at political or economic enmity over long periods in the past. It requires a great fund of goodwill and understanding as well as the appropriate machinery,
  Yet I can say with complete conviction that the very distinguished and devoted body of international and national

  47
  civil servants who have been working at Paris for the last two years, and amongst whom this country is very well represented, have succeeded in bringing about a degree of co-operation and understanding which I regard as little short of miraculous. It is only necessary to study the Second Report of O.E.E.C. to appreciate that fact.
  But there are other very real accomplishments besides this. The Second Report of the Organisation points out that the growth of production last year has been higher than was ever expected at 25 per cent. above that of 1947, and indeed it is now above pre-war level. This is a great step forward towards that viability by 1952 which is the goal of all European countries. It is, too, a great tribute to the efficacy of Marshall Aid, for which all the democratic world must be grateful. As the Report says:
  " Four to five billion dollars a year of aid has permitted an expansion of annual output of about 30 billion dollars."
  That is a pretty successful pump-priming operation. We were very glad to be able to record our gratitude and admiration of those responsible for the initiation and carrying out of that great scheme at the time of the celebration of the second anniversary of its coming into operation.
  We have gone a long way during the past year to remove restrictions upon imports into this country in accordance with the suggestion we made at O.E.E.C. and which was there adopted. We believe that for a great trading community like our own, with markets in every country of the world, the fullest possible removal of trade restrictions is beneficial, provided we can maintain the controls necessary to safeguard our balance of payments and our reserves, and to carry out that degree of planning which is essential for the maintenance of full employment in our own country.
  Within the framework of O.E.E.C. we have been able to agree with certain other countries, notably the Scandinavian countries whose economies are somewhat similar to our own, to go further and get rid of certain controls on invisible payments. We hope to be able to continue that general line of policy.
  We are now, as the Committee knows, engaged in an attempt to extend still further the transferability of sterling and
  48
  other European currencies under a European payments scheme which will be better adapted for continuance after Marshall Aid is completed than the schemes which have hitherto operated. I cannot now go into the details of this matter, which is under discussion between O.E.E.C. countries, but I should like to make clear that we are determined, if it is by any means possible, to play our full part in such a scheme, though we must, of course, see to it that the position of sterling, as an international currency which facilitates a great deal of multilateral trade today, is not jeopardised.
  Whatever comes out of our discussions —and we hope it will be a successful scheme—we must ourselves, as responsible for sterling in the world, move steadily forward towards the goal of the maximum multilateral use of our currency. We have over the past two years been gradually extending the transferability of sterling, until today probably half of the world's international trade and commerce is carried by sterling. This is a fine achievement in the face of all the post-war difficulties, and it has been of great service to the world; but it has only been accomplished at considerable cost to ourselves.
  There is one other aspect of this problem to which I must refer. A balance of payments between the sterling and dollar areas depends not only upon dollars being more plentiful but also upon sterling itself not being too plentiful. I have dealt with the means by which we hope to make dollars more plentiful in relation to demand, but we must not neglect the other aspect of the problem—the possible over-supply of sterling. Some such over-supply has been almost unavoidable since the war in view of our desire to maintain the full multilateral nature of sterling and our obligations to our fellow members of the sterling area. Political considerations, too, have played a considerable part in our attempt to encourage a more stable situation in various parts of the world which were behind-hand with their economic development and where, in consequence. the pressure of the cold war was very heavy. As I have already stated in the House, we are now being more careful its regard to the supply of sterling, especially in view of the rapid decrease and ultimate elimination of dollar aid.

  INTERNAL ECONOMIC SITUATION
  I can now relate this review of ow external economic policy, and what we have achieved, to our internal economy. The greatest internal danger to the success of our external policies has been, and still is, inflation. If internal inflationary forces were to get the upper hand in our economy our balance of payments position, both overall and in dollars, would deteriorate disastrously, and the reaction of the rest of the world to any such inflation would become a most potent factor in weakening the position of sterling. We must therefore avoid any development of inflationary tendencies which would prevent us from obtaining by importation the raw materials without which our programme of increasing production and full employment would collapse in ruins.
  The continued growth of production, so much of which is based upon imported raw materials, is the outstanding feature of our internal economic situation. During 1949, industrial production, as strictly defined, rose by 6–1 per cent. in real terms. Over the wider field of business enterprise as a whole, in which transport, distribution, services and agriculture are included with industrial production, output seems to have risen by rather more than 5 per cent. in real terms.
  Allowing for the increase in numbers employed, this suggests an increase of nearly 4 per cent. in output per man per year in business enterprises compared with the forecast of 21 per cent. in the Economic Survey of 1949. It was not thought that we could rely upon quite such a high increase as 4 per cent. for next year, for reasons I will mention in a moment, and the figure of 21 per cent. has therefore been repeated for 1950. In the light of the tentative figures for the first two months of this year I am inclined to think that the assumption of 21 per cent. may again prove to be on the low side. Anyway, it is very much to be hoped that it will prove to be on the low side.
  The increase in production is. I think, evidence that the heavy capital investment since the war, as well as the efforts of the more enlightened sections of management and labour, are beginning to have their effect. I should like here particularly to commend the very good work of the Anglo-American productivity teams, a number of whose most remarkable and
  50
  helpful reports have already been published. I am quite certain—and in this I hope all the Committee will agree with me—that the results in production which we have achieved over the last few years prove the accuracy of the thesis that good relations and full consultation between the two sides of industry at all levels are far more effective levers to increased productivity than the so-called "disciplinary forces" of bankruptcy and unemployment.
  In some cases where shortages have been overcome and mass production on most modern lines has been possible very striking increases in production have resulted. The total output of all vehicles, for instance, went up by nearly 24 per cent. last year. That industry has made a quite spectacular contribution to our exports, and everyone concerned is to be greatly congratulated. We cannot, however, hope to repeat such very large increases in production in individual industries, and this may tend to bring down the overall average. That is the reason why it is doubted whether last year's 4 per cent. increase in productivity can be sustained.
  On the other hand, there are signs of a real movement forward in some industries which have so far been somewhat behind-hand. We still have a serious bottleneck in electric power generation, and unfortunately we are not yet through with those difficulties. Agriculture, which is such a vitally important factor in our home production and in our balance of payments, and which has benefited so much since this Government came into power, was somewhat affected by the drought last summer—even more, I think, than by the previous Tory administration—but nevertheless, good progress was made with the restocking of our farms. I am sure we are all grateful to the farmers and farm workers who have given their energies to this vital agricultural expansion programme for what they have already achieved on the basis of the fair price policy that we are operating.
  Expenditure on gross capital formation was again at a very high level in 1949, and in fact totalled some £2,465 million. Excluding the self-financing expenditure necessary to carry a given volume of stocks when prices rise, which is shown separately in the Economic Survey, real investment was substantially greater, both in fixed capital assets and in additions to

  51
  stocks and work in progress, than it had been in 1948.
  For 1950, the total investment for the year will be about the same as in 1949. Had the high level reached at the end of 1949 been carried forward into 1950 without the cuts announced last autumn, the total for the year would have been considerably greater. A major part of this investment will continue to be for industrial expansion of one kind or another; in 1950 about two-thirds of the new investment in the principal sectors will be for productive purposes, and only about one-third will be devoted to the social services.
  The Committee will remember that one of the adjustments which we made after devaluation was to reduce the housing programme. We are now in the course of considering the investment programme for 1951 including housing amongst other items. The Committee will appreciate that hitherto there have been two reasons for varying the annual capital expenditure on housing: first, the fluctuating supply of materials, including particularly imported timber; and second, the total availability of building resources for our capital investment as a whole, including I may say a very large amount of factory building, especially in the development areas. This latter programme is now tailing off somewhat, and we hope that the materials position is also becoming less critically difficult.

  HOUSING PROGRAMME
  We therefore propose to fix a total for the housing programme upon a more stabilised basis to which the rest of the capital investment programme will have to conform. For the three years 1950–52 therefore we have decided that the programme for Great Britain should be at the completion rate of 200,000 houses a year. [HoN. MEMBERS: "Not enough."] The continuing urgent need for houses, which is a symptom of the better standards of living that the people are now enjoying, makes it desirable, we believe, that housing should be given this special preferential place in our capital investment programme. We are therefore reverting to the rate of completions originally envisaged in last year's programme before the cuts were introduced last autumn. I believe this to be fully
  52
  justified in the light of the results of the past three months.

  EMPLOYMENT AND EARNINGS
  During the past year we have kept to the narrow and difficult path between inflation with an unbalanced external position on the one hand and deflation with its consequent unemployment on the other. We have been able to avoid the pitfalls on either side of this narrow path. In this we have been assisted greatly by the external aid we have received from the United States and Canada, but, nevertheless, we could not have achieved the results which we have unless we had been prepared ourselves to carry out the not always very popular policies that we have pursued.
  In considering the position in which we find ourselves at the beginning of 1950. I would point out that there has been little change in the unemployment figures, except the usual seasonal variations. The course of retail prices has been comparatively steady, the increase in the index from 109 to 113 being mainly due to the limitation of subsidies at the time of the last Budget and to the increase of the price of bread upon devaluation. Neither of these can, of course, be regarded as any evidence of inflationary pressure.
  The wage rate index has remained remarkably steady, increasing only one point between January and December, whereas the index of earnings has just about kept pace with the cost of living index. Between 1948 and 1949, the amounts paid to wage and salary earners went up by over £300 million, which is a measure of their share of increased production. I should like to emphasise in this respect the great difference there is between increases in wage levels whereby more is paid for the same service, and increases in earnings arising from more being paid for more produced. This latter form of increase in personal incomes we have always encouraged because it is the by-product of greater productivity. [HON. MEMBERS: "Oh! '2] Anyone who doubts that has only got to read the original White Paper to see that it is so.
  There has been a falling away in the number of unfilled vacancies which indicates a lower pressure of demand for labour. The figures of labour turnover show a very considerable mobility of

  53
  labour, although it is, of course, held down to some extent by the shortage of housing. This does not support those who say that much less full employment is necessary in order to enable industry to adapt itself to the changing requirements of the markets. [HoN. MEMBERS: "Who says so? "]
  Throughout the year, there was a continual improvement in the quantity and variety of goods available in the shops, and the figures of personal expenditure, which show substantial increases in the amount spent on food and clothing, accompanied by reductions in expenditure on alcoholic beverages, tobacco and entertainments, prove that the pattern of consumption is approaching more closely to that of the pre-war period.

  MONETARY SITUATION
  So far as our monetary situation and the National Debt are concerned, owing to the revaluation in terms of sterling of our dollar debts after devaluation, which involved an increase of £636 million, and to the revaluation of the sterling balances of the International Bank and the International Monetary Fund, which cost a further £173 million, our National Debt has been increased over the year by £809 million, but we have during the same period reduced the debt by £173 million, so that our net increase of debt is £636 million. This is, of course, very different from last year's result, when we paid off £453 million of short-term debt, but I then made it clear that we should not repeat that record as we were not budgeting for any substantial overall surplus.
  The note circulation of £1,267 million at the end of March remains virtually unaltered from the figure at the end of the previous March, while net Bank deposits, at £5,588 million last month, show a small movement downwards, which is in the right direction.
  The main declared policy of the Budget last year was to maintain the degree of disinflation we had then attained. Although in the middle of the year there was a slight tendency towards more inflation, which was liable to be accentuated by devaluation, yet with the adequate correctives which we then applied we can now I think say that we are in a less inflationary condition than at this time last year; so that if we want
  54
  to "ride comfortably" and maintain our primary objective of full employment, our job now is to guard against any kind of increase in inflationary pressure.

  OUTTURN FOR 1949–50
  Having now completed my review of our economic condition, I come to the Budget itself, and I will start by giving the Committee the outturn for 1949–50. The main figures I am about to quote will be found upon pages 4 and 5 of the Blue Paper.
  The Committee will notice that we have continued this year the alternative classification of receipts and payments which is designed to show the true revenue surplus. A good deal of technical work has been done with regard to this alternative classification, but it has not yet, I think, reached a stage when we can with any certainty select the best permanent form for our Budget accounts. It is for that reason that we have this year continued the two alternative forms.
  The surpluses actually realised last year were, above the line, £549 million, true revenue surplus £518 million and overall surplus £62 million. Those all mark, as the Committee can see, an improvement upon the estimated figures, of £470 million, £492 million and £14 million, respectively. But though the out-turn is better than we expected, this does not mean that the original expenditure estimated was not exceeded. In fact the total expenditure exceeded the total estimates by £67 million, but this was, fortunately, more than offset by increases in revenue.
  Total revenue exceeded the estimates by £146 million at £3,924 million. Customs and Excise Duties exceeded by £27 million in a total of £1,520 million. There was a shortfall in tobacco of £25 million, due to our cutting back the dollar purchases of tobacco last year, a very small excess of £6 million on alcoholic liquors and a surplus of £42 million on Purchase Tax. This latter reflects the increased sales of consumer goods to which I have already referred. The Betting Duties provided £2 million less than the estimate mainly due to the reduction in the average amount of stakes in the football pools. On the Inland Revenue side the receipts at £2,111 million show a small excess of £26 million.
  Income Tax receipts were £52 million below estimate, due to an over estimate of profits for 1948. The continual rise in profits which had taken place since 1939 was halted during 1948, but this fact did not become apparent until after the estimates had been made last year. In view of this, it is at first sight surprising to.find that the yield of Profits Tax and Excess Profits Tax actually showed the largest excess of all—£57 million over the estimate of £240 million. The explanation of this apparent contradiction is threefold: First, quicker progress in clearing arrears of Excess Profits Tax; second, accelerated collection of Profits Tax; and finally the fact that the investment income of companies generally has proved much greater than was expected.
  Surtax produced £10 million over the estimate, and Death Duties £14 million more. The yield of other taxes was reasonably near to the estimates. Non-tax revenue yielded £237 million, against the estimate of £145 million. This is, of course, a notoriously difficult field for estimating. The major increases of receipts over estimates were: £35 million from the sale of surplus stores, £30 million from trading services and £27 million miscellaneous revenue. Perhaps the most significant single individual item was a payment out of the surplus arising from the wool disposals scheme.
  Coming now to the expenditure side, the outturn exceeded the Budget estimates, as I have said, by £67 million. The Consolidated Fund services were £11 million more than the estimate, but the major increase was on supply expenditure which, at £2,837 million, was £56 million more than the estimate. The House had an opportunity of examining and discussing the various Supplementary Estimates which contributed to this excess a few weeks ago, and I then stated that I could not give the figure of saving to set against the £170 million supplementaries until after the end of the year. That figure of saving was £114 million—so the net increase was £56 million.
  There is one item below the line on the expenditure side to which I must refer, as it shows so marked a discrepancy from the estimate. This is loans to local authorities. The estimate of £220 million was exceeded by £52 million. We decided, as the Committee knows, to continue the favourable rate of interest on these loans,
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  at 3 per cent., to assist local authorities particularly to keep down their rents of new houses. This favourable rate of interest seems to have led some local authorities to draw more freely on the Local Loans Fund than was warranted by their actual needs, thus taking undue advantage of the special facility which we were providing for them. This could not, of course, be allowed to continue, so that steps were taken to ensure that local authority drawings on the Fund would match more closely their real needs.
  It must be recognised that some of the internal reserves upon which the local authorities have hitherto been able to draw are now exhausted, so that we must expect their demand for loans to be somewhat higher than it has been. We believe, however, that with the continued co-operation of the local authorities the sum we intend to provide for the coming year of £279 million should suffice to meet all their needs.

  PROSPECTS ON BASIS OF EXISTING TAXATION
  I next come to examine the prospects for 1950–51 on the basis of the existing taxation. Consolidated Fund Services will take £537 million, of which £490 million is for service of the debt. We shall continue during this year the policy of using any Budget or other surplus funds to pay off short-term debt.
  The total supply expenditure for the year, as provided by the Estimates submitted to Parliament, amounts to £2,918 million, an increase of £137 million over the original Estimates for 1949–50, and of £81 million over the actual outturn of last year. The result is, therefore, a total estimate of expenditure above the line of £3,455 million.
  Revenue on the existing basis of taxation is estimated for Customs and Excise at £1,510 million. The more important items in this total are as follows: beer and alcoholic drinks, £387 million; tobacco, £590 million; Purchase Tax, £295 million; Entertainments Duty, £46 million; oil, £68 million; betting, £25 million; Import Duties Act, £48 million and other duties, £51 million. There is no very marked variation in these from the actual receipts of last year. The total, as I have said, is £10 million less. Inland Revenue receipts are expected again to be much about the same as last year's

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  outturn, a total of £2,100 million against an outturn of £2,111 million.
  As I stated earlier, the progressive increase in profits which had gone on for nine years came to an end in 1948, and we cannot therefore look to any increase in revenue from that source. It must also he noted, and this like all benefits is soon forgotten, that this year we have to meet the first instalment of the increase in the initial allowance for new machinery which was granted in last year's Budget, and which will this year amount to a sum of £40 million. On the other hand, individual incomes are likely to increase with increased productivity and production, so that taking all the factors into account we hope to raise £1,460 million by Income Tax, which marks a small increase over last year's outturn of £1,438 million.
  Surtax should yield £120 million and Death Duties, which have not yet been fully affected by last year's increases, should yield £195 million. Profits Tax and Excess Profits Tax are expected to yield £270 million, a fall of £27 million compared to last year's outturn, which is mainly attributable to a further decline in Excess Profits Tax which came to an end three years ago. Stamps should give £50 million, and arrears of special contribution and miscellaneous duties £5 million.
  It is pretty clear, I think, that we can no longer look for those large annual increases in Inland Revenue duties which have helped us so much with our finances over the last few years. Any further yield from these taxes can only come from increases in the total of national production. We must not overlook the fact, in this connection, that the effective rate of taxation upon money distributed as salaries and wages is much less than that upon profits. The shift which is now taking place away from the earning of large profits towards the payment of more money in the form of salaries and wages must therefore tend to curtail the amount of Revenue we can raise by the Inland Revenue taxes. This is a material factor in assessing our future capacity to raise the money required to meet a rising expenditure.
  As regards other Revenue, I put Motor Duties at £56 million the same as received last year; surplus Stores, which are naturally decreasing rapidly in volume,
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  at £35 million compared to £79 million received last year; trading services at £85 million compared with £48 million last year. The reason for this is that we can look for further substantial receipts especially from the disposal of war-time purchases of wool, and on stocks of raw materials held by various controls on the cessation of Government trading. Miscellaneous receipts I put at £70 million compared to £78 million last year, which, together with £40 million for other smaller items, gives £286 million for other Revenue, and a grand total of estimated Revenue on the existing basis of taxation of £3,896 million.
  As regards below-the-line items, receipts are put at £70 million as compared to £66 million last year, and payments at £520 million as against £553 million. The two largest items are £279 million for loans to local authorities, which I have already mentioned, and £100 million for war damage, which it will be noted still makes large demands on our resources.
  The result is, therefore, to show, on the existing basis of taxation, an estimated above-the-line surplus of £441 million compared to last year's estimate of £470 million and an outturn of £549 million; a true revenue surplus of £411 million; compared to £492 million estimated, £518 million realised last year, and an overall deficit of £9 million compared to an overall surplus of £14 million estimated, and £62 million realised in 1949–50.

  GOVERNMENT EXPENDITURE
  Many members of the Committee will remember that last year I dealt in some detail with the expenditure side of the Budget, and this year I must again emphasise the need for the most careful scrutiny of any and every suggestion of new expenditure. There is, as I have pointed out, an increase in the estimated expenditure of £147 million over the estimates of last year. This increase makes no allowance for any Supplementaries, such as that for increased National Assistance grants already foreshadowed, but also, of course, takes no credit for economies or under-expenditure.
  In considering these figures we must remember that but for special economies of some £90 million introduced after devaluation, the estimates would have been that much higher, and also that the

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  net increase of £147 million is arrived at after taking into account an anticipated decrease of £50 million in terminal services arising out of the war. In the nature of things we cannot rely much longer upon any such decreases to help us. This increase results mainly from the items covered by the recent Supplementary Estimates. The services concerned are being carried forward into the coming year.
  The largest individual increase shown in the Estimates is for the National Health Services, £123 million for England and Wales and £10 million for Scotland. I will revert to those Estimates in a moment. The next largest is Defence at £21 million. There is not much hope of any immediate reduction here in view of the condition of the world and the obligations of North Atlantic Defence which we are undertaking. Colonial development and welfare accounts for another £17 million and there is an increase of £17 million in grants and loans arising out of the post-war conditions in Burma and Malaya. We cannot avoid such items if we are to discharge our responsibilities in the stabilisation and development of the colonies and of South East Asia. These increases add up to £188 million which is more than the net increase. The other pluses and minuses are not of major importance, and, bearing in mind the reduction in terminal expenses that I have already mentioned, they nearly balance out.

  NATIONAL HEALTH SERVICE
  So by far the largest item is the increased cost of the National Health Service. As to that the Committee will recollect that my right hon. Friend the Minister of Health stated in the course of the Debate on the Supplementary Estimate for the Health Services, that we must now regard the period of their initiation as passed so that there is no excuse for exceeding the estimates in the coming 12 months. My right hon. Friend also stated that further measures of control must be exercised to help to make certain that the annual estimate for the Service as a whole is not exceeded.
  It is clear that it is not possible in existing circumstances to permit any overall increase in the expenditure on the Health Services. Any expansion in one part of the Service must in future be met
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  by economies or, if necessary, by contraction in others. In exercising this essential control over total expenditure, regard will of course be had to priorities. My right hon. Friends have I believe the necessary powers, but should these prove to be insufficient, an Amending Act will be introduced. It is not proposed to impose any charge immediately in connection with prescriptions, since it is hoped that a more easily administered method of economising in this branch of expenditure can be introduced shortly. The power to charge will, of course, remain so that it can be used later if it is needed.

  FOOD SUBSIDIES
  There is one other item of expenditure upon which I must say a word and that is the food subsidies. As the Committee know, the Ministry of Food Estimate is simply for the net cash which the Ministry require for their administration and their trading operations, and its amount will vary from year to year with any change in stocks, up or down, over the year and with the amount fixed for the food subsidies.
  Last year the maximum for the food subsidies was fixed at £465 million and I stated that
  " whatever happens to prices, we must not allow the subsidies to rise above that level"— [OFFICIAL REPORT, 6th April, 1949: Vol. 463, c. 2086.]
  This year, I propose to continue that same ceiling, as modified by the economies introduced in the autumn. As the Committee will remember, these were the elimination of the Exchequer subsidy on animal feeding stuffs, the increases in the prices of dried and frozen eggs and raisins, the removal of the fish subsidy and certain administrative savings, which decreased the subsidies without having any adverse effect on prices to the consumer.
  Taking into account all these items which had previously been included in the £465 million, we arrive at a ceiling for 1950–51 of £410 million, and on that figure the Ministry of Food estimate has been based. The £465 million has not been reduced at all except by the deductions I have just stated, which were all included in last autumn's measures of economy. In the light of the prospects of prices and quantities over the year some small price increases were necessary to

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  keep within that ceiling and these have already been announced by the Minister of Food.
  We hope that no further increases in prices in the basic foodstuffs will be necessary, anyway for some time to come, but we shall have to watch the situation and to see that the subsidies do not exceed £410 million. If, as we hope they may, the prices at which we buy our supplies should be less than we have assumed, I should propose to pass the benefit on to the consumer so far as necessary to cancel out any rise in the cost-of-living index whether from the increased prices recently announced, or from any other source. Thus, the figure of £410 million can be regarded as a floor as well as a ceiling, in this sense. that subsidies will not be reduced below the floor in such a way as to raise prices.
  As I pointed out last year, many of our social services are expanding automatically so that the cost increases every year, as for instance with national insurance and education. We have to bear this fact in mind when we look forward to the prospects for the future, and we must also bear in mind what I have already said about the likely falling off in the yield of certain important taxes. It will, I hope, be perfectly clear both to this Committee and to the country that the very greatest care and restraint must be exercised as to any new charges which it is suggested might be imposed upon the Exchequer. We have in the last four years taken on by way of social services and benefits all that we can possibly afford until such time as there is a large increase in our national production, and even then I have no doubt that the individual will want to retain a very considerable portion of that increase for his own spending.

  BASIS OF BUDGET POLICY
  I now come, in the light of that factual review, to deal with the economic considerations which must influence the form of this year's Budget. I will deal first in general terms with the reasons which have called for a Budget surplus over the past few years. We have during that period been pursuing a budgetary policy which has brought us through most difficult times with a large measure of success, and I can see no present justification whatever for its abandonment; but the
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  persistent fallacies which are given vent to every year show clearly that there is still a wide measure of misunderstanding of the function of a Budget surplus.
  Some re-statement of our general economic policy as affecting the Budget is therefore necessary, especially this year when we have recently passed through a General Election in which some people indulged in a veritable orgy of irresponsible suggestions and half-promises of increased social benefits and decreased taxation, a formula guaranteed to bring almost immediate ruin to our country. Though the technicalities of budgetary and employment policy may seem difficult and complex, the broad essentials at which we must aim are simple and clear for all to see, if they are willing to face the facts of the situation.
  It is our unquestionable duty to avoid the twin evils of inflation and deflation. This we can only do by maintaining a balance between the amount of goods and services which the nation seeks to buy and the amount which can be produced when the labour force is, as at present, fully employed. Excessive demand produces inflation and inadequate demand results in deflation. The fiscal policy of the Government is the most important single instrument for maintaining that balance. On the one hand, Government spending swells the total of national expenditure, both directly through current purchases of goods and services and indirectly through social security payments and the like, by adding to the incomes and spending power of private individuals. On the other hand, taxation, by drawing off part of the incomes of persons and business firms, reduces their spending power, and therefore the total of private expenditure.
  The difference between Government revenue and expenditure, that is to say whether the Budget is in surplus or deficit, gives an indication of the direction in which fiscal policy is influencing the level of total demand. The problem may alternatively be looked at from a more technical standpoint, that of investment and savings. If total demand is not to be excessive then not only must Government expenditure be covered by revenue but also the nation must be willing to hold back from spending on consumption an amount equal to that which it proposes to spend on investment.
  In other words, for the nation as a whole, spending on capital account must be balanced by savings on income account. If the voluntary savings of individuals and firms are insufficient, then the Government must itself make up the deficiency in the nation's savings by accumulating a Budget surplus, which in effect helps to pay for capital development, such, for instance, as that provided by loans to local authorities.
  Clearly, since saving is the opposite of spending, to say that a Budget surplus is necessary to remedy a deficiency in saving is simply to re-state the earlier proposition that a surplus is necessary to curb excessive spending. We must all be agreed that the present danger continues to be one of excessive spending or deficient saving—[An HON. MEMBER: "By the Government."]—that is, of inflation. In these circumstances the maintenance of a Budget surplus is absolutely vital. Should anyone be tempted to argue against the need for us to have such a surplus, I would ask him to consider whether, if we remitted taxation so as to do away with the above-the-line surplus, we should get an equivalent rise in personal savings to make good the loss. Quite obviously that is not what would happen. The great bulk of the remissions would be spent on current consumption.

  USE OF BUDGET SURPLUS
  There is one fallacy which seems to crop up almost every year when there is a Budget surplus. There is a belief amongst some people that a Budget surplus is like the declared profits of a company, and represents a fund available for distribution by way of remission of taxation. It is of course nothing of the kind. Any moneys that are not required during the year to discharge current liabilities on revenue account are used to meet capital liabilities or to pay off debt, and the allocation of these so-called surpluses to such purposes is an essential part of the financial policy laid down in the Budget.
  Under the budgetary system which we follow we settle upon the remissions of taxation that we can afford at the beginning of the year, in the light of the needs not of the past but of the coming financial year. I hope, therefore, that no one will cast their covetous eyes upon last year's surplus, which has, in fact, been finally
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  spent and fully disposed of. We must look to the future and see what we can afford to do, in the light of the expenditure for which we must make provision in the coming 12 months.
  I must repeat what I have often said before, that it is not our financial policy to run a perpetual budgetary surplus. We have said that such a surplus is essential in the present circumstances where there is a constant and imminent danger of inflation. But if and when those circumstances change we may well find ourselves in quite different conditions in which our fear is not of inflation but of deflation. Then in order to pursue our same policy we shall have to reduce the budgetary surplus or eliminate it altogether, or we may even want to budget for a deficit. When that time comes, some considerable remissions in taxation might be possible and, indeed, advisable. But we have certainly not yet reached that state of affairs.
  Many of the critics of our present financial and economic situation, who would like to embark upon a tax remission spree, base their arguments upon an assumption that our present conditions are so hard that we cannot possibly continue without some large measure of relaxation. Our very favourable industrial results over the past year show conclusively that we are not, in fact, being crushed down by the weight of taxation. When production, productivity, exports, profits and all the rest of the indices of industrial activity are at the highest levels ever known in the country it is not good sense to argue that our industry is weighed down and rendered incapable of full performance.
  In fact, the sense of fair shares and full participation in the national effort has easily overcome any disadvantages that might flow from the sort of controls that are necessary to ensure those fair shares and to maintain full employment. So for the present both our past experience and our future prospects point to a continuance of the same budgetary policy that we have followed for the last three years.

  PERSONAL INCOMES
  Intimately bound up with this whole question of inflation is the policy of restraint in the matter of personal in-

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  comes, which was first put forward rather more than two years ago. It is very understandable that that policy should have become difficult to carry through, and the longer the time that passes the more difficult it must become to apply it fully. I must pay a very high tribute to the trade union leaders and their members who have appreciated completely the significance of this policy for continued full employment and have given it their fullest backing.
  The expression "a wage-freeze" has come into common use, but, of course, no law, regulation, or rule has ever been made which imposed a wage-freeze on industry. Wages and conditions of work have been left to free negotiation between employers and employees, but the Government have done what is their duty; they have put before the country the very powerful considerations that should weigh with anyone who seeks to better their own position at the expense of the country as a whole.
  The facts are, of course, that the total of wages and salaries—and that is the important figure; not nominal wage rates has gone up substantially. Earnings increased between 1947 and 1948 by £670 million and between 1948 and 1949 by another £340 million. That certainly cannot be regarded as a standstill, although there was some increase of numbers employed at the same time, and to it must be added the £300 million of increased social services and benefits that have been accruing over the last two years. As these increases in the main were balanced by increased production, their inflationary influence has been slight. But unless there is a comparable increase in production, wage increases cannot take place without serious financial consequences.
  Some 55 per cent. of all company profits are required for taxation; probably not less than half of what is left is used for new capital expenditure in one way or another; so that some three-quarters of the gross profits is already being utilised for essential economic purposes which otherwise we should have to finance in some other way: only a quarter goes to personal consumption, and even some of that may be subject to surtax, so there is not here any great fund from which increases in wages can be paid. There is, furthermore, no fund, as
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  some people seem to think, out of which we can increase our power of consumption beyond what our total production allows.
  The real difficulty is that there are still some cases of low earnings which are very difficult to correct without upsetting the relative wage levels that have been established within each industry for the different grades and classes of workpeople employed in it. This is an immensely difficult problem to solve. So indeed is the whole problem of distributing fairly among the different groups who contribute to the wealth and wellbeing of the community the extra resources made available by their increased efforts.
  There is one thing obvious, however, that if we try, by catch-as-catch-can methods, to advance anywhere and everywhere along the wage front, we shall undoubtedly succeed in destroying full employment in the way I have described earlier, through inflation. Then it will be a problem of wages falling down, and not even of their staying still where they are, and of large scale unemployment.
  We have not yet found the solution for this problem of how to get the increased earnings corresponding to the increased production into the right pockets so as to eliminate cases of personal incomes that are too low. I know that the T.U.C. are working hard at it, and we are anxious to do all we can to help employers and employees to arrive at a solution to their difficulties without endangering the gradually improving standards that we have struggled so hard to achieve. In the meanwhile it is vital to the continued success of our efforts that the policy of restraint should not be broken down either in the matter of wages, salaries or profits, until a better policy has been worked out to take its place.

  SIZE OF SURPLUS REQUIRED
  Let me now turn to the precise amount of the surplus for which we should budget this year. We must have regard to our past experiences in this field and also to the present condition of our economy. As a result of our policies and efforts in 1948 and 1949, as I have said, our internal situation is on the whole less inflationary than at any time since the war. But having reached that condition does not mean that the problem of a proper balance between national output and ex-

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  penditure has been permanently solved. We must continue to take the necessary measures to maintain that balance which is in constant danger of being upset and so of destroying our policy of full employment. This means quite simply that we must ensure that the extra demands which will be made on our national production this year will not exceed the increase in production which we expect.
  As I stated earlier, we are planning for the deficit we ran on international account in 1949 to change to a small but essential surplus. This favourable change in our foreign balance creates a fresh difficulty in maintaining our internal balance, since some £120 million of the extra production in 1950 will be required to replace the supplies we have received as gifts or loans in 1949, measured by that net deficit of £70 million, and to provide for the net gifts or loans or repayment of debt that we in our turn shall make, which will be measured by our net surplus of £50 million. This £120 million must be a first charge on our extra production in 1950.
  Earnings we expect to increase with the growth of production and productivity, just as they did last year. On the basis of the present rates of direct taxation we must reckon, therefore, on an increase in personal expenditure on consumption of at least £200 million. Current expenditure on goods and services by all public authorities will go up by some £180 million. This makes a total for all these three items of at least £500 million, to meet which an equivalent amount of extra production will be required. This is on the basis of our not increasing our capital expenditure substantially above its present level.
  To meet these extra demands the Economic Survey estimates that our extra production in 1950 will amount to about £500 million at market prices. We have, therefore, a balance between increased output and the increased demands upon it, but with no margin whatever to spare for creating still further increases in personal consumption by tax remissions.
  As explained just now, the prospect can be looked at in another way, from the standpoint of capital expenditure and savings. Capital expenditure is likely to be roughly the same in 1950 as in 1949. But the change from a deficit to a surplus
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  on international account means that our domestic savings will have to be increased by £120 million to compensate for that change.
  If the voluntary limitation of dividend distribution continues, and it is of the first importance to the country that it should, we ought to see some further growth of company savings through profits put to reserve. There will also be an automatic increase in the sums set aside for depreciation, because the increase in initial allowances granted last year will become effective this year. Personal savings, in the form of small savings, have been somewhat disappointing. Withdrawals last year exceeded new small savings by nearly £68 million, but that is not altogether unnatural during a year- when more goods have been available for consumption, seeing that a great many people saved in the past so that they could spend the money when the goods came into the shops. New gross savings totalled £778 million apart from the increase in the savings put into insurance policies and building societies.
  I do not propose to count on any spectacular increase in small savings this year; but we cannot afford to have less savings than at present, and I look confidently to the great army of voluntary workers in the Savings Movement to continue their good work over the next 12 months, with all the energy and enthusiasm that they command.
  If, then, we are to continue to avoid inflation and so make it possible to continue full employment, we must secure an overall balance in our Budget, which means an above-the-line surplus large enough to meet all the below-the-line liabilities. The Committee will see, therefore, from the figures I have already given for 1950–51 that on the basis of last year's taxation there is no scope for remission.
  In the light of this over-riding factor I am afraid that all the attractive suggestions put forward for remissions of taxation—which, if they were added together, would reach perhaps £1,000 million sterling—must be put firmly on one side. And much though I appreciate the arguments for a more generous distribution of post-war credits, I am afraid that any of the extensions that have been suggested would be far too costly for us to afford.
  In fact the extra wealth we hope to create by improved and increased pro-

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  duction this year will be used up, in the ways I have shown by improvement in our foreign balance, by increased personal consumption through increased earnings, and by increased social services and benefits. These are the forms in which the increased national dividend is being distributed, and it is out of the question that in addition to these we should give a further dividend by way of any net remission of taxation.

  TAX CHANGES: MINOR PROPOSALS
  Now before I come to my final proposals and summing up, based upon the considerations I have just put before the Committee, there are a number of lesser, but sufficiently important, matters that I ought to mention, in some of which adjustment of taxation requires to be made for reasons other than revenue purposes.
  Two years ago I referred in my Budget speech to the growing avoidance of tax by means of arrangements known as restrictive covenants, amongst others. The form taken by these is that a high executive—it is almost always a high executive —undertakes not to set up in competition with the concern he serves or to serve its competitors. In return, the concern gives him a large sum of money or block of shares which, as the law stands, is not liable to tax. I gave a warning in 1948 that I should not hesitate to introduce retrospective legislation to tax such payments if it became necessary.
  Since then certain glaring instances of such payments have been widely advertised, and I am certain that the public, and particularly those employed in the businesses concerned, do not think it right that a particular individual should by such a device be able to evade paying his proper share of taxation. The payment of such sums is, too, entirely contrary to the spirit of the policy of the White Paper on Personal Incomes, Costs and Prices, and can only help to break down the otherwise good record of voluntary restraint that has so far been shown in these matters.
  I propose, therefore, that these benefits shall be made chargeable to Surtax and that the charge shall be restrospective to the year 1949–50 so that payment will have to be made next January on such benefits.
  Mr. Oliver Stanley: Surtax only?
  Sir S. Cripps: Surtax only. In the case of the larger sums this means that over 95 per cent. of them will be payable as tax. The warning I gave in 1948 applied to other devices besides the one I am now proposing to deal with, and that warning still stands in its full force; I hope that my present proposal will make that clear.
  I have recently had under consideration the Income Tax treatment of superannuation and pension schemes for the benefit of employees on retirement. This is a highly technical subject and I believe that those who are familiar with it will all agree that in a number of respects the present law is unsatisfactory and anomalous. There is a clear need for inquiry into this problem; but there is an allied problem which should, I think, be examined at the same time: that is, the position of those who do not, or cannot, enjoy the same Income Tax advantages as those within such schemes.
  A number of professional bodies have, for instance, made representations to me as to the position of their members. And much the same questions arise as to the individual trader or self-employed persons in general and, indeed, the individual employee who does not belong to a superannuation fund. There is certainly a case for inquiry here, and it would be necessary to bring within such review the present relief for payment of life insurance premiums.
  I have, therefore, decided that this survey should be undertaken by a committee of standing similar to that now sitting under the chairmanship of Mr. Millard Tucker. The committee will be asked to review the more technical matters to which I have referred as well as to consider the wider question of the proper scope of Income Tax relief in relation to saving for old age or retirement or to provide for widows and other dependants after death. I am glad to say that Mr. Millard Tucker has accepted my request that he should act as chairman of this new committee as well.
  There are a number of other minor matters which will be dealt with in the Finance Bill on the Inland Revenue side. As already announced, legislation will be introduced dealing with the treatment for taxation purposes of recoveries of enemy debts. There will be provisions dealing with certain methods of avoiding Death Duties, and with some technical points

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  arising on the taxation of the income of married couples. The taxation treatment of certain wayleaves will be clarified and provision will be made for the superannuation contributions of Northern Ireland civil servants to be treated in the same way as in Great Britain. There will also be two matters which will be of assistance to industry: first, a measure of relief from tax for industrial research associations; and second, a provision extending for a further and final five years the period, expiring in 1950–51, for which, as a transitional measure, the Income Tax Act, 1945, permits the mills, factories, etc., allowances to be continued.

  CUSTOMS AND EXCISE
  I now turn to Customs and Excise and will start off with beer. But let me hasten to assure the Committee that I have no intention of repeating the unpopular action of last year when a reduction of the price was made. Owing to the shortage of cereals since the early days of the war, there has been a necessary restriction on the strength of beer, but more recently supplies have improved and it is now possible to allocate for brewing an.extra quantity of barley sufficient to allow a moderate increase in the strength of beer.
  The brewers have given an assurance that the gravities of all beers will be increased by three degrees, and the Beer Duty which is related to the gravity of beer, is being adjusted to enable this to be done without any additional duty being incurred and also to enable the brewing industry to recover the cost of the extra barley used so as to obviate any rise in the price of beer. The aim is to give the public a better beer at the same price. The extra three degrees represents about a 10 per cent. increase in strength on the average. That is about half-way back to pre-war strength.
  This will entail a small cost to the Exchequer of about £2,750,000 in this year and 0,250,000 in a full year. The arrangements take effect for beer brewed as from to-morrow, so that beer of the new strength will not be on sale immediately, but it should be available within a few weeks. I hope that this arrangement will please the beer-drinkers without upsetting anyone else.
  From beer I pass to whisky. Here it is proposed to abolish some remaining
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  Excise allowances on certain categories of home-manufactured spirits. These allowances were for the most part repealed when the Revenue control of distilleries was modernised after the war, except in respect of stocks of spirits produced under the old system of control. It is now proposed to abolish these remaining allowances, which relate exclusively to exported whisky. The total amount, at 3d. a proof gallon, is comparatively small and its payment involves a disproportionate administrative cost. In the case of whisky exported to the United States where, I am glad to say, a lot of it goes, this allowance is offset by an additional import duty of equivalent amount, so that the exporter has to refund in dollars what he receives in sterling. The change will affect whisky exported or shipped as stores on and after 1st May, 1950.
  Then there is one feature of the Betting Tax which requires a little attention. During the past season some of the smaller football pools have adopted a form of betting known as "fixed odds plus" which enables them to avoid legal liability for the duty, although, in fact, the business is conducted in a way indistinguishable from ordinary pools. This has had no significant effect on the Revenue so far, but in fairness to the great majority of the pools who have refrained from such a practice, it is proposed to close this loophole. Pools conducted in such a way that the promoter retains discretion in the determination of winnings will, therefore, in future seasons be liable to the duty.
  A small point arises as to the relief of duty for goods defective on importation and destroyed. Under the provisions of Section 10 of the Finance Act, 1933, the duty paid on imported goods which are not up to contract may be refunded provided they are returned unused to the seller with his consent. To meet the wishes of the trade, it has been the practice to allow refund of duty provided the goods are destroyed unused with the consent of the seller. It is now proposed to put this practice on a statutory basis.
  Next, as to the Purchase Tax for war memorials. Under the provisions of Section 3 of the Finance (No 2) Act, 1945, certain articles are exempt from Purchase Tax if installed as a war memorial in a place of religious worship. This concession was limited to a period of five years

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  and is due to expire at the end of this year; but in accordance with the undertaking given by my predecessor when introducing the provision in 1945, I have looked into this matter again and I propose to extend the concession for a further five years.
  Provision will also be made to regularise and bring up-to-date the traditional privileges of the Navy as regards duty-free stores.
  I now come to a more substantial item which I must explain at rather greater length. As those who have studied the capital investment programmes will realise, we have over the last two years been seriously troubled by the excess investment in commercial vehicles in the home market. In 1949, for instance, the target set was for 50,000 new commercial vehicles, but, instead of that, about 100,000 were in fact produced for the home market.
  The over-investment in this particular item is illustrated by the fact that the forecast for 1949 was £35 million, whereas the actual expenditure turned out at £72,500,000, or £37,500,000 more than had been planned. Nor is it as if the number of vehicles on the roads were too few. Before the war there were some 500,000 commercial goods vehicles licensed in the United Kingdom. By the end of the war the number for fallen to 450,000, but at the end of 1949 it had risen to over 800,000.
  It has been found that, despite all the efforts to control the number of these vehicles going on the home market by administrative methods, the excessive volume of home sales has continued, and so it has been decided to adopt fiscal measures to help to restrict demand on the home market and assist the industry to achieve the desired diversion of its output to exports. To this end it is proposed to apply a Purchase Tax of 33·1 per cent. to these vehicles.
  Passenger vehicles and some special types of vehicles not normally used for the carriage of goods will be excluded. The White Paper which will be available afterwards includes a provisional list of such vehicles, which will be discussed with the motor trade before the tax comes into effect on 1st May next. It is estimated that this tax will yield £9 million this year and £13 million in a full year.
  There is another small proposal in this category, that is to reduce the rate for higher priced private cars from 663 to 33+ per cent. This is not done to increase their sales markedly in the home market, but in order to keep alive one of our high-quality engineering industries which has a valuable contribution to make to exports, especially to the dollar area.
  Business has in fact fallen below the point necessary to enable these cars to be manufactured at a price attractive to the export markets and it is desired to re-establish a home market sufficient for this purpose. The cost of this concession will be about £1 million this year and £1,500,000 in a full year. I have received an assurance from the manufacturers that there will be no question of their trying to get an undue expansion of their sales in the home market as a result of this reduction in the tax.
  I should here mention a matter which caused a little trouble last year and that is the form of the general Resolution so far as it deals with Purchase Tax. A special form has been adopted so as to enable the Committee to have general discussions upon the different rates a Purchase Tax without embarking upon what the right hon. Gentleman the Member for Bristol, West (Mr. Stanley) referred to as a "Dutch auction" on particular items, which, in present political circumstances, would be likely to have particularly unfortunate results.

  TAX CHANGES: MAJOR PROPOSALS
  I now come to a major matter which has a bearing upon our dollar balances as well as upon our domestic revenues. We are one of the few countries that have not yet tried to persuade users to economise in petrol—a commodity still very expensive in dollars—by means of price increases. In almost every other country which relies so largely upon imports of petrol, the retail price is a good deal higher than it is here. Thus in France, for example, petrol is about 4s. 4d. a gallon, in Belgium 3s. 3d. and in Italy 6s., compared with the present price in this country of 2s. 3d. a gallon. Our taxation of light hydrocarbon oils—to give the full title—has not been increased since before the war.
  The time has come when some of the other automatic methods of restricting the consumption of petrol, such for instance,

  75
  as the shortage of vehicles, are disappearing, so that fiscal inducements to economy have become necessary. Indeed it is difficult to think out a better case for fresh taxation. We here have a commodity costing us a great many dollars; where demand at present prices exceeds supply; where the rate of tax has not been increased since before the war; where rationing in a large part of the field—that covered by commercial vehicles—cannot effectively restrict consumption and where some of the factors which have hitherto tended to restrict consumption are now disappearing. Furthermore, an increase in the tax on petrol, which is at present only 9d. a gallon, will, we hope, lead to savings in consumption by commercial vehicles, so that it will be possible without any great increase in imports, to do a little better for the ordinary car user.

  INCREASE IN PETROL TAX
  We propose, therefore, to add 9d. a gallon to the Customs Duty on petrol and other light oils and on heavy oils used as road fuel. This increase will apply from 6 o'clock today. [Laughter.] I am afraid there is hardly time for hon. Members to get to a pump. As a result of this the price of petrol will be increased to 3s. a gallon and, as I have said, this should lead to some resultant economies in consumption.
  We propose, therefore, to continue throughout the next 12 months the extra ration of 90 miles a month already promised to ordinary car users for the three summer months. This will mean that as from 1st June, the beginning of the next standard rationing period, the standard ration will be increased from the rate of 90 miles to 180 miles a month. The increased ration for the six months June—November will be made available to motorists from 8th May. So far as passenger transport is concerned, the overall cost will go up as a result of this increase of the tax by 4 per cent. in the country and by 5 per cent. in London. This small increase in costs should not lead to many additional applications for increases in fares.
  There is one class of user of hydrocarbon oils where the circumstances are such that I feel justified in proposing a measure which will go far to offset the effect of the increase of duty. Certain
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  agricultural operations are performed in some cases by vehicles or machines using fuel which is taxed and in other cases by vehicles or machines using an untaxed fuel. The additional duty now to be paid in respect of the former would involve a considerable extra cost to the farmer and an undue discrimination between the two types unless suitable measures were taken to offset the extra cost of running such vehicles or machines.
  I propose therefore that an annual grant should be paid in respect of each such vehicle or machine based on a reasonable assumption as to the average amount of taxed fuel which each type consumes. Legislation will be necessary to authorise these grants, but it cannot be included in the Finance Bill. Before the necessary Resolution is tabled, my right hon. Friend the Minister of Agriculture will consult the representatives of the farmers and manufacturers on the details. I provisionally put the cost of this concession at between £21 million and £3 million a year. The expenditure on these new grants will of course form the subject of a Supplementary Estimate in due course.
  The producers of indigenous oils which are at present free of duty, thereby receive a preference of 9d. a gallon. After consultation with my right hon. Friend the Minister of Fuel and Power, I propose to continue this margin unchanged. From tomorrow therefore these indigenous oils, together with petrol substitutes, will be subject to an Excise duty of 9d. a gallon, that is to say 9d. a gallon less than the new rate of. Customs duty. The existing duty on power alcohol will be raised by the same amount.
  The provision in the Finance Act, 1938, under which the present margin has, in part at least, been guaranteed for the past 12 years, expires next July. I do not think that it would be right to ask the House to undertake, by legislation, that this margin should remain unchanged for a further period of years. But there would, of course, be no question of modifying it, without very careful consideration of the circumstances prevailing at the time and then only after giving the interests concerned an opportunity to put forward their case. The extra yield of the increased petrol tax is estimated at f68i million for this year and £73 million for a full year.
  Let me now summarise these various changes that I have proposed so that we can see where we are so far as our necessary surplus is concerned. We start, of course, with the out-turn that we should expect to get if taxation were continued as at present. Those figures which I gave earlier were: above the line surplus £441 million, overall deficit £9 million. Since then we have added receipts for petrol tax £68i million, and for Purchase Tax on commercial vehicles £9 million, that is a total of £77·1 million. We have deducted for strengthening beer £2 million, for Purchase Tax on higher-priced cars £1 million, making a net increase of £74 million, which would yield a surplus above the line of £515 million and overall a surplus of £65 million.
  In the circumstances which I have already explained to the Committee I believe that that is a rather larger surplus than we need budget for this year, and so I have looked round to see what modest adjustment in taxation could best be used to take up the slack. Whatever remissions we can manage must, and I hope we shall all agree on this, give proportionately more relief to those at the lower end of the income scale.

  INCOME TAX (REDUCTION OF LOWER RATES)
  After giving the whole matter the best consideration Oat I can and examining all the different possible alternatives, of which, of course, there are many, I have come to the conclusion that with reasonable optimism we could just manage to reduce the lower rates of Income Tax now at 3s. and 6s. to 2s. 6d. and 5s. This will give the largest possible proportionate relief to people who pay only at these rates, that is people from the minimum up to about £600 a year. This reduction will also be concentrated upon the block of income which includes practically all overtime, and so will still further reduce the tax on overtime.
  The Committee will remember that in 1948 we extended the band of income chargeable at 6s. in the £ to £200, so that, taking the one-fifth earned income relief into account this means that at present many workers pay tax at a maximum rate of 4s. 10d. in the £ on overtime and extra earnings while in other cases the rate is 2s. 5d. or even nothing at all. The proposals I have now made will reduce these
  78
  rates to 4s. and 2s. in the £ respectively over the same range.
  I will now give the Committee one or two instances of how this change in rate in the tax works out. I remind the Committee that the present starting point for the payment of tax for earned incomes is £145 for the single man; £233 for the married man with no children and whose wife does not get a separate allowance of her own; £308 for the married man with one child; and £383 for the married man with two children. Thereafter the next £50 of taxable income, that is, after deducting earned income relief, is charged at 3s.—in future it will be 2s. 6d.—and the next £200 at 6s.—in future it will be 5s. The single man earning £6 a week will get a reduction of 2s. in his tax weekly from 12s. 4d. to 10s. 4d. If he earns £8 a week the tax comes down from 22s. to 18s. 4d. a reduction of 3s. 8d. a week. The married man with two children pays no Income Tax below £7 7s. a week income. At £10 a week his tax will come down from 9s. 8d. to 8s. and so on.
  This will cost us £72 million this year and £82 million in a full year. The change will necessitate new P.A.Y.E. tables, which will be in the hands of employers for use on the first pay day after 8th June. As a result of these changes a minor adjustment will be necessary in the marginal provisions relating to the exemption limit.
  Though these reductions give no direct relief to industry as such, I would remind the Committee that in my last Budget I doubled the initial allowances upon machinery and plant, which will cost the Exchequer £40 million this year and £75 million next year. This means that that amount less of tax will be collected from industry this year and next year, so they cannot expect to have any further remission this year.
  The Committee will therefore see that what we propose—apart from a few minor adjustments—is the increase of an indirect tax which is very broadly spread in order to give proportionately more relief in direct taxation to the lower income groups, although all Income Tax payers will get some benefit. This is a move in the right direction, always bearing in mind that the growing volume of our social service expenditure, the size of our investment programme, and the need for keeping down inflation makes it

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  absolutely impossible for us to envisage any appreciable overall deficit on the Budget.
  The nett result of the whole of the changes should be to give us an above the line surplus of £443 million, on the alternative classification a surplus of £413 million, and overall a deficit of £7 million. We can, I think, regard that in a Budget of nearly £4,000 million as substantially an overall balance.

  GENERAL CONCLUSION
  I hope that the considerations that I have put before the Committee will convince them that we cannot, out of our present volume of production, have both full employment and a general standard of personal incomes much above those which we now enjoy. We could, perhaps, have higher personal incomes, often referred to optimistically as "inducement incomes," for some people if we were prepared to see others living in unemployment at a very low standard. Our general standards are well above those that we experienced before the war, because we have been able to keep all our people employed and so have the benefit of their production. That is a result of full employment.
  Do not let us risk losing the advantages we have built up with such difficulty over these post-war years, just because we are unwilling to acknowledge the need to continue for a while longer stern measures to guard our achievement of full employment. If we were now to relax our restraint and to seek to distribute our hardly earned and essential surplus by way of tax remissions we should be like those bees, which seeing the honey stored in their hive for the winter, gave up their work and indulged themselves upon their apparent but much needed surplus, with fatal results in the ensuing cold weather. We have, by our increased production, earned and obtained not only a higher level of real earnings, but also greatly extended social services and benefits. It is indeed conspicuously in that form that we have, so far, received the major dividend of our successful labours.
  So long as we can maintain full employment by whatever measures are from time to time necessary, including the attainment this year of a large Budget surplus above the line we shall at least
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  know that our National production is at its highest possible, and that we are all sharing in such standards of living as we are able to afford by reason of that National production. We shall also have the satisfaction of knowing that we have succeeded, by our planning, in practically eliminating that most undeserved suffering of our people, long-term unemployment which we tolerated so often and for such long periods in the years before the war.
  Such changes as we can make this year through the Budget without endangering our fundamental objectives will be in the right direction, and these together with the increase in expenditure on social service and social benefits, and in earnings by way of wages and salaries which accompany increased production, will mark another small but well defined step forward in the direction of more equal and higher general standards of living and towards that greater happiness and contentment of our people that is our aim.
  The Chairman: It is now my duty to put the necessary Resolutions to the Committee. I assume that all hon. Members have received a copy of them—[flox. MEMBERS: "No."] Arrangements have been made to that end. I shall wait a moment or two while they are distributed and then forthwith put the necessary Resolutions. With the consent of the Committee I will put them in the shortened form which we have adopted recently.

  CUSTOMS, EXCISE AND PURCHASE TAX
  1. Hydrocarbon oils
  (rate of customs duty and rebate)
  Resolved:
  "That as from six o'clock in the evening of the eighteenth day of April, nineteen hundred and fifty, there shall be an increase of ninepence a gallon—

  (a) in the rate of the duty of customs on hydrocarbon oils; and

  (b) in each of the rates of the rebate allowed on the delivery for home consumption of hydrocarbon oils other than light oils;

  and for the purposes of section two of the Finance Act, 1935 (heavy oils used as road fuel), no rebate shall be treated as having been repaid unless either it has been repaid before that hour or it has been repaid at the rate for the time being in force for the oils in question.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."
  2. Hydrocarbon oils (excise)
  Resolved:
  "That—

  (a) a duty of excise shall be charged on all hydrocarbon oils produced in the United Kingdom, if so produced on or after the nineteenth day of April, nineteen hundred and fifty, or if stored on or after that date in a refinery or on other premises in the United Kingdom used for the production of hydrocarbon oils or on premises containing any bonded storage for hydrocarbon oils;

  (b) the rate of the duty shall be the rate at which the duty of customs on hydrocarbon oils is for the time being chargeable, less ninepence a gallon or such other amount per gallon as may from time to time be directed by order of the Treasury;

  (c) in the case of oils which are not light oils and are not intended for use as road fuel, there shall be allowed from the duty a rebate at the rate for the time being in force for the duty;

  (d) the duty and any rebate therefrom shall be charged or allowed in the case of any oils when they are first (on or after the said nineteenth day of April) either—

  (i) delivered for home consumption from a refinery or from other premises used for the production of hydrocarbon oils or from premises containing any bonded storage for hydrocarbon oils; or

  (ii) removed to a refinery which it appears to the Commissioners of Customs and Excise is not primarily used for the production of hydrocarbon oils and which is for the time being specified in a direction given by those Commissioners for this purpose; or

  (iii) used in a refinery in such circumstances that an allowance is payable in respect thereof under subsection (4) of section eight of the Finance (No. 2) Act, 1945;

  and shall be charged or allowed according to the quantity so delivered or removed or the quantity treated for the purposes of the said section eight as so used, as the case may be;

  (e) in this Resolution the expressions "hydrocarbon oils," "light oils" and "refinery" have the same meanings as for the purposes of the customs duty on hydrocarbon oils, but this Resolution does not apply to oils on which that duty is chargeable or to any such oils as are exempted from that duty by subsection (5) of section six of the Finance Act, 1933 (solid or semi-solid substances);

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  (f) in this Resolution the expression "road fuel" means fuel for any engine with which a road vehicle is equipped, whether for the propulsion of the vehicle or not, and for the purposes of this definition the expression "road vehicle" means any mechanically propelled vehicle constructed or adapted for use on roads, being a vehicle within the meaning of section two of the Finance Act, 1935, as amended by any subsequent enactment;

  (g) references in this Resolution to the production of hydrocarbon oils include references to the obtaining of one description of hydrocarbon oils from another description thereof and to the subjecting of hydrocarbon oils to any process of purification or blending, as well as references to the obtaining of hydrocarbon oils from other substances or from any natural source."

  3. Petrol substitutes (excise)
  Resolved:
  "That as from the nineteenth day of April, nineteen hundred and fifty, there shall be charged a duty of excise on any petrol substitute which is sent out from the premises of a person producing or dealing in petrol substitutes and was not acquired by him with the duty paid, and the rate of the duty shall be the same as that at which any duty of excise on hydrocarbon oils is for the time being chargeable.
  In this Resolution the expression ' petrol substitute' means any liquid intended to take the place of petrol as fuel for internal combustion engines, being neither a hydrocarbon oil (within the meaning of that term for the purpose of customs duty) nor power methylated spirits."
  4. Power methylated spirits (rate of excise duty)
  Resolved:
  "That as from the nineteenth day of April, nineteen hundred and fifty, there shall be an increase of ninepence a gallon in the rate of the duty of excise on spirits used for making power methylated spirits.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."
  5. Beer (customs and excise)
  Resolved:
  " That as from the nineteenth day of April, nineteen hundred and fifty, the rates specified in the First Schedule to the Finance Act, 1949, for the duties on beer and the drawbacks thereof shall be altered by substituting for all purposes a specific gravity of 1,030 degrees for a specific gravity of 1,027 degrees, and by subtracting half a crown from each of the rates so specified, except any rate so speci-

  83
  fled for additional degrees of specific gravity in excess of 1,027 degrees:
  Provided that this Resolution shall not apply to reduce any drawback in respect of beer as to which it is shown to the satisfaction of the Commissioners of Customs and Excise that duty was paid at the rate in force before the said nineteenth day of April.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."
  6. Spirits (allowances on export etc.)
  Resolved:
  " That in section eleven of the Finance (No. 2) Act, 1945 (which abolished certain allowances in respect of spirits exported or otherwise disposed of), any saving for spirits warehoused or distilled before the beginning of the year nineteen hundred and forty-six shall cease to have effect as from the first day of May, nineteen hundred and fifty.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."
  7. Pool betting duty
  Resolved:
  " That the enactments relating to purchase tended so as to make duty chargeable whenever a number of persons make, or are to be treated as making, bets on the basis that the winners or their winnings (whether pecuniary or not) shall, to any extent, be at the discretion of the person with or through whom they bet or some other person; and this Resolution shall apply to bets made before or after the passing thereof by reference to any event taking place on or after the first day of August, nineteen hundred and fifty."
  8. Road vehicles (purchase tax)
  Resolved:
  "That the enactments relating to purchase tax shall be amended so that (subject to the power of the Treasury to make orders under section twenty-one of the Finance Act, 1948)—

  (a) as from the first day of May, nineteen hundred and fifty, the road vehicles mentioned below shall be chargeable goods, and the rate of tax chargeable in respect of them shall be the first rate; and

  (b) as from the nineteenth day of April, nineteen hundred and fifty, any road vehicles which would otherwise be chargeable at the second rate shall be chargeable at the first rate;

  and any Act giving effect to this Resolution may contain provisions incidental to or consequential on those amendments.
  The road vehicles referred to in paragraph (a) above are any vehicles constructed or
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  adapted for use for the carriage or haulage of goods or burden of any description not forming part of the vehicle or necessary for its propulsion or equipment, being either mechanically propelled vehicles or vehicles designed for use as trailers with a mechanically propelled vehicle or as components of a composite vehicle which is mechanically propelled."
  9. War memorials (purchase tax)
  Resolved:
  " That further provision shall be made for the exemption of war memorials from purchase tax."
  10. Supply of goods to H.M. ships (customs and excise)
  Resolved:
  "That the Treasury shall be authorized to make regulations for the purpose of giving relief from customs and excise duties where goods are supplied to or intended for ships of the Royal Navy or naval establishments; and on the coming into force of any such regulations sections one hundred and twenty-one to one hundred and twenty-five of the Customs Consolidation Act, 1876, shall cease to have effect."
  11. Repayments on destruction of imported goods (customs and purchase tax)
  Resolved:
  " That the law relating to customs shall be amended so as to authorize repayment of duty where goods imported in pursuance of a contract of sale are destroyed unused, being not in accordance with the contract or being damaged in transit; and that the amendment shall have effect also for the purpose of the law relating to purchase tax."

  INCOME TAX, PROFITS TAX AND EXCESS PROFITS TAX
  12. Charge of income tax
  Resolved:
  "That

  (a) income tax for the year 1950–51 shall be charged at the standard rate of nine shillings in the pound, and, in the case of an individual whose total income exceeds two thousand pounds, at such higher rates in respect of the excess over two thousand pounds as Parliament may hereafter determine;

  (b) all such enactments as had effect with respect to the income tax charged for the year 1949–50 shall have effect with respect to the income tax charged for the year 1950–51.

  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."
  13. Higher rates of income tax for 1949–50
  Resolved:
  "That income tax for the year 1949–50 shall be charged, in the case of an individual whose total income exceeded two thousand pounds, at the same higher rates in respect of the excess over two thousand pounds as were charged for the year 1948–49.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."
  14. Income tax; reduced rate relief, etc.
  Resolved:
  "That

  (a) in subsection (2) of section forty of the Finance Act, 1927 (which, as amended by section seventeen of the Finance (No. 2) Act, 1945, and section twenty-eight of the Finance Act, 1948, provides for the relief from income tax commonly known as the reduced rate relief), the words 'thirteen-eighteenths' shall throughout be substituted for the words two-thirds ' and the words ' four-ninths' shall throughout be substituted for the words one-third ';

  (b) in subsection (2) of section nineteen of the Finance Act, 1935 (which, as amended by subsequent enactments, limits the tax on incomes exceeding one hundred and thirty-five pounds but less than one hundred and sixty pounds to three-tenths of the excess) the words one-quarter' shall be substituted for the words three-tenths':

  Provided that the additional relief afforded by this Resolution for the year 1950–51 shall not affect the amount of tax deductible or repayable before the eighth day of June, nineteen hundred and fifty.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."
  15. Income tax; payments for restrictive covenants, etc.
  Resolved:
  "That—

  (a) where an individual who holds, has held or is about to hold an office or employment gives an undertaking, whether absolute or qualified and whether legally valid or not, the tenor or effect of which is to restrict him as to his conduct or activities, and any sum is paid or valuable consideration given to him or to any other person in respect of the giving or total or partial fulfilment of that undertaking, such additional surtax shall be charged in respect of the income of that individual as may be determined by any Act giving effect to this Resolution;

  86

  (b) this Resolution shall be retrospective but tax shall not be charged by virtue thereof for any year before 1949–50."

  16. Income tax; electricity wayleaves.
  Resolved:
  "That—

  (1) subsection (1) of section twenty-one of the Finance Act, 1934, (which, amongst other things, charges certain rents to tax under Schedule D and provides for the deduction of tax therefrom on payment thereof) shall apply to rent in respect of any easement enjoyed in the United Kingdom in connection with any electric, telegraphic or telephonic wire or cable (not being such an easement as is mentioned in that section) as it applies to rent in respect of easements enjoyed in connection with any of the concerns specified in Rules b>1, 2, and 3 of No. III of Schedule A, not being rent rendered in produce of the concern:

  Provided that

  (a) any payment of rent to which this Resolution applies which does not exceed two pounds ten shillings per year—

  (i) may, if the payer so elects, be treated as not affected by so much of subsection (1) of the said section twenty-one as provides that the rent shall, for the purpose of such of the provisions of the Income Tax Acts as refer to royalties paid in respect of the user of a patent, be treated as if it were such a royalty; and

  (ii) shall in that event be made without deduction of tax accordingly; and

  (b) any payment of rent to which this Resolution applies which is made without deduction of tax (whether by virtue of the preceding provisions of this proviso or otherwise) shall, unless tax is assessed thereon under Rule 21 of the General Rules, be chargeable to tax under Case III of Schedule D as if it were mentioned in Rule I of the Rules applicable to that Case;

  (2) this Resolution shall be deemed always to have had effect and references to the said section twenty-one in any provisions of the Income Tax Acts (including the reference in subsection (2) of the said section twenty-one itself) shall be construed as including, and as having always included, references to that section as extended by this Resolution:
  Provided that where, before the nineteenth day of April, nineteen hundred and fifty, any payment of any rent to which paragraph (1) of this Resolution applies has been

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  made without deduction of tax, nothing in this Resolution shall affect—

  (a) any determination of any Commissioners made before the said date as respects the chargeability of that payment to tax; or

  (b) any appeal from or case stated in respect of any such determination; or

  (c) any agreement which, under section fifty-one of the Finance Act, 1949, has the effect of such a determination; or

  (d) any appeal against any assessment the effect of which is to charge that payment to tax, if notice of the appeal was given before that date, and the appeal remains undetermined at that date;

  (3) in this Resolution the expressions "rent" and "easement" have the same meanings as in the said section twenty-one, and the reference to easements enjoyed in connection with any electric, telegraphic or telephonic wire or cable includes (without prejudice to the generality of that expression) references to easements enjoyed in connection with any pole or pylon supporting any such wire or cable or with any apparatus used in connection with any such wire or cable, including any transformer so used.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."
  17. Income tax: Northern Ireland super-annuation contributions
  Resolved:
  That—

  (1) relief from income tax shall not be allowed to any person under section thirty-two of the Income Tax Act, 1918 (which provides relief for, amongst other things, contributions to secure deferred annuities to widows and provision for children) or under any other provision of the Income Tax Acts providing for relief for income tax purposes, in respect of any contributions made by him under any enactments of the Parliament of Northern Ireland corresponding to Parts I and 11 of the Superannuation Act, 1949, and in particular, under Parts I and II of the Superannuation Act (Northern Ireland), 1949;

  (2) this Resolution shall have effect, and be deemed always to have had effect, for the purposes of income tax for the year 1949–50 and all subsequent years of assessment.

  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes +Act, 1913."
  "That the extent and incidence of income tax shall be varied so as to give effect to pro-visions

  (a) defining the cases in which, the purposes for which and the extent to which sums which would otherwise be treated as income of a woman are to be treated as her husband's income;

  (b) amending the law as to reliefs from income tax in its relation to married persons;

  (c) rendering a woman, her trustee, guardian, tutor, curator or committee, or her executors or administrators, liable in certain cases for amounts of unpaid income tax assessed (whether before or after the passing of this Act and for whatever year of assessment, including a year before the year 1950–51) on her husband, his trustee, guardian, tutor, curator or committee, or his executors or administrators, and for interest thereon."

  19. Income tax; enemy debts. etc.
  Resolved:
  "That the extent and incidence of income tax (including income tax for years of assessment before 1950–51), shall be varied so as to give effect to provisions as to cases where a recovery is made of or in respect of—

  (a) any debt owed by, or actual or contingent claim on, an enemy or ex-enemy State or Sovereign or a person resident or carrying on business in territory which is or has been enemy or enemy-occupied territory; or

  (b) property which was in or believed to be in such territory or under or believed to be under the control of an enemy or ex-enemy Power, being a debt, claim or property which had been wholly or partly written off for income tax, profits tax, or excess profits tax purposes, or the position of which had been treated as a reason for leaving income tax, profits tax, or excess profits tax uncollected."

  20. Profits tax
  Resolved:
  " That the extent and incidence of the profits tax (including profits tax for past chargeable accounting periods) shall be varied so as to give effect to provisions extending the period for which relief from income tax can be given under section fifteen of the Finance Act, 1937, and provisions as to cases where a recovery is made of or in respect of—

  (a) any debt owed by, or actual or contingent claim on, an enemy or ex-enemy State or Sovereign or a person resident or carrying on business in territory which is or has been enemy or enemy-occupied territory; or

  (b) property which was in or believed to be in such territory or under or believed to be under the control of an enemy or ex-enemy Power,

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  being a debt, claim or property which had been wholly or partly written off for income tax, profits tax, or excess profits tax purposes, or the position of which had been treated as a reason for leaving income tax, profits tax, or excess profits tax uncollected."
  21. Excess profits tax
  Resolved:
  " That the extent and incidence of excess profits tax for all chargeable accounting periods shall be varied so as to give effect to provisions as to cases where a recovery is made of or in respect of

  (a) any debt owed by, or actual or contingent claim on, an enemy, or ex-enemy State or Sovereign or a person resident or carrying on business in territory which is or has been enemy or enemy-occupied territory; or

  (b) property which was in or believed to be in such territory or under or believed to be under the control 3f an enemy or ex-enemy Power,

  being a debt, claim or property which had been wholly or partly written off for income tax, profits tax, or excess profits tax purposes, or the position of which had been treated as a reason for leaving income tax, profits tax. or excess profits tax uncollected."

  ESTATE DUTY
  22. Miscellaneous amendments of estate duty law
  Resolved:
  " That as respects persons dying after the eighteenth day of April, nineteen hundred and fifty, the enactments relating to estate duty shall be amended—

  (a) so as to make further provision for charging duty where an interest limited to cease on a death has been disposed of or has determined after becoming an interest in possession, and as to the persons accountable for the duty in any such case;

  (b) so as to make further provision for charging duty on property disposed of during the life-time of the deceased in favour of a relative of his or certain companies;

  (c) so as to make section forty of the Finance Act, 1930 (which exempts objects of national, scientific, historic or artistic interest) have effect subject to conditions for the retention in the United Kingdom and preservation of the objects exempted or otherwise, and to charge duty on those'objects if the conditions are not observed."

  GENERAL
  23. Amendment of law
  Motion made and Question proposed:
  "That it is expedient to amend the law with respect to the National Debt and the public revenue, and to make further provision in connection with finance, so, however, that this
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  Resolution shall not extend to the making of amendments of the law relating to purchase tax except amendments, if any, reducing the first, second or third rate of the tax generally for all goods to which the rate applies."—[Sir S. Gripps.]
  5.58 p.m.
  Mr. Eden: As the Chancellor remarked at the opening of his survey, for the last three years we have pursued this practice of discussing in one and the same Debate, both the Economic Survey and the opening of the Budget for the year. I am inclined to think that that has certain quite definite advantages from the point of view both of the Government and of the Opposition; but it also has certain physical disadvantages. The Chancellor speaks—and I make no complaint in view of all the ground he had to cover—for something like 2i hours, after which the Committee's—I will not say capacity or intelligence, because I am sure that is unlimited in time or strength, but at any rate the Committee's desire to listen to prolonged arguments is somewhat exhausted. After consultation with my colleagues, I think it will be our wiser course this afternoon to consider what the Chancellor has had to say and to make our considered comments upon it in the next day or two.
  I want to make only two observations now. The first is that we would give a general welcome to the reduction of taxation on overtime, a welcome none the less sincere because we have advocated it ourselves. We also agree that that can be regarded not only as assistance to the individuals themselves but as assistance to industry. Therefore, it is to be welcomed. The other preliminary observation I want to make is that we are glad that the Chancellor has not repeated last year's complete exclusion of the Purchase Tax from our discussions. As I understand it, there is not even a partial exclusion—U-10N. MEMBERS "There is."1 If there is it is a partial exclusion which we hope will not unduly handicap us in our discussions. That matter can be further probed in due course.
  I conclude by saying to the Chancellor what he knows, that his performance was of a lucidity which we always associate with him. If what he had to tell us was less to our taste, it certainly lacked nothing in the manner in which he presented it.
  Ordered: "That the Chairman do report Progress, and ask leave to sit again."—[Mr. Pearson.]
  Resolutions to be reported Tomorrow; Committee also report Progress; to sit again Tomorrow.

  RIVER IRWELL (POLLUTION)
  Motion made, and Question proposed, That this House do now adjourn."— [Mr. Pearson.]
  6.4 p.m.
  Mr. Anthony Greenwood: The subject to which I want to call attention tonight is the pollution of the River Irwell. Eight hundred years ago, when the hamlet of Kersal in the township of Broughton, which now forms part of the City of Salford, was handed over as a gift to the Cluniac monastary of Lenton, near Nottingham, the most important part of the gift was the fishing rights in the river Irwell. Even in the 18th century the salmon rights in the rivers of Lancashire were let every year for many hundreds of pounds. Today I am afraid that fish in most of those rivers are virtually extinct. Anybody who stands today in the City of Manchester outside the Exchange Station and looks down at the noisome black water which flows beneath him would find it difficult to believe that any fish, or any other living creature, could ever have lived in what the "Manchester Guardian" has so rightly called that "melancholy stream."
  Yet, Sir, from many points of view we should all be proud of the River Irwell. It is the hardest working river in the whole of the United Kingdom. On the 50-mile stretch of the River Irwell and its main tributary, the Roach, stand more than 100 cotton mills, in addition to a large number of other industrial undertakings—slipper factories, bleach works, coal mines, tanneries, paper mills and gas works. I think it is true to say that no other inland river has made a greater contribution to the industrial greatness of this country.
  Unfortunately, however, the amenity value of the River Irwell is practically negligible, although there are parts of the Irwell Valley which from the point of view of beauty, could compare with almost anything in North Wales. But, so far as I know, the only amenity value of
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  the Irwell at present is the fact that the Agecroft Rowing Club in the City of Salford still use the Irwell for rowing and, I believe, continue to hold an annual regatta. I know of no other amenity value of this river. It is of no use to agriculture because the water is too full of impurities for livestock to benefit from it. There is no fishing in the Irwell for reasons that I shall come to in a moment. Swimming is completely out of the question, and even walking along its wooded banks is spoiled by the condition of the water. In a letter to me a constituent said:
  " The only real pleasure that the River Irwell can give in this part of the world is the music of water running over the stones, but such is the odour at times that you cannot get near enough even to enjoy this."
  Hon. Members who were in the last Parliament will remember that I have had my differences with the British Field Sports Society, but I have nothing but admiration for the excellent series of reports on river pollution which have been prepared for that Society by Mr. H. D. Turing. When the first of these reports appeared, I wrote to the Society and ventured to suggest that they should make a similar survey of the Rivers Irwell and Roach. These two rivers were covered by the third report; and very sorry reading it made. There are two passages in that report which I should like to read. The first says:
  "The banks are lined with factories, large and small, many of which take their water from the drainage of the hills forming the slopes of the river's valley, and discharge it as a polluted effluent, either into the small feeders, or the main river itself, so it may be said that no natural water normally enters the river from its cradle in the moors to its grave in the Manchester Ship Canal."
  The second quotation is one which I find still more appalling than the first. It is:
  " There are no fish in these rivers (apart from a very occasional tributary), no insects, no weeds, no life of any kind except sewage fungus, nothing but chemicals and any dirt which cannot be put to profitable use. Sewage effluents (and, being usually very good, they are the most encouraging feature of the appalling situation) are hailed with delight as being the purest water which the rivers hold."
  The full importance of that statement will be realised when I remind hon. Members of the frequency with which residents in Bacup, Ramsbottom, Manchester and Salford are subjected to flooding from the waters of the Irwell.
  From the report of the British Field Sports Society, it emerges that there are

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  three main sources of pollution—the paper mills, the dyers and the tanneries. I appreciate that all these undertakings have been labouring under very great difficulties. For example, the paper mills, during and since the war, have had to make do with straw for pulping when they would sooner have been using esparto grass or the wood which they used to use before the war. I am afraid that there may be very little hope of reverting to the use of esparto grass and wood in any quantities during the next few months or even years. The difficulty is that straw requires a much greater degree of caustic soda for pulping purposes than either of the other raw materials. The result is that the caustic flows in great quantities into the river, causing, in Mr. Turing's words:
  a gruesome-looking foam to cover the surface, killing off any life which may by chance be trying to establish itself, and stultifying the effects of attempts to purify other effluents."
  Perhaps I can give an example along these lines. It is, I believe, the practice of manufacturers who have works along the Irwell—if they take water direct from the river for feeding their boilers—to introduce water softeners in order to counteract the effects of the natural hardness of the water. I know of one undertaking where it is frequently unnecessary to introduce water softeners because the water is so heavily impregnated with caustic soda from paper mills nearly two miles up stream.
  The dyers, too, are faced with serious problems. I think hon. Members will appreciate that if a dyer succeeds in getting a really fast dye which will not wash out of cloth, it is extremely difficult to remove it from the spent dye which goes out of the works in the form of an effluent. The consequence is that every day literally millions of gallons of grotesquely coloured fluid, often with a transparency of less than one inch, are discharged into the Irwell or its tributaries. I know of one dye works—not by any means one of the biggest—which uses 1,250,000 gallons every day, all of which is discharged into the river in the form of an effluent. The result is that at different times of the day the Irwell may be all the colours of the rainbow. On 2nd November, for example, the chairman of the general purpose committee of the Bacup Corporation, reporting to his council on what he called the "increasing pollution of the
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  river," said that at 8 o'clock that morning the river was a vivid orange colour, with suds rising 18 inches high on the water, and that by noon it had changed to an intense black.
  I do not want to give the impression that this is a new problem, or that nothing is being done about it. In fact, it is an extremely long-standing problem and, in spite of what I have said, substantial progress has been made. Even within living memory, the scum on the Irwell was so thick at times that birds could be seen walking on it. The work done since then, however, has produced some results. I should like, particularly, to pay tribute to the work of Dr. Southgate, the Director of Water Pollution Research at the Water Pollution Research Laboratories at Watford and also to the Lancashire Rivers Board, who have tackled this problem with great keenness and zeal. 1 think that the hon. Member for Bury and Radcliffe (Mr. W. Fletcher) will agree that the Lancashire Rivers Board have been doing extremely good work. I am glad to see the hon. Gentleman in his place, because I discovered the other day that it was one of his predecessors, Mr. John Kenyon, Member for Bury, who in 1899 moved the rejection of the Rivers Pollution Prevention Bill and succeeded in getting it talked out. I am hoping that the hon. Gentleman will do something tonight to make up for the error of his predecessor.
  We have, in fact, in Lancashire enjoyed various powers in this matter denied to other parts of the country. The Mersey and Irwell Joint Committee Act of 1892 was in many ways a model of its kind, and that Act, together with the Lancashire County Council (Rivers Board and General Purposes) Act of 1938 gave the Lancashire Rivers Board powers not possessed in any other industrial area outside the West Riding of Yorkshire. I believe that the Board have been making as full use of those powers as is practicable under present conditions. I certainly believe that the local authorities and the industrialists in the area are unanimous in praising the Lancashire Rivers Board for the efficient and speedy way in which they have tackled their herculean task. Nor do I complain of the manufacturers in the area. I believe that the needs of the nation have made it necessary for them to do various things which it might

  95
  have been possible to avoid under easier circumstances. Far be it from me to propose placing upon them heavier burdens than those which they bear at present.
  I am not suggesting that this is an easy problem, and I am not claiming that I have any solution for it tonight. If all the trade effluents in the area were discharged straight into the sewers, there would be precious little river left over long stretches. If, on the other hand, we adopted the "closed circuit" system, by which each undertaking purifies its own water and uses it over and over again, that would be very desirable if it could be done. Unfortunately it is impracticable in many cases, and would, I am afraid, place a heavy financial burden on industry which it would be difficult to justify in the economic circumstances of today.
  Indeed, I do not believe that we can hope for any very radical measures under present conditions, but I raise the problem tonight because I want to focus attention upon it, and I hope that, as a result of this Debate, some manufacturers will be encouraged to make that little extra effort in dealing with effluent which may make all the difference between the River Irwell being a dirty river and being the disgracefully dirty river which it is at present. The advantages to the manufacturers themselves would be not inconsiderable if that could be done.
  At present, we are in a period of transition. The excellent Lancashire Rivers Board are to give way shortly to a new board, the Mersey River Board, which is being set up under the River Boards Act of 1948. I want to ask the Parliamentary Secretary tonight when that Board will be set up, when it will be in operation, and what more effective contribution it will be able to make towards coping with this problem than its predecessor has made. Are we at last to have a standard of water purity laid down as suggested in the Hobday Report? I hope he will tell us whether his Ministry, in co-operation with industry and with the River Boards, has any concrete plan, practicable under present circumstances, for restoring to our rivers some of their original beauty.
  I will conclude by quoting from a leading article in the "Bury Times" of a year ago:
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  "It is time the public conscience was roused and a check put to the practice of turning our rivers into open sewers. It is time, too, that a more determined and scientific approach to the problem of industrial effluents was made. Dirty and filthy rivers in which all natural life has been killed should no longer be tolerated. Given the will, a much more successful effort could be made to clean our streams and rivers, and industry, the River Boards and the Government must get together to devise a plan."
  6.19 p.m.
  Mr. Walter Fletcher: I think that a great public service has been done by the hon. Member for Rossendale (Mr. Anthony Greenwood) in raising this point. He has put forward the facts with fairness and accuracy, and though, in the same way as myself, he is not able to suggest an immediate practical solution, nevertheless, it is a very good thing to bring the matter forward, even if the moment is one when we have not a crowded House to listen to us.
  The hon. Gentleman pointed out that I represent the constituency—although he only mentioned Bury—which has a direct interest in this matter. I would remind him that the constituency is Bury and Radcliffe, he having kindly handed over half his previous constituency which, from his point of view, I now misrepresent. I should like to add that while it is perfectly right to try to bring this matter forward with the idea that action should be taken in every possible way, we must not let ourselves slide into an attitude of wishful thinking with the idea that we can do very much to restore the Irwell and its tributaries to what they were before.
  The hon. Member for Rossendale has referred in rather surprising terms to the British Field Sports Society and the benefit he received from the advice given by somebody there. But if his mind is in a state of change about blood sports he might remember that when the Irwell was a pleasant stream for fishing and boating and bathing there were also foxhounds and beagles who practised their wickedness there along its banks. Today the only real trouble the local hounds have is to learn the difference between red and green lights.
  The river Irwell has been described to me as "no longer a river but a drain."
  Mr. Jack Jones: A sewer.
  Mr. Fletcher: A drain—I select my own word. With the greater care now taken by industry—and on which a very watchful eye must be kept—in an area where streams running into the Irwell cause great pollution before they come near the boroughs of Bury and Radcliffe and where single industries on streams running into the Irwell, some in the hon. Member for Rossendale's own constituency, cause much pollution, no easy remedy exists. In an area where industry is urged to greater production and efficiency the chances of making the Irwell anything but part of the industrial machine are practically nil.
  It may well be that action that can be taken here will be a useful warning for other parts of the country where rivers have not got into the advanced and awful state that the Irwell is in now. I do not think it is wise to be very optimistic and to think that very much can be done to restore the Irwell and to make it a pleasant stream in any way at all. If something can be done, industry undoubtedly will lend a hand and the local industrialists and Chamber of Commerce are extremely keen to help. If industry will co-operate with the successor to the Lancashire River Board there is possibly a chance, not that we shall notably improve the waters of the Irwell or the Roach, but that we shall show to authorities concerned with rivers not yet in that advanced state of pollution, the best way of preserving in something like decency a stream which must essentially serve industrial purposes. There are many of these streams in the country.
  I hope the Minister will realise that all those responsible for these areas are at one in wishing to arrest or even to mitigate the terrible pollution that has taken place. I hope an effort will be made to improve the position and above all to set an example of what can be done in other streams. I have not found in my division a voice raised against such an effort. I have found great willingness to co-operate in every possible way, bearing in mind that industrial efficiency and maximum output unfortunately must take precedence over the amenity value of the Irwell.
  6.24 p.m.
  Mr. Jack Jones: I speak as one who, with the exception of perhaps
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  one hon. Member, lives as near to the Irwell as anybody in this House. We have listened to a carefully designed Budget Speech which stated that we must increase production, and I am one of those simple fellows who believe that to secure that production one must have a sane and satisfied atmosphere in the workshops. I speak on behalf of those disciples of angling who get enormous pleasure from a few hours of fishing. I know of nothing more relaxing or more calculated to take one away from the turmoil of this House than fishing. This Debate will have been of value if it does nothing more than to draw the attention of the Minister to this question of ensuring that the rivers of Lancashire where fishing is followed, are not allowed to get into the same condition as the Irwell.
  With the growth of industry there has been a great increase in the disposal of effluent. Leather, paper and other industries have had to find an outlet for their effluent and the River Irwell has become an industrial sewer. As a result we do not see on the River Irwell what is to be found on the River Weaver where, the Minister if he goes there at the opening of the angling season, will find thousands of good honest British workmen enjoying a little repose not 30 miles from the Irwell.
  I hope that everything possible will be done in the future to safeguard the amenities of rivers of this kind, where working men can have the form of sport they enjoy most, just as some hon. Members opposite can rent at high prices reaches of salmon rivers in the North of Scotland. I hope that as a result of this Debate no rivers will be allowed to get into worse condition, and that the Irwell will receive more attention. I should like to compliment my hon. Friend the Member for Rossendale (Mr. Anthony Greenwood) for raising this matter on behalf of working men who derive enormous enjoyment from fishing, to the benefit of their industrial production.
  6.28 p.m.
  Colonel Clarke: Like the hon. Member for Rotherham (Mr. Jack Jones) I join in the Debate because I am a fisherman, and I want to see the sport of fishing distributed as widely as possible. I know that the pollution of many of these rivers in industrial areas is preventing a great number of people

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  who might enjoy that sport from doing so. I am glad indeed that the hon. Member for Rossendale (Mr. Anthony Greenwood) has brought up this matter with regard to the River Irwell. As an officer of the British Field Sports Society I should like also to thank him for the complimentary remarks he made regarding the work of the society in trying to prevent this pollution.
  I am sorry that my hon. Friend the Member for Bury and Radcliffe (Mr. W. Fletcher) has left the House, because I should like to emphasise exactly what the society have done in this matter. My hon. Friend said he thought the hon. Member for Rossendale had obtained the benefit of advice from the British Field Sports Society. Actually, of course, the society has spent a great deal of money in recent years in having surveys made of these rivers and letting people know what a tremendous amount of harm was done in this way during the industrial revolution and what a tremendous amount of pleasure is now being denied to fishermen in industrial areas.
  I feel that my hon. Friend was rather defeatist in this matter. I see no reason why we should submit to the managers of these factories doing what they like. In many cases that is the position. In my constituency I heard only this morning of a case where the County Medical Officer of Health had been trying for some time to persuade a man with a small factory to do something about the effluent. He had just stuck his toes in and said that he did not see any reason why he should do anything, since there was no legislation to make him do it. I know that we cannot discuss legislation now, but I think I should be in Order in saying that I recollect that in the last Parliament we passed an Act which consolidated existing legislation relating to pollution. Many of us have been looking forward to some other Act which will further widen the powers of local authorities and others in this respect.
  This question of pollution does not affect just one river. There are many rivers all over the country which are affected, and the survey of the British Field Sports Society has made this known to the public. I believe the public conscience is now being roused. I am glad that this matter has been raised, and I
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  give my full support to anything that can be done to try and put it right. I am certain that a great many people in the industrial areas have been denied a great deal of pleasure, and as a fisherman, I also very much regret the state of this river.
  6.32 p.m.
  Mr. James Hudson: I apologise for intervening in this Debate when Members may desire to bring business to an earlier conclusion than usual, but I have a better qualification for speaking about this matter than most other Members because for many years I lived on the banks of the Irwell. I have had a closer experience of the Irwell than even my hon. Friend the Member for Rossendale (Mr. Anthony Greenwood) has had. I fell into it. Indeed, I fell into it in days when the water was infinitely worse than it is now, when it was absolutely black and when the stink of it was different from all other stinks which have ever been experienced by man.
  Mr. Ellis Smith: Has my hon. Friend been there lately?
  Mr. Hudson: Yes, I have been there lately. That is one of the points I want to make, that things are now much better than they were in days gone by. I remember, too, that when I fell in I was a prominent worker in the local Band of Hope. The amount of water that I was able to partake of on that occasion—it was not the pure water which we sang about in the Band of Hope—still leaves a reminder of the dreadful things that the mill owners in my hon. Friend's constituency and the constituency of the hon. Member for Bury and Radcliffe (Mr. W. Fletcher) did to the Irwell in those days. Some of them are still prepared to do so.
  I am a little disappointed by my hon. Friend's speech. He spoke too excusingly of the difficulties of the local manufacturers in this connection. The Irwell joins the Mersey near where my hon. Friend the Member for Rotherham (Mr. Jack Jones) now lives, and it used to pollute the Manchester Ship Canal. In the Manchester Ship Canal just after the Irwell had entered into it, was the effluent of the Manchester Corporation's sewage works. For many years the local council of the area where I live complained that when night came the Manchester

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  Corporation turned their crude sewage into the Manchester Ship Canal. I understand that that has now ceased. The Manchester Corporation has had to make very expensive arrangements for dealing properly with the sewage so that it does not cause a nuisance as the constituents of my hon. Friend do.
  I was appalled at the intervention of the hon. Member for Bury and Radcliffe. He ought to be as keen on improving the Irwell as those of us who live on its banks lower down. I was appalled at the readiness with which he suggested that this stream was bound to continue to be the defective thing that it has been. The River Weaver is another tributary of the Mersey, and it might be just as bad as the Irwell but for the care that has been taken, at any rate in the middle reaches of that stream, by industrialists who have their works on its banks.
  I do not know what steps can be taken but I hope that greater attention will be paid to this matter. I hope steps can be taken by regulation, and better still by education and appeal, to get the industrialists in the upper parts of the Irwell, round Rochdale, Oldham and up to Irwell Springs, to save the waters of this stream from the pollution that has for so long been practised there. Irwell Springs is a lovely name; it is the only part of the Irwell where there is a little pure water still running. The river is not allowed to run more than about a mile before the pollution begins.
  I admit that a matter like this cannot be put right in a day or two, but action should now be taken. I am a fisherman, although I never hope to see fish in the Irwell. I should think the fishes' memory of what the Irwell has been like during all the time that I have known it, will for ever discourage any poor fish from swimming into the Irwell again. If, however, the fish can go back there it will be something to be thankful for. The people who have lived on the banks of the Irwell will also be grateful because they are so sick of the pollution and stink of that poor stream.
  6.37 p.m.
  Mr. Hardy: I make no apology for intervening in this Debate. I congratulate my hon. Friend the Member for Rossendale (Mr. Anthony Greenwood) on raising this question. I do not agree
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  that there has been the improvement which it has been suggested has taken place in recent years. I am sure that a great deal more could have been done. I am not an angler, although I have every respect for anglers; but I think this House should be more concerned with the health of the people. Three years ago, when there was a serious flood which ruined hundreds of houses and furniture, the damage was done not by clean water but by filth from the river and its bed.
  If hon. Members were compelled to live next to the River Irwell, something would have been done many years ago; but because these are only working-class people, little or no attempt has been made by the Government to tackle the question at all. In fact, when the flood took place and damage to the extent of £500,000 was done, the Government were approached, but all we got was sympathy Of coarse, sympathy is like gravy without the meat. We had to appeal to the Lord Mayor of London's Fund to enable us to compensate or rehabilitate some of those people —to restore them to their houses with the utility furniture available at that time.
  If steps were now taken by the Government, I feel sure that they would eliminate the fear which exists in the minds of the people who are compelled to live in that area. The River Irwell has been a music-hall joke for many years—as black as ink and filthy. The filth has been responsible for creating a lot of disease. Negotiations have been going on for a considerable time between the catchment board and the local authorities in the area, but the improvement scheme has been abandoned because the Government are not prepared to say what grant they will make towards it.
  I hope the Minister will give us some definite information tonight about the steps which the Government propose to take in order to try to prevent the recurrence of the flooding which took place three years ago. The people who are compelled to live in this industrial area are very seriously disturbed. We can imagine the position after a day like yesterday in Manchester, Salford and other districts around there. I do not want to make it appear that Manchester gets all the rain and that Salford gets none. There was incessant rain from five o'clock in the morning yesterday until late in the evening, and one can imagine

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  the fear and dread which exist in the minds of people compelled to live in that area when they see a day like that. If the river were as clean as it ought to be or as it may have been many years ago, that fear and dread would not exist.
  As a representative of this area, and one who has lived in it all his life, I believe the inhabitants will expect me to congratulate the hon. Member for Rossendale who raised the subject. We have been hoping for some considerable time that something definite would be done by the Government. I sincerely trust that they will make up their minds to make these people feel happier—or, if they cannot make them feel happy—make them more comfortable in the knowledge that the Government will deal with this serious question of the River Irwell.
  6.43 p.m.
  The Parliamentary Secretary to the Ministry of Health (Mr. Blenkinsop): I think we are all very grateful to my hon. Friend the Member for Rossendale (Mr. Anthony Greenwood) for raising this subject this evening and also for the wide variety of experiences which have been related by other hon. Members—experiences which went as far as that of the hon. Member for Ealing, North (Mr. J. Hudson) and his trial by immersion. It has been suggested to me that some of his well-known views might have suffered a change as a result of his experience of water on that occasion but, as he rightly says, the water was not the sort of water in which he and others are interested.
  This is, indeed, a serious subject, and it is of the greatest importance that we should give every possible consideration to ways in which we can alleviate the difficulties which arise from the particularly hideous condition of the Irwell. I believe that all those who are in any way concerned with this problem realise that it must inevitably need a long-term policy to achieve any striking improvements to this river. There is no doubt that we can do more in connection with rivers which have not yet reached the state of the Irwell, but that does not mean that we ought not to do what we can for the Irwell itself.
  I want to say a word or two about the action which has already been taken and which will, I hope, continue to be taken
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  in the future. I should dike to pay a compliment to the old committee, the Mersey and Irwell Joint Pollution Committee, who did some very valuable work before the war—so much so that it could fairly be said that at the outbreak of the war the river was in a much better condition than had been the case for some considerable time previously. It may be that that is not saying very much, but at any rate the committee did make real progress and showed that it was possible to make improvements.
  Unhappily, during the war and since, the conditions have deteriorated, partly because of the new factories which have been established on the side of the river and partly because of shortages of material, some of which were mentioned by my hon. Friend the Member for Rossendale. The main problem is, of course, that of the use of straw pulp for paper manufacture. That is, perhaps, the most important single item of all the many contributory factors—and there are many contributory factors. I believe there are some 210 trade premises which have discharged their effluents into the River Irwell by the time it reaches the Manchester Ship Canal, and there is also the effluent from some 54 sewage disposal works, although it may be true that the effluent from the sewage disposal works is pure by comparison with some of the trade effluents.
  The problem is, what can be done, in particular, about the effluent from paper mills what can be done to try to remove the excess soda in the effluent from these mills? Some mills have already installed recovery plants, and both my own Ministry and the Board of Trade are interested that this should be done. The recovery of caustic soda can be of value and we shall certainly encourage in every way possible the use of these plants. We have to face the fact, however, that their installation is expensive, and naturally the mill owners themselves have wanted to know how long they are likely to go on using the straw pulp, which is a substitute for the wood pulp they used previously. As far as we can see, they are likely to go on using it for some time, and the advice we have been given from those who made a very careful survey of the position suggests that, on economy grounds, there may indeed be a need for a further use of straw pulp. We have, therefore, discussed this matter with the Board of Trade and

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  we shall see that, before any fresh straw pulp apparatus is installed in any of the factories or in new factories, full consideration is given to methods of recovery of caustic soda.
  The question of other trade premises which discharge their effluent into the river has also been raised this evening, although none is quite so serious as that of straw pulp. Further, the local authorities in the area are considering in what way their sewage disposal works can be improved and whether or not a regional scheme for sewage disposal could be developed. Again, this is inevitably a long-term problem; the solution will take some time to develop, as well as being expensive, but I have no doubt that if it were possible it would be of great advantage to the area. Reference has also been made to the Water Pollution Research Board who have done, and are doing, some valuable research work. They are trying to see whether there is any less expensive way of recovering soda which might help us in tackling that side of the problem.
  As my hon. Friend the Member tor Rossendale said, we are in process of setting up a new river board, as we are in the process of setting up new boards throughout the country, under the new Act. I believe that today the Order has been made defining the area of this new river board. The area of the board will include the Mersey and its tributaries—the Irwell and other tributaries of the Mersey. One of the first problems it will have to tackle will be this very serious problem of pollution here and in the other streams. It will take some time to establish this new board, because the full statutory procedure has to be gone through and a further draft Order has to be made for the constitution of the board itself. It will not directly affect the powers because, as my hon. Friend said, there are wider powers already in existence in that area than in most other
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  areas of the country; but it should be possible for the new board to give perhaps rather closer attention to the problem than was possible in the past.
  I should mention the fact that the new river boards will take over the functions of fishery boards. I do not think we can be optimistic enough to hope we can provide for the two hon. Gentlemen who spoke about fishing and the point of view of anglers any catches—or any that they would value—in the river Irwell in either the near or long-distant future. However, we do, of course, take account of those interests in setting up the new river boards, and in considering what action can be taken to preserve other rivers from the sort of difficulties that have arisen here.
  I can say, therefore, that we are giving continual consideration to ways in which we can lay down reasonable standards for rivers. Obviously this is not a matter I can go into fully tonight because it would undoubtedly require legislation, but we are considering the report which has been submitted by the sub-committee of the Central Advisory Water Committee which has made a series of very interesting and helpful suggestions for the future, some of which would not necessarily require legislation to carry through. My hon. Friends and all others who have shown interest in the subject can be assured that we are very anxious on our part to do everything we can to assist in dealing with this problem, remembering all the time the essential economic conditions in which we are working. It is for that reason that I cannot offer an early hope to my hon. Friend, but with the co-operation of the new board and the authorities I am sure some improvement can be made eventually and that deterioration in our rivers can be prevented.
  Question put, and agreed to.
  Adjourned accordingly at Six Minutes to Seven o'Clock.