HC Deb 04 July 1950 vol 477 cc286-317
Mr. Selwyn Lloyd (Wirral)

I beg to move, in page 2, line 45, after "Treasury," to insert: so however that during the period of twelve years from the relevant date the amount of the deduction shall not be less than ninepence a gallon. Clause 2, as will be remembered, deals with the rebate in respect of home produced hydrocarbon oils and prescribes that that rebate or deduction shall be ninepence a gallon or such other amount per gallon as may from time to time be directed by order of the Treasury. I moved an Amendment to the Clause during the Committee stage, but that took place at 2.30 a.m. on 15th June. If nothing else is agreeable, it is at any rate agreeable that we are discussing the Clause on this occasion at a rather more seemly time of day. In the early hours of the morning on 15th June, the point which was mainly dealt with was the constitutional one with which the next Amendment of the Chancellor to some extent seeks to deal. During the Debate upon it, however, two of my hon. Friends—the hon. Members for Hall Green (Mr. Aubrey Jones) and Esher (Mr. W. Robson-Brown)—made speeches on rather wider aspects which had such great force in them that after consultation with my two hon. Friends I have put down this further Amendment which raises the whole question of the guarantee that the deduction will not be diminished for a period of 12 years. The precedent for this is contained in the Finance Act, 1938. when a margin was guaranteed for 12 years and provision was made for a sliding scale. This, I think, had the effect, in certain circumstances, of reducing the amount of the deduction, but it preserved a definite deduction for a fixed period. The purpose of that was to encourage production of motor spirit and associated light oils at home. It enabled the industry to plan ahead and was of very considerable benefit.

The industry is now at a critical phase of its development and re-equipment, and the need for security is still considerable. The Chancellor of the Exchequer dealt with this matter in his Budget speech on 18th April. He referred, as I have just done, to the Finance Act, 1938, and he then went on to make this statement: 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 the right hon. and learned Gentleman gave no reason why he was not willing to continue to give a guarantee. He did, however, say: 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."—[OFFICIAL REPORT, 18th April, 1950; Vol. 474, c. 76.] That, although helpful, is nothing like as helpful, as the Chancellor himself would admit, as a guarantee for 12 years.

I suggest that even at this late stage the right hon. and learned Gentleman should consider the question of giving a guarantee for a term of years, because if the preference is diminished, or disappears, the effect will be that the financial return from benzol will be diminished. I am told that the consequences of that might be very substantial; that, for example, it would make the home production of benzol uneconomic, the effect of which, in turn, would be that benzol would no longer be extracted from coal gas and, therefore, more oil would have to be imported, which might well entail the expenditure of more dollars. Another consequence would be that distillation and recovery plants might well have to close. Third, the profitability of coke oven plants would be affected, and if the whole of the deduction were eliminated, it might well mean an increase of between 2s. and 3s. a ton in the price of coke.

It should be obvious to all Members of the House that that would have a serious effect upon steel costs, which have recently been so adversely affected by the increased costs of transportation. I am told that if the financial yield from benzol were to be diminished, as I have suggested, it might well affect the whole of the development plan for coke ovens and would also have an indirect effect upon our chemical industry.

This is a matter of considerable substance and I ask hon. Members opposite for once to engage in a little practical planning. We hear a great deal of airy platitudes about planning in general and the super planners. Here is an opportunity to do a little practical planning for there could be nothing more practical than to give this guarantee for 12 years. Those in the various industries would know where they were and would be able to make their plans and benefit to the community would be assured.

Mr. Aubrey Jones (Birmingham, Hall Green)

I beg to second the Amendment.

The purpose of the Amendment is to fill what I consider to be an unaccountable gap in the Bill. As my hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd) reminded the House, we have to deal with a preference established originally for 12 years and which now expires. I think it reasonable to expect that the Finance Bill should contain an arrangement to take the place of that now defunct provision. It seems to me that the Bill as constructed leaves nothing but a vacuum. The Bill provides that the preference may be either decreased or annulled at a moment's notice, which means that the future of this industry—the home production of hydro-carbon oils—is enshrouded in a question mark.

It is reasonable to ask that we should have something more definitive and more clarified than that.

The Amendment rests on certain assumptions which I do not think the Treasury Bench would contest. Briefly, they are that, first, we need the home production of hydro-carbon oils for economic and defence reasons. If we recognise that we have to face the problem that there will always be a disparity between the cost of home produced hydro-carbon oils and that of imported hydro-carbon oils. Somehow or other the disparity has to be bridged. There are only two ways of bridging it. The first is by a direct subsidy and the second is by a preference. The 1938 Act opted for the principle of a preference and in the Debates on the present Bill so far no one has contested that principle. But a preference is pointless and fails of its purpose unless in some measure it is a continuing preference.

A short while ago, in reference to one of the proposed new Clauses, the Solicitor-General spoke of the need for re-equipping some of our basic industries. We are concerned here with the re-equipment of a basic industry and if a preference is terminable at a moment's notice, as it is as the Bill now stands, clearly there is no inducement for the industry to re-equip itself. That is the argument for some stability.

We have inserted the figure of 12 years partly because 12 was the figure given in 1938 and partly because 12 years represents the average life of the necessary plant. Granted the principle of stability, we have then to determine the amount of the preference. We have to devise a formula which is not too rigid and which is adaptable to changing circumstances. The 1938 Act dealt with the matter quite skilfully. It established a maximum and a minimum and allowed for the variation of the preference between those two in accordance with changing circumstances.

The fault of the 1938 Act was that it was guilty of an error of foresight. The Act provided that as the price of imported petrol increased and so the disparity of cost between home produced and imported hydro-carbon oils diminished, so, equally, the preference could contract. But that is not how things turned out. They turned out quite differently. What happened was that the price of home coal was raised relatively to the price of im- ported petrol and the assumption of the 1938 Act was destroyed. That is the position we have now reached. In view of these changed circumstances, I suggest that what was then reasonable to regard as the maximum, of 9d., it is now reasonable to regard as the minimum. For that reason the Amendment provides for a stable minimum of 9d. In so far as the cost of home coal increases further it is open to the Treasury to enlarge the preference, if they want to.

5.15 p.m.

In the past 24 hours we have heard various objections to new Clauses and Amendments, the objection, for instance, that the Clause or Amendment in question would cost something to the Revenue. This Amendment would cost nothing to the Revenue. We have heard the objection that a Clause or Amendment is imperfectly drafted. I would be the last to contend that this Amendment is impeccably drafted, but if hon. Members opposite do not accept the exact terms, I do not think it is too much to ask them to accept that, in place of the now defunct provision, there must be some more enduring arrangement than that contained in the Bill as at present constructed and, secondly, that if we are to devise a new arrangement that arrangement must recognise the changed circumstances. It must recognise that the cost of producing hydro-carbon oils at home is relatively much greater than it was in the halcyon days of 1938.

The Financial Secretary to the Treasury (Mr. Douglas Jay)

This Amendment seeks to give a statutory guarantee for 12 years for the 9d. preference at present enjoyed by indigenous hydro-carbon oils. We entirely agree that in present circumstances a case is made out for continuing this preference, but we do not agree that there is any need to continue the unique statutory guarantee given to the industry in the past. That guarantee was given in 1934 and continued, as the hon. and learned Member for Wirral (Mr. Selwyn Lloyd) said, by the Finance Act of 1938, for 12 years. It was a unique guarantee in that it was laid down statutorily that the preference should remain in force for 12 years. That has not been done, as far as I know, in the case of any other import duty or in the case of any preference for the product of any other British industry.

We have considered this carefully in the past year and have come to the conclusion that there is a case, in present circumstances, for continuing the preference. I think most of the arguments used by the hon. and learned Member for Wirral and the hon. Member for Hall Green (Mr. Aubrey Jones) were really arguments for continuing the preference, with which we entirely agree, and not arguments for continuing the statutory guarantee. It was said by both hon. Members that it gave a greater basis of security for planning ahead if the industry, with its large programmes of capital expenditure, had this peculiar form of guarantee. Of course, that could have been argued by those in the iron and steel industry in 1945 when they embarked on a £200 million capital expenditure programme. They could have said they must have a guarantee, of this kind, that the import duties on steel would continue. They did not do so, but embarked. with very great success, on their capital expenditure programme under the practical planning of the Government, of which the hon. and learned Member spoke.

The fact is that looking at this from the point of view of the industry their security rests not so much on any guarantee of this kind but on the good sense of future Governments and Parliaments. After all. the Government cannot guarantee that Parliament will never take any action in the matter. The security to the industry is the reasonable expectation that this Government, no more than any other Government, will not remove this preference so long as it is required. I am not sure whether it is realised that only 3-id. of the present 9d. preference is actually derived from the statutory guarantee.

Mr. Selwyn Lloyd

Fourpence.

Mr. Jay

I agree. The greater part of the preference remains in force as a result of the decision of the Government that it should continue to do so as a matter of policy.

I would point out that we are proposing, a little later on the Order Paper, to alter the procedure so that this preference can be reduced in future only by an affirmative resolution of the House. That, of course, gives the House an opportunity to express an opinion on any proposal to reduce the preference.

My right hon. and learned Friend said quite clearly, both during the Committee stage and in his Budget speech, which has been quoted, although the subsequent and more crucial sentence was not quoted, that there is no intention of altering this preference without the fullest consultation with the industry. That undertaking stands. In all the circumstances, I do not think there is any need to continue this unique guarantee.

Sir H. Williams

I do not see why the Financial Secretary should not agree to this Amendment. It will not do him any harm. Curiously enough, it does not bind Parliament, because Parliament can repeal any Act that has been passed. The point is that it stops the Treasury from monkeying about on their own. I agree that the Government's proposal will very much improve the situation, because if they propose to increase the tax they will have to do so by affirmative resolution, whereas if they increase the preference it will be by the negative procedure. I can see the difficulty about amending a Bill. The only time that a Bill is easily amended is before it is printed, because the people who produce it are so proud of it, that they hate to accept any Amendments.

This provision is very well drafted. because I can understand it without consultation with the Solicitor-General. Why not put it into the Bill, therefore, and give these people the satisfaction and assurance that as far as possible there is this guarantee? We know that Dicey, in his "Constitutional Law" said that Parliament could do everything except make a man into a woman and a woman into a man. But fashion has already done that, so perhaps he is out of date As I said, the point is that we are taking this out of the hands of the Treasury Therefore, I ask the Financial Secretary to think again, because this will cost nothing and will give great satisfaction. If that is not the cheapest way of giving satisfaction, then I do not know what is

Lieut.-Commander Gurney Braithwaite (Bristol, North-West)

I wish to add my plea to those that have been made to the Financial Secretary. When we reach the last lap of the Report stage of a Finance Bill we find that the Government are increasingly reluctant to make these minor alterations. We were told only a few moments ago that the reason the Government could not take a certain course was because a certain committee had not reported, but when a committee has reported they say that is a reason why they can do nothing about it.

What are the objections to inserting these words in the Bill? The Financial Secretary did not give one reason for it, although I saw him looking rather nervously over his shoulder when he pointed out that he could not bind future Governments from altering an Act of Parliament, thereby indicating that an election is extremely imminent. The House of Commons does not function in that way. Governments are bound to have regard to Acts of Parliament, and the House of Commons is generally reluctant to pull legislation about. I should have thought it was a very simple operation to close this very narrow gap between us.

The Financial Secretary said in his first sentence that the Government agree that this preference should continue. All he objected to was saying so in the Bill. I should have thought the most businesslike thing to do was to put this on record and give confidence to the industry. I am still hoping that it will be possible to insert this provision.

Major Sir David Maxwell Fyfe (Liverpool, West Derby)

I hope that the Chancellor will reconsider this matter for the reason my hon. Friends have given—namely, that there does not seem to be any difference between us. I have the

Chancellor's Budget speech in front of me, in which he said: After consultation with my right hon. Friend the Minister of Fuel and Power, I propose to continue this margin unchanged.

Then, as the Financial Secretary drew our attention to it, he went on to say: There would, of course, be no question of modifying it, without very careful consideration of the circumstances prevailing at the time….—[OFFICIAL REPORT, 18th April, 1950; Vol. 474, c. 76.]

That would be only after consultation.

The Financial Secretary has asked, when that has been said and with the slight change proposed in the procedure, why we want the continuance of the preference in statutory form. The answer to that is perfectly clear. It is not only the position of the industry which has been so clearly put by my hon. Friends today and by my hon. Friend the Member for Esher (Mr. W. Robson-Brown) on a previous occasion, but the fact that if there has been a statutory preference which is then taken away, it alters a position of strength into one of comparative weakness, because it means relying upon an indefinite statement. If there is any purpose we should be pleased to hear it, but no such intention has been explained. In the circumstances, the result must be to weaken the position of the industry in regard to its future planning. If the Chancellor is not prepared to meet us on this point, I must ask my hon. Friends to divide the House.

Question put, "That those words be there inserted in the Bill."

The House divided: Ayes, 252; Noes, 275.

Division No. 55.] AYES [5.30 p.m.
Amory, D. Heathcoat (Tiverton) Boyd-Carpenter, J. A. Cranborne, Viscount
Arbuthnot, John Bracken, Rt. Hon. Brendan Crookshank, Capt. Rt. Hon. H. F. C
Ashton, H. (Chelmsford) Braine, B. Cross, Rt. Hon. Sir R.
Assheton, Rt. Hon. R. (Blackburn, W) Braithwaite, Lt.-Comdr. J. G. Crosthwaite-Eyre, Col. O. E.
Astor, Hon. M. Bromley-Davenport, Lt.-Col. W. Crouch, R. F.
Baker, P. Browne, J. N. (Govan) Crowder, Capt. John F. E. (Finchley)
Baldock, J. M. Buchan-Hepburn, P. G. T Crowder, F. P. (Ruislip-Northwood)
Banks, Col. C. Bullock, Capt. M. Cundiff, F. W.
Baxter, A. B. Bullus, Wing-Commander E. E Cuthbert, W. N.
Beamish, Maj. T V H. Burden, Squadron-Leader F. A Darling, Sir W. Y. (Edinburgh, S.)
Bell, R. M. Butcher, H. W. Davidson, Viscountess
Bennett, R. F. B. (Gosport) Butler, Rt. Hon. R. A. (S'ffr'n W'ld'n) Davies, Rt. Hn. Clement (Montgomery)
Bennett, W. G. (Woodside) Carr, L. R. (Mitcham) Davies, Nigel (Epping)
Bevins, J. R. (Liverpool, Toxteth) Channon, H. de Chair, S.
Birch, Nigel Churchill, Rt. Hon. W. S. Deedes W. F.
Bishop, F. P. Clarke, Col. R. S. (East Grinstead) Digby, S. Wingfield
Black, C. W. Clarke, Brig. T. H. (Portsmouth, W.) Donner, P. W.
Boles, Lt.-Col. D. C. (Wells) Clyde, J. L. Douglas-Hamilton, Lord M
Boothby, R. Colegate, A. Drayson, G. B
Bossom, A. C. Cooper, A. E. (Ilford, S.) Drewe, C.
Bowen, R. Cooper-Key, E. M. Dugdale, Maj. Sir T. (Richmond)
Bower, N. Craddock, G. B (Spelthorne) Duncan, Capt. J. A. L.
Duthie, W. S. Lennox-Boyd, A. T Renton, D. L. M.
Eccles, D. M. Lindsay, Martin Roberts, Emrys (Merioneth)
Eden, Rt. Hon. A. Linstead, H. N. Roberts, P. G. (Heeley)
Elliot, Lieut.-Col. Rt. Hon. Walter Llewellyn, D. Robertson, Sir D. (Caithness)
Erroll, F. J. Lloyd, Rt. Hon. G. (King's Norton) Robson-Brown, W. (Esher)
Fisher, Nigel Lloyd, Maj. Guy (Renfrew, E.) Roper, Sir H.
Fletcher, W. (Bury) Lloyd, Selwyn (Wirral) Ropner, Col L.
Fort, R. Lockwood, Lt.-Col. J. C. Ross, Sir R. D. (Londonderry)
Foster, J. G. Longden, G. J. M. (Herts, S.W.) Russell, R. S.
Fyfe, Rt. Hon. Sir D. P. M. Low, A. R. W. Ryder, Capt. R. E. D
Galbraith, Cmdr. T. D. (Pollok) Lucas, Major Sir J. (Portsmouth, S) Sandys, Rt. Hon. D
Galbraith, T. G. D. (Hillhead) Lucas, P. B. (Brentford) Scott, Donald
Gammans, L. D. Lucas-Tooth, Sir H. Smiles, Lt.-Col. Sir W.
Garner-Evans, E. H. (Denbigh) Lyttelton, Rt. Hon. O. Smith, E. Martin (Grantham)
Gates, Maj. E. E. McAdden, S. J. Smithers, Peter H. B. (Winchester)
Glyn, Sir R. McCallum, Maj. D. Smithers, Sir W. (Orpington)
Gomme-Duncan, Col. A. McCorquodale, Rt. Hon. M. S. Snadden, W. McN.
Gridley, Sir A. Macdonald, A. J. F. (Roxburgh) Soames, Capt. C.
Grimond, J. Macdonald, Sir P. (I. of Wight) Spearman, A. C. M.
Grimston, Hon. J. (St. Albans) Mackeson, Brig. H. R. Spence, H. R. (Aberdeenshire, W.)
Grimston, R. V. (Westbury) McKibbin, A. Spens, Sir P. (Kensington, S.)
Harden, J. R. E. McKie, J. H. (Galloway) Stanley, Capt. Hon. R (N. Fylde)
Hare, Hon. J. H. (Woodbridge) Maclay, Hon. J. S. Stevens, G. P.
Harris, F. W. (Croydon, N.) Maclean, F. H. R. Steward, W. A. (Woolwich, W.)
Harris, R. R. (Heston) MacLeod, Iain (Enfield, W.) Stewart, J. Henderson (Fife, E.)
Harvey, Air-Codre. A. V. (Macclesfield) MacLeod, John (Ross and Cromarty) Storey, S.
Harvey, I. (Harrow, E.) Macpherson, N. (Dumfries) Strauss, Henry (Norwich, S.)
Hay, John Manningham-Buller, R E Stuart, Rt. Hon. J. (Morav)
Head, Brig. A. H. Marlowe, A. A. H. Studholme, H. G.
Heald, L. F. Marshall, D. (Bodmin) Summers, G. S.
Henderson, John (Cathcart) Marshall, S. H. (Sutton) Sutcliffe, H.
Hicks-Beach, Maj. W. W. Maude, A. E. U. (Ealing, S.) Taylor, W. J. (Bradford, N.)
Higgs, J. M. C. Maudling, R. Teeling, William
Hill, Mrs. E. (Wythenshawe) Medlicott, Brigadier F. Thompson, K. P. (Walton)
Hill, Dr. C. (Luton) Mellor, Sir J. Thompson, R. H. M. (Croydon, W.)
Hinchingbrooke, Viscount Molson, A. H. E. Thorneycroft, G. E. P. (Monmouth)
Hirst, Geoffrey Moore, Lt.-Col. Sir T. Thornton-Kemsley, C. N.
Hogg, Hon. Q. Morris, R. Hopkin (Carmarthen) Thorp, Brigadier R. A F
Hollis, M. C. Morrison, Maj. J. G. (Salisbury) Tilney, John
Hope, Lord J Morrison, Rt. Hon. W. S. (Cirencester) Touche, G. C.
Hopkinson, H. L. D'A. Nabarro, G. Tweedsmuir, Lady
Hornsby-Smith, Miss P. Nicholls, H. Vane, W. M. F.
Horsbrugh, Miss F. Nicholson, G. Vaughan-Morgan, J. K
Howard, G. R. (St. Ives) Nugent, G. R. H. Vosper, D. F.
Howard, S. G. (Cambridgeshire) Oakshott, H. D. Wakefield, E. B. (Derbyshire, W.)
Hudson, Sir Austin (Lewisham, N.) Odey, G. W. Wakefield, Sir W. W. (St. Marylebone)
Hudson, W. R. A. (Hull, N.) Ormsby-Gore, Hon. W. D. Walker-Smith, D. C.
Hulbert, Wing-Cdr. N. J. Orr, Capt. L. P. S. Ward, Hon. G. R. (Worcester)
Hutchison, Lt.-Com. Clark (E'b'rgh W.) Orr-Ewing, Charles Ian (Hendon, N.) Ward, Miss I. (Tynemouth)
Hyde, H. M. Orr-Ewing, Ian L. (Weston-super-Mare) Waterhouse, Capt. C.
Jeffreys, General Sir G. Osborne, C. Watkinson, H.
Jennings, R. Perkins, W. R. D. Watt, Sir G. S. Harvie
Jones, A. (Hall Green) Peto, Brig. C. H. M. Webbe, Sir H. (London)
Joynson-Hicks, Hon. L. W. Pickthorn, K. Wheatley, Major M. J. (Poole)
Kaberry, D. Pitman, I. J. Williams, C. (Torquay)
Keeling, E. H. Powell, J. Enoch Williams, Gerald (Tonbridge)
Kerr, H. W. (Cambridge) Price, H. A. (Lewisham, W.) Williams, Sir H G. (Croydon, E.)
Lambert, Hon. G. Prior-Palmer, Brig. O. Wills, G.
Lancaster, Col. C. G. Profumo, J. D. Wilson, Geoffrey (Truro)
Langford-Holt, J. Raikes, H. V. Winterton, Rt. Hon. Ear
Law, Rt. Hon. R. K. Rayner, Brig. R.
Leather, E. H. C. Redmayne, M. TELLERS FOR THE AYES:
Legge-Bourke, Maj. E. A. H. Remnant, Hon. P. Sir Arthur Young and
Major Conant.
NOES
Acland, Sir Richard Blenkinsop, A. Chetwynd, G. R
Adams, Richard Blyton, W. R. Clunie, J.
Albu, A. H. Boardman, H. Cocks, F. S.
Allen, A. C. (Bosworth) Booth, A. Coldrick, W.
Allen, Scholefield (Crewe) Bottomley, A. G. Collick, P.
Anderson, F. (Whitehaven) Bowden, H. W. Cooper, G. (Middlesbrough, W.)
Awbery, S. S. Bowles, F. G. (Nuneaton) Cooper, J. (Deptford)
Ayles, W. H. Braddock, Mrs. E. M. Cove, W. G.
Bacon, Miss A. Brookway, A. Fenner Craddock, George (Bradford, S.)
Baird, J. Brook, D. (Halifax) Cripps, Rt. Hon. Sir S
Balfour, A. Brooks, T. J. (Normanton) Crosland, C. A. R.
Barnes, Rt. Hon. A. J Broughton, Dr. A. D. D. Crossman, R. H. S
Bartley, P. Brown, T. J. (Ince) Cullen, Mrs. A.
Bellenger, Rt. Hon. F. J Burke, W. A. Daggar, G.
Benson, G. Burton, Miss E. Daines, P
Berwick, F. Butler, H. W. (Hackney, S.) Dalton, Rt. Hon. H.
Bevan, Rt. Hon. A. (Ebbw Vale) Carmichael, James Darling, G. (Hillsboro')
Bing, G. H. C. Castle, Mrs. B. A. Davies, A. Edward (Stoke, N.)
Blackburn, A. R. Champion, A. J. Davies, Ernest (Enfield. E.)
Davies, Harold (Leek) Jeger, G. (Goole) Rankin, J.
Davies, R J (Westhoughton) Jeger, Dr. S. W. (St. Pancras, S.) Rees, Mrs. D.
Davies, S. O. (Merthyr) Jenkins, R. H. Reeves, J.
de Freitas, Geoffrey Johnston, Douglas (Paisley) Reid, T. (Swindon)
Deer, G. Jones, D. T. (Hartlepool) Reid, W. (Camlachie)
Delargy, H. J. Jones, Frederick Elwyn (West Ham, S.) Rhodes, H.
Diamond, J. Jones, William Elwyn (Conway) Richards, R
Dodds, N. N. Keenan, W Roberts, Goronwy (Caernarvonshire)
Donnelly, D. Kenyon, C. Robertson, J. J. (Berwick)
Driberg, T. E. N Key, Rt. Hon. C. W. Robinson, Kenneth (St. Pancras, N.)
Dye, S. King, H. M. Rogers, G. H. R. (Kensington, N.)
Ede, Rt. Hon. J. C. Kinghorn, Sqn.-Ldr. E Ross, William (Kilmarnock)
Edelman, M. Kinley, J. Shackleton, E. A. A.
Edwards, John (Brighouse) Lang, Rev. G. Shinwell, Rt. Hon E
Edwards, Rt. Hon. N. (Caerphilly) Lee, F. (Newton) Shurmer, P. L. E.
Edwards, W. J. (Stepney) Lee, Miss J. (Cannock) Silverman, J. (Erdington)
Evans, Albert (Islington, S.W.) Lever, L. M. (Ardwick) Silverman, S. S. (Nelson)
Evans, E. (Lowestoft) Lever, N. H. (Cheetham) Simmons, C J
Evans, S. N. (Wednesbury) Lewis, A. W. J. (West Ham, N.) Slater, J
Ewart, R. Lewis, J. (Bolton, W.) Smith, Ellis (Stoke, S.)
Fernyhough, E. Lindgren, G. S. Smith, H. N. (Nottingham, S.)
Field, Capt. W. J. Lipton, Lt.-Col. M. Snow, J. W.
Finch, H. J. Logan, D. G. Sorensen, R. W.
Fletcher, E. G. M. (Islington, E.) Longden, F. (Small Heath) Soskice, Rt. Hon. Sir F
Follick, M. MoAllister, G. Sparks, J. A
Foot, M. M. MacColl, J. E. Steele, T.
Forman, J. C McGhes, H. G. Stewart, Michael (Fulham, E.)
Fraser, T. (Hamilton) McGovern, J Strauss, Rt. Hon. G. R. (Vauxhall)
Freeman, J. (Watford) McInnes, J. Stross, Dr. B.
Freeman, Peter (Newport) Mack, J. D. Summerskill, Rt. Hon. Edith
Gaitskell, Rt. Hon. H. T N McKay, J. (Wallsend) Sylvester, G. O.
Ganley, Mrs. C. S. Mackay, R. W. G. (Reading, N.) Taylor, H. B. (Mansfield)
Gibson, C. W. McLeavy, F. Taylor, R. J. (Morpeth)
Gitzean, A. MacMillan, M. K. (Western Isles) Thomas, D. E. (Aberdare)
Glanville, J. E. (Consett) McNeil, Rt. Hon. H. Thomas, George (Cardiff)
Gordon.Walker, Rt. Hon. P. C. MacPherson, Malcolm (Stirling) Thomas, I. O. (Wrekin)
Greenwood, A. W. J. (Rossendale) Mainwaring, W. H. Thomas, I. R. (Rhondda, W.)
Greenwood, Rt. Hn. Arthur (Wakefield) Mallalieu, E. L. (Brigg) Thorneycroft, Harry (Clayton)
Grey, C. F. Mann, Mrs. J. Thurtle, Ernest
Griffiths, D. (Rother Valley) Manuel, A. C. Timmons, J.
Griffiths, Rt. Hon. J. (Lianelly) Marquand, Rt. Hon. H Tomlinson, Rt. Hon G.
Griffiths, W. D. (Exchange) Mathers, Rt. Hon. George Tomney, F.
Gunter, R. J. Mellish, R. J Turner-Samuels, M.
Hale, J. (Rochdale) Messer, F. Usborne, Henry
Hale, Leslie (Oldham, W.) Middleton, Mrs. L. Vernon, Maj. W. F
Hall, J. (Gateshead, W.) Mikardo, Ian Viant, S. P.
Hall, Rt. Hn. W. Glenvil (Colne V'll'y) Mitchison, G. R. Wallace, H. W.
Hamilton, W. W. Moeran, E. W Watkins, T. E.
Hannan, W. Monslow, W. Webb, Rt. Hon. M. (Bradford. C.)
Hardman, D. R. Morgan, Dr. H. B Weitzman, D.
Hardy, E. A Morley, R Wells, P. L. (Faversham)
Hargreaves, A. Morris, P. (Swansea, W.) Wells, W. T. (Walsall)
Harrison, J. Morrison, Rt. Hon. H. (Lewisham, S.) West, D. G.
Hayman, F. H Mort, D. L. Wheatley, Rt. Hn. John (Edinb'gh, E.)
Henderson, Rt. Hon. A (Rowley Regis) Moyle, A. White, Mrs. E. (E. Flint)
Herbison, Miss M. Mulley, F. W. White, H. (Derbyshire, N.E.)
Hewitson, Capt. M. Nally, W. Whiteley, Rt. Hon. W.
Hobson, C. R. Oldfield, W. H Wigg, George
Holman, P. Oliver, G. H. Wilkins, W. A.
Holmes, H. E. (Hemsworth) Orbach, M. Willey, O. G. (Cleveland)
Houghton, Douglas Padley, W. E. Williams, Ronald (Wigan)
Hoy, J. Paling, Rt.Hon. Wilfred (Dearne V'lly) Williams, Rt. Hon. T. (Don Valley)
Hubbard, T. Pannell, T. C. Williams, W. T. (Hammersmith, S.)
Hudson, J. H. (Ealing, N.) Pargiter, G. A Winterbottom, I. (Nottingham, C.)
Hughes, Emrys (S. Ayr) Parker, J. Winterbottom, R. E. (Brightside)
Hughes, Hector (Aberdeen, N.) Paton, J. Wise, Major F. J.
Hughes, Moelwyn (Islington, N.) Pearson, A. Woodburn, Rt. Hon. A
Hynd, H. (Accrington) Peart, T. F. Woods, Rev. G. S
Hynd, J. B. (Attercliffe) Poole, Cecil Wyatt, W. L.
Irvine, A. J. (Edge Hill) Popplewell, E Yates, V. F.
Irving, W. J. (Wood Green) Porter, G.
Isaacs, Rt. Hon. G. A. Price, M. Philips (Gloucestershire, W.) TELLERS FOR THE NOES:
Janner, B. Pryde, D. J. Mr. Collindridge and Mr Royle.
Jay, D. P. T. Pursey, Comdr. H
Mr. Jay

I beg to move, in page 4, line 22, to leave out the second "or," and to insert "and."

This Amendment corrects a misprint in the Bill as it was originally before us, and meets the request of the House that that misprint should be put right on Report.

Amendment agreed to.

Mr. Jay

I beg to move, in page 4, line 34, to leave out from "be," to the end of line 35, and to insert: laid before the Commons House of Parliament after being made and—

  1. (a) if it increases the rate of duty under this section, shall cease to have effect on the expiration of a period of twenty-eight days from the date on which it is made, unless at 299 some time before the expiration of that period it has been approved by a resolution of that House (but without prejudice to anything previously done thereunder or to the making of a new order); and
  2. (b) if it does not increase the rate of duty under this section, shall be subject to annulment in pursuance of a resolution of that House.
In reckoning any such period of twenty-eight days as aforesaid no account shall be taken of any time during which Parliament is dissolved or prorogued or during which the Commons House is adjourned for more than four days.

Mr. Boyd-Carpenter (Kingston-upon-Thames)

On a point of order. There is on the Order Paper, as you are no doubt aware, Mr. Deputy-Speaker an Amendment in the names of my hon. Friends and myself dealing with the same subject as the Amendment put down by the Chancellor of the Exchequer. I would appreciate your guidance whether you propose to call that separately or whether it is your wish that the subject matter should be discussed with the Amendment of the Chancellor.

Mr. Deputy-Speaker (Major Milner)

To which Amendment does the hon. Gentleman refer?

Mr. Boyd-Carpenter

In page 4, line 34, to leave out from "be," to the end of line 35, and to insert: laid in draft before Parliament and shall not take effect until a resolution approving the draft has been agreed to by the Commons House of Parliament.

Mr. Deputy-Speaker

They may both be discussed together if that is the will of the House, but if the hon. Member is referring to the proposed Amendment in line 34, Mr. Speaker is not proposing to select it.

Mr. Boyd-Carpenter

It is, of course, dealing with the same subject matter, though differently; and I take it that the effect of your Ruling is that those who wish to raise this issue should raise it on the Amendment of the Chancellor.

Mr. Jay

This Amendment honours the undertaking we gave in the Committee stage to substitute the affirmative resolution procedure for the negative procedure in any case where it was proposed to increase the rate of duty on home produced hydro-carbon oils. It is in accordance with the undertaking we gave, and I do not think it requires any further explanation.

5.45 p.m.

Mr. Boyd-Carpenter

The Financial Secretary has indicated that this Amendment is intended to carry out a pledge given at about 3 o'clock in the morning of 15th June, and although it does obviously amount to some advance on the position as it was under the Bill as drafted, two objections to it remain. In the first place, the pledge itself does not, in my view, go anything like far enough, and secondly, contrary to the Financial Secretary's statement, this Amendment does not carry out the pledge as given. I would remind the hon. Gentleman of the words of the Minister of State for Economic Affairs on this issue. The right hon. Gentleman said: However, we have listened to the arguments put forward and agree that there is something to the point that there ought to be an absolute guarantee of adequate discussion, which, I think, was the main burden of the Opposition speeches, and will put down an Amendment on Report providing that the Treasury Orders which have the effect of increasing taxation should be subject to an affirmative Resolution. So far, so good; but the right hon. Gentleman goes on to say: That, I think, is a reasonable proposal, because it enables the Treasury, if it becomes necessary between the two Finance Bills to make a change in the preference which has the effect of increasing taxation to do so; but only after discussion by Parliament"—[OFFICIAL REPORT, 14th June. 1950; Vol. 476. c. 447-448.] This Amendment makes no such provision. By adopting the form of the affirmative procedure other than the one which the right hon. Gentleman's words clearly indicated that he had in mind, it does not provide that these changes resulting in increases in taxation can only take place after discussion by Parliament. If hon. Members will look at the words on the Order Paper in the Amendment of the Chancellor they will see that the effect of the Amendment is that the Orders, when made, can take effect at once or on any such day as the Treasury may determine; that they remain in force and only lapse if, after 28 days, they have not been approved by affirmative resolution. That is to say, they remain in force during 28 days but what is important, and I would ask the attention of the House on this point, is that the Amendment includes the words: In reckoning any such period of twenty-eight days as aforesaid no account shall be taken of any time during which Parliament is dissolved or prorogued or during which the Commons House is adjourned for more than 'four days. Let us assume that one of these Orders which have the effect of increasing taxation is made in the first week of August. That Order could remain in force and taxation be levied under it until the next assembly of Parliament say at the end of October and then for 28 days thereafter, without any Motion being approved by this House. What is more, if one looks again at the terms of the Amendment one sees that even though this affirmative resolution is not carried and the Order lapses, it is without prejudice to anything done under it while it was in force.

The effect, then, is that for some period which, if the House is in Session, will be for 28 days, and which if the House is not in Session could be for unlimited period, taxation could be increased by one of these Statutory Instruments, not only without the approval of this House, but without the discussion which, in the words I have quoted, the Minister of State for Economic Affairs expressly promised should precede the levying of this taxation.

Therefore, leaving out the general question as to whether it is right either under affirmative or negative procedure to impose increased taxation, I must make the protest that the Amendment now before the House, and offered to the House by the hon. Gentleman with becoming brevity on the grounds that it did fill a pledge, does not, in fact, fulfil that pledge. The pledge would be honoured if the other form of affirmative procedure, the form in which the Order is made in draft and does not come into effect until approved by resolution, had been adopted; and that is the solution suggested in the Amendment in the name of my hon. Friends and myself, and which, as you, Sir, have been good enough to indicate will not be called.

It is perfectly true that that Amendment goes further than the Government pledge in that it applies this procedure also where taxation is reduced. But on the actual subject matter of the Government pledge, the only way in which it could be carried out in the words used by the Minister would be to adopt that other form, that alternative form, of affirmative procedure in which the Order is laid in draft and does not come into effect until the House has approved the draft. That is a form with which hon. Members are perfectly familiar, and which is suggested in the Amendment which appears in my name. Our first protest must be that that pledge made originally at 3 o'clock in the morning—and I say that in extenuation of the Government, although it was not our fault that it was made at 3 o'clock—has not been carried out. That leaves the whole position to all intents and purposes as unsatisfactory as it was when the Bill was first presented to this House.

All the objections then put forward, those for example voiced by my right hon. and learned Friend the Member for West Derby (Sir D. Maxwell Fyfe), remain as valid as they were, since the change, although it may be a move in the right direction, is to the less effective form of affirmative procedure. I must urge that this Amendment does not meet the real charge that the Government are trying to by-pass the accepted procedure under which increased taxation is only imposed after proper and full debate in this House with the possibility of amendment and discussion at various stages.

It seems to me that the Financial Secretary, not only by the subject matter of this Amendment but, still more, by the manner in which he moved it, does not appreciate the fact that there are many hon. Members to whom the conferring upon the Government of power to increase taxation by this insidiously easy system of delegated legislation remains objectionable on constitutional principle, undesirable in its application and wholly inconsistent with the traditional control by this House of the taxation of the people.

Mr. Pickthorn (Carlton)

I shall not weary the House by making the speech which I should have made, very much worse, if I had been the first speaker, and which seems to me unanswerable. I would only, if I may, add two considerations. The first is this: I have not read very carefully the Debate on the Committe stage, but I have perused it, and I think it fair to say that nobody with that Debate before him could doubt that this point was in the minds of this side of the Committee. /t really is difficult to see how Ministers and their advisers, in preparing this Amendment to meet the pledge there made, could have failed to see the distinction insisted upon by my hon. Friend, or could have failed to see that the Amendment as drafted would be inadequate to that distinction. I think that really anyone who remembers at all clearly the Debate we then had, or who has read it since, will bear me out in that.

Secondly, I should like to say one small thing. I have been reminded by a Friend, not technically but otherwise extremely learned, who sits near me, that the House is very rapidly, rather strikingly in the last few days, especially if this Amendment goes through as it stands, turning backwards on the procedure by which it achieved greatness. All the procedure by which the House in the 14th and 15th centuries—[Interruption.] They were just as important as the 20th century in their time, and if they had not been there then, we and the 20th would not be here now. All the procedure by which the House then established complete control over legislation, by making it necessary that the Executive should do it by a Bill containing in itself the form of the act intended, instead of by merely indicating a general intention and leaving it to the Executive to do the thing by Order in Council, Proclamation, and so on—all that procedure is being turned back again.

Just as we saw yesterday on the Entertainments Duty, we are turning back the whole procedure, which was then contemporaneous, or a little earlier, by which it was insisted that in fiscal matters the Crown should deal with the whole nation at once, and should not deal with the F.B.I. one moment, the wool importers another moment, the cloth exporters another and so on. It may seem a smallish thing here, just as the distinction between "and" and "or" may seem a smallish thing. Incidentally, I thought that manners might have led to some expression of gratitude from the Treasury Bench to those who pointed out that the Bill was in a small respect nonsense unless that alteration was made, last time.

Now this may seem as small a point, but it is a point very great in consequence, both on the ground that in so far as the Treasury Bench may, as I think it may, be reasonably accused of not meeting its pledges, there is no excuse on the ground of inattention. They ought, if they looked at the earlier Debate, to have known what they were doing. Secondly, it is a matter of great importance, because it goes deep into the history of the power of this House. Hon. Gentlemen who regard that as a matter for mere inarticulate facetiousness are really making a grave error.

Mr. Jay

In reply to the hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) I frankly agree that. taking literally the words of my right hon. Friend, spoken, as he says, at three o'clock in the morning, it might be held that we had undertaken that the change in tax should not come into force, even for a few days, until discussion had taken place in Parliament.

Mr. Oliver Lyttelton (Aldershot)

Does the Financial Secretary suggest that we should not take literally the words of a Minister? On what other basis are we to take them?

Mr. Jay

I was going on to say that, equally frankly, I think our proposals are entirely in the spirit of what my right hon. Friend said and in the spirit of the general argument put forward that morning by the Opposition. It is true that under this procedure there will be a period of days, and perhaps weeks, in which the tax will be in force before the discussion has taken place in Parliament. But the essential point is that it cannot remain in force for any long period of time until there has not merely been discussion but actual approval by Parliament. That, as I understood it, was the substance of the request made. That is why it seems to me that we have, in spirit and in substance, fulfilled the undertaking.

Mr. Lyttelton

Nothing of the sort.

Mr. Jay

I should also like to explain why it is impossible in practice to adopt the alternative procedure.

Mr. Boyd-Carpenter

Before the hon. Gentleman passes from that point, would he, as he now has the advantage of having the Minister of State for Economic Affairs beside him, tell the House what is the meaning of the words: … but only after discussion by Parliament. Under this procedure the tax can take effect without discussion by Parliament.

Mr. Jay

I agree that literally, on the small point of the short period of time, the hon. Gentleman was perfectly correct, but in substance this provision carries out the undertaking we gave. Perhaps I might explain why it is impracticable to adopt the alternative procedure even if we wished to do so. That cannot be done, and has never been done in matters of taxation, because it would give notice to various persons concerned in buying and selling the product, whatever it was. that there was to be a change in taxation at some future date. That would give rise to forestalling and would involve us in all the same difficulties as a premature disclosure of a Budget proposal would cause.

For that reason, this precisely similar procedure has been followed both in the case of import duties under the Import Duties Act and in the case of Purchase Tax, under the procedure for making small changes by order, which the House approved two years ago. Therefore, when hon. Members raise these important questions of Parliamentary control over taxation, which we all regard as of the greatest importance, I entirely agree that it should be clear that we are merely introducing here the only practical procedure. Exactly the same procedure has been in force for a long time both for import duties and Purchase Tax

Finally, since we are discussing this Amendment. I would emphasise the fact that what the Government are doing is to take a step in the direction of fuller, and not less full, Parliamentary control.

Mr. Gerald Williams (Tonbridge)

Does not the hon. Gentleman remember the fiasco there was over Christmas cards when an order was brought out and catalogues had to be changed, and then the order was never agreed to by this House? That is the very sort of thing we want to avoid.

6.0 p.m.

Mr. Henry Strauss (Norwich, South)

I am astonished by the speech of the Financial Secretary to the Treasury. It has been pointed out, and, indeed, it must have been obvious to the Minister and his advisers, that the proposal which they are now putting forward was not in accordance with the pledge. Nor do I follow the point that this is somehow excusable because it was done in the middle of the night. Since the Government do insist on working throughout the night, they must, presumably, take it upon themselves to be compos mentis for the whole period. They really must not treat lightly the ignoring of a pledge. If it was sought to ask the House to forgive them for not honouring the pledge, I think the Chancellor himself might have been here to make the request personally.

Apart from that altogether, the assumption in the speech of the Financial Secretary is that it is necessary to have the power to make these orders by subordinate legislation. That is not admitted on this side of the House at all, it was not admitted in Committee, and it is not admitted by any student of the constitution. If the Government have this great difficulty in doing it by the action suggested by my hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), and if the Government are right in their objections to that course, that is only an argument for deleting this suggestion altogether and proceeding in the ordinary way, which is the proper method for taxation, by a Bill which eventually becomes an Act of Parliament. That is in accordance with the traditions of this House, it is in accordance with the interests of democratic government, and it is in accordance with the desire of those interested in liberty that their liberties should be preserved. It is idle to pretend that this is not an extremely important issue.

There is only one other matter of which I wish to remind the House. The Financial Secretary to the Treasury referred to the procedure in the matter of the import duties. As was pointed out in the Debate on the. Committee stage, whatever else it did, the procedure under the Act providing for import duties did provide certain safeguards which are not provided here at all. I do not wish to repeat any of the arguments put before the Committee, because those interested can read them, but it really does not afford a precedent for this. On account of the constitutional importance of this matter, and on account of the importance of the fact that the Government are breaking a pledge and know that they are breaking it, whether they knew it or not when the Financial Secretary first rose, I beg them now, in the interests of the honour of this House, to reconsider their decision.

Mr. John Foster (Northwich)

I want to make a suggestion to the Financial Secretary which might meet the difficulty in which he says he finds himself about the draft Order in Council announcing the change in taxation as only coming into effect later, if these Amendments were agreed to. My suggestion may not be acceptable, but I should like to hear the Government's view of it.

When one introduces taxation legislation, the Bill makes the change operative usually from the day when it is introduced, as with the Finance Bill. I suggest that the draft Order in Council should follow that practice and should say that, as from 1st July, 1950, the tax shall be so-and-so, and then the Order in Council will not come into effect until approved by Resolution of this House. I think that would meet the hon. Gentleman's point, because it is just like legislation. We shall know that the change in taxation will start from a given date, and, therefore, people will not be able to take avoiding action, because, if the Resolution is passed, the tax starts from the date when the Order in Council is drafted.

In other words, it is making the procedure of the Order in Council fit in with that of a Bill, and I think that would meet the Financial Secretary's point when he says that the Opposition Amendments are not acceptable, because the change in taxation would be announced prematurely. I ask him to say whether that suggestion would not meet this difficulty, and whether he could not then agree to our point of view regarding the undertaking given by his right hon. Friend that taxation would only be imposed after discussion.

Sir D. Maxwell Fyfe

I am very sorry that we should have come to disagreement on this point. As my hon. and learned Friend the Member for Norwich, South (Mr. H. Strauss), has pointed out, it illustrates the great danger of departing from the constitutional and correct procedure of imposing increased taxation only by means of a Bill and subsequent Act of Parliament.

I do not want to state again the reasons why I think that is the correct position, but, after considerable discussion, covering a wide field, the Minister of State gave us the clear assurance that the taxation would not be increased before it was discussed in this House. The words have been quoted twice, the right hon. Gentleman himself has bobbed in and out of the Chamber, but he has been here sufficiently long to hear his own words read, and we have waited, with an expectation which has been growing every moment, to hear how even his subtle casuistry would make the course taken by the Government accord with the words which he spoke and which are now on record.

I feel that, on this matter, even now we ought to try to reach agreement. My hon. Friend the Member for Kingston-on-Thames (Mr. Boyd-Carpenter) has made it quite clear that, although he drafted the Amendment which has not been called and to which he has referred, he would be quite prepared—and everyone on this side of the House will be quite prepared—that his procedure should apply to an increase in the rate of duty. If that was done, it would meet our point of view.

The Financial Secretary said that the second form, the wider and more generous form of the affirmative resolution, was never used in taxation matters. Curiously enough, on today's Order Paper that form is used with regard to double taxation relief, as the hon. Gentleman himself will see if he looks at page 1650. Therefore, once again, the width of language of the representatives of the Treasury is found to be insupportable, although I quite agree that there is a difference between the two things.

My hon. and learned Friend the Member for Northwich (Mr. J. Foster) has indicated one way in which the matter could be dealt with, and I am quite sure that it is not beyond the wit of the draftsmen or those who study the procedure of the House to meet that point. On the spur of the moment, my hon. and learned Friend gave one way in which to meet the point, and there are others that will occur to anyone familiar with the procedure of the House.

I have tried to put this as moderately as I can and to suggest the best via media I can to meet the matter, but pledges given between the Committee stage and the Report stage are a vital matter for the running of this House. I put that to the right hon. Gentleman because it is one of the most important conventions by which our business can be carried on. If we get an undertaking, almost in 99 cases out of 100 it stops discussion. We try and leave the matter because we know that in the vast majority of cases—I find it difficult to remember exceptions even at this moment—the undertaking will be carried out or else the Minister will come and say that he has done his best, but finds it impossible, and explains his reasons to the House.

Here we have an undertaking which has been met by the stony silence of the right hon. Gentleman who gave it, and if that position continues then the only way that we can mark our resentment of the sense in which the House has been treated is to divide against the Amendment and the refusal to carry out the undertaking given by the right hon. Gentleman the Minister of State.

Mr. Jay

Perhaps with the leave of the House I may say one further word in response to the right hon. and learned Gentleman. I attempted to argue this matter on the substance and in the spirit of the Amendment, but if hon. Members opposite wish to rest it on the literal words of my right hon. Friend, I am bound to point out what I would not otherwise have done, that my right hon. Friend, in fact, withdrew his offer in the last sentence of his speech. He actually said: I have made an offer, but if the Opposition are not prepared to accept that, all I can say is we withdraw the offer, and we can take the matter to a Division."—{OFFICIAL REPORT, 14th June, 1950; Vol. 476, c. 448.]

Mr. Boyd-Carpenter

If there is any validity in that contention, why did the hon. Gentleman move the Amendment now before the House on the express ground that it was to carry out this undertaking?

Mr. Jay

Because, as I said, in our view this carries out the spirit and the substance of what we are trying to do. But if hon. Members opposite were really to argue that it is a matter of the literal wording of the pledge, then we are bound to point out that, literally, the offer was withdrawn. However, I prefer to rest our case for the Amendment on our belief that we are here doing the right thing, and are going as far towards meeting the request for the affirmative resolution procedure as is, in fact, practical in matters of taxation.

Mr. Lyttelton

Are we not to hear the Minister on this matter? I see he is smiling; he obviously thinks it extremely funny. I think it a very serious matter that when a Minister makes a categorical pledge he does not, for some reason best known to himself, carry out that pledge, and does not defend the position himself, but puts up the Financial Secretary to do so. We take a serious view on this because we think it undermines the general conventions by which we try to carry on our business. Not only that; it is an affront to this House for a Minister who has palpably not carried out a pledge not to explain to the House the reasons for the course he has taken.

The Minister of State for Economic Affairs (Mr. Gaitskell)

I think the right hon. Gentleman is being quite needlessly discourteous to my hon. Friend the Financial Secretary who has explained perfectly plainly the position of the Government in this matter. It is quite true that I used the words quoted by the hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) and others. It is equally true that towards the end of the Debate I withdrew that offer, and it is quite ridiculous for the right hon. Gentleman to say that I have broken a pledge, and that it is contrary to the conventions of the House, when he knows perfectly well that the Opposition did not accept our proposition and insisted on taking the matter to a Division.

6.15 p.m.

As far as the fulfilment of pledges is concerned, it would have been quite unnecessary for us to put down the Amendment. Despite the fact that I withdrew the offer, we considered that it was as well to have an affirmative resolution. But, for the reasons given by my hon. Friend, we considered it most desirable that we should not allow forestalling to take place, and that we should therefore follow the usual procedure with orders of this kind. It is on those lines that we have proceeded.

Mr. Selwyn Lloyd

I do not think we can allow the right hon. Gentleman or his colleague to get away with that. I think it is a shabby, shoddy attempt to shuffle out of an obligation. When the Financial Secretary moved this Amendment, he said it was to honour the undertaking given. Either it was to honour that undertaking or it was not, and, if not, why begin by saying it was? When we look at the undertaking, leaving out of account the other aspects of the matter, we find that the right hon. Gentleman said that he thought it reasonable that taxation should only be altered under those circumstances after discussion by this House. I do not know whether he was here, but during the earlier portion of the Debate it was shown quite clearly that, in certain circumstances, taxation could be altered over a period of at least four months without any discussion at all in this House. It might well be that time before the House had an opportunity of discussing it. Therefore, the Amendment put before the House does not meet the criterion which the right hon. Gentleman put forward, that alterations should only take place after discussion in this House.

The plain fact is that if it is impossible for the Government to carry out that which the right hon. Gentleman said was reasonable, then they ought to revert to the old system. It really reinforces the argument we originally put forward, that there ought to be a reasonable guarantee to people in this industry, or that the rate of taxation should only be altered each year in the ordinary way by the machinery of the Finance Bill. That is the plain issue, and the Government in refusing to attempt to do what they admitted was reasonable, are dishonouring themselves and abusing the processes of the House.

Mr. Charles Williams (Torquay)

I regret that the Minister of State for Economic Affairs should have used the words he did. In his opening remarks, the Financial Secretary was quite obviously trying to carry out a pledge. That he did not go far enough is the cause of the difference of opinion between us. We do not think the pledge has been fully honoured. On the other hand, he has gone a certain way towards it.

We then had the Minister of State for Economic Affairs getting up and referring to the fact that he said he would withdraw the pledge. Most of us who heard it, I think, rather took the line that that was one of his little outbreaks of temper, in which he often indulges to the amusement of the Financial Secretary to the Treasury, and that the Government thought that this was an incident not very creditable to the House or to the right hon. Gentleman and decided to draw a veil over it,

as almost everyone would like to have done. I certainly would. It was not a creditable outbreak. It is a very bad thing if when a pledge is made it is not carried out in the spirit in which the whole Committee believed it would be carried out at that time. It is far worse when one has a comparatively senior Minister taking the line that was taken just now.

The other point is the Financial Secretary's reference to the import duties. I happen to have been in the House at that time. We had then a different purpose in mind. We were dealing with the whole question of protection. This proposal does not do that in any way. It is absolutely false to base the argument on the question of Import Duty. If any of us had known at that time, at 3 o'clock in the morning, that this was going to be the attitude of the Minister of State for Economic Affairs, our attitude to the rest of that Debate would have been very different.

I bitterly regret that the Chancellor of the Exchequer and the senior Members of the Government are not here now. I feel it is absolutely certain that if they had honoured the House with their presence, or rather if they had done their duty and been in the House when the Government has been accused by two very senior Members on this side of not carrying out their pledge, they would have been obliged and indeed would have been the first to wish, to carry out that pledge. They would have seen that this Amendment. was properly amended to carry it out. P is all very well for the Financial Secretary to the Treasury to treat pledges in a light. hearted way, but that is not the strength of our Parliamentary constitution, and that is why, sooner or later. he is likely to take the same road as hi; unfortunate predecessor.

Question put, "That the words proposed to be left out stand part of the Bill."

The House divided: Ayes, 244; Noes, 276.

Division No. 56.] AYES [16.23 p.m.
Amory, D. Heathcoat (Tiverton) Baldock, J, M. Birch, Nigel
Arbuthnot, John Banks, Col. C Bishop, F. P.
Ashton, H. (Chelmsford) Beamish, Maj. T V H Black, C. W.
Assheton, Rt. Hon R (Blackburn, W) Bell, R. M Boles, Lt.-Col. D. C. (Wells)
Astor, Hon. M Bennett, R. F B. (Gosport) Boothby, R.
Baker, P Bevins, J R. (Liverpool, Toxteth) Bossom, A C
Bower, N Hogg, Elan. Q. Osborne, C.
Boyd-Carpenter, J. A. Hollis, M. C. Perkins, W. R. D.
Bracken, Rt. Hon. Brendan Hope, Lord J Peto, Brig. C. H. M
Braine, B. Hopkinson, H. L. D'A. Pickthorn, K.
Braithwaite, Lt.-Comdr. J. G. Hornsby-Smith, Miss P. Pitman, I. J.
Browne, J. N. (Govan) Horsbrugh, Miss F. Powell, J. Enoch
Buchan-Hepburn, P. G. T. Howard, G. R. (St. Ives) Price, H. A. (Lewisham, W.)
Bullock, Capt. M. Howard, Gerald (Cambridgeshire) Prior-Palmer, Brig. O.
Butins, Wing-Commander E. E. Hudson, Sir Austin (Lewisham, N.) Profumo, J. D.
Burden, Squadron-Leader F. A. Hulbert, Wing-Cdr. N. J. Raikes, H. V
Butcher, H. W. Hutchinson, Geoffrey (Ilford, N.) Rayner, Brig. R.
Butler, Rt. Hon. R. A. (S'ffr'n W'ld'n) Hutchison, Lt.-Corn. Clark (E'b'rgh W.) Redmayrte, M.
Carr, L. R. (Mitcham) Jeffreys, General Sir G. Remnant, Hon. P.
Channon, H. Jennings, R. Renton, D L. M.
Clarke, Col. R. S. (East Grinstead) Johnson, Howard S. (Kemptown) Roberts, P. G. (Healey)
Clarke, Brig. T. H. (Portsmouth, W.) Johnson, James (Rugby) Robertson, Sir B. (Caithness)
Clyde, J. L. Jones, A. (Hall Green) Robson-Brown, W. (Esher)
Colegate, A. Joynson-Hicks, Hon. L. W Roper, Sir H.
Conant, Maj. R. J. E. Kaberry, D. Renner, Col. L.
Cooper, A. E. (Ilford, S.) Keeling, E. H. Ross, Sir R. D. (Londonderry)
Cooper-Key, E. M. Kerr, H W. (Cambridge) Ranier, Capt. R. E. D.
Craddock, G. B. (Spelthorne) Lambert, Hon. G. Sandys, Rt. Hon. D.
Cranborne, Viscount Lancaster, Col. C. G. Scott, Donald
Crookshank, Capt. Rt. Hon. H. F. C. Langford-Holt, J. Smiles, Lt.-Col. Sir W
Cross, Rt. Hon. Sir R. Law, Rt. Hon. R. K. Smith, E. Martin (Grantham)
Crosthwaite.Eyre, Col. O E. Leather, E. H. C. Smithers, Peter H. B. (Winchester)
Crouch, R. F. Legge-Bourke, Maj. E. A. H. Smithers, Sir W. (Orpington)
Crowder, F. P, (Ruislip-Northwood) Lennox-Boyd, A. T. Snadden, W. McN.
Crowder, Capt. John F. E. (Finchiey) Lindsay, Martin Soames, Capt. C.
Cundiff, F. W. Linstead, H. N. Spearman, A. C. M.
Cuthbert, W. N. Llewellyn, D. Spence, H. R. (Aberdeenshire, W.)
Darling, Sir W. Y. (Edinburgh, S.) Lloyd, Rt. Hon. G. (King's Norton) Spens, Sir P. (Kensington, S.)
Davidson, Viscountess Lloyd, Maj. Guy (Renfrew, E.) Stanley, Capt. Hon. R. (N. Fylde)
Davies, Nigel (Epping) Lloyd, Selwyn (Wirral) Stevens, G. P.
de Chair, S. Lockwood, Lt.-Col. J, C. Steward, W. A. (Woolwich, W.)
Deedes, W. F. Longden, G. J. M. (Hems, S.W.) Stewart, J. Henderson (Fife, E.)
Digby, S. Wingfield Low, A. R. W. Storey, S.
Donner, P. W. Lucas, Major Sir J. (Portsmouth, S.) Strauss, Henry (Norwich, S)
Douglas-Hamilton, Lord M Lucas, P. B. (Brantford) Stuart, Rt. Hon. J. (Moray)
Drayson, G. B Lucas-Tooth, Sir H. StudIvolme, H. G
Drove, C LytleIton, Rt. Hon. O Summers, G S
Dugdale, Maj. Sir T. (Richmond) McAdden, S. J. Sutcliffe, H.
Duncan, Capt. J. A. L. McCallum, Maj. D. Taylor, W. J. (Bradford, N.)
Duthie, W. S. McCorquodale, Rt. Hon. M. S. Teeling, William
Eccles, D. M. Macdonald, Sir P. (I. of Wight) Thomas, J. P. L. (Hereford)
Eden, Rt. Hon. A. McKibbin, A. Thompson, K. P. (Walton)
Erroll, F. J. McKie, J. H. (Galloway) Thompson, R. H. M. (Croydon, W.)
Fisher, Nigel Maclay, Hon. J. S. Thorneycroft, G. E. P. (Monmouth)
Fletcher, W. (Bury) Maclean, F. H. R. Thornton-Kemsley, C N
Fort, R. MacLeod, lain (Enfield, W.) Thorp, Brigadier R. A. F
Feeler, J. G. MacLeod, John (Ross and Cromarty) Tilney, Jahn
Fyfe, Rt. Hon. Sir D. P. M. Macmillan, Rt. Hon. Harold (Bromley) Touche, G. C
Galbraith, Cmdr, T. D. (Pollok) Macpherson, N. (Dumfries) Tweedsmuir, Lady
Galbraith, T G. D. (Hillhead) Manningham-Buller, R. E Vane, W. M. F.
Gamer-Evans, E. H. (Denbigh) Marlowe, A. A. H. Vaughan-Morgan, J K
Gates, Maj. E. E. Mercies, A. E. Vesper, D. F.
Glyn, Sir R. Marshall, D. (Bodmin) Wakefield, E. B. (Derbyshire, W.)
Gomme-Duncan, Col. A. Marshall, S. H. (Sutton) Wakefield, Sir W. W. (St. Marylebone)
Gridley, Sir A. Maude, A. E. U. (Ealing, S.) Walker-Smith, D. C.
Grimstan, Hon. J. (St. Albane) Maudling, R. Ward, Hon. G. R. (Worcester)
Grimston, R. V. (Westbury) Medlicatt, Brigadier F Ward, Miss I. (Tynemouth)
Harden, J. R. E. Mellor, Sir J. Waterhouse, Capt. C.
Hare, Mon. J. H. (Woodbridge) Matson, A. H. E. Watkinson, H.
Harris, F. W. (Croydon, N.) Moore, Lt.-Col. Sir T. Watt, Sir G S. Harvie
Harris, R. R. (Heston) Morrison, Maj. J. G. (Salisbury) Webbe, Sir H. (London)
Harvey, Air-Codre. A. V. (Macclesfield) Morrison, Rt. Hon. W. S. (Cirencester) Wheatley, Major M. J. (Poole)
Harvey, Ian (Harrow, E.) Nabarro, G. Williams, C. (Torquay)
Hay, John Nicholls, H. Williams, Gerald (Tonbridge)
Head, Brig. A. H. Nicholson, G. Williams, Sir H. G. (Croydon, E.)
Heald, L. F. Nugent, G. R. H. Wills, G.
Henderson, John (Cathcart) Nutting, Anthony Wilson, Geoffrey (Truro)
Hicks-Beach, Maj. W. W. Oakshott, H. D Winterton, Rt. Hon. Ears
Higgs, J. M. C. Odey, G. W. Wood, Hon. R.
Hill, Mrs. E..(Wythenshawe) Ormsby-Gore, Hon. W. D
Hill, Dr. C. (Luton) Orr, Capt. L. P. S. TELLERS FOR THE AYES:
Hinchingbrooke, Viscount Orr-Ewing, Charles Ian (Hendon, N.) Brigadier Mackeson and
Hirst, Geoffrey Orr-Ewing, Ian L. (Weston-super-Mare) Lieut.-Colonel Bromley-Davenport.
NOES
Acland, Sir Richard Allen, Scholefield (Crewe) Bacon, Miss A
Adams, Richard Anderson, F. (Whitehaven) Baird, J.
Alhu, A. H. Awbery, S. S. Balfour, A.
Allen, A. C. (Bosworth) Ayles, W. H. Barnes, Rt. Hon. A. J.
Bartley, P. Griffiths, D. (Rother Valley) Mort, D. L.
Bellenger, Rt. Hon. F. J Griffiths, W. D. (Exchange) Moyle, A.
Benson, G. Gunter, R. J. Mulley, F. W.
Beswick, F Hale, J. (Rochdale) Nally, W.
Bevan, Rt. Hon A. (Ebbw Vale) Hale, Leslie (Oldham, W.) O'Brien, T.
Bing, G. H. C. Hall, J. (Gateshead, W.) Oldfield, W. H.
Blackburn, A. R. Hall, Rt. Hn. W. Glenvil (Colne V'll'y) Oliver, G. H
Blenkinsop, A. Hamilton, W. W. Orbach, M.
Blyton, W. R. Hardman, D. R Padley, W. E.
Boardman, H. Hardy, E. A. Paling, Will T. (Dewsbury)
Booth, A. Hargreaves, A. Pannell, T. C.
Bottomley, A. G. Harrison, J. Pargiter, G. A.
Bowden, H. W. Hayman, F. H. Parker, J.
Bowen, R. Henderson, Rt. Hon. A. (Rowley Regis) Paton, J.
Bowles, F. G. (Nuneaton) Herbison, Miss M. Pearson, A.
Braddock, Mrs. E. M. Hewitson, Capt. M. Pearl, T. F.
Brockway, A. Fenner Hobson, C. R. Poole, Cecil
Brook, D. (Halifax) Holman, P. Popplewell, E.
Brooks, T. J. (Normanton) Holmes, H E. (Hemsworth) Porter, G.
Broughton, Dr. A. D. D. Houghton, Douglas Price, M. Philips (Gloucestershire, W.)
Brown, T. J. (Ince) Hoy, J. Pryde, D. J.
Burke, W. A. Hubbard, T. Pursey, Comdr. H.
Burton, Miss E. Hudson, J. H. (Ealing, N.) Rankin, J.
Butler, H. W. (Hackney, S.) Hughes, Emrys (S. Ayr) Rees, Mrs. D.
Carmichael, James Hughes, Hector (Aberdeen, N.) Reeves, J.
Castle, Mrs. B. A. Hughes, Moelwyn (Islington, N.) Reid, T. (Swindon)
Champion, A. J. Hynd, H. (Accrington) Reid, W (Camlachie)
Chetwynd, G. R Hynd, J. B. (Attercliffe) Rhodes, H.
Clunie, J. Irvine, A. J. (Edge Hill) Richards, R.
Cocks, F. S. Irving, W. J. (Wood Green) Roberts, Emrys (Merioneth)
Coldrick, W. Isaacs, Rt. Hon. G. A Roberts, Goronwy (Caernarvonshire)
Collick, P. Jay, D. P. T. Robertson, J. J. (Berwick)
Collindridge, F. Jeger, Dr. S. W. (St Pancras, S.) Robinson, Kenneth (St. Pancras, N.)
Cooper, G. (Middlesbrough, W.) Jenkins, R. H. Rogers, G. H. R. (Kensington, N.)
Cooper, J. (Deptford) Johnston, Douglas (Paisley) Ross, William (Kilmarnock)
Cove, W. G. Jones, D. T. (Hartlepool) Royle, C.
Craddock, George (Bradford, S.) Jones, Frederick Elwyn (West Ham, S.) Shackleton, E. A. A.
Cripps, Rt. Hon. Sir S. Jones, Jack (Rotherham) Shurmer, P. L. E.
Crosland, C. A. R. Jones, William Elwyn (Conway) Silverman, J (Erdington)
Crossman, R. H. S. Keenan, W Silverman, S S. (Nelson)
Cullen, Mrs. A. Kenyon, C Simmons, C. J
Dagger, G. Key, Rt. Hon C W Slater, J.
Daines, P. King, H. M. Smith, Ellis (Stoke, S.)
Dalton, Rt. Hon. H. Kinghorn, Sqn.-Ldr E. Smith, H. N. (Nottingham, S.)
Darling, G. (Hillsboro') Kinley, J. Snow, J. W
Davies, A. Edward (Stoke, N.) Lang, Rev. G. Sorensen, R. W
Davies, Harold (Leek) Lee, F. (Newton) Soskice, Rt. Hon. Sir F
Davies, R. J. (Westhoughton) Lee, Miss J. (Cannock) Sparks, J. A.
Davies, S. O. (Merthyr) Lever, L. M. (Ardwick) Steele, T.
de Freitas, Geoffrey Lever, N. H. (Cheetham) Stewart, Michael (Fulham, E.)
Deer, G. Lewis, A W J. (West Ham, N.) Strauss, Rt. Hon. G. R. (Vauxhall)
Delargy, H. J. Lewis, J (Bolton, W.) Stross, Dr. B.
Diamond J. Lindgren, G. S. Summerskill, Rt. Hon. Edith
Dodds, N. N. Lipton, Lt.-Col M Sylvester, G. O.
Donnelly, D. Logan, D. G. Taylor, H. B. (Mansfield)
Driberg, T. E. N Longden, F. (Small Heath) Taylor, R. J. (Morpeth)
Dye, S. McAllister, G. Thomas, D. E. (Aberdare)
Ede, Rt. Hon. J. C. MacColl, J. E. Thomas, George (Cardiff)
Edelman, M. Macdonald, A. J. F. (Roxburgh) Thomas, I. 0. (Wrekin)
Edwards, John (Brighouse) McGhee, H. G. Thomas, I. R. (Rhondda, W.)
Edwards, Rt. Hon. N. (Caerphilly) McGovern, J Thorneycroft, Harry (Clayton)
Edwards, W. J. (Stepney) McInnes, J. Thurtle, Ernest
Evans, Albert (Islington, S.W.) Mack, J. D. Timmons, J.
Evans, E. (Lowestoft) McKay, J (Walisend) Tomlinson, Rt. Hon. G
Evans, S. N. (Wednesbury) Mackay, R. W. G. (Reading, N.) Tomney, F.
Ewart, R. McLeavy, F. Turner-Samuels, M.
Fernyhough, E. MacMillan, M. K. (Western Isles) Usborne, Henry
Field, Capt. W. J. McNeil, Rt. Hon. H. Vernon, Maj. W. F
Finch, H. J. MacPherson, Malcolm (Stirling) Viant, S. P.
Fletcher, E. G. M. (Islington, E.) Mainwaring, W. H. Wallace, H. W.
Follick, M. Mallalieu, E. L. (Brigg) Watkins, T. E.
Foot, M. M. Mann, Mrs. J. Webb, Rt. Hon. M. (Bradford. C.)
Forman, J. C. Manuel, A. C. Weitzman, D.
Fraser, T. (Hamilton) Mathers, Rt. Hon. George Wells, P. L. (Faversham)
Freeman, J. (Watford) Mellish, R. J. Wells, W. T. (Walsall)
Freeman, Peter (Newport) Messer, F. West, D. G.
Gaitsketl, Rt. Hon. H. T. N Middleton, Mrs. L. Wheatley, Rt. Hn. John (Edinb'gh, E.)
Ganley, Mrs. C. S. Mikardo, Ian White, Mrs. E. (E. Flint)
Gibson, C. W. Mitchison, G. R White, H. (Derbyshire, N.E)
Gilzean, A. Moeran, E. W Whiteley, Rt. Hon. W.
Glanville, J. E. (Consett) Monslow, W Wigg, George
Gordon-Walker, Rt. Hon. P C Moody, A. S. Willey, F. T (Sunderland)
Greenwood, A. W J. (Rossendale) Morgan, Dr. H. B. Willey, O. G. (Cleveland)
Greenwood, Rt. Hn. Arthur (Wakefield) Morley, R. Williams, Ronald (Wigan)
Grey, C. F. Morris, P (Swansea, W.) Williams, Rt. Hon. T. (Don Valley)
Williams, W. T. (Hammersmith, S.) Wise, Major F. J. Yates, V. F.
Wilson, RI. Hon. J. H. (Huyton) Woodburn, Rt. Hon. A.
Winterbottom, I. (Nottingham, C) Woods, Rev. G. S. TELLERS FOR THE NOTES:
Winterbottom, R. E. (Brightside) Wyatt, W. L. Mr. Hannan and Mr. Wilkins.

Question, "That those words be there inserted in the Bill" put, and agreed to.