Commons Sitting of 15 June 1950

Preamble
The House met at Half past Two o'Clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  CARDIFF EXTENSION BILL
  As amended, considered; to be read the Third time.

  OLDHAM EXTENSION BILL
  As amended, considered; Standing Order 205 (Notice of Third Reading) suspended; Bill to be read the Third time forthwith.—[The Chairman of Ways and Means.]
  Bill accordingly read the Third time, and passed.

  TOWYN TREWAN COMMON BILL
  As amended, considered; to be read the Third time.
  WOLVERHAMPTON CORPORATION BILL
  As amended, to be considered upon Wednesday next, at Seven o'clock.
  BATH EXTENSION BILL [Lords]
  Standing Order 170 (Interval between First and Second Reading) suspended.— [The Chairman of Ways and Means.]

PETITION (RETAIL SOAP SALES)
Mr. Russell: Mr. Speaker, I beg to present a Petition, signed by about 5,000 persons from all over the United Kingdom, as follows:
"The Humble Petition of the undersigned sheweth that whereas, on and after 27th March, 1949, facilities for selling soap are made available to new traders being retailers with food registrations, chemists, druggists and hardware merchants, credits are not granted to new traders being hairdressers, drapers and fancy goods stores.
Wherefore your Petitioners pray that the House of Commons will alleviate this grievance by including hairdressers with the new traders who, from 27th March, 1949, having been identified as those normally expected to retail soap, have been granted facilities for selling it.
And your Petitioners, as in duty bound, will ever pray."
Petition to lie upon the Table.

ORAL ANSWERS TO QUESTIONS
  COMMONWEALTH RELATIONS

    Petrol De-rationing (New Zealand)
    Mr. Gammansasked the Secretary of State for Commonwealth Relations what has been the result of his investigations into the failure to inform the Government of New Zealand that petrol rationing was to be abolished in this country.
    Mr. Hollisasked the Secretary of State for Commonwealth Relations for what reason the New Zealand Government was not informed of the recent decision of His Majesty's Government in this country to de-ration petrol.
    Mr. Boyd-Carpenterasked the Secretary of State for Commonwealth Relations, why, in view of the fact that His Majesty's Government in the Dominion of New Zealand had retained petrol rationing in that Dominion at the request of His Majesty's Government in the United Kingdom, no prior notification was given to His Majesty's Government in New Zealand of the intention of His Majesty's Government to end petrol rationing in the United Kingdom.
    Lieut.-Commander Gurney Braithwaiteasked the Secretary of State for Commonwealth Relations whether he informed the Government of New Zealand of his decision to de-ration petrol prior to the announcement made on 26th May last.
    The Secretary of State for Commonwealth Relations (Mr. Gordon-Walker): I would refer hon. Members to the reply I gave on 13th June in reply to Questions by the hon. Members for Wimbledon (Mr. Black), Darwen (Mr. Prescott) and Sutton Coldfield (Sir J. Mellor).
    Mr. Gammans: In order to clear up this unfortunate affair, can the right hon. Gentleman assure the House that adequate apology has been tendered to New Zealand over this apparent discourtesy, and that New Zealand is now satisfied that we do not fail to appreciate all she has done in the past to co-operate with us?
    Mr. Gordon-Walker: I think the affair is settled now. No apology was made to New Zealand, but an explanation was given to the New Zealand Prime Minister. He accepted it completely, and said that the matter was closed as far as he was concerned.
    Mr. Hollis: Is the right hon. Gentleman aware that in his reply the other day he told the House that at one important point in this story there was an unexplained reason for delay? The Question by my hon. Friend the Member for Hornsey (Mr. Gammans) asked the result of the investigation. Is the right hon. Gentleman able to explain that hitherto unexplained delay?
    Mr. Gordon-Walker: No. I am not in a position to do that, because it was due to a failure of the human factor which is, as the hon. Gentleman knows, sometimes very difficult to explain. All I can do is to repeat my assurance that this will not happen again.
    Lieut.-Commander Braithwaite: Does the right hon. Gentleman recollect that in the reply to which he has referred he used the words:
    "In the small hours of 26th May, further telegrams were sent to our High Commissioners. …"—[OFFICIAL REPORT, 13th June, 1950; Vol. 476, c. 25.]
    Does that phrase, "the small hours", refer to this country, when it is high noon in the Antipodes, or vice versa?
    Mr. Gordon-Walker: It referred to the small hours here.
    Mr. Boyd-Carpenter: Does not the answer to which the right hon. Gentleman has been good enough to refer indicate that the only attempt to communicate this information to the New Zealand Government was made only a few hours before the announcement in this House; and, as the New Zealand Government had retained petrol rationing at the express request of His Majesty's Government, should not some days' notice have been given during which that Government could have made its own consequential arrangements?
    Mr. Gordon-Walker: The final telegram was sent as early as possible, immediately after the decision here was taken. All Commonwealth Governments, including the New Zealand Government,
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    were informed, of course, of the discussions that had been going on. I should explain that exactly the same steps were taken to inform all other Commonwealth Governments, and that all but New Zealand were informed in time of the final decision. It was only because there was an inexplicable accident in this case that the New Zealand Government were not informed in time,
    Mr. Boyd-Carpenter: Will the right hon. Gentleman say why the New Zealand Government were not notified in sufficient time to enable them to take their own action and make their own arrangements?
    Mr. Gordon-Walker: A longer interval could not be given because the telegram could not be sent until the final decision had been taken.

    Trade and Fiscal Policy
    Mr. Russellasked the Secretary of State for Commonwealth Relations if he will consult the Governments of the Dominions as to the advisability of arranging an Empire Economic Conference similar to the Ottawa Conference of 1932 to plan Empire trade and fiscal policy in the light of post-war conditions.
    Mr. Gordon-Walker: I can assure the hon. Member that His Majesty's Government have constantly before them the (importance of consultation with other Commonwealth countries on major questions of economic policy as on other matters. He will, of course, be aware that such consultation takes place as a normal matter of day to day business, and, as stated in my reply to the hon. Member on 25th May, we have already had several informal meetings with other Commonwealth representatives since the war to discuss matters of mutual interest connected with Commonwealth trade. A formal high level conference such as he contemplates is by no means the only method of securing the necessary exchange of views on matters of importance. I can assure the hon. Member that his suggestion will be borne fully and continuously in mind.
    Mr. Braine: Would the Minister not agree that a high level conference, such as is suggested, would probably be the best method of dealing with questions

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    that are likely to arise as soon as Marshall Aid comes to an end? Is this not a matter of urgency, in view of the approaching end of Marshall Aid?
    Mr. Gordon-Walker: I do not know that this is the best method, though it may be. Certainly, it is not for this Government to decide what is the best method.

    Trawler, "Loch Esk" (Irish Coast Incident)
    Captain Orrasked the Secretary of State for Commonwealth Relations whether he has any statement to make on the circumstances in which the trawler "Lock Esk" was fired upon by Irish Republican fishermen off Malin Head on the night of 10th June.
    Mr. Gordon-Walker: The skipper of the "Loch Esk" has stated that he was fishing at night off the coast of the Irish Republic near Inishtrahull Light in Donegal. While fishing there his vessel was fired upon from three small boats. The skipper was wounded in the thigh. The authorities in the Republic have stated that none of their fishery protection vessels was involved. The local police have questioned fishermen and arrested a man whom they have charged with causing grievous bodily harm to the skipper of the trawler. This man has been remanded on bail until 20th June. A request has been received from the police of the Irish Republic for statements to be obtained by our police from the skipper and members of the crew of the "Loch Esk." The House will not expect me to say more while the matter is sub judice in the Irish courts.
    Sir Ronald Ross: Does not this case emphasise the importance of having British fishery protection vessels at places such as Inishtrahull, not only to protect British trawlers but to see that the regulations applying to trawlers are fulfilled in every detail?
    Mr. Gordon-Walker: I think it will be difficult to comment on that without prejudging the issue in this case.
    Professor Savory: Is the right hon. Gentleman not aware that no fishermen from Eire would ever be refused the right of fishing in either British or Northern
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    Ireland waters? Why not, therefore, demand reciprocity?
    Mr. Gordon-Walker: I think we must be careful not to assume the facts until they have been established. We only know them at present from the newspapers.
    Sir Herbert Williams: On a point of order. We know that we are unable to discuss a matter which is sub judice in British courts. Does that also apply to matters which are sub judice in foreign courts?
    Mr. Speaker: I should like to have notice of a difficult question like that.

  TRADE AND COMMERCE

    Materials (Quality)
    Miss Irene Wardasked the President of the Board of Trade if he will institute an inquiry into the bad quality of materials used in many cases for making clothing of all kinds, household furnishings and stockings.
    The President of the Board of Trade (Mr. Harold Wilson): No, Sir. I cannot accept the suggestion that the use of poor materials in these articles is widespread.
    Miss Ward: Is the right hon. Gentleman aware that his answer will cause great annoyance to housewives, who are suffering from bad materials, deteriorating quality and ever-increasing prices? Will he not reconsider his decision?
    Mr. Wilson: If the hon. Lady wants me to introduce a lot more controls than we have ever had before on the manufacture of these things by private industry, I am always prepared to consider such a step.
    Mr. Albu: Will my right hon. Friend take every step possible to counteract propaganda against the high quality and great advantages of utility goods?
    Mr. Wilson: The Question did not refer to utility goods, but, of course, if there are any cases in the utility field into which the hon. Lady or any other hon. Member would like me to inquire I should be prepared to inquire into them.
    Miss Ward: On a point of order. Owing to the unsatisfactory nature of the reply, I beg to give notice that I will raise this matter on the Motion for the Adjournment at the earliest possible opportunity.

    Price Regulations Committee
    Mr. Boyd-Carpenterasked the President of the Board of Trade why he has increased from 11 to 15 the maximum number of members of the Central Price Regulations Committee; and whether this change will involve any increased charge to public funds.
    Mr. H. Wilson: We have thought it desirable in the conditions affecting supplies and prices of consumer goods which have followed devaluation to make room for the appointment of additional members so as to permit an extension of the range of experience and knowledge already available on the Committee. The only increased charge to public funds will be small amounts for reimbursement of travelling expenses, etc.

    Imported Goods (Marking)
    Captain Duncanasked the President of the Board of Trade what steps he takes to ensure that goods imported into this country and marked "Empire Made," are, in fact, made in the Empire.
    Mr. H. Wilson: The sale in the United Kingdom of goods falsely marked as to origin is an offence under the Merchandise Marks Act, 1887. Any person may prosecute the offender, and the Board of Trade is empowered to prosecute where this appears to be in the public interest. If goods are improperly marked at importation, they can be confiscated by the Customs.
    Captain Duncan: Will the right hon. Gentleman look at this boy's shirt, which is marked "Ever Lucky—Empire Made," which I bought the other day in a retail shop in Scotland, and for which I paid 3s. 6d.? To make such a shirt in this country would cost 3s. 6d. for the raw materials alone. Will he look into this sort of case, which, if it becomes general throughout the country, will ruin British industry?
    Mr. Wilson: I will certainly look into it. At this distance, the shirt would appear to have come from Hong Kong, which is within the Empire and so that
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    such a mark would be appropriate. There have been a number of suggestions that shirts marked "Made in Hong Kong" have come from Japan, and we have investigated these cases. If we find any cases of incorrect marking, we shall not hesitate to take action.
    Mr. Turton: Has the Minister instituted any prosecutions in this matter in the last 12 months?
    Mr. Wilson: I should want notice of that question.
    Sir R. Ross: Has the right hon. Gentleman had any luck in catching Japanese sending shirts to Hong Kong?
    Mr. Wilson: There has not been any evidence to prove that that is going on, but if any hon. Member could give me evidence I should be glad to see it.

    Factories, Scotland
    Mr. Hamiltonasked the President of the Board of Trade if he can supply figures for 1949 showing the extent of dollar earning or dollar saving by factories established in Scotland since 1945.
    Mr. H. Wilson: I regret that no figures are available of the dollar earnings or savings of factories established in Scotland since 1945.

    Gloves (Manufacture)
    Mr. Heathcoat Amoryasked the President of the Board of Trade whether he will consider allowing glove manufacturers to use, for the production of utility goods, redundant stocks of non-utility material provided that the prices charged do not exceed normal utility ceiling prices for similar articles made with utility grade material.
    Mr. H. Wilson: I am reluctant to alter the present specifications in the Utility Glove Order so far as they prescribe the use of utility material, but if the hon. Member will let me know what particular descriptions of non-utility material he has in mind, I will look into the possibility of licensing its use.

    Bulb Imports
    Mr. Douglas Marshallasked the President of the Board of Trade if he will make a statement with regard to the freeing of bulb imports from Holland in 1951.
    Mr. H. Wilson: It has recently been decided, as part of our general policy of relaxing restrictions on imports from O.E.E.C. countries, to bring to an end the arrangements that have been in force for some years to regulate, in conjunction with the Netherlands authorities, the trade in bulbs from the Netherlands to the United Kingdom. Owing to the seasonal nature of the trade and the desirability of giving as long notice as possible to the bulb growers, it has been decided to let the present arrangements stand for the forthcoming season. As from 1st May, 1951, however, importers of bulbs from the Netherlands will no longer be required to produce proof to His Majesty's Customs that shipment of the bulbs has been authorised by the Netherlands Bulb Exporters' Association
    Mr. Marshall: Is the Minister aware that during the war bulb growers were restricted to only 25 per cent. of their growing capacity, which involved a great capital loss, and that at that time it was agreed by His Majesty's Government that they should be allowed time to rehabilitate themselves? Is he further aware that some of the Dutch growers are also against taking away the present form of regulation on the import of Dutch bulbs into this country?
    Mr. Wilson: That may be so in the case of certain Dutch growers, but this question was, of course, settled after consultation with the Dutch Government.
    Major Legge-Bourke: Will the Minister say whether, before coming to this decision, he entered into consultation with the Minister of Agriculture, and whether he is quite satisfied that the position of the home bulb grower has been protected?
    Mr. Wilson: I do not think it is usual to say, in any particular case, what consultation did or did not take place, but I can assure the House that on all questions concerning relaxation of restrictions there is the fullest consultation between my Department and the Ministry of Agriculture.

    Colonial Timber (Classification)
    Mr. Russellasked the President of the Board of Trade whether, in order to encourage the greater use of Colonial timber, he will consider reclassifying
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    timber described as hardwood according to the weight of wood per cubic foot and the uses to which it can be put.
    Mr. H. Wilson: As the import of all, and distribution of nearly all, hardwoods is now handled by private traders, I am not in a position to adopt the hon. Member's suggestion.
    Mr. Russell: Could the Minister say who can adopt the suggestion?
    Mr. Wilson: Yes, Sir, the private trade. If the hon. Gentleman will perhaps discuss it with them, or if they see a report of his Question, perhaps they may agree to adopt it.
    Sir H. Williams: Cannot the Board of Trade classify timbers according to whether they are hardwood or softwood?
    Mr. Wilson: In any figures there have ever been there have always been classifications of softwood and hardwood, but I think the hon. Gentleman's question asked for a simplification of a list of woods which is at present on a botanical names basis instead of on a basis of weight.
    Mr. Ian L. Orr-Ewing: Will the Minister see that information—only some of which is available as the result of investigations by research departments under his control—about the performance of these timbers is more widely known?
    Mr. Wilson: I shall be very glad to arrange for anything that can be done on those lines.

    German Competition
    Mr. Russellasked the President of the Board of Trade if he will give an estimate of the value of business lost by British firms in Turkey during the past six months owing to German firms quoting lower prices, earlier delivery dates and easier terms of credit.
    Mr. H. Wilson: I have no information on which to base any such estimate. I should, however, like to emphasise that it is Turkey's shortage of sterling, and not German competition, which has been a major factor in the decline of United Kingdom exports to Turkey.
    Mr. Russell: Is the Minister not aware that there has been this competition despite the shortage of sterling, and does

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    not it show that it is really much more sound to rely on Empire markets, where we have protection, rather than on foreign markets?
    Mr. Wilson: I agree that there has been this competition, but I am quite convinced that we could have stood up to it successfully had Turkey not had to restrict imports from this country owing to the shortage of sterling. With regard to the second part of the question, obviously we want to rely on trade both within the Commonwealth and with a wide range of countries outside it.
    Sir Jocelyn Lucas: Could we not buy more Turkish tobacco?
    Mr. Wilson: I should want notice of that question, although I think the answer is that we have bought all that the consumers in this country seem likely to consume.
    Mr. John Grimstonasked the President of the Board of Trade what steps he is taking to meet the competition from Western Germany in semi-fabricated non-ferrous metals, sales of which are now at the rate of 10 times what they were a year ago and at prices below the cost of production in Germany.
    Mr. H. Wilson: I am aware that, as a result of Germany's post-war return to industrial production, competition from German exports is now being encountered in a number of fields, including that of semi-fabricated non-ferrous metals. It is, however, misleading to compare present statistics with those for a year ago, since German exports of these products a year ago were in most cases either nil or negligible. If the hon. Member will furnish evidence in support of his statement that the exports are being offered at prices below the cost of production, I am prepared to examine the matter further.
    Mr. Grimston: May I ask the Minister two things? First, will he not examine the figures, which show a month by month increase of something like 10 per cent. in the export from Germany of these particular articles—therefore, the information is available to him—and, second, will he not discuss with the German people whether they are not aware that the prices at which these goods are sold are well below world level?
    Mr. Wilson: As I have already made clear, a 10 per cent. increase on a basis that is very small is not quite so serious as the hon. Gentleman suggests. With regard to his second point, I have always made it clear in this House that if there is any evidence of German goods being sold by dumping methods, below the cost of production, I shall always be glad to look into it with the German authorities.

    Newsprint Supplies
    Air-Commodore Harveyasked the President of the Board of Trade if he will make a statement on the future supply position of newsprint.
    Mr. H. Wilson: There is nothing which I can yet add to the statement I made on 22nd May, when this matter was discussed in the debate on the Motion for the Adjournment.
    Air-Commodore Harvey: Can the right hon. Gentleman confirm that as from 1st July, the daily national newspapers are to be reduced in size, and say why this country is exporting something like 100,000 tons of newsprint a year, much of it to Australia? Why not keep it here and let other countries buy it from Canada and the dollar areas?
    Mr. Wilson: Instead of attempting to control the size of the newspapers, week by week and month by month, this was left to the newspaper trade itself within the supplies available. I understand from them that they propose to return from the seven pages originally fixed for the election period to six pages at the beginning of July. We are exporting newsprint to Australia to pay for the wool, raw materials and foodstuffs which we import from that country.
    Mr. Hurd: Are the Government making available the necessary foreign currency, dollars in particular, to enable the supply of newsprint to be maintained in the coming year at the same rate as in the past year?
    Mr. Wilson: There has been no decision yet as to the amount of dollars to be allocated for newsprint in 1951.
    Air-Commodore Harvey: Will the Minister say why it has been decided to reduce the size of the national dailies?
    Mr. Wilson: I understand from my discussions with them that the calculations

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    they made earlier, when they were hoping to maintain the seven page newspaper for a longer period, have proved somewhat unrealistic because it has been more difficult than was expected to buy supplies in certain soft currency countries.
    Air-Commodore Harvey: In view of the unsatisfactory nature of the reply, I beg to give notice that I shall raise this matter on the Adjournment at a very early date.

    Building, Portsmouth (Use)
    Sir J. Lucasasked the President of the Board of Trade if he will expedite his decision on the application from Messrs. Johnson and Johnson (Great Britain) Limited, backed by the Portsmouth Chamber of Commerce, to take over for use as a factory the redundant building training centre at Paulsgrove, thereby giving much needed employment.
    Mr. H. Wilson: I hope that a decision will be reached shortly.

    North America (British Exports)
    Sir H. Williamsasked the President of the Board of Trade if he will publish a White Paper to indicate to what extent British exports to the United States of America are hindered by the high level of United States tariff rates.
    Mr. H. Wilson: There is no doubt that existing United States tariff rates hinder United Kingdom exports to that market, but it is extremely difficult to estimate the extent of the hindrance. I doubt, therefore, whether the hon. Member's proposal is practicable, but I shall certainly bear it in mind.
    Sir H. Williams: Will the Minister represent to the United States, who are constantly preaching one doctrine for themselves and another for us in Europe about their tariff rates, that they might start a bit of improvement at home?
    Mr. Wilson: We have discussed with British industry all the rates, the lowering of which would lead to an increase in exports, or the removal of which would lead to the starting of a general increase in exports, and this matter will be coming up at Torquay.
    Sir H. Williams: I asked the Minister whether he will make representations to the people of the United States who preach one doctrine for themselves and another for us?
    Professor Savory: Has the Minister's attention been called to the enormous protective duty on Irish linen, which hampers very considerably the export from Ulster?
    Mr. Wilson: Yes, Sir, my attention has been drawn to it on a number of occasions. If I remember rightly, some improvement was made in it at the Conference at Geneva.
    Mr. Maclay: Can the Minister say whether any improvement has been made in the executive side of the Customs procedure in the United States which was almost as big a barrier to our goods as the tariffs themselves?
    Mr. Wilson: I quite agree with the hon. Gentleman. We are hopeful that there will be some substantial improvements on the administration side in the United States.
    Mr. Speaker: Perhaps I ought to point out that it is now 3 o'clock and that we generally get through 60 or 70 Questions in the hour; we have got through 20 in the first half hour. Some of the supple-mentaries have been long and very repetitive.
    Mr. Jenkinsasked the President of the Board of Trade whether he will make a further report on the progress in the development of our exports to North America.
    Mr. H. Wilson: Yes, Sir. Though too much should not be read into the figures for a particular month, I am glad to say that the strenuous efforts which all concerned have been making to develop our exports to North America are now showing encouraging results. The value of United Kingdom exports to North America last month is provisionally estimated at £20.6 million, compared with a monthly average of only £10 million during the third quarter of 1949—that is, immediately prior to devaluation— and £14.5 million in April, 1950. In terms of U.S. dollars the increase has been from 40.3 million dollars per month in the third quarter of 1949, to 42.8 million dollars in the first quarter of 1950, and 57.7 million dollars in May. Up to

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    now we have made rather more rapid progress in developing our exports to Canada than to the U.S.A. In May, our exports to Canada were £12.4 million compared with £8.2 million to the U.S.A.
    Mr. Quintin Hogg: Can the right hon. Gentleman give us some break-up as between industries in these gratifying figures, with reference to the motor car industry?
    Mr. Wilson: Yes, Sir. The motor car industry has certainly accounted for a considerable proportion, particularly the exports to Canada. When the full Trade and Navigation Accounts are published next week the hon. Gentleman will have all the figures he wants.

    Census of Distribution
    Mr. C. S. Taylorasked the President of the Board of Trade what will be the total cost involved in compiling a list of the names and addresses of traders throughout the country to whom Census of Distribution Forms are to be sent early in 1951; and whether, in view of the fact that a legal obligation rests upon traders to obtain such a form for completion, why his Department is arranging for a personal inspection.
    Mr. H. Wilson: The preparation of an up-to-date register of traders is necessary to enable the Board of Trade to discharge its obligations under Section 3 (2) of the Statistics of Trade Act, 1947, to give notice in writing and to issue the forms required to be filled up. The procedure under Section 6 can be used to complete any gaps in the list. The estimated cost of obtaining the names and addresses of traders for the register is £75,000.
    Mr. Taylor: Is the right hon. Gentleman aware that a letter has gone out from the statistics division of his Department saying that this list is being compiled by personal inspection? Why is that necessary when there is a legal obligation on traders to register in any case?
    Mr. Wilson: I think I have already answered that question before the Whit-sun Recess.

    Mohair
    Mr. Peter Freemanasked the President of the Board of Trade whether he is
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    aware of the shortage of mohair; and what steps are being taken to augment the supply.
    Mr. H. Wilson: I am informed that there is no shortage of mohair, and, consequently, the second part of the Question does not arise.
    Mr. Freeman: If I send my right hon. Friend details of a case in Newport in which perambulators for babies have been held up for three months for want of this material, will he look into this case?
    Mr. Wilson: Yes, I shall certainly be prepared to look into it, but I am informed by the trade that they do not consider mohair is in short supply.

  FESTIVAL OF BRITAIN

    Hotels, London (Charges)
    Mr. Frank McLeavyasked the President of the Board of Trade what steps he proposes to take to prevent the practice of London hotels of raising their accommodation charges at times when extra numbers of visitors are expected, particularly in connection with the Festival of Britain.
    Mr. H. Wilson: It has always been the normal practice of hotels to charge lower prices out of the season than during the season. This practice is a sensible one in that it encourages greater use of hotel services in the off-season. I have no knowledge of any proposal significantly to increase hotel prices during the period of the Festival of Britain and many hotels have, in fact, already let their accommodation for this period at normal rates.
    Mr. McLeavy: Is my right hon. Friend aware that during the recent British Industries Fair, one London hotel in particular doubled its charges, an action which was very much resented? In view of the importance of the Festival of Britain, can he at least give an assurance, not only to visitors from outside London but also to visitors from abroad, that hotels will not be allowed to profiteer at the expense of this great national effort?
    Mr. Wilson: I have investigated the case to which my hon. Friend refers, and I find that it is a case in which, owing to the shortage of accommodation, a visitor from the provinces was occupying a

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    double room and was, therefore, charged more than he would have been if he had had a single room. With regard to the Festival of Britain, we are watching the position, but I am quite sure that the hotel trade generally will exercise reasonable restraint.

    Publicity, America
    Mr. Prescottasked the Lord President of the Council whether he is satisfied at the publicity being given in America to the forthcoming Festival of Britain; what steps His Majesty's Government propose to take to make this event more widely known in the United States of America; and, to that end, what sums have been expended to date.
    The Lord President of the Council (Mr. Herbert Morrison): The publicity campaign in America for the Festival of Britain will begin in the late summer of this year. No money has been spent on it up to the present time. The British Travel and Holidays Association and the British Information Services in America are closely associated with these arrangements and are in full agreement as to the timing. I am satisfied that they are on the right lines.
    Mr. Prescott: Can the right hon. Gentleman tell the House what is the total sum of money which will be allocated to this subject when the campaign begins?
    Mr. Morrison: No, Sir.
    Mr. Manningham-Buller: Can the right hon. Gentleman say when the Government will begin the late summer?
    Mr. Joynson-Hicks: Does the right hon. Gentleman's reply conform with his earlier replies that the Festival of Britain will not involve us in dollar expenditure?
    Mr. Morrison: Perhaps the hon. Gentleman will let me know when I said that.
    Mr. Joynson-Hicks: Certainly.

  METROPOLITAN SPECIAL CONSTABULARY
  Lieut.-Commander R. H. Thompsonasked the Secretary of State for the Home Department what has been the response to his appeal for 10,000 men to
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  join the Metropolitan Special Constabulary; and how many volunteers are now enrolled.
  The Secretary of State for the Home Department (Mr. Ede): Between 15th November, 1949, when the national recruiting campaign began, and 10th June, 271 men and 17 women were enrolled. The present strength of the force is 3,277, including 16 women.
  Lieut.-Commander Thompson: In view of the alarm over the rising tide of crimes of violence, would the right hon. Gentleman consider making more extensive use of this fine body of men than he is at present doing?
  Mr. Ede: I am willing to make as much use of them as possible, and I regret that their recruitment is not more rapid. I hope that good citizens who have the time to spare will enrol in this, force.

  DANGEROUS DOGS
  Mr. Eric Fletcherasked the Secretary of State for the Home Department whether he will introduce legislation amending the Dogs Act to secure the destruction of dangerous dogs after a magistrate has made an order for such dogs to be destroyed.
  Mr. Ede: Under an Act applying to the Metropolis there is already power for a magistrate to direct that a dog which has bitten or attempted to bite any person within the Metropolis should be destroyed and for the police to carry out the order of the court. I cannot hold out any prospect of its being possible to introduce in the near future legislation to enable the general law to be amended for the purpose suggested by my hon. Friend.
  Mr. Fletcher: Is my right hon. Friend aware that in my constituency there is a particularly vicious dog which a magistrate has ordered to be destroyed, and that as a result of failure to comply with that order the owner has twice suffered a sentence of imprisonment? The police allege that they have no power to carry out the order, and unless something is done, when the owner comes out of prison in a few weeks' time the dog will again be restored to him.
  Mr. Ede: I understand that in the case about which my hon. Friend has written to me the position is that when the time for appeal against the present order has expired the dog will be destroyed.
  Sir J. Lucas: While agreeing with the Question, may I have an assurance that the right of appeal will be safeguarded, because some magistrates do not like or understand dogs?
  Mr. Ede: This particular piece of legislation is confined to the Metropolis and it would have to be executed by the Metropolitan Police. In the case that has been brought to my notice I understand that they are waiting for the time for an appeal to end before action is taken.
  Lieut.-Commander Braithwaite: Do police dogs enjoy a special dispensation in this matter? Is it still the case that other dogs are allowed two bites before being defined as dangerous?
  Mr. Ede: No. I understand that in the Metropolis a dog is not even allowed a first bite before being regarded as dangerous. Police dogs are trained not to bite, but merely to hold.
  Mr. Keeling: Will the Home Secretary confirm the fact that dogs have often appealed successfully against an order for their destruction?
  Mr. Ede: No. But I think that the owners of the dogs sometimes succeed.

  ALIENS

    Italian Subject (Refusal of Entry)
    Mr. Donnerasked the Secretary of State for the Home Department why a Swiss, M. Luigi Cei, of Davos Platz, was refused entry into this country at Folkestone on 27th April; and why he was not allowed to telephone his prospective hostess, living near Andover; this refusal causing that lady needless anxiety and waste of time.
    Mr. Ede: This alien is an Italian who had been working in Switzerland as a ski-ing instructor. He had only a single
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    ticket and he admitted that his real purpose in coming to the United Kingdom was to take employment. He had no Ministry of Labour permit and he was refused leave to land. He did not ask to be allowed to get in touch with his prospective hostess. If he had done so permission would have been readily given.
    Mr. Donner: Is the right hon. Gentleman aware that I am informed that this man was not allowed to telephone his friends? Would the right hon. Gentleman issue instructions to ensure that in future there can be no repetition of what amounts to either a genuine misunderstanding or quite intolerable officiousness on the part of an official?
    Mr. Ede: No, Sir. I have inquired very carefully into this case and my information is that this man did not ask to telephone. Had he done so the immigration officer, according to instructions, would have allowed him to telephone. If such a person has no money with which to telephone or if he does not understand the British telephone system the official will telephone for him. May I say, as one who, on occasion, has tried to telephone abroad that it is sometimes difficult to understand the telephone system of another country, particularly when one has been accustomed to so efficient a system as the British system?

    Naturalisation Certificates
    Sir Waldron Smithersasked the Secretary of State for the Home Department the number of aliens who have received British nationality for each year since the war; and the monthly figures since 1st January, 1950.
    Mr. Ede: Since the end of the war 50,062 certificates of naturalisation have been granted. I will, with permission, circulate in the OFFICIAL REPORT the annual and monthly figures for which the hon. Member asks.
    Sir W. Smithers: What steps has the right hon. Gentleman taken to see that none of these people who are naturalised are undesirable and that none of them are Communist agents?
    Mr. Speaker: The hon. Member only asked for the figures.
    Following are the figures:
    Certificates of naturalisation granted and registered during the period 1st May, 1945, to 31st May, 1950:

    1945 (1st May to 31st December)

    407

    1946

    3,630

    1947

    17,742

    1948

    15,108

    1949

    9,593

    1950—

    January

    861

    February

    731

    March

    899

    April

    571

    May

    520

    50,062

    Displaced Persons (Yugoslav Generals)
    Mr. Hollisasked the Secretary of State for the Home Department whether he will give permission to General Zivcovic and 37 other Yugoslav generals, at present classed as displaced persons at Schloss Varlar in the British zone, to come to this country.
    Mr. Ede: As I informed the House on 4th May, His Majesty's Government have undertaken to admit up to 2,000 displaced persons and refugees now in the care of the International Refugee Organisation in Germany and Austria for whom accommodation and maintenance can be provided by relatives, friends or voluntary organisations. Applications may be made on behalf of the generals to whom the hon. Member refers, but in selecting the limited number who can be admitted under the scheme it is proposed to give priority to persons with relatives in the United Kingdom and to children.
    Mr. Hollis: Is the Home Secretary aware that, whereas from one point of view one appreciates his principle, there is a very large number of people in this modern world, people of integrity and ability, who are unable to play any part in the life of their own natural country or in any other country? Will he not agree that the fact that they have no friends or relatives is surely a reason not for not giving them consideration but for giving them consideration?
    Mr. Ede: The unfortunate thing is that in the world at the present time there are, I venture to say, millions of such people. If I did not exercise some discrimination about them it would only be
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    the carrying capacity of ships and aeroplanes that would determine the number of people who applied for permission to come to this country. It is a matter of grief to me that I cannot admit all the people who would like to come, but I have to discriminate. The hon. Gentleman can rest assured that, as far as these men are concerned, I will exercise as much sympathy as the interest of this country will allow.
    Major Tufton Beamish: Will the Home Secretary perhaps give special consideration to these cases, as these senior officers were taken prisoners by the Germans when, with great gallantry, they led the Yugoslavs early in the war? Is it not awful that such distinguished men should spend the rest of their lives on the German dole?
    Mr. Ede: I hope I have indicated that I will examine these cases with sympathy. I do not deprecate the special pleading but very similar cases can be put up, I regret to say, for thousands of equally deserving persons on the Continent of Europe.

  CONTEMPT OF COURT SENTENCE
  Lieut.-Colonel Liptonasked the Secretary of State for the Home Department why, and for how long, Mr. D. J. Corcoran has been imprisoned at Winchester gaol.
  Mr. Ede: This man has been in custody since 12th February, 1949, for contempt of court.
  Lieut.-Colonel Lipton: Is the Home Secretary aware that if Mr. Corcoran now tries to purge his contempt by complying with the English court's decision he will be flouting a diametrically opposed decision of the Dublin Supreme Court? Is it proposed that this man shall remain for years in Winchester gaol at the taxpayers' expense, until this judicial conflict is resolved?
  Mr. Ede: That is no responsibility of mine. This case cannot be dealt with under the Prerogative. If this man will make his apologies to the court I think it would be worth while seeing what would happen.

  FIRE SERVICES, SOMERSET
  Mr. Ian L. Orr-Ewingasked the Secretary of State for the Home Department whether he will reconsider his refusal to agree to the retention of towing vehicles for trailer fire pumps in the parishes of Banwell, Wrington and Blagdon in the Axbridge rural district, in view of the fact that the Somerset County Council had proposed to retain them.
  Mr. Ede: Towing vehicles are not usually provided for local fire units, such as those at the three places referred to, but if the county council consider there are circumstances justifying these vehicles, I would raise no objection.
  Mr. Orr-Ewing: While I am glad to have that answer, may I ask the Home Secretary whether he will look into the answer he gave me on 4th May when he said this was entirely a matter for the county council and that he was not responsible, whereas on 3rd January of this year he had refused the request of the county council that such vehicles should be supplied in these villages?
  Mr. Ede: I did look into the correspondence and I hoped that the answer I have given this afternoon would be regarded as satisfactory by the Somerset County Council and those who purport to speak for them.
  Mr. Orr-Ewing: Would the Home Secretary look into the manner in which he was misinformed—I am sure it was not done deliberately—on 4th May and which led to his giving an answer which, on reconsideration, I think he will agree was very misleading?
  Mr. Ede: If it was misleading I am sorry. I thought I had been very careful to answer very particularly about the cars.

  HOUSING

    Site, Kidderminster
    Mr. Nabarroasked the Minister of Health for what purpose a compulsory purchase order has recently been confirmed by his Department in respect of 3,085 acres of freehold pasture land, fronting on Rectory Lane in the parish of Rock, in the Kidderminster rural district of the county of Worcestershire.
    The Minister of Health (Mr. Aneurin Bevan): For the purposes of Part V of the Housing Act, 1936.
    Mr. Nabarro: Does the Minister appreciate that, as a result of the intervention of his Department, for which I am most grateful, the Ministry of Fuel and Power have withdrawn proposals for opencast mining on the site, but now propose to surround the entire site with opencast mining activities? Would he again intervene?
    Mr. Bevan: The Order has now been made. The Orders are made by the Minister in a quasi-judicial capacity, and the matter cannot be reopened.

    Key Money
    Mr. E. Fletcherasked the Minister of Health what steps he is taking to prevent evasion of the law against charging premiums or key-money in respect of the letting of empty premises.
    Mr. Bevan: I have no power to enforce the law in this matter, but local authorities have power to institute proceedings for offences under the Rent Restrictions Acts, and I have recently reminded them of their powers.
    Mr. Fletcher: Is my right hon. Friend aware that there is great indignation at the widespread evasion that is going on, and will he do all he can to suppress it?
    Mr. Bevan: I said this was a matter for the local authorities. They are exercising their powers in a number of areas, and I hope local authorities will be vigilant and exercise their powers when they are invoked.

    Local Authorities (Allocations)
    Mr. Prescottasked the Minister of Health to what extent, in allocating housing programmes to local authorities, he is guided by the number of persons registered with individual local authorities as being in need of housing accommodation.
    Mr. Bevan: Allocations made to local authorities by my principal regional officers under standing administrative procedure are determined in the light of the current evidence available as to relative housing needs and building progress. As regards the inferences to be drawn from local authority lists of applicants, I

    541
    would refer the hon. Member to the statement I made on 9th March, of which I am sending him a copy.
    Mr. Prescott: While awaiting that statement, may I ask the right hon. Gentleman whether he is aware that almost throughout the whole country these waiting lists for houses are increasing rapidly, week by week and month by month? May I ask the right hon. Gentleman, too, what steps he proposes to take to solve the housing problem before the next election, as he could not solve it before the last election?
    Mr. Bevan: The housing lists in the country are not increasing month by month. That statement is incorrect.

    Private Building
    Brigadier Clarkeasked the Minister of Health if he will allow houses costing under £2,000 to be built without restriction.
    Mr. Bevan: No, Sir.
    Brigadier Clarke: Does the Minister not realise that unless he makes some concessions we shall never get the bomb-damaged towns rebuilt as long as we have a Labour Government?
    Mr. Bevan: If this concession were made it would be at the expense of persons needing houses and favouring those with money to buy them.
    Brigadier Clarke: It would be no such thing in Portsmouth. It would be in lieu of garages and greenhouses and other things which are not necessary.

  NATIONAL HEALTH SERVICE

    B.C.G. Vaccine
    Mr. Remnantasked the Minister of Health whether he has considered the merits of B.C.G. vaccine as a tuberculosis immuniser; and whether he will make it available to the public.
    Mr. Bevan: A trial use of the vaccine is being made for selected cases, but I am advised that it would not yet be suitable for indiscriminate use.
    Mr. Remnant: Will the Minister keep in close touch with this experiment, as this shows every chance of being a most useful vaccine?
    Mr. Bevan: We are watching it very anxiously and with a good deal of expectancy.
    Mr. Snow: Will the Minister examine the controlled experiment conducted in Portsmouth over the last four years in connection with this vaccine?
    Mr. Bevan: Certainly. If my hon. Friend will give me particulars I will have them investigated.

    Nurses
    Mr. E. Fletcherasked the Minister of Health why, in view of the shortage of nurses, it is necessary to charge an enrolment fee of £3 3s. to duly qualified persons willing to join the roll of assistant nurses.
    Mr. Bevan: The enrolment fee prescribed by the Rules of the General Nursing Council is required to meet the expense of maintaining the Assistant Nurses' Roll.

    St. George's Hospital, Lincoln
    Mr. E. Martin Smithasked the Minister of Health when it is proposed to reopen the St. George's Hospital, Long Leys Road, Lincoln.
    Mr. Bevan: The Regional Hospital Board hope that it may be possible to bring part of the hospital into use by the end of the present year.
    Mr. Smith: Is the Minister aware that when this hospital was taken over again in November, 1948, there were also taken over two clerks, four or five boiler and maintenance men and also, about that time, a steward or attendant and an assistant matron? Is he aware that, because of that, the hospital has been spending—I am told on good authority— approximately £10,000 a year, for which there has been no return whatsoever? Is he also aware that—
    Mr. Speaker: The length of supplementaries is getting intolerable.

    Medical Consultants (Awards)
    Mr. C. S. Taylorasked the Minister of Health when he expects to receive the report of the committee now sitting to deal with merit awards for medical consultants.
    Mr. Bevan: I expect to receive a report within the next three months.
    Mr. Taylor: Is it not intolerable that this class of consultant should be left in such a state of uncertainty for so long?
    Mr. Bevan: This is entirely a professional matter. It has not been determined by me at all. It would have been even more intolerable if, by hasty action, the wrong people had been selected.
    Colonel Stoddart-Scott: Can the right hon. Gentleman say how long this committee has been sitting, who is its chairman and what is the salary paid to him for a year?
    Mr. Bevan: If the hon. Member will put that question on the Order Paper I will try to give him a reply.

    Hospital Medical Officers
    Surgeon Lieut.-Commander Bennettasked the Minister of Health to what extent medical officers graded senior hospital medical officer are thereby rendered ineligible for promotion to consultant status.
    Mr. Bevan: Not at all.
    Surgeon Lieut.-Commander Bennett: Would the Minister not agree that the interpolation of this grade between the grade of senior registrar and that of consultant looks extraordinarily like a device for obtaining the services of specialists at cut rates?

  SHOPS, BRIGHTON
  Mr. James Hudsonasked the Minister of Health if he is aware that the Brighton Corporation has passed a resolution to the effect that applications made by persons already occupying business premises in Brighton or Hove, shall not be entertained in respect of shops on the council's housing estates; and whether, to prevent discrimination of this kind, he will consider legislation designed to provide equality of opportunity for all classes of retailers including multiples, individual traders and co-operative societies.
  Mr. Bevan: I am aware of the resolution; the matter is one within the discretion of the local authority and I do not think I should be justified in introducing legislation to interfere with this discretion.
  Mr. Hudson: If my right hon. Friend is unable to recommend legislation, could he suggest any means by which he could impress upon the local authority the necessity to allow members of the Cooperative Society, 90 per cent. of whom at least are in new districts, to have the opportunity to shop in co-operative shops in these districts?
  Mr. Bevan: The selection of tenants for houses and for business premises on these estates is entirely a matter for the local authority, and if local citizens disagree with the local authority's decision they have their remedy, of course.
  Mr. Marlowe: Is the Minister aware that the residents in this area can get on perfectly well without the assistance of the hon. Member for Ealing, West (Mr. J. Hudson)?
  Mr. Hudson: They do not seem to do so at present.

  REGISTER OFFICES (MARRIAGE NOTICES)
  Lieut.-Colonel Liptonasked the Minister of Health whether he authorised the Registrar General's circular banning reporters from taking notes of marriage announcements at register offices.
  Mr. Prescottasked the Minister of Health if he is aware that the Registrar General has issued an instruction to superintendent registrars to ban Press reporters from taking notes of marriage announcements at register offices; whether such instruction was issued with his approval; and whether he will annul this instruction as being contrary to the principle of the freedom of the Press and contrary to public interest.
  Brigadier Medlicottasked the Minister of Health if he is aware that the banning of reporters from taking notes of marriage announcements at register offices is causing dissatisfaction; and if he will cause the ban to be removed.
  Mr. Bevan: The Registrar General has advised superintendent registrars that if any representative of the Press wishes to copy particulars of a notice of marriage, this should be permitted as being generally in line with the purpose for which the notices are exhibited, namely, to enable persons knowing of a lawful impediment to a marriage to declare it.
  Lieut.-Colonel Lipton: While I am sure that that answer will be welcomed, may I ask whether the ban still applies to copies of marriage notices made for commercial purposes? If so, who will investigate and decide by what motives those who copy marriage notices are animated?
  Mr. Bevan: I will make inquiries into the first part of my hon. and gallant Friend's question, but there has been some misunderstanding owing to the language used by the registrar in the notice sent out. The word "intended" was omitted. The purpose of the notice is intended to enable people to raise objection in certain cases. The dropping of the word "intended" made it appear that the purpose was to prevent the Press from looking at the notices.
  Sir H. Williams: Is it not time that someone was appointed to ensure that words and phrases are not omitted from public documents?
  Mr. Stanley Prescott: While welcoming the new directive, may I ask whether it is not a fact that the recent directive is a complete reversal of previous policy followed by the Minister? Will he say whether the change of heart resulted from Questions in this House or from representations made by him to the Registrar General?
  Mr. Bevan: My attention was called to the fact that the language appeared to prohibit the Press from taking notes of the notices because the word "intended," which is a form of art in this matter, had hot been included in the original notices.

  NATIONALISED INDUSTRIES (COMMITTEES)
  Mr. Errollasked the Prime Minister if he will publish a list of the names and addresses of consultative committees and consumers' councils set up under postwar nationalisation schemes, together with the names of their members and any salaries and allowances paid; a separate list of individuals holding more than one appointment; and what those appointments are.
  The Prime Minister (Mr. Attlee): I will, with permission, circulate in the
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  OFFICIAL REPORT certain information relating to these committees and councils. I do not consider that the labour involved in collecting and publishing all the information sought by the hon. Member would be justified.
  Mr. Erroll: Do the Government not know to whom they have given jobs?
  Mr. Ellis Smith: Many Tories.
  The Prime Minister: The hon. Member should realise that, of about a thousand names which he wants included in the list, all but a very small minority are people who are doing valuable voluntary work for the country.
  Mr. Erroll: In that case, would it not be valuable to know who they are?
  Following is the information:
  Domestic Coal Consumers' Council, Industrial Coal Consumers' Council, Area Gas Consultative Councils for each of 12 areas, Area Electricity Consultative Councils for each of 14 areas, North of Scotland Electricity Consultative Council, Central Transport Consultative Committee, Transport Users' Consultative Committee for Scotland, Transport Users' Consultative Committee for Wales, Transport Users' Consultative Committee for London, Air Transport Advisory Council, Scottish Advisory Council for Civil Aviation, Northern Ireland Advisory Council for Civil Aviation, Welsh Advisory Council for Civil Aviation, Scottish Aerodromes Board, Aerodrome Consultative Committees for each of 13 aerodromes, Channel Islands Advisory Council for Civil Aviation, Isle of Man Airports Board, National Civil Aviation Consultative Council.
  Communications for these Committees should be addressed to them at the Ministry concerned. The Chairman of the Domestic Coal Consumers' Council and of each of the Area Gas and Electricity Consultative Councils receives £250 a year, but the members are unpaid. The Chairman of the Air Transport Advisory Council, which has also certain executive functions, receives 20 guineas a day for attendance at meetings, and members 15 guineas a day. No other salaries are paid, but travelling and subsistence is allowed on the usual scales.

  STATUTORY INSTRUMENTS (MOTIONS)
  Sir H. Williamsasked the Prime Minister if he will take steps to prevent the frustration of Motions to annul Statutory Instruments by the device of a Department publishing regulations to repeal existing regulations and, at the same time, publishing regulations to re-enact the repealed regulations.
  The Prime Minister: I assume that the hon. Member has in mind the case of the Bacon (Rationing) (Amendment No. 2) Order, 1950, to which reference was made in the House on 24th May. I should explain to the House that it has been found convenient, from the point of view of the public, and particularly of traders, to set out the rationing provisions of general application in a general Rationing Order; to set out specific requirements about individual foods in a simple Order for each rationed food, related to the main Rationing Order and through that to the ration book; and to re-make the whole set of Orders annually with effect from the date when the new ration book comes into operation. This serves to keep to a minimum the number of amending Orders to which a trader may need to refer.
  The 1950–51 ration book was due to operate as from 21st May. Consequently, a new set of Rationing Orders had to be made to take effect on that date. Revocation of all the previous Orders, including the Order against which hon. Members desired to pray, was clearly a necessary part of the arrangements for having a new set. The arrangements had been made before notice of the Prayer was received, and I can, of course, assure the hon. Member that there could be no question of an administrative device being used deliberately to frustrate a Motion.
  Sir H. Williams: Could the right hon. Gentleman say why the re-enacting Order was made seven days before the repealing Order was made? They were both presented on the same day and the repealing Order appeared only in very small type in a footnote on a page which no hon. Member was, ordinarily, likely to see at such short notice.
  The Prime Minister: I cannot add to the information which I have already given to the hon. Member.
  Sir H. Williams: Is the right hon. Gentleman aware that another Order has since been made?

  GROUNDNUT SCHEME
  Mr. Walter Fletcherasked the Prime Minister if he will now appoint a Royal Commission to study the groundnut scheme in East Africa with a view to its discontinuance or its reduction.
  The Prime Minister: No, Sir. I rely on my right hon. Friend the Minister of Food, in consultation with the Overseas Food Corporation, to make recommendations about the scale of operations of the groundnut scheme in East Africa.
  Mr. Fletcher: In view of the great public interest and disquiet about facts already revealed about the groundnut scheme, does not the Prime Minister think that the chance of a reduced scheme succeeding, which is the desire of everybody, would be very greatly enhanced if a body with the authority of a Royal Commission were to be appointed instead of a Departmental commission, which cannot have the same force in the public eye?
  The Prime Minister: No, I do not think so. I think the inquiries already going forward, under the chairmanship of Sir Charles Lockhart, will prove effective and will meet the kind of needs the public require.
  Mr. Gammans: In view of the fact that some millions of the taxpayers' money which has been invested in this scheme will have to be written off in any case, does not the Prime Minister feel that an impartial inquiry should take place about what is to happen in the future?
  The Prime Minister: The hon. Member will realise that there have been very full reports on this from the Public Accounts Committee.
  Captain Crookshank: Is the right hon. Gentleman aware that working parties set up under the chairmanship of a Member of the Board cannot be considered as impartial as a Royal Commission would be? Why is it that he will not concede this demand which we have pressed upon him repeatedly when he has already conceded the other two demands —the removal of the late Minister and of Sir Leslie Plummer?
  Mr. Fletcher: In view of the very unsatisfactory nature of the reply, I beg to give notice that I will raise this matter, at the first opportunity, on the Adjournment.

  U.S.S.R. (MINISTER'S STATEMENT)
  Mr. Osborneasked the Prime Minister if the Secretary of State for Scotland's recent statement regarding relations with the Union of Soviet Socialist Republics represents the policy of His Majesty's Government.
  The Prime Minister: I presume that the hon. Member has in mind the opinion expressed by my right hon. Friend the Secretary of State for Scotland when addressing the General Assembly of the Church of Scotland at the end of last month, that there can be no expectation that the cold war will end in the near future. This was, of course, a purely personal expression of opinion and if it proves incorrect no one would be happier than I myself—or, I imagine my right hon. Friend.
  Mr. Osborne: Is not the Prime Minister aware that the statement was that the cold war with Russia would not end this year or next year or the year after? Is that not a serious confession of terrible failure on the part of His Majesty's Government?
  The Prime Minister: No, Sir. It is not an expression of Government policy any more than if anyone were to say that the fine weather would last for two days it would be an expression of Government policy. It may be a prophecy or a statement of facts, but it is certainly not a statement of policy, which was what the hon. Member was inquiring about.
  Mr. Harmar Nicholls: Is the Prime Minister suggesting that His Majesty's Government have no more control over international events than they have over the weather?
  The Prime Minister: His Majesty's Government will deal with matters arising from the weather as well as from international politics, but in neither case are they able to control all the factors.
  Mr. Osborne: Is not the Prime Minister aware that this statement was made by a Minister who had been in contact
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  with foreign affairs for the last four years and who, therefore, should have special knowledge?

  MUSCULAR DYSTROPHY
  Mr. Turtonasked the Lord President of the Council how many persons have been diagnosed as suffering from muscular dystrophy in the last five years, and what research is being conducted into the origin of and cure of this disease.
  Mr. H. Morrison: With regard to the first part of this Question, I am advised that figures are not available. Research on the muscular dystrophies forms an important part of the work of the Medical Research Council's Neurological Research Unit at the National Hospital, Queen Square, London.
  Mr. Turton: Is the right hon. Gentleman aware that in some 300 cases people have been told that this disease is incurable, whereas in some cases a cure has, in fact, been effected? As there appears to be a great lack of knowledge about this disease, will he encourage the medical profession to institute further research into the matter?
  Mr. Morrison: Certainly; we will do all we can in the matter.
  Mr. Chetwynd: Can my right hon. Friend say whether any satisfactory results have been reached so far in this research?
  Mr. Morrison: I am not in a position to say that yet, Sir.
  Sir Richard Acland: Would it be possible to indicate the volume of the research being carried on, for example, by saying how much it costs in a 12 month?
  Mr. Morrison: No, Sir. If I may say so, hon. Gentlemen are repeatedly wanting to know how much these things cost, as though that were an accurate measure of successful research. It cannot be measured by money. Brains come into it as well.
  Sir R. Acland: Does my right hon. Friend appreciate that the amount of money provides a measure, if not a very adequate one, of the importance which the General Medical Council attaches to the hope of success?

  SCHUMAN PLAN
  Mr. Eden (by Private Notice)asked the Prime Minister whether the erratum issued to the Government's White Paper at page 15, paragraph 2, of Document 16 of 3rd June now represents the considered view of His Majesty's Government as to putting forward any British alternative to the Schuman Plan.
  The Prime Minister: As my hon. Friend the Minister of State said yesterday, the sentence to which the right hon. Gentleman refers was omitted, as a result of an editorial mistake, from the White Paper. It was, of course, included in the communiqué which had already been issued by the Government, and the complete document, therefore, represented and still represents the considered view of His Majesty's Government.
  Mr. Eden: I am much obliged. May I ask the Prime Minister if he will recall that in his statement in the House on Tuesday, as well as in his reply to the hon. Baronet the Member for Gravesend (Sir R. Acland), he made it plain that the Government did not propose to put forward any proposals at the present time, whereas the White Paper 10 days' earlier certainly held out hopes that something of that kind is intended? Can the right hon. Gentleman at all elucidate that position, so that we may know what is in the Government's mind?
  The Prime Minister: I do not think there is any real inconsistency. The argument was that it would be a mistake for us to put forward, so to speak, rival proposals at the present time, but that, on the other hand, we were setting to work to work out some kind of scheme so that in case the time came to put it forward we should be ready with proposals if they were required.
  Mr. Eden: May I ask the right hon. Gentleman whether he does not now consider it desirable, if we have plans, to put them out soon, especially in view of the fact that it seems that the Dutch Government are putting forward their plan? Also, may I say that the statement put out on Tuesday, or on Monday night, by the Socialist Party has, without doubt, caused very considerable consternation as to where we do stand among many of our friends in all parts of the world?
  The Prime Minister: The Government's view is that it definitely would not be a help but a hindrance to put forward rival proposals before we have had an elucidation of the proposals that are being put forward by the French Government. After all, it is their initiative. We do not in any way want to cut across their initiative.
  Hon. Members: Oh!
  Mr. Eden: In that case, can the right hon. Gentleman say why this declaration by the Socialist Party was so extraordinarily timed for that particular moment?
  The Prime Minister: It was, as a matter of fact, not timed for that particular moment. [HON. MEMBERS: "A leak."] A decision was taken to publish a statement of policy. It was left to be published, and it happened to be published on that day—I think through having gone to the printer at a certain time. I think it was unfortunate myself. I should like to make it perfectly plain that it was not in fact a matter for that day. It was a matter of routine publication.
  Mr. Nally: Would not the Prime Minister agree that it is quite inaccurate to refer, as is done in many of these questions, to the Schuman Plan, when, in fact there is no Schuman Plan but simply a series of vague and ill-defined thoughts about the future of Europe? Would it not be an act of the gravest discourtesy to the French Government for us to publish proposals without having first of all seen in some detail exactly what it is the French Government have in mind?
  Mr. Boothby: In view of the very great weight of the criticism being levelled against this country both in Europe and in the United States, does not the Prime Minister think that it would be advisable to issue a comprehensive statement of Government policy, if only to clarify the issue as to whether this country is being governed by His Majesty's Government or by the Executive of the Labour Party?
  Hon. Members: Answer.
  The Prime Minister: I do not know if the hon. Member was in his place the day before yesterday, but I made it perfectly plain what the Government policy

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  was, and the difference between Government policy and a statement in a party document.
  Mr. Eden: The right hon. Gentleman will bear in mind, will he not, that it is one of the leading Ministers of the Crown who introduced this statement? In fact, I understand that he is one who we are told goes in second wicket down. How then can the Government say they have no responsibility for the statement?
  The Prime Minister: The right hon. Gentleman is himself, I believe, a member of the Opposition who goes in second wicket down, but he makes statements of party policy; and I have no doubt that when he was a Minister he made statements on party policy, but that when he made a statement on party policy it was never taken as a statement of Government policy.
  Hon. Members: Oh!
  Mr. W. Fletcher: Will the Prime Minister say how the Government plans, when they are finished, are to be brought to fruition and are to be brought into play in Europe, if his policy is to stand coyly at the brink waiting to be asked by some unknown person whether he will join in? Otherwise what is the use of his making a plan, if he is without any means of bringing it into the European arena?
  The Prime Minister: Perhaps the hon. Gentleman also did not follow what was said in the House, when it was pointed out that there is liaison between this Government and the Governments at the meeting. It is obvious that until there have been discussions and the thing develops, it will be impossible to say when it will be useful to intervene.
  Sir H. Williams: In spite of the muddle the Government have got into, may I ask the right hon. Gentleman if he is aware that many people in this country would entirely disapprove of proposals that made the British Isles subordinate to European industry?
  Sir R. Acland: Is my right hon. Friend aware that his first answer to the Private Notice Question will be welcomed by many who wrongly understood from the earlier statement that we should not work out proposals? Could he say, when these
  554
  proposals are worked out, whether they will be communicated to the French Government if, at any stage, the French Government ask for that to be done?
  The Prime Minister: I think it is very difficult to follow out these hypothetical matters. The point is, as has been said, and as, I should have thought, has been quite clearly expressed—though I will say it again—that we do not think it would be useful at the present moment to set out rival proposals to those set out by the French Government. On the other hand, we wish well to the Plan. We ourselves shall work out proposals, and if at a certain time it seems useful that these should be brought forward they will be brought forward. That is the point.
  Mr. Profumo: Can the right hon. Gentleman tell us whether he or the Foreign Secretary knew the Labour Party document was to be published on the day when it was published?
  Hon. Members: Answer.
  Mr. Peter Thorneycroft: May I ask the right hon. Gentleman to say, is he not in fact a member of the National Executive of the Labour Party? If so, can he have had no knowledge of this document before it was published?
  Hon. Members: Answer.
  Mr. Sydney Silverman: On a point of order. Is there any Minister of the Crown who is responsible in this House for answering for the policy of an outside group of persons?
  Mr. H. Strauss: Will the right hon. Gentleman give an answer to this simpler question? Had he, in fact, read the statement of the Executive?
  Mr. Silverman: On a point of order. I did venture to raise a point of order, Mr. Speaker, with you. May I have an answer?
  Mr. Speaker: I did not hear the question raised as a point of order. There was such a noise going on at the time that I did not hear the opening of the hon. Gentleman's question.
  Mr. Silverman: Then may I put it again, Sir? Has it not always been the established custom of the House that Ministers of the Crown are responsible for answering questions from Members on matters for which they exercise depart-

  555
  mental authority, and is it in order to ask them questions about these other matters?
  Mr. Speaker: It is always rather difficult to draw the line, but of course Ministers are responsible to this House for their actions and for their policies.
  Mr. Quintin Hogg: Further to that point of order. Has it not always been the custom and, properly, the right of this House to inquire of Prime Ministers whether statements made by bodies of which they are members, together with other Ministers, represent Government policy or not?
  Mr. Speaker: I think the answer to that is: "Never."
  Mr. Hogg: Was there not a Question down to the Prime Minister today about just such a statement by the right hon. Gentleman the Secretary of State for Scotland?
  Mr. Speaker: That is a Minister, not a body. I said "Never by a body."
  Mr. H. Strauss: The Prime Minister will recall that he informed the House that he regretted the publication of this document on that particular date. Can he not tell us whether he had in fact read the document?
  Hon. Members: Answer.
  Mr. Eden: Will the Prime Minister not consider for broader interests even than those of this House, if it be the fact that the Prime Minister deprecates the timing of this document and does not take responsibility for it, and has not even read it, whether it would not be for the advantage of everybody to know that neither he nor the Foreign Secretary approves of it?
  Mr. Manuel: On a point of order. May I have your ruling, Sir, on whether we are now discussing what arises out of the proposed Schuman Plan or the Labour Party pamphlet, which is our business on this side of the House and, in my opinion, no business of the other side?
  Mr. Speaker: These are all public documents, and therefore public notice can be taken of them.
  Mr. Michael Foot: Does not the Prime Minister think that it might solve the whole
  556
  of this question if a little time were given for the Opposition to read this pamphlet, when they would discover that none of these questions arise?
  Hon. Members: Author.
  Several Hon. Members rose—
  Mr. Speaker: I think we had now better get on with the Business Question.

BUSINESS OF THE HOUSE
Mr. Eden: May I ask the Lord President of the Council to give us the Business for next week?
The Lord President of the Council (Mr. Herbert Morrison): The Business for next week will be as follows:
MONDAY and TUESDAY, 19th and 20th JUNE—Committee stage of the Finance Bill.
WEDNESDAY, 21st JUNE—Second Reading of the Public Registers and Records (Scotland) Bill [Lords];
Second Reading of the Allotments Bill, and Committee stage of the necessary Money Resolution;
If there is time, Second Reading of the Medical Bill [Lords].
THURSDAY, 22nd JUNE—Completion of the Committee stage of the Finance Bill.
FRIDAY, 23rd JUNE—Consideration of Private Members' Motions.
Mr. Eden: On Thursday's business, I am sure the Lord President understands that we do not cavil at the way he put it, but there is no undertaking on this side of the House necessarily to finish the Finance Bill on that day. We have not promised that it will be finished.
Mr. Morrison: I think the right hon. Gentleman made that clear last week, and has indeed done so since. Still, I hope that sweet reason and co-operation, within limits, will prevail.
Mr. Eden: Can the right hon. Gentleman tell us when the Government expect to be able to make a statement about the European Payments Union negotiations?
Mr. Morrison: Those discussions are proceeding, and indeed my right hon. Friend the Minister of State for Economic

557
Affairs will be involved in them at the Executive Committee level at this weekend. I cannot be certain when they will be completed, but I would hope at any rate before the Summer Recess. I cannot be quite certain.
Mr. Eden: On the suggested Debate on the Schuman Plan, in view of the wide interest shown could the Lord President indicate at all when it may be possible to have that Debate?
Mr. Morrison: Some conversation on that has taken place through the usual channels, and we are proposing to put down a Supply Day for Monday week, which date I understand will be acceptable to the Opposition.
Mr. Clement Davies: In the interests of all Members of the House, is it not possible to extend the time that has been allotted for the Committee stage of the Finance Bill, lest we should again be called upon to sit into the small hours of the morning? I could well understand the attitude of the Leader of the House if there were some great pressure of public business, or a great amount of legislation to go through. It would be very much better in the interests of the House—and I am sure it would be the wish of Members—if we perhaps shortened the vacation and gave more time to the discussion of this important Bill.
Mr. Morrison: I really do not think it is necessary, if I may say so with respect—
Mr. Davies: We sat till six o'clock this morning.
Mr. Morrison: I am not complaining; the House exercised its right, but it could have risen earlier. I think that with reasonable co-operation all round we ought to get through quite well. After all, I understood it was being commented yesterday that one of the big issues was on Clause 1; there is another big issue on the Purchase Tax on mechanical vehicles. Nevertheless, this really is not an extraordinarily controversial Budget. Indeed, it has been described as a dull one. It is a shorter Finance Bill than last year and we are giving one more day to it. I really think that we have been quite nice. I am surprised that the Leader of the Liberal Party should be stoking up trouble where it need not exist.
Mr. Davies: The last thing I want is any trouble. I was only anxious to help. I am asking for an extra day. Surely there was no obstruction at all yesterday; all the speeches were relevant. I would ask the Leader of the House to consider this further.
Mr. Leslie Hale: Is my right hon. Friend aware that we are now told that the length of the discussion yesterday was prolonged at the request of the hon. Member for Ayr (Sir T. Moore), so that he might stop at Ascot and see an extra couple of races while his hon. Friends continued the Debate until he could return to vote; and would my right hon. Friend ascertain through the usual channels what race meetings the hon. and gallant Gentleman is attending next week on the days when it is proposed that the House should further consider the Finance Bill?
Mr. Peter Thorneycroft: When is it intended to take the Transferred Undertakings (Compensation to Employees) Regulations, 1950? These men have been expropriated a long time and have not been paid any compensation. When could we have that discussed? Secondly, I understand that the Transport Commission Bill is to be discussed next Wednesday, but the House will be in some difficulty in discussing that because there is no copy of any of the proceedings of the Committee upstairs available to Members, as far as I am aware. It would be quite impossible to have the Third Reading until we have had a chance to see what happened in Committee, so that may have to be postponed for quite a time.
Mr. Morrison: Of course, this is not my business. The Bill was debated on Second Reading, and it is not very often that a Private Bill is debated on Second and Third Reading. The House is within its right to do so, but it is not my business. The guardian of Private Bills is the Chairman of Ways and Means. On the first point, it is not proposed to take that Order next week.
Mr. Selwyn Lloyd: Would the right hon. Gentleman bear in mind what my right hon. Friend the Member for Warwick and Leamington (Mr. Eden) said yesterday about the necessity, or the possible necessity, for a Debate on the disturbances in Nigeria, the Enugu riots; and, as a necessary condition precedent

559
to that Debate, will he try to persuade the Colonial Secretary to publish the minutes of evidence of that Inquiry?
Mr. Morrison: I should not like to express an opinion on the last point without consulting my right hon. Friend. With regard to a Debate, I think it is usual in most years that there is a Supply Debate on Colonial Affairs, when this matter might well arise.
Mr. Emrys Hughes: Further to the question put by my hon. Friend the Member for Oldham, West (Mr. Leslie Hale), could the Lord President of the Council find time to debate a Motion to the effect that for yesterday the salary of the hon. and gallant Member for Ayr (Sir T. Moore) for the time he was at Ascot should be transferred to the hon. Member for Ayrshire, South?
Mr. Speaker: That is not a question on Business.
Mr. Eden: On the question of the minutes of the Nigeria inquiry, would the right hon. Genetleman ask the Colonial Secretary about this, as it does seem important that we should have the evidence. I understand that there is one copy in the House, but that is not very convenient in a matter of this kind.
Mr. Morrison: Certainly I will go into that with my right hon. Friend.
Lieut.-Commander Gurney Braithwaite: May I submit with great respect, Mr. Speaker, the difficulties that arose earlier today, affecting all Members of the House, namely, that neither the Order Paper nor the Amendments to the Finance Bill were available in the Vote Office until ten minutes before the sitting of the House, possibly owing to the all-night sitting?
Mr. Speaker: I am afraid that arose out of the all-night sitting, and these are things that cannot very well be avoided. I got my copy—I have forgotten exactly when, but I think it was a little after one o'clock—and I looked through it. There is no single new Amendment down until Clause 26, so I do not think that Members, if they have their old copies, will be very much affected.
Colonel Gomme-Duncan: May I ask on Business when it will be convenient for resolutions to be considered to give effect to the recommendations of the
560
Report on the Poaching of Salmon and Illegal Fishing in Scotland because this is very urgent?
Mr. Morrison: I cannot say. The matter is under consideration, but I am not in a position to make a statement at this moment. I understand that there are some shocking practices of private enterprise going on in Scotland in this respect, and the hon. and gallant Gentleman is quite right in suggesting that sometimes private enterprise wants restraining and looking at.
Mr. Henderson Stewart: Is the Lord President able to tell us on which day next week the promised statement on Government policy for the fishing industry is likely to be made?
Mr. Morrison: I do not think that any promise was made that it would be made next week. Therefore, the word "promise" seems to be used in the wrong connection.
Mr. Stewart: Is it not a fact that the Prime Minister on Monday rather indicated to the House that this statement was to be made?
Mr. Morrison: I remember that the Prime Minister was pressed on this matter, but he did not commit himself, and he said that he would make a statement as soon as he could.
Mr. Stewart: Is there going to be any statement at any time?
Mr. Pickthorn: May I put what I think is a point of order, Sir? Since the Whit-sun holidays, it has been very much more difficult to hear either Front Bench from the fourth or fifth benches. I do not know how that may be on the other side, but it is certainly so on this side. I wonder, Sir, if you would give instructions to the experts to see if the microphones are working properly, because it is certainly more difficult now to hear the Front Bench speakers than it used to be.
Mr. Speaker: I will see what I can do. I know that there is an adjuster down below who adjusts the thing because I have been down to see it. I may say incidentally that there may be a great difficulty about secret sessions because there is this fellow down below listening to everything we say. I have had the same difficulty, and I will see what I can do.
Mr. Ellis Smith: On Business, hon. Members have raised the question of the convenience of Members of this House, but there are other difficulties even greater. May I ask if the Lord President of the Council and the Chief Whip will bear in mind the difficulties of catering which are greater than ever, and the difficulties of the staff and the police? Those of us who have had previous experience of all-night sittings know that the staff of the catering department are now in more difficulty than ever. We hear a lot from both Front Benches about the need for efficiency in industry. I want to ask if we can have an instalment of efficiency in the running of this House, and if an attempt has been made through the usual channels to agree upon a time-table so that this House can conduct its business on an efficient basis.
Mr. Morrison: With regard to the catering facilities, a debate is coming some day about the Report of the Kitchen Committee. With regard to the police and so on, like hon. Members they have advantages and disadvantages in being associated with this House, and they cut both ways. I can only assure my hon. Friend that we shall keep in mind what he says. We do discuss through the usual channels these matters of business from time to time, and we try to agree; but on the other hand, the Opposition have their rights—very full rights—and I think that except for Standing Orders and that sort of thing, it would be wrong for the Government in any way to try to check the activities of the Opposition, which, on the whole, are useful and help us.
Mrs. Middleton: Is my right hon. Friend aware that in the Members' tea room and in the cafeteria last night some of the women members of the staff were working all the night through without any let-up at all, and does he not agree that these are not the sort of conditions we ought to see in this House?

BILL PRESENTED
  CINEMATOGRAPH FILM PRODUCTION (SPECIAL LOANS) BILL
  "to amend the Cinematograph Film Production (Special Loans) Act, 1949, as respects the permitted maximum aggregate amount of principal outstanding in respect of advances made by the Board of Trade to the National Film Finance Corporation," presented by Mr. Harold Wilson; supported by the Chancellor of the Exchequer and Mr. Rhodes; read the First time; to be read a Second time upon Monday next, and to be printed. [Bill 35.]

SCOTTISH ESTIMATES
Committee of Supply discharged from considering the Estimates set out hereunder and the said Estimates referred to the Scottish Standing Committee:
Class VI, Vote 20, Department of Agriculture for Scotland.
Class VI, Vote 21, Department of Agriculture for Scotland (Food Production Services).
Class V, Vote 14, Department of Health for Scotland.
Class I, Vote 26, Scottish Home Department.
Class VI, Vote 22, Fisheries. Scotland.
Class VI, Vote 23, Herring Industry.— [Mr. Herbert Morrison.]

ORDERS OF THE DAY

  WAYS AND MEANS
  Considered in Committee.
  [Major MILNER in the Chair]
  Motion made, and Question proposed.
  1. TRACTORS, &C. (EXCISE LICENCES)
  That, as from the beginning of nineteen hundred and fifty-one, the Vehicles (Excise) Act. 1949, shall be amended—

  (a) by increasing to two pounds the five shilling rate of duty applicable to vehicles falling within paragraphs (a) to (d) of subsection (2) of section four of that Act;

  (b) by repealing paragraph (e) of that subsection (vehicles chargeable on a scale beginning at twelve pounds) and extending paragraphs (a) and (f) to include vehicles which, but for the repeal, would fall within paragraph (e).—[Sir S. Cripps.]

  Captain Crookshank: I understand that the right hon. and learned Gentleman is reserving his explanations until a later stage. That is, I suppose, because it was impossible to get these Resolutions ready, or perhaps the Government had not made up their mind, for them to be included on Budget day. Had they so been, they would not have been individually discussed until the Committee Stage of the Finance Bill, and, therefore, using that analogy on this occasion—and I repeat on this occasion— without prejudice for the future, we accept the position that they will be formally moved and discussed in their places in due course.
  Question put, and agreed to.
  Resolved:
  2. HYDROCARBON OILS (CUSTOMS REBATE ON HEAVY OILS)
  That, as from the beginning of nineteen hundred and fifty-one, section two of the Finance Act, 1935 (which withdraws the customs rebate on heavy oils used for road transport), shall apply to heavy oils used as fuel for tractors, agricultural tractors and agricultural engines not falling within paragraph (a) of subsection (2) of section four of the Vehicles (Excise) Act, 1949, as amended by any Act of the present Session relating to Finance.
  3. HYDROCARBON OILS (EXCISE REBATE ON HEAVY OILS)
  That any Act of the present Session imposing an excise duty on hydrocarbon oils and applying section two of the Finance Act, 1935, in relation to any rebate of that duty, may apply it with any amendments made in it by the Act for the purposes of the customs rebate.
  4. INCOME TAX (DOUBLE TAXATION PROVISIONS)
  That any provisions of any Act of the present Session relating to Finance which amend the law as to the effect for tax purposes of taxation payable under the laws of territories outside the United Kingdom may abolish the relief from income tax given by section twenty-seven of the Finance Act, 1920, and apply, with modifications, Part V of the Finance (No. 2) Act, 1945, and the Ninth Schedule to the Finance Act, 1947, to tax payable under the laws of any such territory notwithstanding that there are no arrangements in force under the said Part V with the Government of that territory providing for the granting of credit in respect of that tax against United Kingdom taxes.
  5. PROFITS TAX (DOUBLE TAXATION PROVISIONS)
  That any Act of the present Session relating to Finance may vary the extent and incidence of the profits tax for any chargeable accounting period falling wholly or partly after the end of March, nineteen hundred and fifty, so as to give effect to provisions amending the law as to the effect for tax purposes of taxation payable under the laws of territories outside the United Kingdom.—[Sir S. Cripps.]
  Resolutions to be reported Tomorrow.
  Committee to sit again Tomorrow.

  FINANCE BILL
  Considered in Committee [Progress. 14th June].
  [Major MILNER in the Chair]

  FINANCE BILL

    Clause 13.—(ROAD VEHICLES—PURCHASE TAX.)
    4.0 p.m.
    The Chairman: I think it will be for the convenience of the Committee if in discussing the first Amendment on the Order Paper we also discuss the Amendments in page 9, line 42, to leave out from "if," to the end of the subsection, and to insert:
    "a reference to the first rate were substituted for the reference to the second rate in the second column in Group 35 in Part I of the Eighth Schedule to the Finance Act, 1948,"
    and in page 10, line 1, to leave out subsection (2).
    Mr. Peter Thorneycroft: I beg to move, in page 9, line 40, to leave out "first day of May," and to insert, "nineteenth day of April."
    I think it would be convenient to take these Amendments together as you suggest, Major Milner, and then to have a Division on one of them, unless, as I hope, the Chancellor can see his way to concede what we are asking. The purpose of these Amendments is, quite simply, to abolish the 33⅓ per cent. Purchase Tax imposed by the Budget on commercial vehicles. The Clause does two things. Firstly, it imposes this tax on commercial vehicles, and, secondly, it reduces from 66⅔ per cent. to 33⅓ per cent. Purchase Tax on cars over £1,000 in value. The effect of these Amendments is to leave untouched the Government's intention to give this benefit to the higher priced cars. It may be that some will see a certain inconsistency or startling change in Socialist policy by the Government imposing an added tax on invalid carriages and removing taxation from Rolls Royces. However, that is a matter for Members opposite to sort out between themselves and their consciences.
    As the Lord President of the Council has said, this tax on commercial vehicles is a big issue. It is a tax very widespread in its effect, and it is, we think, a very damaging tax for the industry of this country. We propose to deploy the arguments against the tax, and I hope we
    566
    shall be successful in persuading the Chancellor that he can well do without it. This is the second of the two major taxes imposed by the Budget. The first is the increase in Petrol Duty, which also falls heavily upon the road transport industry.
    The Chancellor would have us believe that it is a mere coincidence that the two substantial taxes he is imposing by the Budget happen by some freak of fortune to fall on the same section of the same industry. No one else believes that it is a coincidence, and I do not think Members opposite really believe that is so. I have listened to many speeches from Members opposite in which they have made savage attacks upon "C" Licence holders. Time after time they have said in transport Debates that there are too many "C" Licence vehicles, particularly the hon. Member for Perry Barr (Mr. C. Poole). They have attacked the right of a man to transport his goods in his own vehicle. I do not think it is a coincidence, therefore, when the Chancellor of the Exchequer comes along with a tax specifically directed against this type of transport. We think it is done deliberately.
    I studied rather carefully the Press reports of the Budget Speech of the Chancellor, and almost every section of opinion in the Press was united on one thing, and that was that the Chancellor had not given the true reasons, or the whole reasons, why this tax was being imposed. "The Times" said:
    "The argument is so thin that it is impossible not to look for a deeper motive in the Government's desire to protect the nationalised railways. The suspicion is strengthened by the large increase in Petroleum Duty."
    This is what the "Financial Times" had to say the day after:
    "His own explanation, other than the hard need for revenue, cuts little ice. This has led to the suspicion that the Chancellor of the Exchequer has more in his mind than he disclosed to the Commons. The plight of the railways is well known."
    The "Manchester Guardian," which is not wholly a Tory newspaper, stated:
    "No doubt it is hoped that this will help to keep the traffic on the railways, or at least to check the growth of their losses."
    It is a fact that hardly anyone believes the reasons that were put forward by the Chancellor as representing the actual

    567
    reasons which actuated him in imposing this tax.
    What we are proposing to do on these Amendments is to deal with the main issue of whether Purchase Tax ought to be imposed on commercial vehicles or not. Later on in our discussions, when we reach the Third Schedule, we shall produce specific arguments directed to specific types of vehicles, such as shopkeeper delivery vans and special type vehicles, which we shall seek to exempt. I think it would be for the convenience of the Committee if at this stage we considered whether this tax on commercial vehicles is a good thing or a bad thing. We think that it is a very bad thing. We think it is a most extraordinary thing to impose Purchase Tax upon capital goods of industry, such as these vehicles are.
    Last night, arguments were brought to bear on the question of taxing raw materials for industry. The Chancellor apologised to the Committee and said that he did not really want to tax the raw materials of industry. In that case, however, it was inevitable, because it is impossible to distinguish between the petrol that is put into cars and the petrol which is used as raw material for industry. Whatever the merits of that excuse might be in that case, this tax is not accidental. It is not due to administrative inconvenience, but is a coldly calculated tax. The Chancellor has chosen these capital goods and decided to impose a tax upon them.
    Suppose that such a tax were put on railway engines. I think that most people would regard that as an astonishing proposal. But this is just the same thing. It just happens to be another form of transport. This is a tax that is calculated to force up the general level of transport costs throughout the country. I should have thought that the Chancellor would have had to produce very formidable arguments indeed before he could justify a tax which can hardly be calculated to injure more our industrial economy.
    I want to take the arguments which the right hon. and learned Gentleman has so far adduced in favour of the tax. Let me dismiss one altogether. It can no longer be said that this tax is necessary to alleviate Income Tax. That argument was expounded yesterday. The Government said that the Petrol Duty was neces-
    568
    sary in order that particular sections of the community could benefit in the Budget. I hope the Financial Secretary to the Treasury will not say tonight that the Purchase Tax on commercial vehicles, in effect, is a way of providing tax relief somewhere else. If he does we can well believe that the same argument is being produced all the time.
    The only argument put forward by the right hon. and learned Gentleman is that in the last two years he has been seriously troubled by the excessive investment in commercial vehicles in the home market. It is a pathetic picture of the right hon. and learned Gentleman bothering his head in case more grocers managed to get delivery vans. At no stage in the proceedings has he given to this Committee any clue whatever as to what he judges to be excessive or not excessive in the rate of replacement of vehicles of this character. How would he judge it? How often are Ministerial cars replaced? We always hear about the big sales of second-hand Ministerial cars, but Ministers are not always anxious to answer questions about that.
    It is equally important that commercial fleets should have the same rate of priority as Ministerial cars. The arguments which the right hon. and learned Gentleman has adduced in these matters throw a remarkable searchlight upon what he is pleased to call democratic planning. Let us consider the kind of factors one can sensibly bear in mind in deciding whether too many commercial vehicles are sold upon the home market or not. One is, how many cars are being sold on the home market in other countries? We would not put this country at a particular disadvantage in a matter of this kind. One hopes that one of the things that would be borne in mind is what people want, unless, indeed, the man in Whitehall must always be the judge of what is better. The public demand is something which cannot be dismissed from one's mind in matters of this kind.
    Another issue is whether the export hopes or targets are being fully met or not. I will say a word about that in a few moments. None of these seems to have borne with the right hon. and learned Gentleman for one moment. All he has done is to take the number of commercial vehicles used at home before the war, say that there are more used

    569
    now, that that is a quite impossible situation, and that we cannot have that sort of thing going on. It is the most extraordinary way to conduct any planning.
    Let me take the figures of what has been going on, of what has been happening in other countries. Last night the right hon. and learned Gentleman was using what happened in other countries to justify the putting up of the Petrol Duty here. I dare say that Members of the Committee will remember his arguments under that head. He was saying, "Look at Switzerland, it is higher there. In Italy they have a much greater Petrol Duty. All over Europe the Petrol Duty is greater." He was wondering why it was he could not have it here, just like a confirmed alcoholic gazing wistfully through the windows of a pub. If one is going to use that kind of an argument one must be consistent.
    Of course, we have got more commercial vehicles in this country than before the war. That has been the tendency all over the world. People are moving over to more transport. We have, in fact, got a 77 per cent. increase on 1938, but what about America? After all, the right hon. and learned Gentleman and his friends are quite indebted to what is going on in America. The Americans have been very helpful not only to them but to this country as well. They have increased their commercial vehicles by 90 per cent. Europe as a whole has increased by 97 per cent. Wherever one looks, South America, South Africa, Canada, and India, the rate of increase in the sale of commercial vehicles on the home market is substantially greater than in this country. I ask the right hon. and learned Gentleman to ponder those facts.
    4.15 p.m.
    Is it possible that what the business men and transport operators in all these countries in the world are doing might be right and the man in Whitehall might be wrong? It is an impertinent suggestion to say that such might be a possibility? Certainly, if the right hon. and learned Gentleman is going on as he has started in these matters, we are going to be under a very serious handicap compared with other countries. In regard to exports, is it possible to say that such commercial vehicles as have been sold here have seriously hampered achieve-
    570
    ments in the export market? I hope to carry the whole Committee with me when I say that the achievement of the motor manufacturers in this country has been magnificent. Everybody in that industry deserves tribute from all sides of this Committee.
    Despite all the difficulties and disadvantages which confronted them—shortages of steel and if I may say so, although I do not want to be too controversial, some of the difficulties of having a Socialist Government as well—they have pushed production up and up and up. In 1949 in the export of commercial vehicles they were second only to the great United States of America, and, after all, the United States of America were leaders in this field. They really were building up the export and production of commercial vehicles in numerous instances. In the first three months of this year our producers actually beat them and took the lead. That is a matter of which we can be reasonably proud.
    What is the right hon. and learned Gentleman saying? He says he has published an economic survey, in which the home market has got a few more commercial vehicles than it ought to have had according to the figures which he has worked out. Since when were the figures in an economic survey sacrosanct in this country? Most people have regarded "Old Moore's Almanac" as a better forecast. It is more accurate, and I understand is published six months earlier. Since when has it been a crime for free enterprise in this country to move a little faster than our wonderful planners allowed for? What would the right hon. and learned Gentleman have said if the production of motor cars had been kept back to the level which he was, in fact, forecasting as the production of this country? What we ought to try to do is to push it a little faster.
    I do not know what attitude the right hon. and learned Gentleman takes about these matters, but if there have been these great achievements in production, and if, in fact, more commercial vehicles are being produced than the planners had expected, is he suggesting that the home market ought not to share a little bit in that? Is there anything harmful in the home market sharing in all these things? The home market has not shared in them to anything like the extent the export

    571
    market has, nor would we expect it to be the case.
    May I give the Committee some figures on that, because they are revealing? These figures are the average monthly production of these vehicles. In 1938 the total average production was 8,600; by 1949–50 it had risen to 20,700. That is a substantial increase. The figures for the home market went up only from 7,400 to 8,900. In other words, out of the total increase over 1938, the home market had only participated as to 12 per cent. and the export market as to 88 per cent. I am not quarrelling with that and saying that it is wrong that the export market should have had a full 88 per cent. but it is a little hard for hon. Gentlemen opposite to say that there has been something grossly excessive on the home market side. I should say that the home market has not as much as it needs, and that it certainly has not had too much.
    I do not know what the effect of this tax will be. The right hon. and learned Gentleman apparently hopes that it will dissuade people from buying new vehicles on the home market and that it will force the vehicles into the export market. I very much doubt whether that is likely to happen. I do not think that the export of commercial vehicles is quite as simple as that. It is a matter of going out and finding the markets to start with. Only the most naive planner thinks that you have only to deny a vehicle to the milkman and it is translated almost automatically into a sale in Canada. I know that the costs falling upon industry will be substantially increased by the tax.
    I know what the argument from the Government is going to be. I can tell the Committee what it is before we start. It is that the effect of the tax is only one half of 1 per cent.; how can the Committee take up the time of the Chancellor by sitting late at night arguing about one half of 1 per cent.? The Chancellor never seems to remember, or he does not like to be reminded, that almost day after day we are dealing with matters involving one half of 1 per cent., like the coal charges and the freight rates. Gradually all these halves of 1 per cent. pile up. The people who really recognise what is going on are the British housewives who have to go into the shops. In the small hours of last night I was
    572
    reading a newspaper, and I will quote as an example what I saw announced there:
    "Gas Prices Up by One Penny per Therm. The price of gas in the Southern Area is going up by one penny per therm. It is necessary because of increased freight charges, Purchase Tax on commercial vehicles, the petrol duty increase, and adjustments in the wage scales."
    When all those matters were discussed by us they were treated from the other side as almost trivial. The increases in freight rates were nothing, only about 1 per cent. Today we are talking about the Purchase Tax on commercial vehicles. I agree with the "Economist" in this matter. It said:
    "A heavy and damaging fiscal bludgeon is brought into play which, it is hoped, will reestablish the Divine Tightness of planned guesswork at the mere incidental cost of making transport of goods more expensive."
    The tax is certainly clumsy. It is an utterly indiscriminate tax. It includes every type of commercial vehicle, broadly speaking, and it makes no distinction between those which are essential and those which are less essential, those which have an export market and those which have not an export market. It taxes the little milk trolley. Why we should want to tax a thing of that kind I do not know. It taxes it just as much as the £10,000 special type of vehicle for carrying frightfully-needed export goods to the docks.
    It is a vicious and vindictive tax which is calculated to hit at the small man particularly. The monopolies will manage all right, but they are busily engaged in squeezing out the small man. The tax will help to smash competition, and it will be passed on to the consumer in higher charges. It is a tax on capital goods. We say that a tax on capital goods in this country at the present time is thoroughly evil. It imposes a special and distinctive burden upon the industry of this country rather than upon the industries of other countries.
    The tax is designed to increase the cost of distribution at a time when Ministers of the Crown have the hypocrisy to talk about the importance of bringing down the cost of distribution. The tax has been roundly condemned by all sections of political opinion. We ask the right hon. and learned Gentleman

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    and hon. Gentlemen opposite to stop talking about the importance of bringing prices down and to start taking action to bring them down. The most effective way to do that would be to vote in favour of the Amendment tonight.
    Mr. Oliver Lyttelton: On a point of order. I hope that I am not wrong in supposing that we are not to deal with specific cases on this matter. We are reserving them for the Schedule. I want to get that clear.
    Mr. Dodds: I am still feeling the effects of the long sitting last night, and I am not anxious to take up the time of the Committee unduly, but I cannot help marvelling at the hon. Member for Monmouth (Mr. P. Thorneycroft) every time he gets up to make a contribution, and I cannot help thinking that if we could harness some of his vim and vigour to the productivity drive, we might be able to make some good use of his efforts in this House. I also cannot help feeling that he must be a little concerned about what will happen when old age deprives him of that vim and vigour. He has used it to such a great extent upon a tired Committee like this, that he does not get all the praise that he might otherwise get if he were to put his facts in more ordinary fashion.
    I have said I will not weary the Committee, but I would recall that I said upon the Second Reading of the Bill that it might be useful in the present Debate to deal with the tax as it affects electrically-propelled vehicles. I well remember that during our Budget debates my hon. Friend the Member for Leeds, West (Mr. Pannell) in a remarkable speech, raised this question and that the Chancellor of the Exchequer got up and made the important and unusual admission that he had not given to the matter all the consideration that he might have given it. He added that he would do so. It was hoped that at a later stage we might hear something of advantage.
    On Second Reading I put a case which I believe should receive sympathetic consideration. I do not want to go over all the points which I then brought forward, but I think there is in the Budget a most glaring anomaly which affects the electrically-propelled vehicle. We have heard much about the need for conserving dollars, but it seems to have been over-
    574
    looked that the electrically-propelled vehicles, of which there are about 15,000 in use, are used for door-to-door deliveries, particularly of bread and milk, and that they cannot be used for long hauls.
    4.30 p.m.
    Secondly, not so very long ago labour was very badly used in pushing bread and milk vans on their various rounds. It cannot be contested that remarkable progress has been made in saving labour and, at the same time, in getting rid of the irritating noises which were made in the early hours of the morning. From the point of view of hygiene, no one can deny that the use of electrically-propelled vehicles represents great progress.
    Thirdly, it is estimated that the use of the 15,000 vehicles meant a saving last year of 14,500,000 gallons of petrol or roughly 2,500,000 dollars. That in itself is a very important factor. Fourthly, we were told during the Budget Debate that there was a need to ensure that more vehicles were sent abroad and that that was one of the reasons for applying the tax. There can be no fear of that sort in regard to electrically-propelled vehicles because every attempt which has been made to sell them abroad has failed. Thus the same reason cannot be used for taxing these vehicles.
    One of the most important factors in asking for sympathetic consideration is that an electrically-propelled vehicle of the same size as a petrol vehicle costs anything from £200 to £400 more. The batteries, which cost roughly £200 per vehicle and the wear and tear of which is very heavy, are also subject to a 33⅓ per cent. tax. In addition, an essential component called a charger costs £100. A very strong case can be made out for sympathetic consideration at least in connection with the batteries and the chargers.
    I hope that my right hon. and learned Friend will give us some good news about relief in the tax on these vehicles, for in every possible way they represent progress with a capital "P," and it is in the best interests of the people that their use should be encouraged. I have a point to put to hon. Members who are interested in safety measures. The maximum speed of these vehicles is 16–18 miles an hour. From every aspect, therefore, there is an

    575
    excellent case for special consideration on behalf of these vehicles. I hope that hon. Members will feel that the tax is unfair and undesirable and that this matter should receive sympathetic consideration in the best interests of many sections of the community.
    Sir Arnold Gridley: It is very seldom that I can say that I am 100 per cent. in agreement with an hon. Member opposite. An Amendment to give effect to the desire of the hon. Member for Dartford (Mr. Dodds) appears later on the Order Paper and I hope that when we deal with it we shall have his support.
    It is not inappropriate that I should intervene for a very short time in this Debate to speak on this matter from the point of view of the user and purchaser, or would-be purchaser of commercial vehicles. I do not know what is the experience of others who are engaged in industry, but I have been waiting for months for the delivery of commercial vehicles which I have had on order, and even today it is quite impossible to get any news about when delivery is likely to take place. In such conditions as these it is proposed to reduce the number of vehicles which may be supplied to the home market. How can we possibly carry on our industries properly if we are to be handicapped by being told that a delivery which we had hoped for in six months' time, may not take place for a year?
    There is very little variety in the design of commercial vehicles, but there are a great many varieties of cars. The effort to get into overseas markets depends upon how the taste of the prospective buyer can be met. There is very little difference between one type of commercial vehicle and another and consequently it is much more difficult to get into the overseas market for commercial vehicles in competition with American producers than it is in the case of the market for cars. Those of us who are engaged in the industry know only too well that if we are to be helped to expand our exports, we must be assured of a substantial home demand. That will be jeopardised by this tax. That is recognised by the Government, but the Government are very illogical. They recognise the importance of expanding the overseas market in the
    576
    case of cars by reducing the Purchase Tax on the highest-priced cars, and yet in regard to commercial vehicles, the numbers of which we desire to increase so that we may earn more dollars in the American and Canadian markets, the Government will, by the imposition of the tax, make the cost greater than it is at present.
    There is another special point about commercial vehicles which cost many thousands of pounds, such as the big petrol and milk lorries, and a range, which has particularly interested me for many years, composed of the extremely heavy and costly vehicles which are essential for the transport of very heavy lumps of machinery, electrical machinery in particular—large generators, large transformers, condensing plant and the like, which cannot be transported on our railways because they are too large to go through our tunnels and must, therefore, be carried by road. The cost of these vehicles will increase enormously as a result of the 33⅓ per cent. tax. That will increase the cost of the plant going into our power stations and increase the cost of the current supplied to our industries, and so the vicious movement goes on.
    There is another point to which I ask the Chancellor of the Exchequer to give thought. Those of us who use commercial vehicles know only too well that we have to write them off over a short period of years, usually three or five years. If the vehicle costs £500 at present—I take this as an illustration only because £500 is a cheap price for a commercial vehicle —that means £100 a year written off and added to the costs of production. If they are to be increased by another 33⅓ per cent. by virtue of the increased tax, we have to add another one-fifth to our working expenses to write off the cost of the more expensive vehicle in the same period.
    I am getting absolutely sick and tired of being asked to reduce my costs of production and to compete with the increasing competition of overseas countries at a time when our power is costing more, our gas is costing more, our railway transport is costing more and now our road transport has to go up. I say to hon. Members opposite that it is heartbreaking when we are exhorted to do these things. What are the Government

    577
    doing to help us? Not one iota. Piling up our costs month after month until one often feels desperate in trying to help the Government to increase the income of dollars by exporting in competition with our European and other competitors, all of whom are seeking, as we are, to get into the dollar markets.
    I ask the Chancellor of the Exchequer to listen to some of us who at least know something about the conduct of business, having been in it all our lives, and to realise that we do not put forward these points in argument from ignorance but from solid and lengthy experience. I shall certainly vote without any hesitation against the imposition of a tax which will add yet one additional burden more to the dozens of burdens that we are at present being compelled to carry.
    The Financial Secretary to the Treasury (Mr. Douglas Jay): I think the hon. Member for Stockport, South (Sir A. Gridley) was a little ungrateful in saying that the Government had not done one iota to help industry in these matters. Quite apart from many other things, we are this year giving a relief by way of the initial allowance on depreciation which is costing £40 million this year in revenue and £75 million in a subsequent year.
    Sir A. Gridley: It is only deferred.
    Sir Wavell Wakefield: They get it all back later on.
    Mr. Jay: The hon. Member for Monmouth (Mr. P. Thorneycroft), who obviously had not suffered either mentally or physically by last night's sitting, included in his speech what has become a rather habitual but cheap sneer on the part of Opposition speakers about democratic planning. Of course it is easy to sneer at anything. Dr. Goebbels used to sneer at democracy itself, probably rather more skilfully than the hon. Gentleman, but before Opposition speakers continue with this particular sneer, I ask them to tell us what alternative they propose to democratic planning. There are, in fact, only two alternatives. One is the totalitarian system which we all detest, and the other is the old system of unbridled laissez faire. If they want to go back to the latter, I wish they would tell us so clearly; if they do not, they would be more honest to give up these sneers at democratic planning.
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    After listening to the hon. Member for Monmouth, I felt that Opposition policy on the level of our national investment programme is getting harder and harder to follow. At present that programme, under the guidance of the Government, is high and represents about 20 per cent. of our national income. The attitude of the Government on this is perfectly clear. We say, first, that the programme cannot be allowed to go higher without exerting an inflationary pressure on the cost of living and an adverse effect on our balance of payments. We say, secondly, that of all sections of that programme the excess investment in commercial vehicles is the one which, though no doubt desirable in itself, can more easily be spared for the time being than anything else—by excess is meant excess over the figure in the Economic Survey. Thirdly, we say that this is a case where fiscal as well as physical controls can usefully be employed to achieve some diversion of vehicles from the home to the export market.
    4.45 p.m.
    That is our policy, but what is the policy of the Opposition in this matter? Both the Leader of the Opposition—who I believe, is engaged somewhere else today—and the Deputy-Leader, told us last autumn that the investment programme was much too large. So both the Leader and Deputy-Leader of the Opposition believe that there is an excess somewhere. Indeed, Opposition speakers constantly tell us that there is still a present threat of inflation and of a rise in the cost of living, and Lord Woolton informed us not so long ago that we are suffering from over-full employment. From the point of view of investment policy, I was particularly interested to see that the hon. Member for Chippenham (Mr. Eccles), who is also not with us today, in a letter to "The Times" as recently as 6th June, told us he believes that we are still suffering from over-full employment in this country and, a day later, "The Daily Telegraph," which I believe has some association with the party opposite, said the same thing in a leading article.
    If we are, in fact, thus threatened by inflation and if the Opposition want to diminish that inflationary pressure, even at the cost apparently of some increase in unemployment—since they talk of overfull employment—why do they object to

    579
    this rather modest measure for restraining the least essential section of the investment programme? For it is really a strange doctrine that all other sections of the programme—houses, factories, schools, electric power, oil refineries, etc. —on which our recovery of the last two years has been so largely based, should all be cut down, as we were told by the Leaders of the Opposition last autumn, but that investment in commercial vehicles, essential or otherwise, should alone be allowed to go unchecked. Why should this be sacrosanct—to use the word which the hon. Gentleman used today— and if, as the Opposition so often tell us, particularly the hon. Member for Chippenham, we need more flexibility in our economy, why do they so violently object to a little flexibility in the shift of the sales of this industry from the home to the export markets?
    In our view a moderate shift to the export market is both thoroughly desirable and quite practicable at present. Indeed, this is perhaps our moment of greatest opportunity in the export markets in these post-war years. We have today the price advantage of devaluation still with us and we have so far largely successfully checked any consequential rises in internal costs which might have been expected to follow devaluation. On the other hand we know, and we have long said, that the full force of German and Japanese competition is yet to come. Therefore, if ever a major effort in the export market by a new and growing industry like this one is to be made, which, as the hon. Gentleman rightly said, and as we have said frequently in these Debates, has such a magnificent export record since the war, surely the time is now.
    One hon. Gentleman yesterday suggested that we had been pessimistic about the export prospects of the motor industry in these last five years but, as my right hon. and learned Friend said, it was he who publicly expressed the view that the industry could reach a level of exports much higher than it had reached, and it was the motor manufacturers who replied, with some opprobious language, that it was quite out of the question. On that occasion my right hon. and learned Friend proved right, and we remain more optimistic on this point to-
    580
    day than the rather gloomy forecasts of the hon. Member for Monmouth.
    It is even stranger that the Opposition should suddenly object to the use of a fiscal rather than a physical control to encourage this diversion. They have been telling us for the last five years that physical controls were clumsy and expensive and that we ought to try financial ones instead, but as soon as we do that the right hon. Member for Bristol, West (Mr. Stanley) and, again, the hon. Member for Monmouth today complain that this tax will fall on all commercial vehicles, both on those in the programme and on those outside it. But that is simply to argue that fiscal weapons are in their nature rather clumsy, which is precisely why we have preferred to use physical controls wherever the circumstances of the case showed them to be practical and effective in the last few years.
    Here, however, we think there is some force in the general argument of the Opposition in favour of fiscal weapons, even though they abandon that argument the moment they see it put into force. The truth is that the Opposition do not really know whether they want more investment or less. When they say that they want less, they do not know what part of the programme should be cut nor do they know whether it should be cut by fiscal or by physical measures. The Opposition have no economic policy on these matters at all, except to advocate cuts in revenue adding up to £400 million and then to tell us next day that those cuts and the Amendments are not, of course, meant seriously, but are merely a parade for purposes of Parliamentary Debate, as the hon. and gallant Member for Bristol, North-West (Lieut.-Commander Braithwaite) told us yesterday. If that is not financial irresponsibility, to quote another phrase of the hon. Member for Monmouth, I do not know what is.
    Hon. Members opposite have also vastly exaggerated the argument that this tax will add to the cost of transport. The hon. Member for Monmouth said that it would be widespread and very damaging. Those are merely words, and anyone who looks at the facts and figures will see that it will be nothing of the kind. The hon. Gentleman really showed by his speech that he knew that quite well, be-

    581
    cause he threatened me by saying that whatever I did I must not use the argument that this would not really have a very large effect and that it was quite trivial and did not much matter. By saying that, of course, he showed quite well that he knew that that was the case, as, in fact, it is.
    This tax, after all, will fall only on the annual addition of something between 50,000 and 100,000 vehicles to a stock of vehicles in this country which already exceeds 800,000. That is to say, after it has been in force for a year something less than one-eighth of the vehicles on the road, which are themselves only one form of transport, will have paid a tax amounting to something less than one-third on their total retail value. That may have some effect in restraining the flow of investment in the home market in this industry, but—
    Mr. Summers: Are we to understand that it is Government policy for manufacturers, who are always being exhorted to be efficient, to retain lorries for eight years before replacing them?
    Mr. Jay: I was merely mentioning the existing stock of lorries in the country. That is not a material increase in our industrial costs as a whole, particularly when it is remembered that this tax is not intended to be permanent—[Laughter.]— but is needed only as long as the necessity for restraint on our investment programme and the maximum of exports are paramount.
    Nevertheless, for all the reasons which the hon. Member mentioned, amongst others, we are exceedingly anxious that this tax should cause the minimum of administrative difficulty and extra work or disturbance to the vehicle and other industries. We have, therefore, been considering, in consultation with the industry, since the Budget speech, whether we can simplify the practical application of this tax and somewhat lighten its impact at the same time. Of course, in order to preserve proper Budget secrecy, we could not have as full consultations as one would have wished before the Budget, but in the light of these subsequent consultations and of what we have heard here today and in the earlier Debates, we have come to the conclusion that it would be better to impose the tax simply on the chassis of the vehicles in question and to exempt all the subsequent
    582
    operations. [HON. MEMBERS: "Hear, hear."].
    That will, in the first place, greatly simplify its application since the very large number of firms, with whose representatives we have been discussing this, who are involved in the later operations of coach building, painting, and so on, will now be relieved of all obligation to ensure the collection of the tax. The change will also greatly benefit certain particular types of vehicle which have been mentioned today, such as those carrying petrol and milk, where the cost of the superstructure is proportionately high. It will further, naturally, lighten the total amount of the tax and so help in particular the heavier and more expensive vehicles, where its weight has naturally tended to be higher, including the electrical vehicles which were mentioned by my hon. Friend the Member for Dartford (Mr. Dodds). For instance, in the case of the electrically-controlled vehicles the batteries, of which I think he spoke, will now be outside the range of the tax.
    We shall therefore propose, in order to carry out this change, the deletion of the provisions at present in the Bill and the substitution of fresh ones imposing a tax on chassis as from 1st July at the same rate—that is to say, 33⅓ per cent.— with arrangements for collecting tax only on the chassis when a goods vehicle is delivered completed by the chassis manufacturer.
    Mr. Harrison: Will my hon. Friend allow me to intervene for a moment?
    Mr. Jay: I think I had better continue. The consequence will be that commercial vehicles supplied since 1st May will be free of tax and provision will be made in the Bill for adjustment of contract prices which were affected by the prospective tax liability from 1st May on the completed vehicle. We believe from our consultations with the industries concerned that it will not be insuperably difficult to arrange for these payments to be refunded. The necessary Ways and Means Resolutions and the Amendment to the Bill will be tabled immediately.
    Mr. Lyttelton Mr. Lyttelton rose—
    Mr. Jay: I should like to finish on this subject first. We shall at the same time, in order to facilitate these changes, ask the Committee not to pass the existing

    583
    Clause 13 since it will be replaced by another Clause. The result of the alteration of the date and the reduced incidence of the tax on commercial vehicles will be to bring in about £3 million less than we originally budgeted for this year. This, incidentally, will be another figure to charge against the additional £23 million which we shall have from the Petrol Duty and car licences.
    Mr. Brendan Bracken: The figures are wrong.
    Mr. Jay: Those vehicles which were to be exempt from the original proposals will also be exempted from the chassis tax and we are at the same time including two new exemptions. The first is for pedestrian-controlled vehicles, which my hon. Friend described as "prams," although they are not what we should normally describe as "prams." They are light vehicles used for retail distribution which are controlled by somebody who walks on the road or on the pavement and who does not ride in the vehicle. I think that in the great majority of cases they are electrically- and not petrol-driven. That will go some way I think, to meet the arguments, particularly about the physical strain on those engaged in retail distribution, which have been advanced about electrical vehicles. In fairness to the petrol-driven vehicles generally, I think the Committee will agree that it would be impossible to exempt all electrical vehicles and retain the tax on petrol vehicles, but the pedestrian-controlled vehicle, I think, falls into a separate category. In some ways it is analogous to hand-drawn barrows, which are outside the scope of the tax.
    5.0 p.m.
    The second additional exemption we propose is for the class of vehicle known as the "Land Rover" type. Those are light vehicles but are designed mainly not for use on the road, but on rough ground on farms, woodlands and so on. We think they can reasonably be distinguished from ordinary road vehicles for the purposes of this tax. That exemption will, of course, benefit both agricultural and forestry operations although, of course, the passenger form of this type of vehicle will continue to bear the tax.
    Finally, may I say that we believe that the tax in this improved form will, first
    584
    of all, give some relief where a strong case has been made out. Secondly, it will be much simpler both for industry and for the Customs and Excise to operate and, thirdly, it will still secure our essential purpose of somewhat increasing the export of commercial vehicles at the expense of the home market.
    Mr. Lyttelton: Before the Financial Secretary sits down, I want to elucidate the figures on which I am a little concerned. I think he said he estimated that the loss in revenue would be £3 million.
    Mr. Jay: This year.
    Mr. Lyttelton: This year. That is to say one-third of the revenue originally estimated?
    Mr. Jay: One-quarter.
    Mr. Lyttelton: I thought the figure was £9 million, and if we take £3 million that would seem to us to be 33⅓ per cent. of £9 million.
    The Chancellor of the Exchequer (Sir Stafford Cripps): The date has been altered from May. It would have been from 1st May and now it would be from 1st July, and there will be no tax collected for May and June, which makes a difference in this year.
    Mr. Lyttelton: The point about which I want to be clear is that it would not be correct to say that if we estimated for a full year at £14 million, one-third of that sum would represent the deduction.
    Sir S. Cripps: No.
    The Chairman: May I say to the Committee that whilst I do not know how far what has been said by the Financial Secretary is acceptable, if it were proposed to consider the matter further it might be that the Committee would wish to await the new Clause. If that were so, the appropriate way to deal with it would be for the Amendment to be withdrawn and the present Clause negatived and then we could later discuss the proposed new Clause. I am in the hands of the Committee.
    Mr. Lyttelton: May I say that would not be agreeable to us, because at the beginning of this Debate I think my hon. Friend the Member for Monmouth (Mr P. Thorneycroft) made it quite clear that

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    we wanted to discuss the general principle of the tax. That is not in fact altered by the concessions, although they are considerable, on the administration of the tax. It seems to me we should still be in absolute accord with what we said at the beginning if we continued to discuss the principle, which remains unaltered, of Purchase Tax on commercial vehicles, and then we could discuss the administrative details on the Schedule.
    Sir S. Cripps: There is only one little difficulty. I quite agree with what the right hon. Gentleman the Member for Aldershot (Mr. Lyttelton) said, but we also shall be voting against Clause 13 because we desire to replace it by another Clause. It will be difficult actually to get a vote exactly on the point which the right hon. Gentleman needs. That is all I am pointing out. We are quite prepared to continue on this, but I did not want him to be misled on that point and then find himself in the same Lobby in the end.
    Mr. Lyttelton: We have had a certain amount of practice in going to the Lobby and if we are deprived of the opportunity on this occasion, I dare say we shall be all right.
    Mr. Nigel Birch: While agreeing with my right hon. Friend the Member for Aldershot (Mr. Lyttelton) that these concessions, as far as they go, are very welcome, they do not touch the principle of the tax. In passing I would like to say that I am very glad that the Financial Secretary has found means to give a repayment of Purchase Tax wrongly paid, because one of the things we are always urging is that wrongly paid Purchase Tax should be remitted, and invariably we are told it is impossible. But in this case the Government have managed to do the impossible and they may be congratulated upon it.
    Mr. Jay: I may perhaps point out that we have always said that vehicles are one of the very few things in regard to which we agree this is practicable.
    Mr. Birch: I still thank the hon. Gentleman for his great kindness. I think my hon. Friend is very pleased about the "Land Rover." I am not very clear about pedestrian-controlled vehicles, but I dare say they exist if the hon. Gentleman says so. I want to deal
    586
    with the earlier part of the hon. Member's speech when he was dealing with the motives which inspired the Chancellor to impose the tax. I thought the first part of the speech was very familiar. He started with a great panegyric on democratic planning. As I understand it, the democratic planning of this Government is like that of Dr. Schacht, the only difference being that Dr. Schacht was rather good at it—and that is a very material difference. The reason we are finding co-operation with Europe so difficult is that we are running a Schachtian economy. We do not believe in such a policy, but in the very progressive American policy. I understand that hon. Gentlemen opposite now consider that policy progressive.
    Then we had a reference to "overfull employment" again. The only thing I want to point out is that in the Building Working Party's Report, signed by three leading trade unionists, there was a long passage on the evils of overfull employment and it seems quite respectable to refer to that now.
    The main point the hon. Gentleman made was the question of the investment programme and that the buying of lorries was not fitting in with the investment programme. The thing that annoyed hon. Members opposite is that their planning made a sort of rough guess at what someone might buy in the way of lorries, and as all their guesses are bad they found it extremely irritating and decided that buyers should be punished because they did not agree with the guess.
    Let us think a little on the question of investment. Surely the things we must not cut in our investment programme are the things which are absolutely basic. The two basic factors in production I would say are, first, fuel and power, and secondly, transport. If we do not have sufficient coal for our electricity and gas and if we do not have sufficient transport we cannot possibly have an efficient industry. That seems perfectly clear, and it is all very well to say, "We did not guess you wanted so many lorries." As my right hon. Friend the Member for Bristol, West (Mr. Stanley) pointed out, people do not buy lorries for fun but in order to carry on their business efficiently. They are not making a corner in lorries but trying to get some in order to run

    587
    their business, and if they cannot get them they cannot run the business efficiently.
    On the question of costs and prices, the hon. Gentleman said that devaluation provided a great opportunity to burst into the dollar market, and he said "We are doing everything we can to check the rise in internal costs." I am bound to say that this does not seem to me to be a very potent method of doing that. When one objects one always gets the housemaid's baby argument. I refer to the housemaid who had an illegitimate baby but excused herself on the grounds that after all it was only a little one. We have had that argument again and again from hon. Gentlemen. It was best answered yesterday by the hon. and gallant Member for Hull, Central (Captain Hewitson). Look at what the Chancellor does. He said in his devaluation broa that it would not make any difference to prices. Then we have railway charges going up and we are told that it will not make any difference. We are to have another £80 or £90 million put on road transport and we are told that it will not make any difference. As the hon. and gallant Member for Hull, Central, pointed out, 20 one-half per cents, together come to a large percentage, and that is what is going on.
    Everything the Government do tends to put up prices. The hon. Gentleman said that we have a limited time to break into the dollar market. Conditions are at the moment extremely favourable, but what hon. Gentlemen are doing is to cut down that time as quickly as they can and leave us at the end of it with no other resource except a further devaluation. We are now told that devaluation is one of the greatest pieces of economic planning and forethought ever indulged in by the leaders of the economy of this country. I have no doubt that that will be again the answer if we go on like this. I repeat that we are grateful for these concessions but they are minor ones and do not go to the root of the matter. We consider this proposal to be basically Wrong.
    Mr. Martin Lindsay: I should like to thank the Financial Secretary for the important concession announced by the Government to benefit the "Land Rover," the Rover Company being the most important firm in my constituency. I should at the same time like
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    to utter a note of warning. This story is a very good example of the difficulties in which the Government can place an important component of British industry by an ill-considered piece of fiscal planning. The "Land Rover" is today selling abroad to the extent of between £4 and £5 million a year. I understand that the Ministry of Supply attach great importance to this because they consider that these vehicles are of a kind which can provide for a market which we may be able to hold, if later we find it difficult in certain other vehicle markets to hold our ground there.
    What happened after the Chancellor's Budget statement, when it was apparent that the "Land Rover" would have to pay the 33⅓ Purchase Tax, and that a farmer using one for cultivation would not receive the petrol concession whereas a farmer using a tractor perhaps in the next field would do so? Eighty per cent. of the home market orders for "Land Rovers" were cancelled in the course of a few days. That is a very important matter from the export viewpoint because these "Land Rovers," which sell to the tune of between £4 and £5 million overseas, have their prices subsidised by the profit made by the "Land Rovers" sold on the home market. The company was then faced with a most grave situation— that with the cancellation of 80 per cent. of home market orders they would have to increase the price of these vehicles sold overseas considerably, and of course they would then be bound to lose ground immediately to American competition.
    I was a little anxious when, in announcing this concession, the Financial Secretary said that this lifting of the Purchase Tax would not apply to those "Land Rovers" used for passenger purposes. I was anxious because this is a vehicle which is used for three main purposes, for haulage, for cultivation and of course for the domestic running of the farmers and others use it for their livelihood. If this proposal is merely to have the effect of removing Purchase Tax in respect of those vehicles which are used only for haulage or fitted at the back with, for example, certain pieces of agricultural machinery, it may not have the required effect of keeping the home sales sufficiently high to enable the profit made from those sales to be used to lower the price of those sold overseas.

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    5.15 p.m.
    I stress the point that now that the Government have accepted the fact that it is vital to do something in respect of these vehicles, it is necessary to do it in such a way that their sales on the home market will be maintained at the pre-Budget figure, and will not merely be a partial concession which will benefit only a proportion of such sales. However, we are most grateful that this story, at all events, looks as if it may have a happy ending.
    Mr. Pargiter: While I welcome the concession which the Financial Secretary has announced, I agree with him that the fiscal weapon still remains a clumsy one in dealing with problems of the capital investment programme. The hon. Member for Monmouth (Mr. P. Thorneycroft) referred to the purchasing of a few lorries or something of that kind and pooh-poohed the idea that that was of any importance. But it is true that the commercial vehicle industry as a whole did, according to the Chancellor's statement, absorb double the amount of capital which it was expected should properly be invested in it in a balanced investment programme covering all types of investment. It was, therefore, rather an important matter.
    It is disappointing that in spite of the considerable amount of control that can be exercised in this matter by the allocation of steel supplies, control has not proved to be sufficient or to have provided a good enough weapon to deal with this matter without resort to what the Financial Secretary himself refers to as the rather clumsy fiscal weapon for curtailing purchases or investment of capital in this way.
    It is equally true that while we welcome the concession in regard to bodies, it does not make this weapon any the less clumsy in relation to the commercial vehicle production world as a whole. There is no doubt that the excessive pressure from the investment point of view has been in respect of the lighter type of commercial vehicle, certainly not in respect of the heavier type of commercial vehicle. There is not the excessive demand for the heavier type which would justify any measures at present to curtail the purchasing of them.
    In regard to the lighter type of vehicle and chassis, which is readily adaptable
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    either for private car manufacture or commercial vehicle manufacture, it is understandable, in view of the fact that we have a greater supply of goods on the home market, thanks to the measures of the Labour Government, that there is considerable pressure for the lighter type of vehicle for delivery purposes. Many retailers who have not delivered goods for a long time now find that there is some competition, and they naturally wish to look after their customers. That pressure will still remain whether there is Purchase Tax on the vehicles or not. Therefore, I am not at all sure that the tax in the form here proposed will achieve the Chancellor's stated objective, and which I accept is the only objective he had in imposing this tax.
    It is true that it is these lighter types of vehicles which have a more ready sale in overseas markets. The heavier types of vehicles do not sell so well. There is obviously a much more limited market for them overseas, just as there is a much more limited market for them than for the lighter types in this country. The heavier type of commercial vehicles generally in use with an 8-wheel chassis and a gross load of 22 tons cost about £2,500 or sometimes a little more. The body used on it for normal transport purposes probably costs not more than about £400. But leaving the tax on the £2,500 it is still a pretty considerable figure. The effect of that is likely to be to shift the demand, because of the high rate of Purchase Tax, from the heavy vehicles to one of the lighter type where the tax is obviously less, because it is a cheaper vehicle.
    That class of vehicle is, again, the type of vehicle which more readily sells abroad and the effect will again not be what the Chancellor desires, which is to stimulate the export market. I am not suggesting that everything has been done by everybody in the heavy vehicle market with regard to the heavier type of vehicle. We know there are difficulties. Last year there were difficulties; and as a result the Ministry of Supply agreed that a greater number of heavy commercial vehicles should be put into the home market because of the difficulties of the export market and in order to keep the people in this industry employed.
    That is a factor with which I am particularly concerned and with which the engineers whom I represent are also con-

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    cerned. The degree of skilled engineering work that goes into the heavy vehicle is, in proportion, greater than that which goes into the light vehicle; and if it comes to the question of war potential it is essential that nothing should be done to dissipate that labour force, unless it is done with great care. If the market abroad is stabilised and the demand from the home customer is to be further damaged by the transfer of demand from the heavy to the light type of vehicle, it inevitably means less employment in those particular factories which produce these heavy vehicles, unless some other channel is found to utilise their labour.
    It is also true that the plants used for such production will not readily lend themselves to other types of engineering production. Such plant is laid down especially for the job and will not necessarily do other work efficiently, so that we cannot mix our economy to the extent of producing heavy vehicles and other things along with them. The problem is whether or not there is to be a constriction in the industry as a whole and that is a point I would ask the Chancellor to consider carefully. I feel that the tax of £800 or £900—£800 at any rate—which will remain on the heavier type of vehicle is an imposition which will tend to make the customers buy fewer of them. In effect, the Chancellor says that he wishes to do that, but I would ask him to divide the market into its respective sections and see that he does not unduly damage the heavier section, and at the same time still further increase the pressure on the lighter type of vehicle.
    The Chancellor has gone some way, and we welcome very much what he has said about the pedestrian-controlled electrical vehicles, which is undoubtedly a very valuable concession and will be particularly appreciated. Hon. Members opposite talk about hitting at the small man, but it is essentially the small man who will benefit as a result of the decision not to put a tax on pedestrian-controlled electrical vehicles. I would ask the Chancellor to consider further the incidence of the nature of the tax, this clumsy bludgeon which falls equally on the just and on the unjust, with a view to separating it. If he wishes to curtail the investment pressure on the light vehicles he should do something about
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    the heavy vehicles which by this impost suffer even worse than the light vehicles will suffer.
    I know that it is extremely difficult for him to make all the concessions we would like, but I ask him to have particular regard to this industry and the numbers employed in the heavy commercial vehicle industry, with a view to adjusting the tax in some form so that it does not fall in such a heavy way upon the heavier type of industry.
    Mr. Grimond: I, of course, welcome the concessions which have been made. We shall no doubt be able to consider them in detail and make any remarks which are appropriate upon them. I wish now to address a few remarks to the principle of this tax. I understand it is not a tax intended to raise revenue at all. It is what might be called a planning tax. It is a tax designed to curb this insatiable desire, which apparently exists, to buy commercial vehicles, or what are sometimes called vans and lorries.
    The hon. Member for Southall (Mr. Pargiter) has drawn attention to certain aspects of the uncertainty of this weapon. Presumably the Chancellor of the Exchequer will be deeply disappointed if the tax does raise a great deal of revenue, because then it will have failed in its main objective. Furthermore, by its very nature it is designed to hamper and hinder the best outlets which industry feels it has for its products. It is designed to stop manufacturers, farmers and shop keepers from doing their business in the way they think most satisfactory to themselves and to their customers. It is indeed a most uncertain weapon. No one can tell where it is going to fall and a man who is considering whether he will buy a new van or lorry will have to look at all sorts of aspects of the matters concerned, such as depreciation and the profit he may be making; and whether in the end he will come to the same conclusion as the Government planners must, at least, be very doutful.
    I suggest that if anything is bringing planning into disrepute in this country it is not the sneers of the Opposition, not even the Conservative Opposition, but the extraordinary random effects of the operations of the planners. So far as the

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    ordinary man can understand the general plan, it is at the moment to stop inflation and keep down costs. It is to help him to build up his business and to export more efficiently. But so often in the ordinary operations of his life the acts and activities of the Government, as he meets them, appear to effect the very opposite, and to hamper him, to put up his costs, encourage inflation and hinder export.
    As I understand it, one great concern of the Chancellor is that more vehicles should be exported. It is absolutely essential that the export trade should have a large and flourishing home market. The one is complementary to the other, and I do not think that at the moment there is any hostility between the two in the commercial vehicle trade. Furthermore, the increase in costs which this will cause to so many industries and occupations in this country will put up the costs of a great many exports, and may hamper the general export trade; not perhaps to a very great extent but, as has already been pointed out, it is one of the many factors working in that direction.
    One of the points made yesterday and not repeated today was that if we have a very high level of taxation we must bring all taxes up to that level and the Chancellor has taken the occasion to "whip in" a few taxes which have been lagging behind. We have not yet had any remarks on the suggestion made by the hon. Member for Monmouth (Mr. P. Thorneycroft) that this tax was designed to help the railways. To my mind, there is a certain argument for directing traffic towards the railways, but I think that the imposition of a tax on commercial vehicles is a very bad instrument for the purpose. One cannot help suspecting that something of this sort may well have been in the back of the Government's mind throughout consideration of this tax.
    It seems to me that no case has been made out for this tax as an instrument of planning. It is not an instrument of revenue, as far as we know; it will put up costs; and, whatever the effect of these concessions, which we welcome, the principle of the tax remains an inefficient and a bad one.
    5.30 p.m.
    Viscount Hinchingbrooke: What we have had from the Government today is not so much an exhibition of a change of heart as an exhibition of force majeure. They would love to have this tax operating at full scale; they would love to take the uttermost farthing out of the manufacturers of these commercial vehicles; but after introducing what the hon. Member for Southall (Mr. Pargiter) called a bludgeon of a tax without any thought at all—deriving it I suppose from the inner recesses of Transport House—they then discovered that the thing was quite unworkable. So they have come down to the Committee this afternoon with a proposal to remit a quarter of it and to cut out of the scheme all those small manufacturers of motor bodies who until this afternoon, would have had to be taxed.
    There were several thousands of them; the opportunities for tax evasion were quite immense—so the Treasury was advised very late in the day—and, without saying in detail what has led him to it, the hon. Gentleman has come down and announced this remission. If the Chancellor had had wiser counsel—principally that from his hon. Friend the Member for Southall and those on that side of the Committee who see how costs are rising all the time in the industries in their own constituencies—he might not have brought in this tax at all, let alone have had to come down here and reduce it.
    The speech of the Financial Secretary was, as is usual for him, a most interesting speech. He immediately showed himself to be extremely touchy on the subject of democratic planning, as one would expect from a high doctrinaire of the Labour Party. He reacted sharply when we mentioned the subject, as some high priest in the holy of holies might react if a novice or supplicant for favours twitched the corner of his robes inadvertently. The hon. Gentleman does not like any attack to be made upon the inner sanctuary of his party doctrine. He then went on to charge us with complaining against the use of taxation as a means of stopping investment in a full employment situation, and so stopping inflation. How that argument can prevail today, when for years past, there has been high

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    taxation and rising costs and all the evidence of inflation, I cannot understand.
    It is not good economic doctrine in these days of full employment to say that additional taxation imposed upon an article in some way conduces to an anti-inflationary policy. It adds to costs, as we were told last night by the hon. and gallant Member for Hull, Central (Captain Hewitson), speaking from a very important industrial circle indeed; it adds to wage demands; and if costs go up and wage demands increase, what is that but inflation? I cannot understand this argument that in some way this tax on commercial vehicles leads to an avoidance of inflation.
    Then we were told that we could not make up our minds as between the physical and the fiscal weapon. The hon. Gentleman really ought to know Conservative Party policy better than that.
    Mr. Follick: What is the policy of the Conservative Party?
    Viscount Hinchingbrooke: He knows perfectly well that for five years, since the Socialists came into office, we have been demanding a progressive relaxation of controls and their substitution in appropriate cases by the price mechanism and the law of supply and demand. In general, we do prefer the fiscal or financial weapon to the physical weapon, every time; but that is not to say that the Government can come along and tax a particular part of the economy out of relation to all the rest and impede its development, which is what is happening in this case, as I shall show in a moment.
    Then the Financial Secretary was bitter with us because we charge the Government with an excess of zeal in their Economic Surveys. I might say a word in passing about this annual target practice that goes on on the part of the Government. In 1949, we were told that 50,000 new vehicles were to be manufactured. That was forecast in the Economic Survey. We were led to believe that democratic planning meant that production would be held down to that figure by every sort of control there was. Not at all. The industry responded to a different technique from that of the Survey forecast—to that of appeals for higher productivity, to appeals for enter-
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    prise and enthusiasm—and produced 100,000 vehicles which were sold in that year.
    The Chancellor never learned the lesson, because in this year again, in the Economic Survey, we are given a certain figure, and the tax is brought in subsequently in order to see that that figure is realised. But there is not the slightest prospect of its being realised; the industry will always respond better to appeals for high productivity; it will always respond better to taxation reliefs and depreciation allowances, to all the incentives that are or may be given to a successful and flourishing concern, and it will refuse time and time again to respond to the gloomy prognostications and orders incorporated in the February Economic Survey demanding that productivity should be held down.
    The Chancellor imagines that he is still a chemist; that he is working at a laboratory bench with atoms and molecules which are infinitely responsive to the chemical reagents which he uses. But that is not the way a society of enlightened people works. The Chancellor can never get away from the idea that he is able to produce a sort of museumlike structure for this great country, allotting a show case in one corner and another show case in another corner, and saying that industries must obey his plan as produced year by year in the Economic Survey.
    If such a thing did happen, the way of life of this country would be completely ruined; we should go down before other nations which were producing new forms of transport, new characteristics of living, and getting away with the opinion of the world. Fortunately, this country is not obeying the dictates of the Chancellor of the Exchequer on this business of the production of vehicles—and everything else will be the same.
    A much better plan would be to spend more energy on vehicular traffic, to encourage its development, to allow roads to be put in such a condition as to carry a very much greater volume of transport. As I said not long ago, on the Transport Commission Bill, it may be the case that the railways in this country are doomed to contract. There is much evidence in other countries that wheeled vehicles on the road are destined to expand. It would be much more appropriate to see

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    provisions for such an expansion were incorporated in the Economic Survey and in the democratic planning of the Government.
    On this question of exports, there is great doubt whether the tax will enable exports to be increased. The right hon. and learned Gentleman himself admits the argument that a very large home market is essential if we are to absorb the overheads of the industry and enable cars to be produced cheaply for export by the fact that he has reduced the high scale of Purchase Tax on expensive cars from 66⅔ per cent. to 33⅓ per cent. He admits that it is not possible to expand exports unless we have a home market, and yet he reverses the whole principle when it comes to commercial vehicles. I do not see how it is possible to sell vehicles abroad by stopping home supplies. What relation is there between Mr. Jones, of Balham, who wants to buy a two-ton lorry and is prevented from doing it by the Chancellor's Purchase Tax, and Mr. Silas Q. Jones, of Kansas City, who wants to buy the same thing? They are not even in touch with each other. Their needs and circumstances are entirely different. We cannot switch the vehicle from the one to the other simply by putting on Purchase Tax at home.
    I am told that, since the tax was applied, Messrs. Guy Motors have closed down a night shift on their export programme, and are transferring that productivity to the home trade. That does not look as if this tax is going to have any beneficial effect on the export trade. We are told by people in the industry that it will not lead to any appreciable expansion of exports.
    Mr. Pargiter: Will the noble Lord allow me? What was the percentage of exports of Messrs. Guy on which they have now closed down a night shift?
    Viscount Hinchingbrooke: I do not know what the figure is. I only know that they have, in fact, closed down the night shift on the export programme.
    Finally, there is the argument about applying this tax to capital equipment. The Chancellor is a great lover of principle. Time and again, he has rejected Amendments on the Finance Bill, affecting such things as Easter offerings, because they infringed a particular principle, and yet, this year, he introduces a tax on the
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    capital equipment of industry which it has never borne before in any of its branches. The nation is urged to re-equip, but, as soon as it does it, the Chancellor smites manufacturers on the nose with this tax. It is a tax which discriminates against a vital industry, against the roads and in favour of the railways. There is no doubt at all that this is a cover plan, a sort of outwork defence mechanism of the railway system.
    The Socialist Government, under the influence of hon. Members occupying railway seats, is wedded to the Railway Executive and the National Union of Railwaymen and, by every device, by refusing to repair the roads, by refusing to develop new roads, by putting on an extra Petrol Duty and by means of this Purchase Tax on commercial vehicles— by all these means, they are keeping the ring clear for the railways to recover. I do not think there is any prospect that, without competition from the roads, the railways will recover. It is my supreme conviction that we must have full-scale and uncontrolled competition between the roads and the railways in order to find out which is the most efficient, and which is the natural and right system of transport for the people and this country in this century. For all those reasons I deplore the imposition of this tax.
    5.45 p.m.
    Mr. Pannell: I am pleased to be able to follow the noble Lord the Member for Dorset, South (Viscount Hinchingbrooke), if only in order to take up a point in which he suggested that this side of the Chamber is dominated by representatives of the National Union of Railwaymen. It so happens that three hon. Members now sitting in this part of the Committee represent the Amalgamated Engineering Union.
    Sir W. Wakefield: What about their constituents?
    Mr. Pannell: I am perfectly prepared to deal with that point. Hon. Gentlemen opposite are presumed to represent constituencies, but more than enough in these Debates do we hear the voices of the great selfish vested interests. As a matter of fact, we have the Pharmaceutical Society represented by one hon. Member, and we all know, every time he speaks, whom he represents. We heard

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    the brewers speak twice last night. [HON. MEMBERS: "No."] Oh, yes. We heard the brewers speak twice last night—
    Mr. Arthur Colegate: On a point of order. I do not know what connection this has with a tax on commercial vehicles.
    The Deputy-Chairman(Colonel Sir Charles MacAndrew): I think it is only an example.
    Mr. Lyttelton: Further to that point of order, Sir Charles. I think we should all deprecate any suggestion being made that any hon. Member in this House represents any particular body and places the interests of that body in advance of those of his constituents. I do not believe that the hon. Gentleman intends to suggest that. We should all deprecate any such suggestion being made.
    Mr. Sidney Silverman: Further to that point of order. If indeed, we all deprecate any such suggestion, is it not a pity that the subject was started from behind the right hon. Gentleman who has just got up to deprecate it?
    Mr. Pannell: I would be the last to bring into this Debate the suggestion that anybody represented any particular vested interest, but, on the other hand, if the noble Lord will read HANSARD tomorrow, he will find that he said that we were dominated by the railway interests and by hon. Members on this side who were members of the National Union of Railwaymen. That is all very well, but it is very well known—although I do not want to pursue the point—that there are hon. Members on this side of the Chamber who are sponsored by the National Union of Railwaymen. I only tried to point out, as I am entitled to do and as I wish to do with some pride, that I am a nominee of the Amalgamated Engineering Union. I wish to make this further point. When political funds are disclosed, it is well known where my election expenses come from, but the same thing cannot always be said about hon. Gentlemen opposite. However, I will leave that subject.
    I wish to speak as one who has knowledge of this industry and as one who has served his apprenticeship in it. I represent engineers whose work is bound
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    up with road transport, and I have had representations from the union which controls the larger number of the skilled engineering labour in the transport industry asking that I should make a case to the Chancellor.
    I want to come back to the general considerations. We ought to consider the very considerable concessions that have been made by the Chancellor. The hand-controlled electric vehicle that was mentioned earlier has no tax upon it whatsoever, and it is very significant that one of the leading Opposition Members does not even know of its existence. It is not a choice between the petrol vehicle and the electric vehicle, but a choice between a man pushing a cart and a more modern form of propulsion. In the driver-controlled electric vehicles there is an exemption of tax from the body of the vehicle, which is quite considerable and different from the vehicle mentioned by my hon. Friend the Member for Southall (Mr. Pargiter). It is a specially made vehicle for carrying bread or milk, and it has a considerable exemption. Then there is the exemption for the batteries worth over £200, and there is an exemption for the charger.
    I want to refer to the disabilities of the heavy commercial vehicles. My hon. Friend the Member for Southall covered most of the points, but there is one on which I do not think he touched. The heavy commercial vehicle already labours under a disability of a 20-mile-an-hour speed limit, which has a discriminatory influence against it in so far as the prospective purchaser is concerned. It is a curious fact that we are prepared to have a passenger vehicle carrying many lives, which is allowed a 30-mile-an-hour speed limit, and yet an identical vehicle constructed for carrying goods is limited to 20 miles an hour.
    The effect of a tax of 33⅓ per cent. upon a very much heavier type of vehicle will have a tendency—I put it no higher—for people to purchase cheaper vehicles, thus attracting less Purchase Tax, which will be grossly overloaded. There has been a tendency in that direction in the past. There is a tendency for a vehicle up to three tons to be reinforced with helper springs on the rear axle, to be completely overloaded and allowed a 30-mile-an-hour speed limit, whereas the comparatively safer vehicle and a much better

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    engineering job is limited to 20 miles an hour. That fact, together with a 33⅓ per cent. tax, acts as a great discrimination against the best form of engineering in motor transport that we know in this country.
    I do not think that we should completely forget the Chancellor's difficulty. The excess in investments in the home market was an excess greater than the housing cut that was envisaged in the devaluation Debates last year. I think that is a very considerable amount. The total expenditure in this field in the home market is greater than the whole of the education building programme. Consequently we cannot take any of these items in isolation. They stand one against the other. Bearing in mind the need to divert production to the export market, the Chancellor has been reasonably generous, and I should like to thank him for the concessions that have been made.
    Sir Austin Hudson: I am very glad to have this opportunity of saying a few words about the principle of this tax. As the Committee knows, when we come to the Schedule we shall have an opportunity of dealing in detail with the different kinds of vehicle covered by the tax, and I understand that we are also to have a new Clause in which a number of concessions are made. I should like to make an apology to the Financial Secretary because I heard the beginning and the end of his speech, but through circumstances which I could not avoid I did not hear the middle of it. However, I do know the exemptions which are made.
    We object to the tax because it is another tax on industry. It is yet another impost—and we had one yesterday—on the motor industry. A most striking figure was given yesterday and I should like to refer to it again. The figure was given when the argument was being put forward that the present Government are not too friendly towards the motor industry. For Purchase Tax, for motor duties and for fuel tax taken together, no less a sum than £225 million a year is taken from the motor industry.
    I am told that the real reason for this Purchase Tax is that there are too many commercial vehicles being used in the home market, but we have never heard any argument that if those vehicles were
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    not being used in the home market they would immediately find purchasers abroad. If that were so I am certain that my hon. Friends would not be opposing the tax. On the other hand, from all the information we can get from the trade, we hear that the maximum number of vehicles—and a very fine number too— is being sold abroad and that it is not because they are selling on the home market that an even greater number is not being sold.
    There is one interesting line of research. If too many vehicles are being used on the home market, by whom are they being used? There are really only three classes of road user. There is the Road Haulage Executive. Surely, they are not using more vehicles than they require. In any case, they are under the direct supervision of the Government. The "A" and "B" licence holders are almost under sentence of death, and are very unlikely to be squandering their money at the moment in buying vehicles when they may be taken over by the Road Haulage Executive at any time in the next year or two. Then we come to the "C" licence holders, of whom I am told there are some 700,000. I cannot help thinking that the Government have never been particularly friendly towards the "C" licence holders and those are the people at whom this tax is aimed.
    6.0 p.m.
    I want to reinforce what was said by my hon. Friend the Member for Monmouth (Mr. P. Thorneycroft) and other speakers, namely, that manufacturers and business people do not buy vehicles just for the sake of buying them. They buy them because they think they will improve their business. There are more dispersed factories today than before the war; businesses are sometimes carried on in two or three different places. That being so, it is absolutely necessary for them to have commercial vehicles, and it is for that reason, I believe, that the number of such vehicles has increased. Then there are the people who have to use the road for the carrying of fragile goods and things of that sort, and, of course, there is the ordinary delivery service. For all these things commercial vehicles are needed, and that is why their numbers have gone up.
    Is the Chancellor quite sure that the figures given in the Economic Survey

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    concerning new vehicles are always correct? In many cases, somebody buys a new vehicle and his old vehicle is used for other work. That is then counted as two vehicles. I was given an extraordinary example of one vehicle being counted as six. I think that when the Chancellor says that the number of commercial vehicles has gone up from 500,000 before the war to 800,000 now he should have those figures checked. In principle, we object to this tax because it is a tax on industry, and when the opportunity arises, which, I gather, will not be this afternoon, we shall vote against it. At the same time, I should like to say that we appreciate the concessions about which the Chancellor saw fit to tell us earlier this afternoon.
    Mr. Nigel Davies: The hon. Member for Leeds, West (Mr. Pannell), not only supported our argument that this is a very grievous tax, but produced an excellent additional argument in that heavy goods vehicles bear an additional burden by virtue of the 20 miles an hour speed limit imposed upon them. At the same time, I do not imagine that his nominators—I only reverse the phrase; he admitted being a nominee—would allow him to join us in the Division Lobby.
    I wish to concentrate on the bad and adverse nature of the tax on capital goods and capital investment. It is frequently argued by hon Members opposite—it was so argued yesterday and again today— that any tax, whatever it may be, that drains off the purchasing power of the general public is a blow against inflation, and is, in fact, deflationary. Surely, a tax of this nature does precisely the opposite I suggest that the whole idea that any tax is deflationary deserves reexamination.
    Surely, it is necessary to ask who is going to pay the tax and where the money is to come from. In this case, it comes entirely from the ploughed back profits of industry. This money would otherwise be used on other forms of capital investment. It is widely known that, owing to high taxation, business as a whole is now short of funds for capital investment purposes. Capital investment in this country is running at a lower rate than in the United States of America by quite a lot; in fact, we are falling further behind in
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    this respect. This tax on goods vehicles will drain away further funds in this field and thereby tend to weaken us still further competitively.
    I wish to say a word or two about light commercial vehicles, because here, quite apart from the cost of production, is something which is directly going to increase costs of distribution. Whereas the tax on heavier vehicles will have a general effect in increasing the costs of production, and particularly the costs of our exports, the tax on light vehicles will hit the housewife far sooner, because it will be a tax on the distribution of goods and a tax on the small shopkeeper. A very important principle is involved in taxing any particular form of capital goods, and once this principle is accepted, the Chancellor can in future Budgets extend it in any direction he pleases; he can limit capital investment in any sphere where he thinks it undesirable. It gives him a much greater measure of control over and above the very wide control which he already possesses.
    Having had just about half their profits taken, if businesses have to pay a considerable amount over and above that, on capital goods, then there will be very little left for capital investment at all. Surely, it is not a question of the men in Whitehall always knowing best; surely, the managers can judge what are the things they need to reduce costs of production, and, if they feel they need commercial vehicles, they should be allowed to invest their money in that direction. A tax of this nature is inflationary and not deflationary. It is not a tax that will act as a kind of make-weight for the lack of savings; it is a tax that will directly drain away money that would otherwise be saved and invested in other directions
    Much has been said both today and yesterday about the railways, but there is a note of contradiction in what back benchers and right hon. Gentlemen on the Government Front Bench say in this respect. We have heard several admissions by back benchers that the position of the railways cannot have been absent from the Chancellor's mind. I do not believe for one moment that it was. If every opportunity is going to be taken, either by a tax on petrol or by a tax on commercial vehicles, of increasing the costs of road transport until they mount up to the level of railway transport, we

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    in this country shall once again price ourselves out of the market. It will be just another nail in the coffin of low cost production in this country. There seems to be a very wide measure of complacency about this measure of increasing costs.
    I must return to the remark made by an hon. Member that an increase of 1 or 2 per cent. in the cost of production did not matter. I can only say that in a business with which I am principally concerned, we lost a contract with the Greek Government a few months ago to a German firm over a matter of a fraction of 1 per cent. It would be interesting to see what the reaction would be if managing directors of businesses in this country were to write to their agents abroad notifying them of an increase of 1 or 2 per cent.
    We hear a good deal about our economic successes, among which devaluation seems to be included. But if we are to introduce taxes which directly increase our costs of production, that is an admission that we are heading for further devaluation. Whatever the result of the last one may have been, I do not think that anyone would look with complacency on a further step in that direction. Therefore, I ask the Chancellor to state once again that he wishes to cut or limit the rise in the costs of production. If he wishes to stabilise sterling, he should abandon a tax whose only result can be to increase costs of production in this country, and, in particular, to increase the costs of re-equipment and of our capital goods on which alone we can rely.
    Mr. Nabarro: My bon. Friend the Member for Stockport, South (Sir A. Gridley) mentioned that this Government and the Government that preceded it, had made not an iota of fiscal contribution, by way of help, to the aggravated problems of industrialists in the post-war period of reconstruction. In the course of his reply the Financial Secretary, running true to form, said, "See what we have done in our benevolence. We have granted you Income Tax initial allowances." This followed exactly the line of argument advanced by the Chancellor, when he presented the Budget and referred to a remission of 40 per cent. as an initial allowance that was granted in the 1949 Finance Act. In fact, this word "remission" is a gross misnomer. It
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    should be widely known that these arrangements are not, in themselves, a remission of tax at all, but merely a deferment and an interest-free loan for the difference between the previous rate of initial allowance of 20 per cent. and the new rate of 40 per cent.
    Mr. Jay: What the hon. Gentleman says is quite true, as we have often said. But as industry asked for this concession, presumably it regards it as valuable and useful.
    Mr. Nabarro: We regard even a peppercorn, in the present dire circumstances of capital re-equipment, as a contribution, but it is so small as to be nugatory and trifling.
    I object very strongly to the use of this word "remission". My hon. Friend the Member for Enfield, West (Mr. Ian MacLeod) referred to the shortage of capital for re-equipment. In this question of Purchase Tax on commercial vehicles there is a major departure from established fiscal policy in seeking to tax directly capital equipment, I wonder whether due consideration has been given to the fact that the arrangement for initial allowances on commercial vehicles purchased as capital equipment is now completely nullified by this Purchase Tax on commercial vehicles?
    Perhaps I could illustrate it by taking a commercial vehicle, chassis only, which is priced at £1,000. Purchase Tax will raise that price to £1,333. The initial allowance of 25 per cent. will then reduce the £1,333 back to exactly £1,000 so that the Purchase Tax of 33⅓ per cent. has removed what advantages were derived by the industrialist on his initial allowance of 25 per cent.
    Mr. Jay: Or vice versa.
    Mr. Nabarro: I would remind the hon. Gentleman that, in making the initial allowance, the Inland Revenue take the total cost of the piece of capital plant or equipment concerned, and therefore, the 25 per cent. will be levied on £1,333. I believe it is not the intention of the Chancellor to remove the advantages derived by industrialists from the Income Tax initial allowance on commercial vehicles. Therefore, that point is worthy of special consideration.
    In general, I condemn this tax as being wholly inflationary, wholly bad and as

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    adding a very substantial sum to the cost of distribution and of manufacture. Although we welcome the small concessions made this afternoon on trailers, van bodies and the like, in principle this tax cannot do anything else but harm our industrial economy and raise still further the increased costs we have been faced with in the last few years.
    6.15 p.m.
    Sir W. Wakefield: The Financial Secretary referred to electrically propelled vehicles. I wanted to ask him a question on his statement before he sat down, but I was not able to do so. I should be grateful if he could give the information now. If I understood him aright, batteries were not to be charged Purchase Tax and the body on top was not to be subject to Purchase Tax. I ask the question because I have down an Amendment to Schedule 3 in my name and that of my hon. Friends that
    "Battery electric vehicles designed and permanently fitted solely or mainly for the carriage of goods"
    should be exempt from tax. Do I understand that the chassis of an electrical vehicle is still to be subject to tax?
    Mr. Jay: Unless it is pedestrian-operated.
    Sir W. Wakefield: I am much obliged. I hope that between now and later stages of this Bill further consideration will be given to this question of taxation on electrically-operated vehicles. As I understand it, there are various reasons for the imposition of Purchase Tax. One is to stop vehicles from being used on the roads, by putting up the cost of them, and turning the transport of goods to the railways.
    There is no dollar content in the fuel used in electrically propelled vehicles. Therefore, any arguments that might be adduced that it is desirable to save fuel cannot possibly apply to them. The argument might be used that goods which could be and ought to be carried by the railways are being carried by road vehicles. Again, that cannot possibly apply to electrically propelled vehicles, because these only operate in a very limited radius and, indeed, are helpful supplementaries and complementaries to the transportation of goods by the railways. Perhaps the most powerful argu-
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    ment for encouraging their use is that the power they use, that of electricity stored in their batteries is regenerated at night time. We all know the great problem of the electricity authority in evening out the load. These vehicles are re-generated at the time when the electrical load is lightest. Surely, that is a help and an advantage to B.E.A.
    For these reasons, and for other reasons that have been given by hon. Members on the opposite side, I hope that, between now and the later stages of the Bill, reconsideration will be given to this. On all sides of the House statements have been made showing how the increased cost of operation are bound to hurt industry and, in the long run, bound to cause unemployment and to put up the cost of living. I suggest there is no reason at all why these electrically propelled vehicles, at any rate, should have Purchase Tax put upon them.
    When he spoke earlier, the Financial Secretary said that we on this side of the Committee had no policy. He mentioned fiscal and physical controls, a point with which my hon. Friends have adequately dealt. I suggest that the Conservatives, far from having no policy, have the policy of creating the right kind of conditions in which private enterprise can flourish. The policy of hon. Members opposite is precisely the opposite. By putting this tax on commercial vehicles they are putting a premium on efficiency. After all, as other hon. Members have said, why is it that industrialists wish to purchase commercial vehicles in which to carry their goods? They do so only because it will help them to become more efficient.
    I will quote an example of a firm which did not wish to spend money on buying its own commercial vehicles, but which was, nevertheless, compelled to do so. It is not the business of this firm to run transport but it had to do so for the reasons I shall give. I have here a report which I think would interest the Chancellor of the Exchequer. It says:
    "Since the local transport people we formerly used have been nationalised it has been quite impossible for us to give our usual 24-hour or, at maximum, 48-hour service to our customers. Under present-day conditions, when supplies are short and we have to keep many of our more important customers fed from hand to mouth more or less, this deterioration in service given by outside contractors, now unfortunately British Transport, is disastrous to our goodwill."

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    The report goes on to say:
    "Already customers who expected delivery in two days have received in 8 to 10 days, have had plant shut down, operatives idle and have incurred loss in having to wait for goods."
    Details are given of ten days and more taken for delivery and of goods which should have been exported but with which it was unable to catch the ships on which they were supposed to have been sent overseas.
    That all means loss of efficiency and that is why this firm, and many others, have acquired their own vehicles in order that they can carry out the express wishes of the Chancellor of the Exchequer by becoming more efficient. But what does the Chancellor do? As soon as these firms try to carry out Government policy of being more efficient, he does all he can to stop them by putting this tax on commercial vehicles.
    The burden of the tax is great. I have here many figures which, since the Financial Secretary made his announcement about certain concessions to be granted, are not quite accurate but which show in substance the grave effect this increased tax will have on industry. Let us take first a six-ton livestock vehicle. The increased cost in depreciation amounts to about a halfpenny a mile. For a five- to six-ton mass-produced vehicle on a tonnage basis it runs to about 3s. 7d. a day. On a five-ton vehicle, on an hourly basis, it is about 5½d. and on a six-ton non-tipping truck about 14s. 4d. These figures show how an increase in cost takes place on account of depreciation alone. It is these small additions, continuously taking place, that are putting up the cost of living everywhere and adding, one upon the other, to make it increasingly difficult to maintain our export trade.
    I can only draw attention to this as one other instance of the way in which the Government are hindering industry rather than helping it. As I understand it, the main reason for the imposition of this 33⅓ per cent. Purchase Tax is to slow down capital investment in commercial vehicles—that is, to stop a progressive efficient industry, to stop manufacturers from being more efficient. I want to ask the Chancellor of the Exchequer why the equivalent amount of capital investment has not been stopped on the railways. As the Chancellor of the Exchequer knows
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    only too well, the railways are losing vast sums of money. They are an outmoded method of transportation and there are many branch lines which could be shut down so that their maintenance and capital costs could be avoided. I suggest that if the capital cost which is being incurred in certain directions in the railways was stopped and the 33⅓ per cent. tax which is being applied to commercial vehicles were removed, the economic state of the country in the future would be more healthy. There would not be the same disadvantage to efficiency and to progress as that with which industry is now faced as a result of this tax.
    My hon. Friends have referred to the question of road and railway relationships. It seems to me that when hon. Members opposite talk about the co-ordination of road and railway, it is always to shut down the more efficient road transport and to boost up the less efficient railway. There should be rather more co-ordination in shutting down some of the inefficient parts of the railway and in giving greater encouragement to road transport. This country would then be better placed to face the difficult years which lie ahead and to maintain and increase its export trade in face of the growing competition from many countries now recovering from the war whose productions are becoming increasingly competitive.
    Mr. John Foster: The reduction of this tax to the chassis only was a step in the right direction by the Financial Secretary, but it removed none if the objections in principle to the tax. The Financial Secretary said that matters, raised in the Debate had influenced him in his decision and I should be interested to hear from him what those arguments were which made him alter his mind. There is, however, one aspect of his planning which I should like to bring to his notice. He is rather sensitive about what he calls sneers at democratic planning, but I think he misunderstands, what the Opposition are criticising. The Opposition are criticising the fact that his plans and those of his Socialist colleagues are not good plans and that hon. Gentlemen opposite are not planning properly. Obviously, if the Government take a decision they have to act according to a plan. Our objection is that their plans are inefficient.

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    I should like to follow the argument of the hon. Gentleman and of his right hon. and learned Friend when they maintained that there was an excess of investment in commercial vehicles. I shall assume for the moment—which, of course, is not the case—that they are correct. Let us see where that leads us. Many of the vehicles which are bought are bought to replace old vehicles. When they replace old vehicles they do so because the maintenance of the old vehicles has become too great to be economic, because the old vehicles are worn down and because a time has been reached when one cannot go on using the old vehicles. They then have to be replaced.
    I am assuming that I am following the hon. Gentleman's own argument. What is the excess of investment by a man who replaces his own vehicles? Is he investing excessively in commercial vehicles? I imagine that the Financial Secretary would say that he is not. The man whom he would regard as investing excessively is the new man on the road or even the man who increases his production and his export market and who has to take these vehicles to the port. The hon. Gentleman may say that this man is investing excessively. But how will the hon. Gentleman look after the man who must replace his fleet?
    I have some practical instances of this. I know of one big firm which makes commercial vehicles and which is about to enter the Canadian market. I hope that their application to the Exchange Control and the Bank of England will be successful and that they will be given the necessary capital expenditure to enter that market. They also sell a large number of vehicles in other export markets—they have not yet entered the Canadian market—and, of course, they sell a large number of vehicles in this country. It is necessary for them, in order to get their costs down, to have a large output, and since the tax has been announced they have had a disturbingly large number of cancellations. I have seen the cancellations of those people who were intending to replace old vehicles which it would be a danger to continue to operate.
    6.30 p.m.
    Mr. Baird: Will the hon. and learned Gentle-
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    man allow me? I happen to represent a division that is interested in the manufacture of commercial vehicles. I am told that at a factory where there was said to be drying up of orders the shop stewards, when they challenged the company, were told that they were only hypothetical orders which had dried up.
    Mr. Foster: I do not want to mention the name of the firm because of the application to the Canadian market, but I can assure the hon. Member that I have seen the cancellations from the customers. I selected to look at especially the cancellations of people who were using distributing vehicles like milk floats—people who could not raise their costs, and who should not raise their costs because that would raise the cost of living. Yet they have to replace their vehicles in their fleet. Are they guilty of excessive investment in commercial vehicles if they do? That is a very important point.
    Will the right hon. and learned Gentleman or the Financial Secretary say what these people are to do? The articles are in common use and are price controlled, and they operate on the minimum of margin, yet now the right hon. and learned Gentleman increases the price of those vehicles so that they have to continue to run their old vehicles. And that is the result of his planning. I was assuming for the purpose of this argument that I was with him. I was planning with him. But where on earth is he getting to? He has to produce another plan to distinguish between those who, in his view, are wrongly increasing their investment in commercial vehicles, and the people who are, I must assume even according to his views, rightly buying commercial vehicles to replace their others.
    It seems to me that in this particular case the right way to tackle the problem would be first of all to be quite clear whether the figure in the Economic Survey is, in fact, the right one. Nobody has explained what is the relationship between the figure of investment in commercial vehicles and the other figures of the investment programme. The hon. Gentleman has not seen fit to explain that. He says they all have to depend one upon another. I do not disagree with that. What I disagree with is the proportions laid down, and the fact that industries that have increased output and surpassed the targets laid down by the

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    planners, find that it is supposed to be a crime and must stop. On those grounds I say that the reason which the hon. Gentleman has advanced dogmatically about an excess of investment ought to be explained. He ought to explain what he means. I think that if he explains what he means he will see how unjustifiable is the tax which it is sought to impose.
    Mr. Lyttelton: First of all, I should like to refer to the tax concession of which we have heard today. I hope that in anything I say I shall not appear ungrateful for even this small mercy, but I think it would be true to say that this concession is mainly granted because of the administrative difficulties which would face the application of the tax in its present form. I quite realise that before these taxes are put into the Bill very little consultation can take place; but in fact, owing to the large amount of private body building, the tax to be administered, according to the way set down in the Bill, would lead to very great administrative difficulties. I do not think that the concession represents very much of a change of heart. I think it represents administrative convenience.
    On the other hand, of course, it is true to say that once we begin to nibble away at the tax—milk trolleys at one end and heavy vehicles at the other—we are beginning to acknowledge that the original lax was ill-conceived. I think my noble Friend the Member for Dorset, South (Viscount Hinchingbrooke) made a very substantial point when he pointed out the difficulties that the body builders and so forth would have in the application of the tax as it was. We have not yet heard the details of how it is to work.
    Now, there is here a very important point in this whole subject, which was touched upon by the Financial Secretary. Although he allowed some rather tendentious matter to get into his dialectics, it is one to which I must refer. First, I very much hope we are not going to be led into thinking of the planning of manufactures as of the Government interfering with the laws of supply and demand, because if they do so the laws of supply and demand are going to "lick" them. That is what is going to happen. The main idea of planning in the economic field, I think, as an un-
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    regenerate Tory getting more Tory every day, is to try to help people meet demands for which they have estimated. That is the true idea of planning—not to say that because people cannot conform therefore they ought not to have that assistance.
    When we are dealing with Purchase Tax on consumer goods we can see the argument that we do not want people to buy the more expensive goods. It is for that reason that the Government believe in shiny noses and unpowdered cheeks, because they have the tax at 100 per cent. on cosmetics and on lipsticks. That I understand. But when we come down to the field of capital goods, or semi-capital goods, then an entirely different set of circumstances arises, and nothing would be more foolish than to start out on the policy of saying that because people want rather more lorries or commercial vehicles than they did before, therefore they ought to be stopped; because then we should be getting in between the laws of supply and demand.
    Not only does this argument apply in relation to lorries and to our whole national economy, but it has other effects inside the industry itself. We have had a very considerable experience—and this is not at all a party matter—of the evil effects of taxation upon the design of motor cars. Those evil effects were acknowledged by the now Minister of Town and Country Planning when I think he very wisely altered the incidence of motor tax and went over to the flat rate tax. When we are imposing a Purchase Tax on commercial vehicles, we not only abandon the idea underlying Purchase Tax that we should restrain undesirable consumption of consumer goods, but we also are distorting commercial demand for commercial vehicles.
    That point was very well brought out by two very able speeches from the opposite benches, one by the hon. Member for Leeds, West (Mr. Pannell) and the other by the hon. Member for Southall (Mr. Pargiter). Both said—I think it was they who said it—that the effect of this tax might be to drive people normally using heavy vehicles to the lighter types of vehicles in order to avoid tax; and one hon. Member said that that led to misuse—"over loading," I think, was his phrase—of the lighter vehicles. A short time ago we tried to get away from

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    the disadvantages of distorting design and demand by the taxation of motor cars, and now we are back again in the same position.
    I want to discuss for a short time why the tax is vicious in principle. It is really because it taxes the machine tools of an industry. My hon. Friend the Member for Monmouth (Mr. P. Thorneycroft), in his most able and eloquent speech, pointed an analogy by asking what we would think of anybody who proposed to put a tax upon a railway engine now. That is a very striking analogy. In a way, the analogy of the machine tools of industry is still more applicable, although not so striking. Surely, it must be a bad fiscal idea altogether to get at the very root and core of production and impose taxes there. It is bad enough if the drinking water in a house becomes polluted, but the problem is localised. If the reservoir, the whole supply, becomes polluted, then the effects spread out through the whole system. That is what will happen with this type of taxation.
    We have heard a great deal about what the Treasury Bench are pleased to call "fiscal weapons." What a very peculiar phrase to use in relation to the productive industry of this country. I have been brought up to think that weapons were things used to defend oneself against enemies, or, if one is very violent, to attack them with. Yet here we have statements by the Financial Secretary that these are fiscal weapons to be used against the people who have been foolish and wicked enough to exceed in their demands the figures laid down by the gentlemen in Whitehall in the Economic Survey for 1950.
    At this point in his speech the Financial Secretary—it may have been done deliberately for the purpose of argument —confused the matter of financial and physical methods of control. I turn for one moment to say that our general doctrine is that if we keep a proper financial control over the finances of the country, which can be done by a comparative handful of men, then a great many physical controls now necessary will not be necessary. We do not believe in using fiscal weapons to damp down demand for what are the capital goods of industry, because of the two effects which I say will happen.
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    All this is made a little more aggravated in our minds because the yield of the tax was at the best very low and after the concessions, which I believe are due to administrative reasons, the yield will be still lower. I suppose that about £10 million or £11 million will be the most that will be raised from this tax. That is really much too small a sum to raise if we are to cause these various ill effects which I am certain will be caused by the imposition of the tax. It is worth mentioning in passing—and I think the right hon. and learned Gentleman would confirm the figure—that the motor industry as a whole is now making a contribution of £225 million a year to the National Exchequer. That sum is much too high, but it is necessary to remember that the Government are going out of these other fields of Petrol Duty right into the field of the productive tools of industry —and that for £10 million or £11 million.
    I have only a few other comments to make. First about exports. My information—and I should be very glad to know if the Chancellor confirms or refutes it— is that there is no evidence anywhere of any export demand for commercial vehicles remaining unfilled owing to the pull of the home market. On the contrary, although we have a splendid record in exports, in the last few months commercial vehicles have become more difficult to sell. It would be convincing if the Chancellor could point to export demands which were difficult to fill because of the supply of vehicles being insufficient; but that is not the case at all. What is at present hampering the export of vehicles is the fact that the home market has become most restricted owing to these artificial measures, and therefore the manufacturer has not got his overheads spread over a large enough field, and he finds it difficult to keep up the supply. I am advised that there has been no demand in the export market left unfilled due to the pull of the home market.
    6.45 p.m.
    I also want to ask the Chancellor whether, as a result of this tax, he imagines that there will be a contraction in the industry in this country. That question has already been asked and it is a point on which the Committee are entitled to information. I think that it will cause a contraction because, for all

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    that the planners say, they cannot plan the export demand. All they can do is to estimate what it may be and try to make the filling of it by private industry as easy as possible. I am very much afraid that the imposition of this tax, which is so vicious in principle, will make cuts in production in England and cause transitional unemployment in this particular industry.
    To sum up, there are once again the arguments which we have heard all through yesterday and this morning— "really, right hon. Gentlemen opposite ought not to be so distressed about this; only another half or one per cent. on costs of production." But here we are at a time when every Minister, quite rightly, stresses the need for reduced costs. "We cannot maintain our present standard of living, or increase it, unless the costs of British industry are brought down and unless exports can find their place in the markets of the world at competitive prices." That is the type of speech which we all make, and I am sure that it is the correct type.
    But whenever we look at what the hon. Gentleman calls the "fiscal weapons" that he proposes to use against British industry, they always tend, sometimes a little, sometimes a little more, and sometimes greatly, to increase costs and to disprove the words which he uses. Also, the effect, as it is with some other taxes we have discussed, will be to increase costs of distribution. Hon. Members in all parts of the Committee agree that costs of distribution should be kept as low as possible consistent with the amenities which the consumer is entitled to have and the efficient distribution of the goods. But the Government only pay lip-service to the business when they increase the Petrol Duty, which must increase costs of distribution, and then impose a Purchase Tax upon commercial vehicles, a large number of which are engaged in exactly this trade of distribution.
    It is for all these reasons, although we are grateful for the concessions of which we have been told this afternoon, that we believe that this tax is based upon a thoroughly unsound principle and that the revenue which it will raise is very small; and therefore we propose to press our Amendment to a Division.
    Sir S. Cripps: The right hon. Gentleman the Member for Aldershot (Mr.
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    Lyttelton) has put very clearly the point of view which hon. Gentlemen opposite hold in this matter. [Interruption.] I am delighted to see the right hon. Gentleman the Member for Woodford (Mr. Churchill) has crossed the Floor and joined us on this side of the Committee. It reminds me of an occasion when the right hon. Gentleman offered to become a Socialist if I would drink a bottle of champagne.
    Mr. Lyttelton: I hope that the right hon. and learned Gentleman will not be led into the supposition that my right hon. Friend is entirely behind him.
    Sir S. Cripps: No, I am not led into that supposition any more than I was led on the occasion I have mentioned.
    The Temporary Chairman (Mr. Mathers): I see no reference to this in the Amendment under discussion.
    Sir S. Cripps: It is illustrative.
    The right hon. Member for Aldershot said that these so-called concessions announced by my hon. Friend appear to have been made more for convenience than from a desire to mitigate the tax. That is perfectly true so far as the chassis arrangement is concerned. We were not able, as my hon. Friend said, to consult the industry fully before the Budget. Immediately after it, we got into consultation with them, and we found that for their convenience, as well as for our own, it would be much better to make this a tax upon the chassis. So far as the electrical vehicles are concerned, that, I think, could correctly be called a concession, beause we took them out on the strength of the argument put before us by deputations and others dealing with that subject matter.
    When the right hon. Gentleman came to deal with his idea of what planning should and should not do, I think that he gave a perfect definition of the policy of the Conservative Party as being completely laissez faire. That is to say, he said that planning must not interfere with supply and demand; it must only accentuate it. That is not only laissez faire but increased laissez faire.
    Mr. Lyttelton: I did not say that.
    Sir S. Cripps: I think that the right hon. Gentleman will see that he did, if he looks at HANSARD tomorrow.
    Mr. Lyttelton: "Accentuate" supply and demand—I do not remember saying that word in the last 36 hours.
    Sir S. Cripps: The right hon. Gentleman may not have used the word "accentuate," but he said that so far as interfering with supply and demand, it must facilitate it. "Facilitate," I think, was the word used. He wants to accentuate the forces of supply and demand so as to drag more easily the supply into the channel of demand. [Interruption.] I am not suggesting what the hon. Member for Monmouth (Mr. P. Thorneycroft) wants, I am talking about what the right hon. Gentleman said. It will all be in HANSARD, and I can be challenged through HANSARD tomorrow. If I am wrong, I will take the opportunity of apologising to the right hon. Gentleman on the next occasion.
    I mentioned that because I thought that it was perfectly fair to point out the difference between the two sides of the Committee on this subject. We believe that it is necessary, especially in the matter of the capital investment programme, to take steps to interfere with what would be the supply and demand pull if it were left unchecked. For instance, there was a great demand after the war for all sorts of luxury building. We felt it essential to interfere with that demand in order that the resources might be channelled into something which we believed would be more useful but less profitable to the builder. I take that as a typical case.
    Exactly in the same way here, where resources of steel are being utilised in the interests of the country, or should be utilised in the interests of the country, we believe that however great the desire may be of people to utilise it in a certain way, there must be limits to the amount of encouragement of its use in that way in which the State should indulge.
    Mr. Lyttelton: Am I right in supposing that the demand for steel for the increased production of commercial vehicles represents 37,000 tons out of a production of 15 million tons.
    Sir S. Cripps: Certainly. The right hon. Gentleman knows, and he and his hon. Friends have said, that one of the worst forms of inflation is to try to do too much capital investment, and they have constantly said that we are trying
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    to do too much and we ought to cut down our capital investment. The question is: What capital investment are we to cut down? The right hon. Gentleman is now saying that we ought to use physical methods of control, and he asked why did we abandon the allocation of steel. The reason we abandoned the allocation of certain kinds of steel, not all kinds, is because when we get a certain volume of supply, physical control becomes less effective, as everyone knows. We get a black market seeping through the physical control which it would need an enormous number of people to police, and it becomes necessary, as we have always said, to substitute other forms of control—fiscal or financial.
    The right hon. Gentleman prefers financial. We use financial control in a number of matters, as I mentioned in the Budget, and we use fiscal control in others. I think that it is a most extraordinary argument to hear, coming from the benches opposite, that fiscal control should not be used on capital goods. Who was it, who, in 1932, imposed import duties on steel and machinery? It was the right hon. and hon. Gentlemen opposite. Those taxes have continued, as everyone knows. In fact we had in Clause 10 yesterday to exempt certain kinds of machinery from those taxes which were made on imports of machinery into this country, and which now run at 20 per cent. The steel taxes imposed at that time, I think, ran to 33⅓ per cent.
    Mr. Lyttelton: I hope that I am following the argument, but surely there is a great difference between the impost of taxes on foreign imported manufacture and a Purchase Tax on British manufacture. I do not follow the analogy.
    Sir S. Cripps: I should have thought that both were fiscal methods of controlling supply. One controls home supply and the other controls foreign supply. If the right hon. Gentleman is talking of capital investments, the person who wanted steel to put up a building, and who wanted to import it from Belgium at that period of time, was compelled to pay 33⅓ per cent. duty on it. Why? In order to stop him doing it.
    Mr. Lyttelton: No.
    Sir S. Cripps: The right hon. Gentleman will not convince me, and he will

    621
    not convince any one who has read the argument dealing with this, that the reason for putting on an import duty is not in order to stop as much of the supply coming in as would come in if there were no import duty.
    Mr. Lyttelton: To stop him from using the Belgian steel.
    Sir S. Cripps: The right hon. Gentleman said that it was in order to stop him from using the steel. The object of the import duty is to stop him from using the Belgian steel. That is the object of it. It is done by making the Belgian steel more expensive. Therefore, he has to pay more for British steel. This is all perfectly obvious.
    Lieut.-Commander Gurney Braithwaite: The right hon. and learned Gentleman and I were both in the House at the time of the passage of the Import Duties Act and the fiscal operations of 1932. I am sure that he recalls that one of the chief objects of the tariff which has been described to the Committee was that it was a Revenue tariff to help balance the Budget after the economic crisis.
    Sir S. Cripps: No. This was a duty, if I remember rightly, which was imposed I think on the recommendation of the May Committee. Their recommendation was not on Revenue grounds. It was on production grounds for the steel industry of this country, and the steel industry had to make certain promises as to what it would do to put its house in order, in order to meet this competition. The object of the protection was to stop people getting the cheaper steel which they would otherwise have used from Belgium and to make them buy the more expensive steel they got from this country.
    Mr. Lyttelton: Will the right hon. and learned Gentleman in his flow of dialectics explain how the impost of Purchase Tax on commercial vehicles manufactured in this country is to help our trade against the foreigners?
    Sir S. Cripps: I am afraid that the right hon. Gentleman cannot evade his part by asking me to explain my part. I am somewhat surprised to hear the right hon. Gentleman inveighing against any taxes on capital goods for the industries of this country, when his friends themselves
    622
    imposed in 1932 by fiscal means a tax upon capital goods used in British industry. Never mind what the purpose was. We are talking about planning. Was this not a case of planning by the Conservative Party by fiscal means in order to raise the price of steel?
    7.0 p.m.
    Sir W. Wakefield: Hon. Members opposite, particularly the hon. Member for Southall (Mr. Pargiter), have pointed out that the planning which the right hon. and learned Gentleman is doing will create unemployment, whereas the planning referred to in 1932 was to do away with the terrible unemployment figures.
    Sir S. Cripps: I am not impugning the motives in 1932. All I am saying is that planning was used, by fiscal methods, to prevent people doing what they wanted to do, to wit, to buy steel from abroad. All I am saying is that in these circumstances it is very odd that Members opposite should object to fiscal methods of planning, as they have naturally used these methods themselves. The fact is we believe that in this particular case, owing to the over-expenditure in the capital investment programme on this item, the best and only effective way to limit it is by fiscal means.
    Mr. Lyttelton: Over-expenditure on what grounds?
    Sir S. Cripps: Over-expenditure on the basis that it has been discussed in successive years in the Surveys on the capital investment programme, which so far as I know have never been criticised by Members opposite. It has been in separate documents, and it has been in the Economic Surveys. They have always admitted as far as I know, and they admit it now, that we have to have a balance between the different items. We cannot, in fact, allow any one item to run away.
    We have to balance our building for factories, schools and hospitals, and the use of machinery for the railways and electricity and water supplies. These all have to have some allocation. We cannot do all the things we want. Everyone agrees about that. Therefore, we have to allocate our resources as best we can. In that allocation we have said that more has been devoted to this type of capital investment than we can afford as a nation if we are to do the other things which are

    623
    also necessary. That may be right or wrong.
    Mr. Bracken: It certainly is wrong.
    Sir S. Cripps: The right hon. Gentleman has no material whatsoever on which to base that observation.
    Mr. Bracken: Surely the Chancellor knows that the various White Papers that have been published have steadily contradicted one another, and that his planners have had the misfortune to be perpetually mistaken?
    Sir S. Cripps: This does not advance the knowledge of anyone as regards what the right hon. Gentleman thinks the capital should be spent on; whether he thinks more should be spent on vehicles, and, if so, from where it should come.
    Mr. Bracken: The planners do not know either.
    Sir S. Cripps: It is the right hon. Gentleman who is at the moment making the statement that it is wrong. I am merely asking what is right.
    Mr. Bracken: Not the planning.
    Sir S. Cripps: The right hon. Gentleman does not know. The point is, whether we rightly or wrongly have taken this view, that there is over-investment on this item, and the proper method to stop over-investment is to apply fiscal methods such as we suggest. It is on that basis that we ask the Committee to proceed with this.
    The right hon. Gentleman the Member for Aldershot said that as far as he was concerned there did not seem to be any
    more openings abroad for these commercial vehicles.
    Mr. Lyttelton: I did not say that. I said my advice was that there was no demand which had remained unfulfilled because of the pull of the home market, which is a little different.
    Sir S. Cripps: I am sorry, but I thought it was the same thing. But this is precisely what was said four years ago in regard to ordinary motorcars, but by the very strictest limitation of the utilisation of these cars in this country we have created an enormous export trade, despite even what the trade itself though possible at the time. Curiously enough, there has been a 33⅓ per cent. tax on these cars all the time. I am not saying that is a reason, but it happens to be a coincidence.
    There is no reason, in our view, why there should be a contraction of the industry, any more than there was a contraction in the case of the motorcar industry when we stopped the sale of cars in this country. We believe that markets will be found overseas for these vehicles and that it will not be necessary to contract the industry. It is on these grounds that we ask the Committee, somewhat artificially, I am bound to say, to reject this Amendment, as we are later to ask the Committee to reject the Clause in order to put down a new one. However. I think it will clarify the position on both sides if we resist this Amendment, and we are prepared to proceed to a Division to show what are our views.
    Question put, "That 'first day of May' stand part of the Clause."
    The Committee divided: Ayes, 295; Noes, 285.

    Division No. 26.]

    AYES

    [7.5 p.m.

    Acland, Sir Richard

    Boardman, H.

    Cocks, F. S.

    Adams, Richard

    Booth, A.

    Coldrick, W.

    Albu, A. H.

    Bottomley, A. G.

    Collick, P.

    Allen, A. C. (Bosworth)

    Bowles, F. G. (Nuneaton)

    Collindridge, F.

    Anderson, F. (Whitehaven)

    Braddock, Mrs. E. M.

    Cook, T. F.

    Attlee, Rt. Hon. C. R.

    Brockway, A. Fernner

    Cooper, G. (Middlesbrough, W.)

    Awbery, S. S.

    Brook, D. (Halifax)

    Cooper, J. (Deptford)

    Ayles, W. H.

    Brooks, T. J. (Normanton)

    Corbet, Mrs. F. K. (Peckham)

    Bacon, Miss A

    Broughton, Dr. A. D. D.

    Cove, W. G.

    Baird, J.

    Brown, George (Belper)

    Craddock, George (Bradford, S.)

    Balfour, A.

    Brown, T. J. (Ince)

    Crawley, A.

    Barnes, Rt. Hon A. J.

    Burke, W. A.

    Cripps, Rt. Hon. Sir S.

    Bartley, P.

    Burton, Miss E.

    Crosland, C. A. R.

    Benson, G

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

    Crossman, R. H. S.

    Beswick, F.

    Callaghan, James

    Cullen, Mrs. A.

    Bevan, Rt. Hon. A (Ebbw Vale)

    Carmichael, James

    Daines, P.

    Bing, G. H. C.

    Castle, Mrs. B. A.

    Dalton, Rt. Hon. H.

    Blackburn, A. R.

    Champion, A. J.

    Darling, G. (Hillsboro')

    Blenkinsop, A.

    Chetwynd, G. R.

    Davies, A. Edward (Stoke, N.)

    Blyton, W. R.

    Clunie, J.

    Davies Ernest (Enfield, E.)

    Davies, Harold (Leek)

    Johnson, James (Rugby)

    Rankin, J.

    Davies, R. J. (Westhoughton)

    Johnston, Douglas (Paisley)

    Rees, Mrs. D.

    Davies, S. O. (Merthyr)

    Jones, D. T. (Hartlepool)

    Reeves, J.

    de Freitas, Geoffrey

    Jones, Frederick Elwyn (West Ham, S.)

    Reid, T. (Swindon)

    Deer, G.

    Jones, Jack (Rotherham)

    Reid, W. (Camlachie)

    Delargy, H. J.

    Jones, William Elwyn (Conway)

    Rhodes, H.

    Diamond, J.

    Keenan, W.

    Richards, R.

    Dodds, N. N.

    Kenyon, C

    Robens, A.

    Donnelly, D.

    Key, Rt. Hon C. W.

    Roberts, Goronwy (Caernarvonshire)

    Donovan, T. N

    King, H. M.

    Robertson, J. J. (Berwick)

    Driberg, T. E. N.

    Kinghorn, Sqn.-Ldr. E.

    Rogers, G. H. R. (Kensington, N.)

    Dugdale, Rt. Hon. J. (W. Bromwich)

    Kinley, J.

    Ross, William (Kilmarnock)

    Dye, S.

    Kirkwood, Rt. Hon. D.

    Royle, C.

    Ede, Rt. Hon. J. C.

    Lang, Rev. G.

    Shackleton, E. A. A.

    Edelman, M.

    Lee, F. (Newton)

    Shawcross, Rt. Hon. Sir H.

    Edwards, Rt. Hon. N. (Caerphilly)

    Lee, Miss J. (Cannock)

    Shinwell, Rt Hon. E.

    Edwards, W. J. (Stepney)

    Lever, L. M. (Ardwick)

    Shurmer, P. L. E.

    Edwards, John (Brighouse)

    Lever, N H. (Cheetham)

    Silverman, J. (Erdington)

    Evans, Albert (Islington, S. W.)

    Lewis, A. W. J. (West Ham, N.)

    Silverman, S. S. (Nelson)

    Evans, E. (Lowestoft)

    Lewis, J, (Bolton, W.)

    Simmons, C. J

    Evans, S. N. (Wednesbury)

    Lindgren, G. S.

    Slater, J.

    Ewart, R.

    Lipton, Lt.-Col. M

    Smith, Ellis (Stoke, S.)

    Fernyhough, E.

    Logan, D. G.

    Snow, J. W.

    Field, Capt. W. J.

    Longden, F. (Small Heath)

    Sorensen, R. W

    Finch, H. J.

    McAllister, G

    Soskice, Rt. Hon. Sir F

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

    MacColl, J. E.

    Sparks, J. A.

    Follick, M.

    McGhee, H. G.

    Steele, T,

    Foot, M. M.

    McGovern, J.

    Stewart, Michael (Fulham, E.)

    Forman, J. C.

    Mclnnes, J.

    Stokes, Rt. Hon. R. R

    Fraser, T. (Hamilton)

    Mack, J. D.

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

    Freeman, J. (Watford)

    McKay, J. (Wallsend)

    Stross, Dr. B.

    Freeman, Peter (Newport)

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

    Summerskill, Rt. Hon. Edith

    Gaitskell, Rt. Hon. H T. N

    McLeavy, F.

    Sylvester, G. O.

    Ganley, Mrs. C. S.

    MacMillan, M. K. (Western Isles)

    Taylor, H. B. (Mansfield)

    Gibson, C. W.

    MacPherson, Malcolm (Stirling)

    Taylor, R. J. (Morpeth)

    Gilzean, A.

    Mainwaring, W. H.

    Thomas, D. E. (Aberdare)

    Glanville, J. E. (Consett)

    Mallalieu, E. L. (Brigg)

    Thomas, George (Cardiff)

    Gooch, E. G.

    Mallalieu, J. P W. (Huddersfield, E.)

    Thomas, I. O. (Wrekin)

    Greenwood, A. W. J. (Rossendale)

    Mann, Mrs. J.

    Thomas, I. R. (Rhondda, W.)

    Greenwood, Rt. Hn. Arthur (Wakefield)

    Manuel, A. C.

    Thorneycroft, Harry (Claytes)

    Grenfell, D. R.

    Marquand, Rt. Hon H. A

    Thurtle, Ernest

    Grey, C. F.

    Mellish, R. J.

    Timmons, J.

    Griffiths, D. (Rother Valley)

    Messer, F.

    Tomlinson, Rt. Hon. G.

    Griffiths, Rt. Hon. J. (Llanelly)

    Middleton, Mrs. L.

    Tomney, F.

    Griffiths, W. D. (Exchange)

    Mikardo, Ian

    Turner-Samuels, M.

    Gunter, R. J.

    Mitchison, G. R.

    Vernon, Maj. W. F.

    Hale, J. (Rochdale)

    Moeran, E. W.

    Viant, S. P.

    Hale, Leslie (Oldham, W.)

    Monslow, W.

    Wallace, H. W.

    Hall, J. (Gateshead, W.)

    Moody, A. S.

    Watkins, T. E.

    Hall, Rt. Hn. W. Glenvil (Colne V'II'y)

    Morgan, Dr. H. B.

    Webb, Rt. Hon. M (Bradford, C.)

    Hamilton, W. W.

    Morley, R.

    Weitzman, D.

    Hannan, W.

    Morris, P. (Swansea, W.)

    Wells, P. L. (Faversham)

    Hardman, D. R

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

    Wells, W. T. (Walsall)

    Hardy, E A.

    Mort, D L.

    West, D. G.

    Hargreaves, A.

    Moyle, A.

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

    Harrison, J.

    Mulley, F. W.

    White, Mrs. E. (E. Flint)

    Hastings, Dr. Somerville

    Murray, J D.

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

    Hayman, F. H.

    Nally, W.

    Whiteley, Rt. Hon. W

    Henderson, Rt. Hon. A. (Rowley Regis)

    Neal, H.

    Wigg, George

    Herbison, Miss M.

    Noel-Baker, Rt. Hon. P. J.

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

    Hewitson, Capt. M.

    O' Brien, T.

    Wilkes, L.

    Hobson, C. R.

    Oldfield, W. H

    Willey, F. T (Sunderland)

    Holman, P.

    Oliver, G. H.

    Willey, O. G. (Cleveland)

    Holmes, H. E. (Hemsworth)

    Orbach, M.

    Williams, D. J. (Neath)

    Hoy, J.

    Padley, W. E.

    Williams, Ronald (Wigan)

    Hubbard, T.

    Paling, Rt. Hon. Wilfred (Dearne V'lly)

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

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

    Paling, Will T. (Dewsbury)

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

    Hughes, Emrys (S. Ayr)

    Pannell, T. C.

    Wilson, Rt. Hon. J. H. (Huyton)

    Hughes, Hector (Aberdeen, N.)

    Pargiter, G. A.

    Winterbottom, I. (Nottingham, C.)

    Hughes, Moelwyn (Islington, N.)

    Parker, J.

    Winterbottom, R. E. (Brightside)

    Hynd, H. (Accrington)

    Paton, J.

    Wise, Major F. J.

    Hynd, J. B. (Attercliffe)

    Pearson, A

    Woods, Rev. G. S.

    Irvine, A. J. (Edge Hill)

    Peart, T. F.

    Wyatt, W. L.

    Irving, W. J. (Wood Green)

    Poole, Cecil

    Yates, V. F.

    Isaacs, Rt. Hon. G. A.

    Popplewell, E.

    Younger, Hon. Kenneth

    Janner, B.

    Porter, G

    Jay, D. P. T.

    Price, M. Philips (Gloucestershire, W.)

    TELLERS FOR THE AYES:

    Jeger, G. (Goole)

    Proctor, W. T.

    Mr. Bowden and

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

    Pryde, D. J.

    Mr. Kenneth Robinson.

    Jenkins, R H.

    Pursey, Comdr. H.

    626

    627

    NOES

    Aitken, W. T.

    Fraser, Hon. H. C. P. (Stone)

    Mackeson, Brig. H. R.

    Alport, C. J. M.

    Fraser, Sir I. (Lonsdale)

    McKibbin, A.

    Amery, J. (Preston, N.)

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

    McKie, J. H. (Galloway)

    Amory, D. Heathcoat (Tiverton)

    Gage, C. H.

    Maclay, Hon. J. S.

    Arbuthnot, John

    Galbraith, Cmdr. T. D. (Pollok)

    Maclean, F. H. R.

    Ashton, H. (Chelmsford)

    Galbraith, T. G. D. (Hillhead)

    MacLeod, Iain (Enfield, W.)

    Assheton, Rt. Hon. R. (Blackburn, W.)

    Gammans, L. D.

    MacLeod, John (Ross and Cromarty)

    Astor, Hon. M.

    Garner-Evans, E. H. (Denbigh)

    Macmillan, Rt. Hon. Harold (Bromley)

    Baker, P.

    Gates, Maj. E. E.

    Macpherson, N. (Dumfries)

    Baldock, J. M.

    George, Lady M. Lloyd

    Maitland, Comdr. J. W.

    Baldwin, A. E.

    Glyn, Sir R.

    Manningham-Buller, R. E

    Banks, Col. C.

    Gomme-Duncan, Col. A.

    Marlowe, A. A. H.

    Baxter, A. B.

    Gridley, Sir A.

    Marples, A. E.

    Beamish, Maj. T. V. H

    Grimond, J.

    Marshall, D. (Bodmin)

    Bell, R. M.

    Grimston, Hon. J. (St. Albans)

    Marshall, S. H. (Sutton)

    Bennett, Sir P. (Edgbaston)

    Grimston, R. V. (Westbury)

    Maude, A. E. U. (Ealing, S.)

    Bennett, R. F. B. (Gosport)

    Harden, J. R. E.

    Maude, J. C. (Exeter)

    Bennett, W. G. (Woodside)

    Hare, Hon. J. H. (Woodbridge)

    Maudling, R.

    Bevins, J. R. (Liverpool, Toxteth)

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

    Medlicott, Brigadier F

    Birch, Nigel

    Harris, R. R. (Heston)

    Mellor, Sir J.

    Bishop, F. P

    Harvey, Air-Codre. A. V. (Macclesfield)

    Molson, A. H. E.

    Black, C. W.

    Harvey, I. (Harrow, E.)

    Moore, Lt.-Col. Sir T.

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

    Hay, John

    Morris, R. Hopkin (Carmarthen)

    Boothby, R.

    Head, Brig. A H.

    Morrison, Maj. J. G. (Salisbury)

    Bossom, A. C

    Heald, L. F

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

    Bowen, R.

    Heath, Col. E. R.

    Mott-Radclyffe, C. E.

    Bower, N.

    Henderson, John (Cathcart)

    Nabarro, G.

    Boyd-Carpenter, J. A.

    Hicks-Beach, Maj. W. W

    Nicholls, H.

    Bracken, Rt. Hon. Brendan

    Higgs, J. M. C.

    Nicholson, G.

    Braine, B.

    Hill, Mrs. E. (Wythenshawe)

    Nield, B. (Chester)

    Braithwaite, Lt.-Comdr, J. G.

    Hill, Dr. C. (Luton)

    Noble, Comdr. A. H. P.

    Bromley-Davenport, Lt.-Col. W.

    Hinchingbrooke, Viscount

    Nugent, G. R. H.

    Brooke, H. (Hampstead)

    Hirst, Geoffrey

    Oakshott, H. D.

    Browne, J. N. (Govan)

    Hogg, Hon. Q.

    Odey, G. W.

    Buchan-Hepburn, P. G. T

    Hollis, M. C.

    Ormsby-Gore, Hon. W D.

    Bullock, Capt. M.

    Holmes, Sir J. Stanley (Harwich)

    Orr, Capt. L. P. S.

    Bullus, Wing-Commander E. E.

    Hope, Lord J.

    Orr-Ewing, Charles Ian (Hendon, N.)

    Burden, Squadron-Leader F. A

    Hopkinson, H L. D'A.

    Orr-Ewing, Ian L. (Weston-super-Mare)

    Butcher, H. W.

    Hornsby-Smith, Miss P.

    Osborne, C.

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

    Horsbrugh, Miss F.

    Perkins, W. R. D.

    Carr, L. R. (Mitcham)

    Howard, G. R. (St. Ives)

    Peto, Brig. C H. M.

    Carson, Hon. E.

    Howard, S. G. (Cambridgeshire)

    Pickthorn, K.

    Churchill, Rt. Hon. W. S.

    Hudson, Sir Austin (Lewisham, N.)

    Pitman, I. J.

    Clarke, Col. R. S. (East Grinstead)

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

    Powell, J. Enoch

    Clarke, Brig. T. H. (Portsmouth, W.)

    Hudson, W. R. A. (Hull, N.)

    Prescott, Stanley

    Clyde, J. L.

    Hulbert, Wing-Cdr. N. J.

    Price, H. A. (Lewisham, W.)

    Colegate, A.

    Hurd, A. R.

    Prior-Palmer, Brig, O.

    Conant, Maj. R. J. E.

    Hutchinson, Geoffrey (Ilford, N.)

    Profumo, J. D.

    Cooper, A. E. (Ilford, S.)

    Hutchison, Lt.-Com. Clark (E'b'rgh W.)

    Raikes, H. V.

    Cooper-Key, E. M.

    Hyde, H. M.

    Rayner, Brig, R.

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

    Hylton-Foster, H. B.

    Redmayne, M.

    Craddock, G. B. (Spelthorne)

    Jeffreys, General Sir G.

    Remnant, Hon. P.

    Cranborne, Viscount

    Jennings, R.

    Renton, D. L. M.

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

    Johnson, Howard S. (Kemptown)

    Roberts, Emrys (Merioneth)

    Cross, Rt. Hon. Sir R.

    Joynson-Hicks, Hon. L. W

    Roberts, P. G. (Heeley)

    Crosthwaite-Eyre, Col. O. E

    Kaberry, D.

    Robinson, J. Roland (Blackpool, S.)

    Crouch, R. F.

    Keeling, E. H.

    Robson-Brown, W. (Esher)

    Crowder, Capt. John F. E. (Finchley)

    Kerr, H. W. (Cambridge)

    Rodgers, J. (Sevenoaks)

    Crowder, F. P. (Ruislip-Northwood)

    Kingsmill, Lt.-Col. W. H.

    Roper, Sir H.

    Cundiff, F. W.

    Lambert, Hon. G.

    Ropner, Col L.

    Cuthbert, W. N.

    Lancaster, Col. C. G.

    Ross, Sir R. D. (Londonderry)

    Darling, Sir W. Y. (Edinburgh, S.)

    Langford-Holt, J.

    Russell, R. S.

    Davidson, Viscountess

    Law, Rt. Hon. R. K.

    Ryder, Capt. R. E. D

    Davies, Rt. Hn. Clement (Montgomery)

    Legge-Bourke, Maj. E. A. H

    Sandys, Rt. Hon. D

    Davies, Nigel (Epping)

    Lennox-Boyd, A. T.

    Savory, Prof. D. L.

    Deedes, W. F.

    Lindsay, Martin

    Scott, Donald

    Digby, S. Wingfield

    Linstead, H. N.

    Shepherd, W. S. (Cheadle)

    Dodds-Parker, A. D.

    Llewellyn, D.

    Smiles, Lt.-Col. Sir W.

    Donner, P. W.

    Lloyd, Rt. Hon. G. (King's Norton)

    Smith, E. Martin (Grantham)

    Douglas-Hamilton, Lord M

    Lloyd, Maj. Guy (Renfrew, E.)

    Smithers, Peter H. B. (Winchester)

    Drayson, G. B

    Lloyd, Selwyn (Wirral)

    Smithers, Sir W. (Orpington)

    Drewe, C.

    Lockwood, Lt.-Col. J. C.

    Smyth, Brig. J. G. (Norwood)

    Dugdale, Maj. Sir T. (Richmond)

    Longden, G. J. M. (Herts, S. W.)

    Snadden, W. McN.

    Duncan, Capt. J. A. L.

    Low, A. R. W.

    Soames, Capt. C.

    Dunglass, Lord

    Lucas, Major Sir J. (Portsmouth, S.)

    Spearman, A. C. M.

    Duthie, W. S.

    Lucas, P. B. (Brentford)

    Spence, H. R. (Aberdeenshire, W.)

    Elliot, Lieut.-Col. Rt. Hon Walter

    Lyttelton, Rt. Hon. O.

    Spens, Sir P. (Kensington, S.)

    Erroll, F. J.

    McAdden, S. J.

    Stanley, Capt. Hon. R. (N. Fylde)

    Fisher, Nigel

    McCallum, Maj. D.

    Stevens, G. P.

    Fletcher, W. (Bury)

    McCorquodale, Rt. Hon. M. S.

    Steward, W. A. (Woolwich, W.)

    Fort, R.

    Macdonald, A. J. F. (Roxburgh)

    Stewart, J. Henderson (Fife, E.)

    Foster, J. G.

    Macdonald, Sir P. (I. of Wight)

    Stoddart-Scott, Col. M.

    628

    629

    Storey, S.

    Turton, R. H.

    Webbe, Sir H. (London)

    Strauss, Henry (Norwich, S.)

    Tweedsmuir, Lady

    White, J. Baker (Canterbury)

    Stuart, Rt. Hon. J. (Moray)

    Vane, W. M. F.

    Williams, C. (Torquay)

    Summers G. S.

    Vaughan-Morgan, J. K.

    Williams, Gerald (Tonbridge)

    Sutcliffe, H.

    Vosper, D. F.

    Williams, Sir H. G. (Croydon, E.)

    Taylor, C. S. (Eastbourne)

    Wade, D. W.

    Wills, G.

    Taylor, W. J. (Bradford, N.)

    Wakefield, E. B. (Derbyshire, W.)

    Wilson, Geoffrey (Truro)

    Teeling, William

    Wakefield, Sir W. W. (St. Marylebone)

    Winterton, Rt. Hon. Earl

    Thompson, K. P. (Walton)

    Walker-Smith, D. C.

    Wood, Hon. R.

    Thompson, R. H. M. (Croydon, W.)

    Ward, Hon. G. R. (Worcester)

    York, C.

    Thorneycroft, G. E. P. (Monmouth)

    Ward, Mist I. (Tynemouth)

    Young, Sir A. S. L.

    Thornton-Kemsley, C. N.

    Waterhouse, Capt. C

    Thorp, Brigadier R. A. F.

    Watkinson, H.

    TELLERS FOR THE NOES:

    Tilney, John

    Watt, Sir G. S. Harvie

    Mr. Studholme and

    Colonel Wheatley.

    Question put, and agreed to.

    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    Mr. Hopkin Morris: This is a remarkable Clause, and a remarkable situation has arisen in regard to it. The Clause has been withdrawn by the Chancellor himself.
    Sir S. Cripps: Not yet.
    Mr. Morris: He has announced that it will be negatived, or voted against, with the object of substituting another Clause. It is a Clause imposing an important tax. The speech delivered by the Financial Secretary to the Treasury in favour of negativing the Clause was also very remarkable. He told us that it was impossible beforehand to have full consultation with the interests involved. He said something to this effect: "We were unable to discuss and find out what was the proper incidence of the tax and how it would work, and because of that we put the tax in as a guess, as a shot in the dark." That is the way in which the Finance Bill has been built up. The Treasury put in a Clause and let the House of Commons solemnly discuss it, and then they come to the Committee and withdraw it, although it contains such an important tax. It was a shot in the dark, a pure guess by the Treasury, to put the Clause in.
    Question, "That the Clause stand part of the Bill," put, and negatived.

    Clause 14.—(EXTENSION OF PURCHASE TAX EXEMPTION FOR WAR MEMORIALS.)
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    Captain Crookshank: We are glad to see this Clause because we remember having a discussion on the matter five years ago when the then Chancellor of the Exchequer made the concession. The only thing I want to
    630
    ask is why this particular form of Clause has been adopted. As I read the Clause, it means that the extension of this exemption from Purchase Tax upon war memorials is for another five years. I hope that the Government will look at this matter between now and the Report stage to see whether the exemption ought not to be made permanent. It does not seem to me that there are likely to be memorials erected 10 years after the war, but if one were not quite completed or more had to be done to it, it would be a pity if we had to re-enact a further extension. This is only a small point but I think it is worth looking at, and I hope the Clause can be re-drafted so that the exemption will be permanent.
    The Solicitor-General (Sir Frank Soskice): It was pointed out by the predecessor of the present Chancellor that this relief for a particular user must be regarded as an exceptional relief. It was for that reason that he said he felt obliged to put some term upon the relief which he gave, and that position still holds. It would be rather dangerous to start giving relief in respect of particular users in this way. In the circumstances, the position is as it was when the then Chancellor gave the relief in 1945. Without making any kind of promise and after listening to what the right hon. and gallant Gentleman has said, I think that is as far as I can go.
    Lieut.-Commander Braithwaite: I wonder whether the right hon. and learned Gentleman, when reconsidering the matter, would bear in mind that this exemption is entirely outside the ordinary run of matters dealt with by Purchase Tax. I have no doubt that he has had this matter very much in front of him, but I would remind him that although the marginal note to the Clause says that it is dealing with an extension of Purchase Tax exemption in regard to war memorials, the Clause operates only in

    631
    respect of war memorials inside churches and places of religious worship. For that reason I urge upon the right hon. and learned Gentleman that the circumstances are somewhat exceptional.
    I think that he was one of those in charge of the Finance Bill in the autumn of 1945 when this matter was originally discussed, again in the middle of the night. It was at least dawn, and the Committee was somewhat tired with its exertions, when the previous Chancellor of the Exchequer, after a considerable expression of view from all sides of the Committee, agreed to make the concession. The reason I now ask the right hon. and learned Gentleman to give this matter particularly sympathetic consideration is that he will be aware that before a war memorial can be erected inside a church at all, there is a somewhat lengthy procedure of obtaining a faculty for that purpose.
    I happen to know this, because I was connected with the erection of a war memorial in the Thames Estuary, and I know how long it took to obtain the faculty for erecting it. On the occasion of its unveiling, the vicar of the church said, in impressive language which drew a great response among the company present: "This memorial will remain here as long as this church stands." That is, of course, the situation with these memorials. They are not admitted for erection in the churches except on that understanding and on that basis.
    That being so, is it not rather unfortunate that it should be necessary to come back to Parliament every five years for the remission of a tax which I am certain no member of any party would wish to impose? I am sure that no hon. Lady or hon. Gentleman in the Committee, or outside it, would wish to see Purchase Tax imposed upon the very sacred memorials to those who fell in one or other of the great wars. It would be a very proper gesture which would be appreciated by thousands, I was going to say millions, of people throughout the land who have associations with these memorials if, on the Report stage, the Government could say: "Here and now, away with Purchase Tax on these memorials."
    Sir William Darling: I desire to support what has been
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    said by my hon. and gallant Friends, only in a rather different direction. I am concerned with the memorials for all men and women who served in the war and whose memorials are erected in public places. It would not be appropriate to erect memorials to them in religious places because they were not members of particular Churches. Am I to understand that if such a memorial were erected in a place or building which was not for religious worship the Clause would not apply?
    The Solicitor-General The Solicitor-General indicated assent.
    Sir W. Darling: I should have thought that as they all fell in a common cause, as Christians, Jews, Methodists and members of the Church of Scotland, it might be difficult to find a particular religious building in which their memorial could properly be placed. As it is, if the memorial were placed in a public park, then the conditions laid down in the Clause do not obtain. I therefore ask the Solicitor-General to consider whether, if all the other qualifications are satisfied, the phrase relating to a place of religious worship could be permitted not to apply?
    The Solicitor-General: I have listened to what has been said by hon. Gentlemen opposite. As I said when I previously addressed the Committee, this relief must be regarded as exceptional. I can give no kind of undertaking at all, but we will carefully consider what has been said. We understand the feeling behind the sentiments that have been voiced, and we will carefully consider the matter.
    Sir Herbert Williams: There is another point which I would like to put. There is a practice of placing flags upon war memorials. Those flags become damaged by weather and in other ways, and at intervals have to be replaced by new flags. I think I am right in saying that the material of which the flags are made is subject to Purchase Tax. I suggest that the question might be considered of exempting from Purchase Tax the textile materials of which these flags are made. Otherwise those flags may in the end have attracted more Purchase Tax than the actual materials of which the war memorials themselves are made.
    Clause ordered to stand part of the Bill.

    Clause 15.—(SUPPLY OF DUTY FREE GOODS TO H. M. SHIPS.)
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    7.30 p.m.
    Squadron-Leader Burden: I wish to bring to the attention of the Committee the very considerable dissatisfaction which exists in His Majesty's Navy, particularly among the ratings, regarding the reduction of the store allowance of duty-free tobacco from 1 lb. to ¾ lb. for a shore-based establishment and from 2 lbs. to 1½ lbs. for sea-going ships. I suppose we shall be told that the reduction has been made in order to lower the demand from the Service in conformity with what has been demanded of the civilian population and that it is an effort to get the Navy to play its part in easing the situation which has arisen through the shortage of dollars. However, it has caused very considerable dissatisfaction.
    I am also told that the Government have been concerned at some abuses which have arisen in regard to the administration of the duty-free tobacco, and we are told that as a result of the Government's new arrangements more will benefit from the concession than has been possible in the past, and that therefore on that ground there is a case for a slight reduction. But if the cut in the tobacco of the serving man in the Navy has been brought about in order to save dollars, there is equally a case for a reduction in the free coal concession to miners. Although coal may not cost dollars, it does earn hard currency, and if it is right that naval personnel should have their tobacco cut because tobacco costs dollars the argument can equally be put forward in our present position that a cut should be made in the free coal allowed to miners, because it can earn hard currency. If it is to be a case of fair shares, naval personnel should not be the only people who are asked to make concessions.
    I submit that there is no real case for saying that there will be any saving in dollars because of the reduction of dutyfree tobacco to the Navy. It is now possible for a man in the Navy to purchase as much tobacco as he was receiving before and the only change is that the Exchequer will now collect from naval
    634
    ratings the money which in the past has been lost by allowing them to receive duty-free tobacco. It is obvious that this puts no restriction on the amount of tobacco which the naval rating can consume. All it does is to impose a greater cost on him if he wishes to smoke as much as he did before. That is one of the reasons for the very considerable amount of irritation which exists at the moment.
    The Opposition feel that if this has been imposed in order to bring the Navy into line with the rest of the country, which has been asked to use less tobacco because of the shortage of dollars, there shoudl be no further cuts, and we ask that the reduction in the issue of duty-free store tobacco shall be reinstated at the earliest possible moment. I am concerned about this chiefly because of the irritation which exists. The best interests of recruitment to His Majesty's Forces are not served when these little pinpricks— that is how naval personnel look upon them—are constantly being levelled against them. I am delighted to see the Parliamentary Secretary to the Admiralty in his place. As a result of his knowledge of the lower deck he will realise that that is a danger, and I feel sure that we shall receive an assurance that the cut will at least be temporary and that no more cuts are envisaged
    Commander Galbraith: I support the plea made by my hon. and gallant Friend the Member for Gillingham (Squadron-Leader Burden). In the first place, the Clause regularises a situation which has been recognised as requiring attention for almost 20 years. As one who had the honour of serving in that great Service I can say that one objects to any interference with the rights and privileges of the Navy, for that is natural, but we recognise that something has to be done.
    The other matter to which my hon. and gallant Friend referred is the cutting down of the allowance of tobacco to men serving in His Majesty's ships and also in certain shore establishments. That is something which is very grievously felt by all ranks and ratings in the Service, and we would only agree to it on the grounds that it equalises the situation as between those who serve in the Navy and those who are civilians or are employed in the other Fighting Forces of the Crown. We

    635
    should first like to be absolutely assured that that is what is happening. We should also like to have some further explanation of how dollars will be saved in view of the fact that a naval rating, like anyone else, can now purchase as much tobacco as he likes.
    What we want principally from the Government are the two assurances for which my hon. and gallant Friend asks. I will repeat them. The Navy is suffering a 25 per cent. cut at present—it is an overall cut of 20 per cent. but it is spread out and the actual cut is 25 per cent.— from 2 lb. to l½lb. and from 1 lb. to ¾ lb. We want to be absolutely certain that this will be restored as soon as it is possible to do so, and that no further cut whatever will be applied to the naval issue of tobacco. I hope that we may have those assurances.
    Sir H. Williams: I have not served in the Navy but only in the Mercantile Marine, and I am not quite certain what the practice is in the Navy. As soon as a ship gets outside the three-mile limit the seals are taken off—
    Commander Noble: Not in the Navy.
    Sir H. Williams: No, but the Mercantile Marine goes to sea much more than the Navy does. I fully recognise that, and that is probably one of the difficulties. The merchant seaman spends the greater part of his life at sea but the man in the Navy spends the greater part of his life ashore, which is one of the difficulties that arise. I should like a little technical explanation from those who are supposed to know. It appears that many men in the Navy will now be put in a much worse position than men in the Mercantile Marine. Maybe the trouble is my complete ignorance of the practice with regard to cheap wines and tobacco in the Navy. I do not wish to see the men in the Navy worse off than the men in the Merchant Service.
    Captain Ryder: I fully support what my hon. and gallant Friend the Member for Pollok (Commander Galbraith) has said but I am not quite clear about subsection (5), which says that the power of the Treasury is to be exercised by Statutory Instrument. In point of fact this has been brought about
    636
    by an Admiralty Fleet Order. Is that a Statutory Instrument or not? Do we get a chance of speaking on this A.F.O. which will carry out the power of the Treasury in this respect, or is it likely to take effect without any discussion?
    The Parliamentary Secretary to the Admiralty (Mr. Callaghan): As the hon. and gallant Member for Pollok (Commander Galbraith) said, what we are considering now is Clause 15 of the Bill which gives us power later on, to make regulations which will be brought before the House for its assent under the Statutory Instrument procedure.
    Sir H. Williams: The Minister is not quite right. It would not be for the assent of the House. It would automatically have effect unless somebody prayed against it.
    Mr. Callaghan: Well, if it is not for the assent of the House, it is for the dissent of the House. It makes no practical difference to the result. [HON. MEMBERS: "Oh"] Let us not have a quarrel about that on this occasion. Let me put it in a completely non-controversial way by saying to the hon. and gallant Member for Merton and Morden (Captain Ryder) that the House will have an opportunity of expressing a view about this matter if it wishes to do so.
    Commander Noble: There is an Admiralty Fleet Order in print now, but it is not dated and is presumably waiting for this Clause to become law.
    Mr. Callaghan Mr. Callaghan indicated assent.
    Commander Noble: What would be the next step?
    Mr. Callaghan: The hon. and gallant Member is quite right. There is an Admiralty Fleet Order in being. The cut has not yet been applied and will not be until the proper procedure has been followed. This was done in order to give the Fleet advance notice and as much of the details as we could give in explanation of the few words that the Chancellor said about this in his Budget statement.
    I think the subsections of the Bill are as reasonably clear as draftsmen ever make subsections and it would perhaps not be proper that we should discuss the details which will come in the regulations

    637
    later on. However, as the point has been raised, perhaps I may put the picture in its proper frame. It is clear, and it would be wrong for me to deny, that the men in the Navy will suffer a cut which amounts to 25 per cent. of their tobacco allowance.
    If I may say so to the hon. and gallant Member for Pollok, without being pedantic, it is not the Navy which is suffering the cut but the men in the Navy, because the Navy as a whole will not be suffering as great a cut as that since there is a spread-over, This means that instead of resentment—which I am bound to say I have not found and I have been round quite a bit in the last few weeks, though the hon. and gallant Member for Gillingham (Squadron-Leader Burden) said he had found some—many men in the Navy are prepared to accept this cut because it is bringing in a large number of other men who were just as much entitled to the duty-free tobacco as are the chaps who were getting it formerly. The new regulations will enable us to bring in these men and to ensure that almost every man in the Navy, with certain minor exceptions, will be entitled to dutyfree tobacco. That is a substantial improvement over the existing condition and will remove many grievances and irritations.
    I will give some idea of the continuing value of this concession because I would not like it to go out from this Committee that whittling away has made it nugatory. A man in a sea-going ship will be entitled to 1½ lb. of tobacco, which makes about 600 cigarettes a month. He will in due course be able to get some of them in the form of "blue liners" as they are now called—we used to call them "ticklers"—because they have a line down the middle with "H.M. Ships only" on them. They will cost 8s. for 400. He will also get 200 cigarettes of proprietory brands in the canteen at 7s. 11d. which will cost him together 15s. 11d. a month for 20 cigarettes a day. In civilian life the same cost is, I am told, £5 5s., so in fact this concession is a valuable one and will save him nearly £4 10s. a month.
    Similarly, for shore-going establishments it is of the same sort of order. A man will get 300 "blue liners" a month for 6s. So this is an extremely valuable concession for the Navy which is now
    638
    being put on a proper legislative basis; the custom which has grown up will now have legal backing, and the Admiralty will play a substantial part in its administration. I hope, therefore, that the Committee will give us the Clause.
    7.45 p.m.
    Lieut.-Commander Braithwaite: May I ask the Parliamentary Secretary a question to clarify the last part of what he said? Is it still the case that duty-free tobacco is available only in shore establishments where the Customs authorities are satisfied that the proper arrangements are being made for the checking of liberty men, and so on, going ashore, to get rid of an obvious abuse? I take it that it is not the case that every naval rating serving ashore will necessarily get duty-free tobacco but will get it if he is in a shore establishment for which proper arrangements are made?
    Mr. Callaghan: That is broadly true, but by changing the nature of the safeguards we intend to extend this concession widely. At the moment it depends on an establishment being fenced in, whereas if we apply other methods of administration it is possible to bring in many more men.
    Commander Galbraith: The hon. Gentleman has not given either of the assurances for which I asked. I do not know if he is going to do so?
    Mr. Callaghan: I do not think the hon. and gallant Member really expects that I can give assurances about the future in that way. There is no intention at the present time of making any further cut, but I cannot say categorically that the cut will be restored. I do not think I can be expected to bind my successors on either of those matters and it would hardly be right to ask me to do so. The hon. and gallant Member also asked me about how the dollar saving was to be effected. It is being effected to some extent by using more non-dollar tobacco in the victualling yard tobacco supplies. I would like to be in a position to give those assurances but I doubt whether it would be proper for me to do so. On the other hand, I would not like the hon. and gallant Member to conclude that because I am not in a position to give those assurances, a further cut is contemplated, because that would not be true either.
    Commander Galbraith: Would the hon. Gentleman be able to go as far as to say that it is the intention of His Majesty's Government, when the financial situation allows, to restore the issue to the same standard as it has been up till now?
    Mr. Callaghan: That is a little hypothetical. We have to set off against the cut now being made the increase that is being given to several thousands of men who are being brought in. I do not wish to bind myself either way. I do not wish to say categorically that the cut will not be restored but, on the other hand, I cannot be expected to say that it will be restored. Is it not better to let this go as it is at the moment? I think we can always trust the Admiralty not to be backward in restoring this concession when it is possible to do so.
    Clause ordered to stand part of the Bill.
    Clause 16 ordered to stand part of the Bill.

    Clause 17.—(CHARGE OF INCOME TAX FOR 1950–51.)
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    Captain Crookshank: This, of course, is the Income Tax Clause, but as you know, Sir Charles, we have an Amendment down on Clause 19 which, if carried, would increase the reliefs. I wonder whether it would be for the convenience of everybody if, instead of discussing Income Tax at this stage, we could have a wider discussion on the Amendment which I hope to move, which would bring that matter into the proper relationship with the general Income Tax position?
    Sir S. Cripps: I understand that the right hon. and gallant Gentleman is referring to the Amendment to Clause 19.
    Captain Crookshank: That is right.
    Sir S. Cripps: It will be perfectly convenient for us to discuss any Income Tax matter on that Amendment.
    Mr. Osborne: Would it be permissible, Sir Charles, under that arrangement, to discuss the standard rate of taxation as it affects production and savings?
    The Deputy-Chairman: I am rather doubtful about that.
    Mr. Osborne: If that is ruled out, should I be in order in discussing the question now on Clause 17?
    Mr. Selwyn Lloyd: Further to that point, Sir Charles. Surely, any argument which would be referable to the standard rate could, under this arrangement, be brought in on the discussion on the Amendment. Could not any argument which may be directed to the standard rate of Income Tax be ventilated on the Amendment when it is called?
    The Deputy-Chairman: If it is the wish of the Committee to have a wide Debate on that Amendment, I should have no objection.
    Sir S. Cripps: That will be a little difficult if we are not to get ruled out of order, because Clause 19, of course, is not dealing with that subject matter at all. It deals with the rates of relief from Income Tax, and not with Income Tax itself. Subject to what the right hon. and gallant Gentleman has to say, I should have thought that if any bon. Members wanted to make observations on the general matter, they had better do so on the Motion that the Clause stand part.
    Captain Crookshank: What I thought was that the reliefs which the right hon. and learned Gentleman is giving in Clause 19, and the reliefs which we seek to have added, could be discussed within what I call the broad framework of the Income Tax as it will be in the course of the year, and that it would be possible on that to raise some of the reasons why, in our view, it is necessary to increase the reliefs, because of the height of the Income Tax, and to show how damaging that high Income Tax is and, therefore, the need for reliefs. That is why I thought it might be more convenient to have one fairly wide Debate on the Amendment instead of two separate discussions. I do not, however, press the point.
    The Deputy-Chairman: That is a different matter from the one which the hon. Member for Louth (Mr. Osborne) wants to raise. Perhaps it would suit the convenience of the Committee if we were to have now a discussion on the Question "That the Clause stand part of the Bill" and go on to the wider issue later.
    Mr. Selwyn Lloyd: With respect, Sir Charles, surely the level of the standard rate affects both industrial concerns and individuals. I should have thought that if we could bring into the Debate on the Amendment the general effect of Income Tax at 9s. in the pound on both corporations and individuals, it would be possible to combine the discussions to save time.
    The Deputy-Chairman: I am advised that we cannot do so. The matter of reliefs has nothing to do with the question of the standard rate.
    Mr. Osborne: I should like, with the permission of the Committee, to make a few observations regarding the effect of the standard rate of 9s. in the pound, first, upon industrial production, and secondly, and more important, upon savings generally. I believe that 9s. in the pound imposes far too great a burden to be carried permanently by our economic machine, and that it is one of the greatest factors that is hindering an increase in production.
    If we are to get that increased production for which the Chancellor is asking, and rightly asking, and if we are to achieve it so that our costs of production are to be reduced, then taxation has to come down, for the simple reason that men in all walks of life are tired merely of working harder in order to have the privilege of paying more taxes. I believe that a high rate of taxation is the greatest hindrance to greater and better production.
    In my own limited experience industrially, I think that this high rate of taxation does four things. First, it causes men, of all classes and in all walks of life, to seek tax evasion within the law. Men will do jobs apart from their own regular job so that they may earn "a bit on the side" in order that they may get something which is free of taxation. It is perfectly legal and is done in every walk of life, and not only by the ordinary man who works for a weekly wage; it is the consideration of many men in industry— "How will this affect my tax position?" —and too much attention is given to the effect of taxation on their activities to the detriment of the efficiency of those activities.
    Secondly, I believe that this high rate of taxation encourages wastefulness, and the one thing which we as a nation cannot
    642
    afford today is to be wasteful. The attitude is growing up in industry, "It really does not matter. It is nobody's business." Often I have heard it said, "Oh, well, Cripps pays for this; it really does not matter." One of the present-day weaknesses of industry is that men in industry —again, in all grades—are not as careful as they might be with materials or with time, because, after all, over a certain margin the Chancellor "stands the racket." This is a cause of industrial inefficiency.
    The third thing which the present rate of high taxation does it that, in my opinion, it increases absenteeism, again affecting all classes. Men say, "Why should I put in overtime? Why should I work extra, because I have to come sooner or later on to this 9s." They say, "We may just as well play for nothing as work for nothing." What they are prepared to buy is time off and fresh air. I believe it is true in the mining industry that the greater part of absenteeism will be found amongst the younger, unmarried miners, and largely because of this heavy rate of taxation.
    Mr. W. J. Taylor: What does the hon. Member know about it?
    Mr. Osborne: Finally, it leaves certain sections of people with the false impression that this instrument of heavy taxation can provide for the nation the sinews for the welfare State without the necessary effort which is required. I think that it gives the false impression that merely by taxation all of us can have what we want. Therefore, on the industrial side, unless this standard rate, which is the cornerstone of our whole taxation system, is lowered, and lowered very substantially, I do not think that we shall get that industrial efficiency which the Chancellor requires.
    I turn to what is, I believe, a much more important effect of this heavy taxation—that is, its effect upon savings. To support this thesis, I should like to remind the Chancellor of what Lord Mackintosh, the Chairman of the National Savings Movement, said last April. When the figures of the National Savings Movement were falling at a rapid, disastrous and alarming rate, he said that there were three principal causes for the falling off of National Savings: first, rigid wages;

    643
    secondly, high prices; and thirdly, heavy taxation. I believe that heavy taxation is a very important contributory cause to high prices and has in turn brought in this vast and rigid wage system. Therefore, the key to unsolving the problem as seen by Lord Mackintosh is to get down heavy taxation. It is this 9 s. in the pound that, I believe, is the root cause of the trouble with our savings movement.
    In the Budget speech the Chancellor on more than one occasion reminded the House of the terrible danger of inflation, and said how important a part small savings could play in avoiding the danger. I want to show to the Committee that the danger of inflation since the Chancellor spoke is not less, but greater, and that that danger arises largely from Clause 17, which embodies the 9s. in the pound standard taxation, upon which the rest of our taxes are really based.
    8.0 p.m.
    In March this year I asked the Chancellor what was the value of the pound today compared with 1945 when the new Government took office after the war, and the Chancellor said that at that time it was 16s. 2d. Subsequently I asked him again what its value was and he said that in March it was then 16s. 1d. Since these answers were given by the Chancellor there have been substantial rises in coal, transport and food and, although I do not know if the Chancellor has the up-to-date figure, I doubt if the value of the pound today is worth much more than 15s.—the Chancellor laughs, but I should like to have the correct figures—or about 15s. 6d. as compared with the time when the new Socialist Government took over.
    The fall in the value of our money and in the value of our savings is a very important factor on the problem of why savings have fallen off. If savings continue to fall off we shall have more inflation, and if we are to stop this process the Chancellor has to give his attention to this high rate of taxation, which I believe to be the primary cause of our trouble.
    May I remind the Chancellor of the responsibilities he and his Government took over when they came to power in 1945, and I wish to give him four examples. In the Post Office Savings bank there was invested £1,642 million,
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    covered by nearly 20 million depositors. The average holding was about £82. In the four and a half years the average interest was £9 4s. 6d. and the average holding in the Post Office Savings Bank has been £91 4s. 6d. but, taking the value of the pound as 16s. 2d. today, the real value is only £74, so that a person who has left money in the charge of the Chancellor and the Government has not only lost four and a half years interest, but something like £17 of his capital.
    This is a vicious and a secret form of capital levy against the very people who ought to be encouraged. But the Chancellor says in his Budget speech that he is sorry small savings are not coming up to his expectations. The reason is that his taxation is so high that it is causing prices to rise and that in turn is causing inflation and people are just not going to save. The remedy is in the Chancellr's own hands. He has to get down taxation and to do that he has to cut down expenditure, although I know I cannot go into that question now.
    In the building societies the Chancellor inherited the responsibility of £152 million in over three-quarters of a million accounts, which gave an average of about £200 per account. Those persons are about 20 per cent. worse off than when the Socialists took over. That is a point to which the Chancellor ought to give attention. In the Trustee Savings Banks there was no less than £579 million spread over a little more than four million accounts. Again the depositors have lost a substantial amount of their real capital. We should not sit idly by and allow this to go by default. Someone ought to speak on behalf of those who have trusted their money to this Government.
    I come back to Lord Mackintosh's warning that it is because of high taxation as embodied in Clause 17 that savings are falling off and are likely to fall off still further. I ask the Chancellor to look at the figures in the National Savings Movement. No one would wish to say any word that would harm that very important and fine movement, least of all myself because I have been associated with it, off and on, since 1926. The Chancellor and his party took over responsibility for no less than £1,816 million in the National Savings Movement in 1945 with an average holding of about £100. Those people today do not hold in capital

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    and interest a real value of more than £80. They are £20 worse off on an average than they were when the Socialists took power and I consider it a grave social injustice—
    Sir S. Cripps Sir S. Cripps indicated dissent.
    Mr. Osborne: The Chancellor shakes his head, but I should like him to refute these facts later on, if he can. In a Question last April I managed to get from him the admission that an ordinary working man or woman who on the day the Socialists took over in 1945, in order to show confidence in the new Government, paid 15s. for a National Savings Certificate had accumulated 2s. 0½d. by way of interest in the four and a half years, making by way of capital and interest 17s. 0½d. But the Chancellor said that, allowing for depreciation of currency, the real value, plus interest, was only 13s. 10d.
    Does the Committee wonder that National Savings are falling off? Is it to be wondered that people are not putting money into this movement? I think it is cowardly to sit by silently and see this happen and make no protest. This will never be righted until the Chancellor finds a way to reduce taxation and the first thing he has to tackle is to get down the standard rate of Income Tax as embodied in Clause 17. With that he can bring down other rates of tax as well.
    Mr. Awbery: Could the hon. Member tell us where the Chancellor can reduce expenditure in order to reduce Income Tax? We would then have some idea of where his party stands on this.
    Mr. Osborne: It would not be in order to go into that in detail, but that challenge was thrown from the other side of the House to this side last year about this time on more than one occasion and it was said that no savings could be effected. But when devaluation came, the Chancellor promptly found £100 million in economies which he could effect. Only a few weeks previously he had said they could not be effected. I should be out of order to discuss that at present, but the Chancellor said a year ago that no economies could be made and when devaluation was forced upon him he soon found £100 million economies which could be made.
    I say in answer to the challenge that if the Chancellor really set about it, as one
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    day the economic position of the country may make him, he will find methods of reducing our expenditure and so effect the reduction in taxation. The astonishing thing about the Chancellor was—
    Mr. Emrys Hughes: Would the hon. Member reduce expenditure on housing, on the social services, on armaments, or on what?
    Mr. Osborne: That is not my job tonight and in any case I should be out of order to discuss it. But you will allow me to say, Sir Charles, that when we were challenged a year ago as to whether we could find economies or not the Chancellor and hon. Members opposite kept saying to us that there was no method by which economies could be effected and when devaluation was forced on the Chancellor, he promptly found economies of £100 million, which previously he said was impossible. I hold that much greater economies could be found if the Chancellor really wanted to do it.
    Mr. Emrys Hughes: Where?
    Mr. Osborne: That is the Chancellor's task. In any case, since 1929, for the first time, the National Savings Movement is not helping the Chancellor's Budgetary position at all. For the first time more money has been taken out of the National Savings Movement than has been put into it since the Socialist Government have been in power. That movement is likely to become worse because men and women find that the money they are putting into the National Savings Movement falls in value when they want to take it out. It is not fair, it is not honest to expect people to continue putting their money into a movement when they know that they will be robbed and defrauded by so doing.
    I come back to what Lord Mackintosh said, that is that one of the principal contributory factors in the falling off in national savings is that taxation is so high. In "The Times" of 13th April there was this comment on the statement of the Chairman of the National Savings Movement, and I commend this to hon. Members who have been asking questions:
    "It is the profligacy of the government much more than the occasional extravagances of an austerity-ridden public which is responsible"

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    for the falling off in savings. The Chancellor wants more and more savings from the ordinary public if his Budget is to retain anything like stability. Here, in tonight's newspaper, is the type of advertisement for which he is responsible:
    "POUNDS, SHILLINGS AND SENSE
    Do yourself a bit of good
    Invest in National Savings."
    Why should people do so? The Chancellor must face up to this question: Why should people put their money into national savings when the Chancellor knows, and Members on both sides of the Committee should know that the money they are putting in today will be worth less in five years' time if we have the same financial policy and the same Government as we have today.
    Mr. Awbery: Is it not a fact that the man who invested £1 in 1914 found that it was worth less than 10s. in 1924 under the Tory Party?
    Mr. Osborne: I cannot either confirm or deny that assertion. All I would say is that if it is so, two blacks do not make a white, and because something went wrong previously that is not to say that the same thing need go wrong again without anyone making a protest. I am making a protest on behalf of the ordinary working men and women who buy these certificates.
    Finally, may I remind hon. Members opposite what their leaders said in 1945 about this problem before they came into power? The Foreign Secretary was reported in the "Daily Herald" of 5th July, 1945, as saying:
    "Labour will protect your savings against rising prices."
    It has completely failed to do so. It has failed partly because it has maintained too high a rate of taxation since the war. I should like to remind the Chancellor of what he said at Exeter in June, 1945:
    "The Labour Party wanted to ensure that people's savings were safer than before the war."
    He has failed miserably. I appeal to him to see what can be done to reduce the standard rate of taxation so that that may be a stepping stone towards giving us a sounder and safer currency and so encourage people to save more.
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    So far as I know there has never been a reply to the problem that was posed by Lord Bruce of Melbourne at the National Savings Rally at the Guildhall last October. He said, and if this is read in conjunction with what Lord Mackintosh says it puts a responsibility squarely on the Chancellor's shoulders, and I should like to hear any hon. Member reply to it:
    "No conscientious person can get up and appeal to his fellow citizens to subscribe their moneys to savings if he knows perfectly well in his heart that when the hour of need comes for people to draw them out the pounds they get won't buy anything like as much as they could have bought when the money was put into the movement."
    Has the Chancellor any answer to that? If not, is he surprised that savings are falling?
    8.15 p.m.
    It is no use talking about where we are to effect economies. The responsibility is on the Government side of the House. I feel that someone ought to make a protest against this continuous drain on the public purse which is causing our money to fall and fall in value, that makes heavy taxation necessary, for unless that is changed we shall discourage the very best section of our people, those who are thrifty and careful and who put their money in the hands of the Government.
    Mr. Harrison: I wish to say a few words about the speech made by the hon. Member for Louth (Mr. Osborne) in this Debate, which concerns the standard rate of Income Tax. That is the basic subject which we are discussing. I wish to refer to two remarks he made. He asked "Why should people save?" Shortly afterwards he said that he did not wish to harm the National Savings Movement. It seemed to me that throughout the whole of his speech he could not help but harm the savings movement by the very tone and substance of his speech.
    Mr. Osborne: Is the hon. Member arguing that it is just, fair and honest to take people's money knowing that you are to pay them back in money that is worth less, and not tell them so?
    Mr. Harrison: That is just the complaint I make against the tone of the hon. Member's speech. It is because he said that that I complain.
    Mr. Osborne: It is the truth.
    Mr. Harrison: He has just made the submission that if people are to lend money at one turn and the value of that money is to be deliberately reduced—
    Mr. Birch: Inevitably
    Mr. Harrison: —inevitably, that will discourage savings. With that comment he points his finger at the Chancellor. That is what I complain about because it is not true, and that is the reason why I am taking the opportunity of trying to refute the central argument of the hon. Member.
    The hon. Member suggests that the devaluation of the currency of this country is something which is special to this country, something deliberately engineered by the Government. That was the implication behind his speech. Can he tell me a country on earth, a civilised country, where the currency has not been considerably devalued during and since the close of the war? [An HON. MEMBER: "Switzerland."] It is not peculiar to this country. It is almost world wide. There has been devaluation of the Swiss currency to a considerable extent in terms of what it can purchase in Switzerland Prices have risen considerably there
    Lieut.-Colonel Sir Walter Smiles: Is it not a fact that Australia is at present talking about revaluing her currency and putting up the price of the Australian pound?
    Mr. Harrison: The position in Australia is that since the advent of the present Government their prices have risen to an almost unbelievable extent, reducing the value of the currency considerably. The position in Australia can be used as an example to prove the submissions of the hon. Member for Louth are very unjust when he points a finger at the present Government of this country as being responsible for deliberately manœdevaluation of the currency. Devaluation of the currencies of the world has almost throughout the world been on an equal basis. Most of the currencies have been devalued almost by the same amount during the last five years and that cannot be the responsibility of the Chancellor. It cannot be cured by suggestions that refer to this country alone.
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    What I assume from the speech of the hon. Member for Louth—and I am sorry to have to say this—is that his references to the deliberate devaluation of our currency can only result in the one thing he says he does not want to achieve— and I believe him—the discouraging of folk, on a wrong premise, from saving, That is what we most certainly do not want to do at this present juncture.
    Mr. Osborne: Does the hon. Member really think it honest and fair to people to say to them, "Give us 20s."—as the Socialists did in 1945—"and in 1950 we will pay you back 15s. 6d."?
    Mr. Harrison: It most certainly would not be honest and fair, if we had the say as to whether the currency had to be reduced to that extent. But since 1902 the currencies of the world have gone down in the extent of their purchasing power. Currencies have a tendency to fall as industrial development becomes more widespread. I think that the hon. Member for Louth is doing a great disservice to the National Savings Movement. It is not the first occasion, and his remarks are completely contrary to the interests of this country as a whole.
    Mr. Selwyn Lloyd: I shall endeavour in due course to deal with one or two points raised by the hon. Member for Nottingham, East (Mr. Harrison), but may I first join in the protest which my hon. Friend the Member for Louth (Mr. Osborne) has made against the level of taxation imposed by this Clause? This Clause really is the main weapon for imposing direct taxation and it is my submission that direct taxation, which is much too high is having an adverse effect upon the trade and economy of this country.
    I would give one set of figures to the hon. Member on the ratio of Government revenue to national incomes in various countries. I think these figures are worthy of notice by this Committee. They are not approximately for the same year 1948: In the United Kingdom the percentage of money taken for Government expenditure was 43 per cent.; in the United States 27 per cent.; in Belgium 30.9 per cent.; in Denmark 19.7 per cent.; in France 29.2 per cent.; in Italy 18.8 per cent.; in the Netherlands 37 per cent. and in Sweden 24.5 per cent. So in

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    this country we find a far greater percentage of national income is being taken from the individual or the company by the State for public expenditure; and that the average citizen in this country is very much worse off than in other countries, according to that test.
    Then we come to the matter of savings. I do not wish to go into the question of whether there is any deliberate intention to devalue the currency and so depreciate savings. I simply wish to deal with the facts, and the facts are that the situation, so far as National Savings is concerned, is exceedingly unsatisfactory. I do not think it is any good in the national interest to pretend that the situation is satisfactory. I shall give only one set of figures of small savings—deposits and withdrawals. In 1946–47 deposits exceeded withdrawals by £324 million; in 1947–48 deposits exceeded withdrawals by £188 million; in 1948–49 by £37 million; in 1949–50 withdrawals exceeded deposits by £66 million. I consider those facts are extremely serious from the point of view of the public interest, and I wish to take up this matter with the Chancellor of the Exchequer, because I do not think it does the public weal any good to pretend that the situation is satisfactory.
    I confess that in the early hours of this morning I got rather angry with the right hon. and learned Gentleman when he suggested that we should go on sitting for 48 hours continuously. Whether anger does sometimes produce afterwards a certain amount of calm I do not know, but this evening, in dealing with the matter, I am simply pained and not angry. Therefore I remind the Committee—with a certain amount of pain—of the speech of the right hon. and learned Gentleman in the Second Reading Debate, to which I have referred before. This is what he said:
    "One of the extraordinary things which the right hon. Member for Warwick and Leamington stated was that the private investor had been almost liquidated. I wonder if he has taken the trouble to look at the actual figures of private savings? As it happens, personal savings in the years 1948 and 1949 were almost precisely the same percentage of disposable personal income as they had been in 1938— 4.8 per cent. in each case. In 1938, when the disposable personal income was £4,500 million roughly, the gross personal saving was £217 million; and in 1948, when the disposable personal income was £8,500 million, the personal saving was £409 million, so that it has remained almost exactly the same per-
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    centage."—[OFFICIAL REPORT, 16th May, 1950; Vol. 475, c. 1154–1155.]
    On 13th June I asked the right hon. and learned Gentleman about the figures which really mattered, not the gross but the net figures. I asked him what were the net personal savings in 1938 and 1949 respectively. The right hon. and learned Gentleman gave these figures as £139 million for 1938 and £174 million for 1949; in other words, an increase of about 25 per cent. I asked him whether, in view of those figures, it was not a little misleading to have said that personal savings had maintained the same ratio to personal incomes between 1938 and 1949, and the right hon. and learned Gentleman said:
    "I am afraid I have not worked out the percentage of the figures I have given."— [OFFICIAL REPORT, 13th June, 1950; Vol. 476, c. 333.]
    If that was correct, if the right hon. and learned Gentleman really had not worked out these percentages, it seems very odd, in view of the portion of his speech which I read which dealt entirely with percentages. If it is true that he did not work out the percentages for the net figure, it seems extraordinary that he should have thought fit to make the comment which he did. But if he had worked them out it was, if I may say so, very naughty of him to answer my Question in the way he did. I cannot conceive that the point was absent from his mind. In order to substantiate his contention that personal savings maintained the same ratio to personal incomes, the right hon. and learned Gentleman had to include Death Duties and sums paid in respect of the Special Contribution, and to suggest that that constitutes personal savings seems to me to be a travesty of the facts.
    The position which we have to face and which this Committee has to face is that the savings situation is extremely serious and we must do everything we can in our financial policy to maintain the confidence of the saver. I am perfectly certain that only by self-denial on the part of public authorities and private individuals at the present time shall we create the resources we need for our capital investment programme.
    8.30 p.m.
    We have been challenged, as we so often are, as to where we would effect savings. It is my rule never to seek to

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    make a speech on the subject without providing the Committee with one practical example of where I think there is gross extravagance. On Second Reading I did give two cases, one with regard to the National Health Service and the other with regard to education. I will give one tonight. It is adduced from certain answers to questions which I have put to the Minister of Works, in the course of the last month, with relation to certain expenditure by His Majesty's Government. It refers to expenditure that has been taking place in France.
    The Deputy-Chairman: I do not think that on this Clause the hon. and learned Gentleman can develop an argument based on expenditure in France.
    Mr. Selwyn Lloyd: If you stop my saying it, Sir Charles, then, if I may say so with respect, the responsibility is yours. We have been challenged and I would certainly have given the answer if I had been allowed to do so, but I shall seek another opportunity. It is very important, when dealing with these matters, to point out the national extravagance which I believe is taking place.
    I suggest that one of the factors causing the falling off in personal savings is the high rate of Income Tax and the effect this high rate is having upon the public confidence. It is becoming increasingly difficult to deny that taxation does feature in costs. As taxation remains high, so it is reflected in high costs. It does not permit adequate resources to be accumulated. That is really conceded, inferentially, by the right hon. Gentleman by the fact that he set up the Tucker Committee to inquire into the definition of profits upon which Income Tax is to be levied.
    Taxation bears very hardly on risk capital. It also has a direct inflationary effect. Here are three very simple examples. I do not think it is very iniquitous of people. I think people are governed in all walks of society by the ordinary rules of human nature. In one case of very recent occurence a gentleman said of a long telegram, "It makes me smile to think that the Chancellor paid half of the cost of that telegram." There was another case of a shipping company, where a wharf had to be kept open under conditions of considerable difficulty and involving the company in considerable
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    loss. I was told, "We have always the consolation that the Chancelor is bearing half that loss."
    The third case is that of a small business where the trading profit is about £6,000 a year and where the taxation— Schedule A, Profits Tax and Income Tax —come to over half that sum, between £3,000 and £3,500. There, I was told, there is anxious consideration, as the year goes on, to see how money can legitimately be spent to avoid the figure of profits increasing, so that the amount to be paid in taxation shall not increase. It is happening in the case of individuals and corporations, and it is a very natural process. People do not feel philanthropic about these matters; and if the money can be spent where they can get most of the advantage they like to spend the money to avoid taxation. The cause is the high level of the standard rate of Income Tax. In the interests of the country and its economic survival, and in the interest of the character of its citizens, I hope we are coming to the day when the standard rate can be safely reduced.
    Mr. McGovern: I have no intention of entering into the Debate on this Finance Bill, because I am anxious to see it through at the earliest possible moment. At the same time, I am always apt to be drawn in when I hear speeches that are unreasonable. I have been listening over a long period of time to the hon. Member for Louth (Mr. Osborne), and to a large number of hon. Members opposite attacking the Government in relation to the amount of money that is raised, the taxation that is imposed, and alleging that the money is squandered in a reckless manner. If this statement that the money is squandered in a reckless manner were true, then any hon. Member of the House and citizens outside would be entitled to stand up and take notice. If the allegations were substantiated, either the Chancellor of the Exchequer or the Members of the Government ought to be put in the dock. When it comes to giving an example of a concrete nature, the case always fails.
    Mr. Osborne: It would be out of order.
    Major J. R. Bevins: On a point of order. If it was out of order for my hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd) to answer those allegations, surely it can hardly be in order

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    for the hon. Member for Shettleston (Mr. McGovern) to make them.
    The Deputy-Chairman: I am trying, as far as I can, to keep this Debate on the Question "That the Clause stand part," within the bounds of order.
    Mr. McGovern: I wish hon. Members would allow the Chair to decide the Rules and not arrogate to themselves the rights of the Chairman of the Committee.
    I want to deal with the question of the 9s. in the £ which is imposed and that was why, first of all, I was answering the allegations. I was then about to analyse them. Nobody likes taxation. As Members of Parliament we all know that when taxation is imposed upon the general body of people in this country, they are all anxious to get rid of it. That applies in the case of the tax on the pools, on betting, on films, on whisky, on tobacco, on beer, and the Purchase Tax; nobody wants to pay taxation and the ordinary man in the workshop and in the office, and indeed every person we meet, wants to divest himself of the obligation to contribute taxation to the State.
    Hon. Members seem to forget that it is inherent in Capitalist society that there should be a continual depreciation of the £ as a result of the fact that we get into large-scale wars. We incur tremendous expenditure in war, and we pay in war sometimes 9s. in the £ to the people who are defending the other 11s. in the £. After the war there comes a position in which we cannot make settlements with other Governments, and then we are going headlong in preparation for another war. I am not blaming anyone for this; it is inherent in the conditions. We find ourselves preparing with armaments and with the training of men—
    Mr. Colegate: Like Russia.
    Mr. McGovern: Yes, like Russia. I am not absolving Russia from being largely responsible, but if we have to impose taxation at 9s. in the £ in order to prepare to resist attack, why should hon. Members say to the Government which has that job to do, "You have no right to ask for a contribution from the wealth produced by the workers in the workshops, mines, factories and fields"?
    This taxation at 9s. in the £ is, therefore, imposed for the purpose of National
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    Defence and for the social services of the country. Further, when hon. Members say that the rate of 9s. is unnecessary, they should show how it is unnecessary. When the hon. Member for Louth says that money is being squandered, he ought to show where it should be saved. I can understand, for example, hon. Members saying that we are raising so many millions by our levy of 9s. in the £ and that portions of the money are being used in a wrong way and are being squandered. I could understand it if they said that, so long as they put their finger on the spot to show where they would save.
    The Deputy-Chairman: But that cannot be done in the discussion on Clause 17.
    Mr. McGovern: After all, the hon. Member for Louth has made many statements about money being squandered and I think I am entitled to ask him what is being squandered and where we could save.
    The Deputy-Chairman: That is just my point. On this Question "That the Clause stand part of the Bill" one can deal only with what is in the Clause. Therefore, this is a very narrow Debate. I hope the hon. Gentleman will try to keep within the bounds of the Clause.
    Mr. McGovern: Yes, I am always willing to do so, but I cannot but notice that other hon. Members are allowed full scope—
    The Deputy-Chairman: I am only human, and maybe I make mistakes, but I do my best to listen to everybody, and to be fair.
    Mr. McGovern: I am sure you do your best, Sir Charles. We all do our best. But when hon. Members get up here and make slashing attacks about money being extravagantly expended, and about this 9s. in the pound being unnecessary, I ask them how money is being squandered and how much could be saved.
    The Deputy-Chairman: That is just my point, and I do not want the discussion to go to that length, and I am not going to allow it to do so.
    Mr. Selwyn Lloyd: Will the hon. Gentleman allow me? Is he really being quite fair? If he had done me the courtesy to listen to what I tried to say,

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    he would have understood that I did try to give specific examples and that I went as far as I could, but that you. Sir Charles, stopped me.
    Mr. McGovern: I was not talking about the hon. and learned Gentleman at all. I was replying to the hon. Member for Louth. The hon. Member for Louth made allegations to which I was attempting to reply, and that was the whole length I attempted to go.
    However, I say in conclusion, in relation to the 9s. tax, that I think the people who are paying that money are entitled to pay it, and to pay it with a certain amount of pleasure, because in this country under this Government the standard of living is higher and prices are very much lower than in a dozen other countries I have visited throughout the world. They are taxed lower in other countries often because of the fact that their standards of life are much lower than ours, and wages are much lower, and the social services are much lower. So I say that our people who pay this tax ought to be proud to contribute it. In my estimation the hon. Member for Louth and other hon. Members opposite, including their Front Bench Members, ought to show where squandermania exists, and they are cowardly in the extreme in failing to put their finger on the spot to show where this squandermania exists.
    Mr. Spearman: I am always interested in hearing speeches by the hon. Member for Shettleston (Mr. McGovern). I can remember in the last Parliament—indeed, in the Parliament before the last—the great contributions he made to open our eyes, and the eyes of hon. Members opposite, to the dangers from Russia at a time when few other people had the courage to speak so openly. I can agree with quite a lot of what he said tonight. I can see that, as we had the disaster of wars in the past, and have the fear of war in the future, we have all got heavily to contribute—painfully to contribute—in taxation.
    But I should like to put this point to the hon. Member—and, perhaps, it will appeal to him more than to many others, because he talked tonight, as he has talked before, about the fear of war —and suggest to him: Is it not a terribly dangerous position we are in, if there is
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    any sort of possibility of the disaster of war ahead, or indeed of any other disaster, when we have no reservoir of taxable capacity left at all?
    We have heard the Chancellor of the Exchequer himself admit that taxation can go no further. Is it not a terribly precarious position to have nothing in reserve at all? After all, a prudent man does insure his house, not because he expects there will be a fire or a burglary, but against the possibility that they may occur. The man who does not insure, and has not got a health service to depend upon, is very imprudent if he spends his entire income, without any reserve left for disasters, however unlikely they may be. I therefore suggest to the hon. Member that certainly we must have taxation but not at such a level that it leaves no reservoir, no reserve, whatsoever.
    8.45 p.m.
    What is also alarming is the fact that there is no indication that taxation can be reduced. Indeed, I do not know how the Chancellor will meet the situation in the future. Let me take, for example, the question of old age pensions. That, I think, is an expenditure to which we on all sides of the Committee are most sympathetic. At present we spend on old age pensions £238 million, or about one-quarter of the entire pre-war revenue of the country. In only 18 years' time without any increase in the nominal sum of those pensions—though, with costs rising, they may have to be increased— the expenditure will be almost doubled. It will amount to £421 million or above one-half of the pre-war national revenue.
    The people would tighten their belts and respond to a continuation of even this level of taxation for a time, if they had some confidence that measures were being taken to enable a drastic reduction, with safety, in future. It is because that confidence is not present that the situation is so uncomfortable today. At present the Government and local authorities between them spend about £4,000 million, or about 40 per cent. of the national income. I believe that this country is capable of spending £4,000 million through the Government and local government, but I am sure that we are not capable, for long, of continuing to spend 40 per cent. of the national income.

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    When we have taken steps to push up our production to the maximum, then indeed we may be able to spend with safety what the Government are now spending. We on this side may think that it could be spent more wisely and beneficially for the country, but we say that the present level, however well it is spent, is dangerous. It is leading us to a most precarious situation. We must not spend as much as 40 per cent. of national income. Let us take those measures which will push u the national income to, say, £12,000 million and then that will be a safe proportion to spend. In the United States of America the Government are planning for, and expecting with confidence, a most enormous increase in national income in the next 20 years. What indications are there that that will happen here? Surely, the Chancellor himself would agree that he would far rather be raising the present sum of £3,600 million on a much larger national income by a lower rate of taxation. That, I believe, is within the capacity of this country if we produce all that we can.
    Lower taxation today means lower national expenditure. It might well be that we should have to reduce expenditure and keep it down for a year or two before it was safe to make any drastic reduction in taxation. On the other hand, it might be that the very fact of reducing taxation would force the Chancellor to reduce general expenditure. I give one illustration. I remember talking to that formidable trade unionist in the United States, John L. Lewis, who has a high opinion of himself, and he said, "I think I have done a very good job of work, because I have continually pushed up wages. That has meant that employers have had to introduce labour-
    saving devices, and that has meant that profits have gone up." Mr. Lewis said, "I do not mind how much the employers make in profits so long as my men profit too. It has meant that prices have gone down, and I am glad of it, but above all it has meant that my men's wages are up."
    It may be that if Income Tax were reduced now, the Government would be forced into making those reductions in national expenditure which I believe are absolutely vital for the safety of the country. I do not believe that the greater
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    incentive provided by a reduction in taxation is the major advantage, important as that is. This would not be the time or the place to show how, with lower Government expenditure and with the better distribution of men and materials, we would increase national income. I confine myself entirely now to the additional incentive obtainable by reducing taxation. At the present time, a married man with one child, earning £7 a week, is paying £5 a year in taxation; if he makes £8 he pays £13; if he makes £10, he pays about seven times as much taxation. The man earning £7 a week pays 3d. in the £1. If he makes £1 more, then he pays 3s. on the extra £1. 1s it not obvious that that must be a great disincentive to a man to work overtime?
    I have in front of me a table taken from E.C.A. showing the approximate current social expenditure per family and the approximate taxation paid per average family, with an income of under £500 in a year. The average family of that income, according to the E.C.A. table, in this country are paying out 67s., of which Income Tax takes 8s., and various other taxes and contributions add up to that amount, and they are receiving in return for that in the form of social insurance, family allowances, etc., 57s. That does not seem on the face of it to be a very good bargain. I believe that quite a lot of people in this country would willingly take a little less for the time being in social services if they were going to have a good deal more to spend in their own way. I, therefore, urge upon the Chancellor of the Exchequer that this is not a question of helping the rich or even the moderately well-to-do, but that it is for the safety of the country that we have to reduce national expenditure and also Income Tax.
    Mr. Emrys Hughes: I understand that we are precluded on this Clause from offering constructive suggestions as to how national expenditure could be reduced. I shall not attempt to put forward constructive suggestions on the lines that I did last night. I wish to make one or two points in reply to the hon. and learned Member for Wirral (Mr. Selwyn Lloyd). I understood him to say that it was necessary in the interests of national finance to reduce our expenditure nationally and privately. One phrase which he used was that we needed, in order to restore our

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    financial equilibrium the practice of self-denial by private individuals. I hope that I have not misunderstood him. I made a careful note of his phrase, that we must at the present time, in order to encourage the habit of thrift and discourage unnecessary expenditure, encourage self-denial by private individuals.
    The hon. Member for Louth (Mr. Osborne) produced a newspaper in which there was an advertisement for National Savings, but he apparently had not seen the first page of that paper because on it was another kind of picture—it was not an advertisement; it was a picture of the Leader of the Opposition at Ascot. I should like to know how the hon. and learned Member for Wirral can reconcile his appeal for the practice of self-denial by private individuals with the spectacle of the Leader of the Opposition encouraging thrift by buying new racehorses. It is not consistent. We come here and appeal to the workers to save, and then the Leader of the Opposition and the hon. and gallant Member for Ayr (Sir T. Moore) have published in the paper pictures of themselves at Ascot. That is not showing an example of thrift.
    Air-Commodore Harvey: How many Socialists were present at Ascot who did not have their pictures published?
    Mr. Emrys Hughes: I do not know, but I know that none of our people were absent from the Division Lobby. I know also that if the Chancellor had bought two racehorses in a year, the suggestion would have been made that he had been pinching the money from National Savings.
    The Deputy-Chairman: I think the hon. Member knows how far he can go in discussing this Clause.
    Mr. Hughes: It may be quite true that National Savings are getting less, but why is that? Surely it is because there are more goods in the shops for the people to buy. They are now spending the savings they made during the war. People are buying new houses and furniture, and therefore we are getting withdrawals from the banks. I am not alarmed at this at all. Unfortunately, we are precluded from discussing constructive proposals for the reduction of national expenditure, but I understand that we can do that later on Clause 17. [HON. MEMBERS: "This is
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    Clause 17."] I am not going to pursue that matter any further. I have succeeded at any rate in puncturing this hypocrisy of talking about self-denial on the part of our people. If the leaders want the people to practise self-denial, then let them give a lead.
    Mr. Mott-Radclyffe: When the hon. Member for Ayrshire, South (Mr. Emrys Hughes) has acquired the same repute as an historian and author as my right hon. Friend the Member for Woodford (Mr. Churchill), and has earned as many dollars, we shall all be pleased to congratulate him if he wins a race.
    This is one of the most important Clauses in the Bill. It is the Clause that imposes the standard rate of Income Tax, which is the major weapon with which any Chancellor frames his financial policy. We have had many exhortations during the last four or five years from right hon. Gentlemen opposite to accumulate savings and to produce more goods. We all agree with these objectives, but I think it is the first duty of the Government to practise themselves the economies they preach to others, and to provide the necessary incentives without which increased production cannot be achieved. As my hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd) has already informed the Committee, we are unfortunately the highest taxed people in the world.
    Since the war, when it might have been expected that there would be some alleviation in the burden of taxation, the burden has actually increased by no less than 20 per cent. Nor should it be forgotten that this burden is not only in the form of direct taxation but in indirect taxation as well. The Report of the E.C.A. Mission states that the load of local government taxation, indirect taxation and insurance contributions for a family of four earning less than £500 amounted to 48s. 6d. a week. We must also take into account that this immense burden of taxation has been accompanied by a steady increase in the cost of living. We shall not be able as a nation to sustain such a heavy burden of taxation in the long run. It is like asking a horse to win a race when carrying too much weight. It makes savings virtually impossible, and it puts the brake instead of the accelerator on incentive.

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    9.0 p.m.
    I hope the Chancellor will forgive me for stating the obvious, namely, that a given sum of money cannot go in two different directions at the same time. It can either go into the Chancellor's pocket in the form of taxation or into savings, but not both. The proof of this lies in the rather misleading impression, which the Chancellor gave on the Second Reading of the Finance Bill in the figures for gross personal savings, for under this heading he actually included Death Duties and the revenue from the Special Contribution. To include those items in personal savings when they are a tax on capital would really make William of Wykeham turn in his grave. The mathematical formula which the Chancellor should have clearly imprinted in his mind is that high taxation plus an ever-increasing cost of living equals no savings, and that is what his figures proved.
    May I say a word about incentives? Socialism goes on the principle that the more you earn the less you keep, and that is the principle on which our present system of taxation is designed. That may be very good Socialism, but it is not the speediest way to prosperity.
    Air-Commodore Harvey: Unless you are sacked from the groundnuts scheme.
    Mr. Mott-Radclyffe: Yes, but that means bringing everyone down to the level of the least efficient and we can all do that.
    What happens to the motor manufacturer who has responded to an increasing demand for lorries by turning out more lorries to go on the roads? My hon. Friend the Member for Monmouth (Mr. P. Thorneycroft) talked on this subject earlier this afternoon. Does the Chancellor go along to the motor manufacturer and say, "Well done, you have increased production. You have increased your sales not only in the home market, but overseas. You have earned more dollars than the man from the Ministry estimated you would earn. Well done. Come and spend a weekend at the Cripps Arms at £18 10s. a night." Does he say that? Certainly not. The reward for having increased the production of road vehicles is that
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    these vehicles are now to bear extra purchase tax. What about the man who puts in a great deal of overtime? The more overtime he puts in the more he piles up his tax liability.
    This burden of direct taxation at 9s. in the £ is a direct discouragement to risk-taking, and it is impossible for Britain to pay her way without those engaged in Commerce taking risks. It is impossible under a Socialist Government for any man to build up a big business from a small one, because the opportunity is not there. Hon. Gentlemen opposite very often tell us that the ladder is now erected by which all can climb to the top. In actual fact it is a ladder without rungs. Today a small business cannot expand into a big one. It is made financially impossible by the Chancellor. But, it is only by reducing taxation that the Government can either encourage savings, which are absolutely vital, or provide the incentive without which in the long run we cannot sustain our economic effort. Most important of all, it is only by reduced taxation and the consequent encouragement of initiative and skill that we can accumulate a reserve of wealth, upon which, in times of strain and stress, every healthy nation must have to draw.
    Mr. Birch: We have had an interesting Debate. It has been a very familiar one. We have heard a number of statistics and facts from this side of the Committee and from the other side we have had doubtfully-in-order speeches on the subject of expenditure. We heard the hon. Member for Shettleston (Mr. McGovern) who, I thought, was very tough with my hon. Friend the Member for Louth (Mr. Osborne). He accused us of making false accusations of waste. What would the hon. Member think of a Government concern which sowed 10,000 acres of ground which was not fit to receive the seed in order to state in the House of Commons that they were sowing a total of 50,000 acres? That was done in the groundnut scheme. Was anyone prosecuted? One who was responsible was made a knight and the other was made Secretary of State for War. Hon. Gentlemen opposite have no business to accuse other people of hypocrisy.
    I do not want to cover the same ground as has been covered by my hon. Friends, but to put one point to hon. Gentlemen opposite. As far as one can see, as a

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    result of the Synod of Dorking the other day, there has been a certain change of policy or of heart on the part of hon. Gentlemen opposite. They now say "We are all Methodists," and that they do not believe in Karl Marx. They are not going to nationalise anything now, because they think it is all nonsense, and they are going on with a Liberal Society. If hon. Gentlemen really believe that, then they must make the system work. It is no good saying they are going to run a Liberal economy and have private industry, and at the same time have a taxation policy which makes it impossible to run that system. It is not straight and it is not honest. It may be, of course, that hon. Gentlemen are just trying to do something by the back-door instead of doing it by the front—which may be the object—while they say that they are trying to make the thing work.
    My hon. Friends have pointed out the difficulties. Income Tax was originally a very small tax and it was thought to be transitory, but it has grown up into the present colossal system. It is damaging to risk-taking and to the building up of small businesses. If we look at economic history, we see how regular the rhythm is of new names coming in and old names going out. But, as my hon. Friend the Member for Windsor (Mr. Mott-Radclyffe) has said, that does not happen today. The whole basis of the Government's policy is conservative, in the bad sense. If anyone was in a big way of business in 1939 he has an absolute guarantee, but if somebody is on the way up he cannot get very far.
    Private savings are going down. I hope that the Chancellor of the Exchequer when he replies will tell us why Death Duties constitute saving. That causes me great trouble. The noble Viscount who is the Leader of the Socialist Party in another place said that he had been consulting Treasury officials all the morning and could not make head or tail of it. I have not been able myself to understand it, and if the Chancellor of the Exchequer will explain it he will be a Duns Scotus or at least a Raffles.
    Leaving that aside, the real aspect which I want to discuss is the effect upon industry. We have to look upon very high taxation in the context of rising prices. As the President of the Society of
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    Incorporated Accountants said some time ago,
    "the colossal rise in the price level means that much of the value of the savings of the past has been destroyed."
    He was talking about industry.
    The mischief arises from the reason that in this country depreciation is allowed upon what is known as "the historical cost." That is to say, if you buy a ship you are only allowed to charge against profit enough to write off the original cost of it. It was stated on behalf of the Cunard Company the other day that a ship built in 1925 for £167,000 and now coming to the end of its useful life would cost £625,000 to replace; but you are only allowed to charge against profits enough to produce £167,000 at the end.
    It is not untrue to say that throughout industry, roughly speaking, for every £1 allowed for wear and tear allowances by the Treasury you have to have £3 of earning in order to counter the rise in the price level. Therefore, in the context of rising prices the very high rates of taxation are being charged not on true profits but on profits which are largely fictitious. The true basis of taxation should surely be that all expenditure which creates an asset of tangible value which is used up in the production or sale of marketable goods should be charged against profits. That is to say, you ought to be able to write off the replacement value. I am not suggesting that we should get away from the historical basis because I believe that it would be too great a step to take yet, but we must recognise that damage is going on, and the only way to counter it is by the reduction of taxation.
    The Chancellor last year postponed the evil day by doubling the rate of initial allowances, but that is only a slight postponement, and meanwhile the process still goes on. The Chancellor is the senior partner in every business and is taking not only the major share of the profits but quite a good share of the junior partner's capital as well. That is going on all the time, and it means that taxation raises prices. We are often told that taxation does not raise prices because you are only taxed after you have made a profit, but that is not so. You do get taxed before you have made a true profit. In order to build up what might be described as the price level reserve—enough money to keep your assets intact but not

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    to increase them—you have to put your prices up to make the profits which are necessary to produce that reserve. It would help the Chancellor in his policy, particularly his wage-freeze policy, if he did not exercise such a rigid economy of the truth about such matters. He should realise what is going on. I hope he will discuss this a little.
    As my hon. Friend said, taxation at this rate produces an inevitable result. It may produce many other unpleasant results, but it has the inevitable result that prices and the cost of living continue to rise. That, combined with the wage-freeze, is really exactly the same as having stable prices and a large wage reduction. In effect, a wage reduction is taking place now as a result of present policy, and when hon. Gentlemen opposite accuse us of all the things of which they do accuse us, they should remember that they are supporting a policy which inevitably results in a lowering of the wages of their supporters.
    Sir S. Cripps: As you have said, Sir Charles, we are debating a very narrow question. The only point which arises for consideration is whether a proportion of the necessary sum of money to be raised in the Budget should be obtained by a tax of this amount in the form of direct taxation. One has to assume for the purpose of the argument on the Clause that the amount of money to be raised is the amount which was determined under the Budget. As you have said on more than one occasion this evening, Sir Charles, we cannot upon the Clause go into the question of expenditure. The question is, therefore, whether some of this money which it is proposed to raise by direct taxation should be raised in some other way; that is, by indirect taxation.
    I venture to suggest that any examination of the proportion between direct and indirect taxation can only lead to the conclusion that it would be quite impossible equitably to reduce the direct taxation except in the way we have done in Clause 19, which we can debate presently, in order to increase the indirect taxation in some other way such as more Purchase Tax, more Tobacco Duty, more Beer Duty or whatever it may be. I have not heard any suggestion in the course of this Debate that this money could or should be
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    raised in any other way, and therefore I ask the Committee to agree to this Clause.
    Clause ordered to stand part of the Bill.

    Clause 18.—(HIGHER RATES OF INCOME TAX FOR 1949–50.)
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    9.15 p.m.
    Sir W. Wakefield: We cannot let this Clause pass without drawing attention to the heavy burden borne by a most important section of the community. I refer to those in the management and executive classes, to those in the professions, to those who provide technical services in industry—in fact, to all those who earn high salaries in the Surtax range.
    With such heavy taxation there is no doubt that the best is not now being obtained from this important body of men; important because the future prosperity of our country depends upon their energy, capacity and determination to work. Those in industry know that often when there is a good job going at a high salary, men who would be fitted to fill it are not prepared to take on the extra responsibilities and work involved because the extra money they would or ought to be paid is worth nothing to them. The result is that valuable services are lost to the community.
    As regards the professional classes, an artist finds that he can earn all that it is worth his while to earn by painting half a dozen pictures in the year, so here again there is a loss to the future of some fine paintings because it is not worth his while to work longer. I submit that in the fields of industry, of science and of art such high taxation is detrimental to the future of this country. Again, people in the professional, theatrical or industrial worlds often undergo long training for many years and then for a long period work at a low salary, so that the years in which they make high earnings are frequently few. Because all the money is taken away from them during that later period they have little or nothing to put aside for their old age or retirement.
    I submit that is wrong, and I suggest that in the future interests of this country steps should be taken to see what can

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    be done to ease the position of this important section of our community. Any relief which it is found can be made would not cost the country anything but would in various ways be found to be an increase in the Revenue. I hope that the Chancellor and those with him at the Treasury will look again at this vitally important matter.
    Mr. Maudling: The criticism that I have to make of the Clause is that it perpetuates an anomaly in our Income Tax system. Surtax continues to be charged on total income, while Income Tax is charged on taxable income. As the Committee are aware, in assessing one's liability to Income Tax, deductions are first made in respect of earned income allowance, child allowance and so on, to reach one's taxable income. It is on that taxable income that Income Tax is charged. Surtax, however, is charged on total income, which means that while in Income Tax the man with a large family pays less tax than the man with no family, or a man with an earned income pays less in Income Tax than the man with an unearned income, in Surtax the charge is entirely the same to every person irrespective of his individual circumstances.
    That seems to me to be an anomaly. The fact that it is an anomaly is further illustrated by the official title which is applied to Surtax—i.e., the "higher rate of Income Tax." If Surtax, is, as it is described, a higher rate of Income Tax, it seems to me an anomaly that it should be charged on a different basis from Income Tax in the case of any particular individual. So far as I can see, there are only two arguments against removing this anomaly in our tax system. First, it might be argued that when a man is liable to Surtax these considerations are of small importance. Perhaps that contention could have been advanced when a generation ago Surtax was first introduced, but since then the value of money has fallen considerably and current rates of taxation have risen considerably.
    One example is the number of incomes of £2,000 a year and over, which between 1938 and 1948 rose from 106,000 to 220,000, a good indication of the fall in the value of money. At the same time, tax rates have considerably risen, with the result that between £1,950 and
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    £2,050 a year, over the £2,000 mark, the effective rate of tax on the top part of any individual incomes leaps from 7s. 2d. in the pound to 11s. in the pound. The Chancellor has recognised, in the Income Tax concessions that he has made, the importance of avoiding abrupt steps upward in taxation because of their disincentive effect. If that is true at the lower ranges of Income Tax, it is also true, I submit, at the lower ranges of Surtax on earned incomes. Therefore, I think, the argument can be carried through.
    The only other argument against abolishing this anomaly is that at present it would cost too much to do so, and that, I am prepared to accept, is probably the case. That is why I raise this point on the Motion that the Clause stand part rather than as an Amendment, but I urge the Committee and the Chancellor to bear this point in mind as an improvement in our tax system that should fee carried out when an opportunity presents itself.
    Mr. Walter Fletcher: I should like to say a word in support of the argument which was put forward by my hon. Friend the Member for St. Marylebone (Sir W. Wakefield). It is becoming very apparent in certain aspects of trade and industry that it is increasingly difficult to get people into the highly important managing director posts because they find so often that in their previous posts, where they travelled around and were salesmen, they got a great advantage. They are able, perfectly legitimately, when they are travelling round to charge all their expenses, and their legitimate expenses, and therefore, although they may be receiving less net income which would not bring them into this category, they are in actual fact making very much more money; they are not having to pay the tax on the higher rate and they are saving a great many expenses which they would otherwise have to pay.
    That is only one facet of the question, but it is a very important one and I think those interested in the direction of business and trades and industries throughout the country would support the argument about the difficulty of getting people in, people who in the end take the essential decisions which make businesses successful and help so much in our export drive.

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    This is only one of the instances of the danger of this form of taxation which is frustrating the very thing which the Government and everyone else wish to encourage.
    Clause ordered to stand part of the Bill.

    Clause 19.—(INCREASE IN REDUCED RATE RELIEF AND CONSEQUENTIAL ALTERATION IN MARGINAL RELIEF FOR SMALL INCOMES.)
    Captain Crookshank: I beg to move, in page 12, line 29, at the end, to insert:
    (3) Subsection (1) of section fifteen of the Finance Act, 1925 (which, as amended by subsequent enactments, provides for a deduction of tax on an amount equal to one-fifth of the amount of earned income but not exceeding four hundred pounds) and subsection (2) of the said section fifteen (which, as amended by subsequent enactments, provides, in a case where an individual or his wife has attained the age of sixty-five years and his total income does not exceed five hundred pounds, for a deduction of tax on an amount equal to one-fifth of his income) shall have effect as if—

    (a) the words "one quarter" were substituted for the words "one-fifth" in each of those subsections; and

    (b) the words "six hundred and twenty-five pounds" were substituted in the said subsection (1) for the words "four hundred pounds"; and

    (c) the word "one-half" were substituted in the said subsection (2) of the word "five-eighths."

    Anyone who has been listening to the Debate on the last two Clauses will have realised that we on this side of the Committee are very worried at the high rate of direct taxation which we are now called upon to bear. While I have no intention of going back over the ground which has already been covered, I must point out that out of every £ of national income the basic horrible figure of 8s. 9d. is taken in tax and rates. The question we are bringing before the Committee is whether anything can be done this year further to alleviate the burden. The right hon. and learned Gentleman has, of course, done something in this Clause, but we are not satisfied that that is all that might be done. As has been pointed out by various hon. Members, there are tremendous disadvantages which come from the very high level of direct taxation, of which the example quoted by my hon. Friend the Member for Bury
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    and Radcliffe (Mr. W. Fletcher) is only one.
    I think everyone is agreed that high direct taxation is a direct disincentive to further effort and it is in recognition of that fact that recent Budgets, including this one, have removed the tax more and more from the lower levels of Income Tax payers because, as was pointed out in the Budget speech, this would help those who might otherwise have been a bit dubious about the value to themselves of overtime or increased piecework, and it was to help with that problem that this Clause was largely drafted. The second thing we are all agreed about is that the high rate of taxation is particularly severe upon all industry today, and, as in the Debate on the Clause before the last one, we have had views expressed from this side of the Committee pointing out how it was adverse to savings.
    Taking those propositions that we should do something even more as an incentive for increased production that we should do something which at any rate would not discourage savings and do something which might help industry, we on this side of the Committee have looked round to see what we could suggest should be done in present circumstances over and above what the Chancellor is suggesting. This Amendment has nothing to do with the industrial part of the problem. We have one in the form of a new Clause with further relief from Profits Tax, but, having seen the kind of suggestions this Clause makes for helping by relief, we seek to extend it further.
    I think it is just as well to point out that, although this change in this Clause, which is to be paid for by the Petrol Duty, represents a good deal of money, and although the Chancellor of the Exchequer himself used what I thought were very extravagant words about it when he spoke yesterday and said:
    "the people, who, everyone agrees, most desire and deserve it, get this large remission of Income Tax."—[REPORT, 14th June, 1950; Vol. 476, c. 341.]
    that is putting it very high. It is not a large remission of Income Tax at all. It is a relief, but the maximum that it ever becomes in any individual case is £11 5s. a year and, if hon. Members look at the tables circulated at the time of the Budget, it is interesting to see what happens to cases under this Clause.

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    9.30 p.m.
    The man with an earned income of £400 a year receives a reduction of his tax to £46 5s. instead of having to pay £55 10s. He gets the maximum reduction of £11 5s. But he is still left, although earning £400 per year, with £46 5s. to pay. On the other hand, all that the married man with two children and earning £400 a year, gets out of this concession is a reduction in tax from £3 to £2 10s., that is to say, 10s. When the Chancellor talks about this as a large remission of Income Tax, it is really rather forcing the words.
    But these figures do reinforce the argument we were putting all yesterday, which I do not intend, of course, to traverse again. When the right hon. and learned Gentleman is trying to make out that the remission in Income Tax will be an equivalent advantage for any extra expenditure that might arise from the Petrol Duty, I would point out that in the case of the married man with two children, whom I instanced, the Income Tax remission of 10s. or 120d. per year, will go a very small way towards paying the increased cost which he will inevitably have to suffer as a result of the Petrol Duty. A third of a penny per day will not begin to deal with the problem raised by the Petrol Duty.
    Sir S. Cripps: Why not take as an example the man who pays nothing? The man who pays £2 10s. can obviously only have a very small remission.
    Captain Crookshank: The man who pays nothing is the man who will be grievously injured by the Petrol Duty, which is supposed to be set off by the reduction in Income Tax. The fact that such a man is not able to secure a remission because his income is not sufficiently high makes the burden upon him very grievous.
    Having seen that the Chancellor's proposal is an advantage but not so immense an advantage, and not immense at all when viewed in the light of the increased Petrol Duty, we seek to increase the reliefs in respect of earned income. The language of a provision like this is rather difficult to understand if one is not really well up in what it all means. The effect of our Amendment is that we seek to help three different classes. First, the Amendment would increase the earned income allowance from one-fifth to one-fourth. Secondly, under paragraph (b) it would
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    increase the limit of the amount which may be deducted in calculating taxable income from £400 to £625. That, in effect, means that the maximum income which could benefit would be raised from £2,000 to £2,500. Thirdly, under paragraph (c) the Amendment seeks to increase the age allowance from one-fifth to one-quarter.
    The group of people who would benefit by this Amendment is very comprehensive. First, by the raising from one-fifth to one-quarter of the earned income allowance we should be extending the benefit to a very large number of wage earners who are now caught under the new scale of the right hon. and learned Gentleman. Granted he has already lifted the scale this year; this would lift it considerably more. The second group would be those who would benefit because this allowance would operate in respect of incomes up to £2,500 instead of £2,000. That is to say, it would be some advantage to the professional and official classes, the Civil Service, the higher ranks of the trade union world and all sorts of middle income groups.
    Thirdly, under paragraph (c), the remaining group of persons who would be assisted would be the older, retired people. In their case again we would have the increased age allowance raised from one-fifth to one-quarter. That is a group of persons who for a long time have had Income Tax advantage on the grounds that the House and the Committee have taken in the past that they were largely persons living on their savings; and that those savings represent, in the majority of cases, what they have earned by hard work, and by thrift put away, during their working lives; and should be considered as something akin to the deferred pay theory of the Service pension.
    Those are the groups whom we seek to benefit by this Amendment—the higher wage earning sections of the community, the middle income group and the older people who are living in retirement. No one can say that any of these classes is not deserving of assistance in view of the very high rate of Income Tax, and we think that that is where the benefit this year might very well be put, coupled of course, as this proposition must be coupled, with our proposal about the Profits Tax in the new Clause.
    I hope that the right hon. and learned Gentleman will say that he can do this.

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    It will, of course, cost money. I do not know what it will cost; would it cost £50 million?
    Sir S. Cripps: It would cost £103 million.
    Captain Crookshank: As much as that? [Laughter.] There is no means by which a private Member can possibly assess the amount. It is no good hon. Gentlemen laughing. The figure is rather higher than I thought, but that does not affect the point, because in a matter like this the right hon. and learned Gentleman has to face up to the fact that he has probably, even in a Budget of the size of this one, something to "play with" as Chancellor during the Debates on the Finance Bill. I refuse, as so many of my hon. Friends have refused—and every time they have said it they have been pulled up as being out of order so I shall not pursue it—to believe that in a Budget so huge as this there is absolutely nothing which may be given.
    I am fortified in that belief when I remember what did in fact happen or was said to be going to happen—although we never found out whether the economies were achieved—at the time of the devaluation crisis. I remember that the Lord President of the Council said that if anyone imagined that the present list represented the end of the efforts of the Government to achieve economies, he was going to be undeceived before long. That is what the Lord President said a few months ago, and basing myself upon that, it seems to me that it is up to the right hon. and learned Gentleman, now that he has secured for one more year this enormously high standard rate of Income Tax by the Clause we have just passed, to try to see how much alleviation, further than he has already proposed in this Clause, can be brought forward. Basing myself on what the Lord President said, I urge the right hon. and learned Gentleman to press on with that sort of economy which the Lord President had in view, and as a result make it possible for these benefits to be paid to these sections of the community which so richly deserve them; that is to say, the higher wage earners, the middle income group and the old people.
    Mr. Jenkins: Despite the almost minor key in which the right hon. and gallant Member for
    676
    Gainsborough (Captain Crookshank) has moved this Amendment, it appears from the Order Paper that it does constitute the major Opposition attack upon the Income Tax Clauses in this year's Finance Bill. On other Clauses in the Bill we have heard a great deal from the other side about attempts to read what was in the Chancellor's mind when he was bringing forward this or that proposal. It is worth while our thinking at the moment what changes occurred in the mind of the Opposition so that this year they bring forward, as a major Income Tax Amendment, such a very different proposal from the one they brought forward last year.
    I am sure many hon. Members on both sides will remember how last year the hon. Member for Chippenham (Mr. Eccles)—whom we are all sorry not to have with us in our Debate—moved as a major attack, a reduction by 6d. in the standard rate of Income Tax. He moved it in strong language. He said it was a token Amendment, a declaration of war upon Socialist finances. It seems strange that the Opposition should have changed their attitude so much in the course of 12 months that they now bring forward this very different, and, to my mind, substantially better Amendment than that of last year. The Amendment last year was wildly regressive in that it offered no relief at all to those who were not earning fairly substantial amounts, and very big reliefs to those who had very large incomes indeed. It was, from that point of view, a very bad proposal.
    They seem to have been chastened by the events of the election year, just as they accused us of having been chastened. So this time we hear nothing at all about last year's proposal to cut the standard rate by 6d. Instead, we have in this Amendment a major proposal for an increase in the earned income allowance. That seems to me a better proposal than the one we had last year although, of course, it is also somewhat regressive in its effects. That is to say, the scale of benefits people would get would increase quite sharply as their income increased.
    I have worked out the figures only roughly. I have not had them checked by anyone else but, as far as I can see, these are the benefits that would accrue to people from this Amendment, taking, in all classes, a married man with two

    677
    children. He would need to earn £375 a year before he got anything. At £400 a year it would save him £2 10s. a year. At £500 it would save him £6 10s., at £1,000 it would save £22 10s., and at £2,500 it would save £101 5s.
    We see, therefore, that the amount of relief which would accrue from this Amendment would increase very sharply as we went up the income scale. While it would bring very small relief indeed to professional people who are not too well off, it would bring a very substantial amount of relief—£2 a week net of tax—to those earning £2,500 a year. It is an Amendment which, from that point of view, has serious disadvantages at the present time. It compares unfavourably with the proposal for relief contained in the Budget which gives £11 5s. a year. It does not give that quite to everybody but it gives the same amount to all those people fully affected by it.
    The right hon. and learned Member for Montgomery (Mr. C. Davies) was complaining yesterday that this relief was only a sectional relief and that it affected a small number of people. He was being cheered by the Conservative Party when he said it. The relief he was then attacking is a relief which brings a far more widespread benefit than the relief contained in this Amendment. Therefore, quite apart from the fact that, as the Chancellor will no doubt argue, we could not afford the Amendment, costing roughly £103 million at the present time, it is, while a great improvement on the comparable one we had last year from the Opposition, still not one we could put at the head of the list for priority in tax concessions. If we could get into the position, into which I would like to get, in which we had a better distribution of income at source—a fairer distribution— and also a slightly easier general financial situation, then this might be a good Amendment, but that time has not yet come.
    9.45 p.m.
    Mr. I. J. Pitman: I think that the hon. Member for Stechford (Mr. Jenkins) is quite wrong in alleging that this is a new departure for hon. Members on this side of the Committee. In many Finance Bills I have put down Amendments or added my name to Front Bench Amendments on all these three
    678
    special sections so ably put forward by my right hon. and gallant Friend. The point is that the Government have not made up their mind as to their policy in regard to priorities between direct taxation and indirect taxation. For the hon. Member for Stechford to refer to the fact that we complained yesterday that indirect taxation was falling most heavily on the lowest paid workers in this country, shows that he, too, has failed to sort out in his mind the fundamental difference between direct and indirect taxation.
    Mr. Jenkins: I am sorry to interrupt, but I do not think I referred at all to indirect taxation. I referred exclusively to the remarks of the Leader of the Liberal Party about the direct taxation concessions which the Chancellor of the Exchequer announced in his Budget statement.
    Mr. Pitman: My recollection is very definitely that the right hon. and learned Member for Montgomery (Mr. C. Davies) was talking about the Petrol Duty and the fact that that would increase bus fares for the smallest income groups.
    Sir S. Cripps: What the right hon. and learned Member for Montgomery was saying was that we were getting the money by means of a widely dispersed indirect tax, the Petrol Duty, and were appropriating it to give a concession to a limited class within the Income Tax group.
    Mr. Pitman: I accept that, for I was listening very carefully at the time the right hon. and learned Member for Montgomery was speaking. Nevertheless, it is a fact that the part of his speech which we cheered was his appreciation of the fact that the indirect tax was very bad because it was falling not on luxuries like beer and tobacco but on necessities like the transport of the working man to his job. Quite clearly there can be no difference except one of degree. The hon. Member for Stechford and the Chancellor of the Exchequer will agree that this Amendment is taking just one stage further the principle of relief for earned income and for retired pay for the people of this country.
    I should like to plead the case of the Civil Service of this country, as I have done in previous years. On both sides of the Committee we know what an extraordinarily poor deal they have had from

    679
    the Chancellor in connection with their pay and we appreciate that one of the best ways in which that situation can immediately be met is by the terms of this Amendment. The terms which increase the allowance from one-fifth to one-quarter would benefit all civil servants, right up to the highest Permanent Secretary to the Treasury, and starting at a relatively low level. The increase from £400 to £625 would benefit those civil servants who are paid at a rate between £2,000 and £2,500 a year.
    It must be particularly galling in the Ministry of Fuel and Power to be a member of the staff of one of His Majesty's Ministers putting out advertisements to obtain staff for the highly paid posts in these great nationalised undertakings. There must be a still further galling sensation when those highly paid, semi-civil servants in nationalised undertakings are put into their jobs and when the civil servant, who is paid very much less, has virtually to wet-nurse them and to give them administrative advice and experience from his great back-log of knowledge. It seems to me that this Amendment does really give a very substantial—not enough, but a very substantial—benefit in the solution of this problem.
    Moreover, let us face the fact that one of the reasons these nationalised undertakings, in such jobs as they give, have got to make them really "plum" jobs, is that the taxation system has made the take-home pay so ridiculously low, that people are not attracted away from a job which they are doing, to move house and take another one. If the Minister of Health would improve housing conditions and the interchangeability of houses, it would go a long way to help, but even then, in many cases, by the time the take-home pay in the old job was compared with the take-home pay in the new job, it would not pay to incur the cost of moving.
    This proposal, therefore, by making the take-home pay relatively more for those accountants and administrators in the big nationalised industries, will, in point of practical effect, make it easier and better for Ministers to recruit first-class men for their jobs, without having to quote these fantastically high salaries which are so completely out of line with what they
    680
    themselves are paying to their own Civil Servants.
    I maintain that, equally in the case of retired pay, we have a very important principle. In those cases it does represent a pension fund. It is a self-administered, self-saved pension fund—the very sort of thing which we in this Committee would wish to encourage. Yet there is, in point of fact, a quite wicked discrimination against the man who does his own saving for his years of retirement as compared with the man who pays in a premium each year through his firm or separately in an insurance company. This Amendment will go a great deal of the way towards making these two relatively fair one beside the other.
    So that whether it is from the point of view of the fraction of the income from one-fifth to one-quarter, whether it is in the lump sum limit from £2,000 to £2,500, or whether it is in the improvement of the lot of the man who has retired and is over the age limit, I think all of these, being within the field of earned income, are definitely stimulative of what is desired by this Committee at this time in our history.
    Sir S. Cripps Sir S. Cripps rose—
    Lieut.-Commander Braithwaite: I am very grateful to the right hon. and learned Gentleman, who was about to reply to the Debate, for giving way. I merely wanted to say a very few words in reply to the hon. Member for Stechford (Mr. Jenkins) who sits behind him, and who a few minutes ago made the perfectly fair point that last year the Opposition directed their attention to the standard rates, and that my hon. Friend the Member for Chippenham (Mr. Eccles), whose absence we regret even more than he does on this occasion this year, did move what he described as a token Amendment to focus attention upon the issue of direct taxation.
    Let me explain to the hon. Gentleman opposite why it is that the Opposition angle is a rather different one this year. First, it is customary, as I am sure he realises, when one is engaged in amending a Bill, to follow to a certain extent the shape of that Bill. Clause 19 reveals the Chancellor's objective this year, which is concentrated upon relief, earned income allowances and the like This

    681
    Amendment shows a difference of degree. The same people will be affected by our Amendment as would be affected by the Chancellor's proposal. In other words, this assists those who are within the Income Tax zone. There is another fundamental difference between this year's discussion and the Debate last year. The hon. Gentleman will remember that last year, for reasons which I will not elaborate again tonight, the Committee were prevented from having any discussion of any sort or kind upon the whole vast field of Purchase Tax. It was therefore necessary to concentrate, in order to focus the attention of the Committee and the country, upon the high rate of Government expenditure last year and to use the medium of the token Amendment on the subject of the standard rate.
    This year it is possible to put down Amendments which cover Purchase Tax. This Amendment is not by any means the only approach towards taxation relief which the Opposition have to submit to the Committee. We have a double-barrelled gun. I am sure that the hon. Gentleman has studied the Order Paper, but if he will refresh his memory he will find that this year there is a large number of proposals in the names of hon. and right hon. Gentlemen on this side of the Committee which come under the general heading of Purchase Tax and which will give relief to the vast number of people who are outside the Income Tax zone altogether and who are not covered by any proposition of the right hon. and learned Gentleman in his Budget this year. I thought that I would take the opportunity to explain to the hon. Gentleman why it is that this year the field of play is somewhat different, because it is wider and we are taking advantage of that for this purpose
    Mr. Jenkins: I am most grateful to the hon. and gallant Gentleman for giving me this long explanation. Are we to believe from what he says that this Amendment on the standard rate of Income Tax last year, about which great play was made and on which we had a long Debate—it was almost the major Debate on the Committee stage of the Finance Bill last year—was purely a stop-gap Amendment?
    Sir H. Williams: On a point of order. Is it competent to discuss Clause 17? The hon. Member for Stechford (Mr.
    682
    Jenkins) started it and my hon. and gallant Friend followed, but surely it is out of order?
    The Chairman: Clearly, we have passed Clause 17, but there is no objection to a passing reference to it.
    Lieut.-Commander Braithwaite: With great respect, both to you and to my hon. Friend the Member for Croydon, East, (Sir H. Williams), I never mentioned Clause 17. I was careful to point out that this Amendment sought to amend Clause 19, in which the Chancellor is seeking to give certain reliefs. In reply to the intervention of the hon. Member for Stechford, it would be intolerable to everybody in the Committee were I to repeat the arguments adduced by my hon. Friend the Member for Chippenham a year ago. The whole matter was then clearly set forth, and I think that we might leave the question there.
    10.0 p.m.
    Sir S. Cripps: This Amendment as I understand it is, in form, an addition to what is in Clause 19 already. That is to say, it is proposed under this Amendment, if I may put it in terms of money, to transform what was a remission of £82 million into one of 185 million. So far as the actual form of the Amendment goes—the manner in which it is proposed to give that relief—it is along lines of continuing what we have in fact done fairly extensively in the various years since the end of the war.
    The Committee will remember that in 1945 the position was still as it had been in 1941—an earned income allowance of one-tenth with a maximum of £150. In 1946, the rate was increased to one-eighth and the maximum remained at £150. That had the effect of reducing the maximum income qualifying for relief to £1,200. In 1947, the rate was increased to one-sixth with a maximum of £250 and that was restoring the income limit to £1,500, and in 1948 there was a further increase to one-fifth with a maximum of £400, that is one-fifth on £2,000. So this form of alleviation we have in fact followed over successive years ever since we came into office in 1945.
    When we came to consider what we could best do this year, we considered again this question of whether we should try to take this a stage further or whether we would adopt the alternative of dimin-

    683
    ishing the two lower rates of Income Tax, the two-thirds and the one-third rates—the 6s. and the 3s.—and we came to the conclusion—and I think that everyone in the Committee agrees with this— that that would give the maximum benefit in that range which was covered most closely by the overtime rates. That is to say, it took the maximum number of people possible as regards their overtime and reduced the rate which would be payable upon the overtime part of their income. From that point of view, we felt that it was desirable, and it also covered a very wide range of persons.
    The fact that this Amendment pursues the same path that we had been following before shows in itself that, as a method of relief, it is something with which we should not quarrel. Similarly, as regards the allowance for age, that also we had improved and increased, and, in 1948 we again made an adjustment there which did improve the position, so that in fact the allowance was effective, partially anyway, up to £750 a year for the single man and £720 for the married man. There again, it is obvious that that kind of relief is something which is quite consistent with the view that we hold as regards the sort of people who should be relieved.
    If there were an extra £103 million to be devoted to tax relief this is obviously one of the methods, or rather two of the methods, that would qualify for high consideration. I would draw the attention of the Committee to what I think the hon. and gallant Member for Bristol, North-West (Lieut.-Colonel Braithwaite), referred to as a double barrelled gun; but I would point out that it has six barrels and that yesterday he referred to it as a parade, which has rather less reality perhaps than a gun.
    Let me recite what it is, because it amounts in total to £400 million in remissions which are suggested by the Opposition. There was petrol £73 million, white spirit, commercial vehicles, earned income £103 million, Purchase Tax £73 million, profits tax £60½ million and tobacco £70 million. These are all quite substantial sums.
    Mr. Lyttelton: Some of them, of course, are alternatives.
    Sir S. Cripps: Tobacco, yes. One of the Front Bench Members opposite has down a new Clause on tobacco which would cost £70 million. It is suggested that these are some of the alternatives; I naturally do not know which of them are alternatives.
    Mr. Lyttelton: It is quite obvious that when the Committee has voted against the tax on petrol, the Chancellor is not justified in adding that to the total.
    Sir S. Cripps: If the Opposition as a result of the vote have changed their views, I should not be entitled to add it in, but if this is the programme they are putting forward of what they would wish to do, as I assumed it was, suppose that the Committee had supported them yesterday. Would they now say they would withdraw some of their Amendments?
    Mr. Lyttelton: Some of them.
    Sir S. Cripps: Perhaps the right hon. Gentleman will tell me which. I am only trying to be helpful.
    Mr. Lyttelton: I am rather interested in this, because it would seem from what the Chancellor is saying that he is about to accept our Amendment. I assure him that if he does, we shall revise our attitude towards the Purchase Tax. Is he about to give us this concession? If not, this is simply shadow-boxing.
    Sir S. Cripps: Not at all. What the right hon. Gentleman has said is very revealing. I do not know whether he was in the Committee a few moments ago when we were told that this is integrated with the Purchase Tax. We have just been told that that was so from the benches opposite, and I am glad that I have the support of hon. Members behind the right hon. Gentleman. They agree that the Purchase Tax was intended to be a relief for those who do not get Income Tax relief, and that this was Income Tax relief, and therefore these two went together to make one total picture, together with the petrol and no doubt the Profits Tax, which we were told was an integral part of this, because this did not relate to company profits. And so, we get the general picture of £400 million to be saved or provided in some way.
    Mr. Lyttelton: 10 per cent. of the total.
    Sir S. Cripps: This is a very easy exercise. I could very easily have made quite as attractive proposals as this if I had £400 million to play with.
    Mr. Lyttelton: You will have.
    Sir S. Cripps: I am glad that the right hon. Gentleman knows so definitely that I shall be here next year.
    Mr. Lyttelton: I meant from this side of the Committee.
    Sir S. Cripps: It is too late. The right hon. Gentleman ought to have thought of that sooner. The real point is that on the merits this is not anything to which anyone could object, but that financially it is impossible. Therefore, I must ask the Committee to reject the Amendment.
    Sir H. Williams: I have listened with interest to the Chancellor. He told us that this Amendment would cost £103 million. When the hon. Member for Stechford (Mr. Jenkins) was speaking, he said that the Amendment was of no value at all —the figures were so trifling that is was not worth considering. [HON. MEMBERS: "No."] That is the impression he conveyed to my mind, and if he cannot convey a clear impression to the ordinary person of what he means, that is not my fault.
    The Chancellor rejects the Amendment on the ground that he has not the money. Surely that is a condemnation of his own financial policy. Everyone knows that there is the most fantastic waste taking place in almost every direction. It is no longer a case in which the Chancellor can say he cannot afford it. Surely the time has come to make expenditure fit the available taxation, instead of the reverse.
    I am getting tired of the Chancellor thinking that the income he allows us is our pocket money. The Exchequer now think they own all our income and that what we are allowed to keep is a great favour. That is all right for those in the happy position of inheriting a good fortune or who accumulated wealth before this oppressive system of taxation came along, but the great mass of the people I represent now see no opportunity of ever saving enough to retire. They are sentenced to death for life. [Laughter.] The phrase is much more explicit than hon. Members opposite seem to think,
    686
    because life under the jurisdiction of the present Chancellor of the Exchequer is so near to death that it is an accurate description. [Interruption.] I am merely correcting misapprehensions in the minds of hon. Gentleman opposite.
    The Chancellor of the Exchequer cannot say all the time that he cannot afford these concessions. Everybody can look at the Budget proposals. I have been in the House longer than the Chancellor of the Exchequer. [HON. MEMBERS: "Question?"] Certainly I have been here longer, and what is more I have always retained the same identity of principle. I have exactly the same principles today as I had when I addressed the most important meeting of my life 41 years ago in support of the right hon. and learned Gentleman's father in Buckinghamshire. That is one case when we were in agreement.
    It is quite intolerable for the Chancellor to ride against every Amendment on the grounds that he cannot afford it. Surely it is time for us to try to adjust our expenditure so that life shall again become tolerable to the great mass of our people. In the days when I was a junior Minister, no Minister of the Crown had a motor car. [HON. MEMBERS: "What about the unemployed?"] Unemployment was not too bad. It only increased by three times in the two years after I ceased to be a Minister. I know that I am getting a bit out of order, but I was provoked. When people make disorderly interruptions, surely it is not unreasonable that there should be comments on those disorderly interruptions.
    The Chancellor of the Exchequer cannot object to every Amendment on the ground that he cannot afford it. That is the least form of resistance to an intelligent Amendment. I am not surprised. The Chancellor of the Exchequer has got a completely false reputation as a financier. The only thing he was ever good at was patent law, and he was rather good at that; but when he gets up to lecture me on economics and when he issues a paper called the Economic Survey, it shows how poor his powers are. Should he ever have the opportunity to bring in Clause 19 again, I hope it will be much different, and when we come to the Question that the Clause stand part of the Bill, I shall have a few observations to make on that aspect.
    Question put, "That those words be there inserted."
    The Committee divided: Ayes, 278; Noes, 292.

    Division No. 27.]

    AYES

    [10.17 p.m.

    Aitken, W. T.

    Fort, R.

    Macdonald, A. J. F. (Roxburgh)

    Alport, C. J. M.

    Foster, J. G.

    Macdonald, Sir P. (I. of Wight)

    Amery, J. (Preston, N.)

    Fraser, Hon. H. C. P. (Stone)

    McKibbin, A.

    Amory, D. Heathcoat (Tiverton)

    Fraser, Sir I. (Lonsdale)

    McKie, J. H. (Galloway)

    Arbuthnot, John

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

    Maclay, Hon. J. S.

    Athton, H. (Chelmsford)

    Gage, C. H.

    Maclean, F. H. R.

    Assheton, Rt. Hon. R. (Blackburn, W.)

    Galbraith, Cmdr. T. D. (Pollok)

    MacLeod, Iain (Enfield, W.)

    Baker, P.

    Galbraith, T. G. D. (Hillhead)

    MacLeod, John (Ross and Cromarty)

    Baldock, J. M.

    Gammans, L. D.

    Macmillan, Rt. Hon. Harold (Bromley)

    Baldwin, A. E.

    Garner-Evans, E. H. (Denbigh)

    Macpherson, N (Dumfries)

    Banks, Col. C.

    Gates, Maj. E. E.

    Maitland, Comdr. J. W.

    Baxter, A. B.

    Glyn, Sir R.

    Manningham-Buller, R E

    Beamish, Maj. T. V. H

    Gomme-Duncan, Col. A.

    Marlowe, A. A. H.

    Bell, R. M.

    Gridley, Sir A.

    Marples, A. E.

    Bennett, Sir P. (Edgbaston)

    Grimston, Hon. J. (St. Albans)

    Marshall, D. (Bodmin)

    Bennett, R. F. B. (Gosport)

    Grimston, R. V. (Westbury)

    Marshall, S. H. (Sutton)

    Bennett, W. G, (Woodside)

    Harden, J. R. E.

    Maude, A. E. U. (Ealing, S.)

    Bevins, J. R. (Liverpool, Toxteth)

    Hare, Hon. J. H. (Woodbridge)

    Maude, J. C. (Exeter)

    Birch, Nigel

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

    Maudling, R.

    Bishop, F. P.

    Harris, R. R. (Heston)

    Medlicott, Brigadier F

    Black, C. W.

    Harvey, Air-Codre. A. V. (Macclesfield)

    Mellor, Sir J.

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

    Harvey, I. (Harrow, E)

    Molson, A. H. E.

    Boothby, R.

    Hay, John

    Moore, Lt.-Col. Sir T.

    Bossom, A. C

    Heald, L. F.

    Morrison, Maj. J. G. (Salisbury)

    Bowen, R.

    Heath, Col. E. R.

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

    Bower, N.

    Henderson, John (Cathcart)

    Mott-Radclyffe, C. E.

    Boyd-Carpenter, J. A.

    Hicks-Beach, Maj. W. W

    Nabarro, G.

    Bracken, Rt. Hon. Brendan

    Higgs, J. M. C.

    Nicholls, H.

    Braine, B.

    Hill, Mrs. E. (Wythenshawe)

    Nicholson, G.

    Braithwaite, Lt.-Comdr. J. G.

    Hill, Dr. C. (Luton)

    Nield, B. (Chester)

    Bromley-Davenport, Lt.-Col. W.

    Hinchingbrooke, Viscount

    Noble, Comdr. A. H. P.

    Brooke, H. (Hampstead)

    Hirst, Geoffrey

    Nugent, G. R. H.

    Browne, J. N. (Govan)

    Hogg, Hon. Q.

    Oakshott, H. D.

    Buchan-Hepburn, P. G. T

    Hollis, M. C.

    Odey, G. W.

    Bullock, Capt. M.

    Holmes, Sir J. Stanley (Harwich)

    Ormsby-Gore, Hon. W. D.

    Bullus, Wing-Commander E. E.

    Hope, Lord J.

    Orr, Capt. L. P. S.

    Burden, Squadron-Leader F. A

    Hopkinson, H. L. D'A.

    Orr-Ewing, Charles Ian (Hendon, N.)

    Butcher, H. W.

    Hornsby-Smith, Miss P.

    Orr-Ewing, Ian L. (Weston-super-Mare)

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

    Horsbrugh, Miss F.

    Osborne, C.

    Carr, L. R. (Mitcham)

    Howard, G. R. (St. Ives)

    Perkins, W. R. D.

    Carson, Hon. E.

    Howard, S. G. (Cambridgeshire)

    Peto, Brig. C. H. M.

    Channon, H

    Hudson, Sir Austin (Lewisham, N.)

    Pickthorn, K.

    Churchill, Rt. Hon. W. S.

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

    Pitman, I J.

    Clarke, Col. R. S. (East Grinstead)

    Hudson, W. R. A. (Hull, N.)

    Powell, J. Enoch

    Hulbert, Wing-Cdr. N. J.

    Clarke, Brig. T. H. (Portsmouth, W.)

    Hurd, A. R.

    Prescott, Stanley

    Clyde, J. L.

    Hutchinson, Geoffrey (Ilford, N.)

    Price, H. A. (Lewisham, W.)

    Colegate, A.

    Hutchison, Lt.-Com. Clark (E'b'rgh W.)

    Prior-Palmer, Brig, O.

    Conant, Maj. R. J. E.

    Hyde, H. M.

    Profumo, J. D.

    Cooper, A. E. (Ilford, S.)

    Hylton-Foster, H. B.

    Raikes, H. V.

    Cooper-Key, E. M.

    Jeffreys, General Sir G.

    Rayner, Brig, R.

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

    Jennings, R.

    Redmayne, M.

    Craddock, G. B. (Spelthorne)

    Johnson, Howard S. (Kemptown)

    Remnant, Hon. P.

    Cranborne, Viscount

    Joynson-Hicks, Hon L W

    Renton, D. L. M.

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

    Kaberry, D.

    Roberts, P. G. (Heeley)

    Cross, Rt. Hon. Sir R.

    Keeling, E H.

    Robertson, Sir D. (Caithness)

    Crosthwaite-Eyre, Col. O. E

    Kerr, H W. (Cambridge)

    Robinson, J. Roland (Blackpool, S.)

    Crouch, R. F.

    Kingsmill, Lt.-Col. W. H.

    Robson-Brown, W. (Esher)

    Crowder, Capt. John F. E. (Finchley)

    Lambert, Hon. G.

    Rodgers, J. (Sevenoaks)

    Crowder, F. P. (Ruislip-Northwood)

    Lancaster, Col. C. G

    Roper, Sir H.

    Cundiff, F. W.

    Langford-Holt, J.

    Ropner, Col. L.

    Cuthbert, W. N.

    Law, Rt. Hon. R. K.

    Ross, Sir R. D. (Londonderry)

    Darling, Sir W. Y. (Edinburgh, S.)

    Legge-Bourke, Maj. E. A. H

    Russell, R. S.

    Davidson, Viscountess

    Lennox-Boyd, A. T.

    Ryder, Capt. R. D

    Davies, Nigel (Epping)

    Lindsay, Martin

    Sandys, Rt. Hon. D

    Deedes. W. F.

    Linstead, H. N

    Savory, Prof. D. L.

    Digby, S. Wingfield

    Llewellyn, D.

    Scott, Donald

    Dodds-Parker, A D

    Lloyd, Rt. Hon. G. (King's Norton)

    Shepherd, W. S (Cheadle)

    Donner, P. W.

    Lloyd, Maj. Guy (Renfrew, E.)

    Smiles, Lt.-Col. Sir W.

    Douglas-Hamilton, Lord M

    Lloyd, Selwyn (Wirral)

    Smith, E. Martin (Grantham)

    Drayson, G. B.

    Lockwood, Lt.-Col. J. C.

    Smithers, Peter H. B. (Winchester)

    Drewe, C

    Longden, G. J. M. (Herts, S. W.)

    Smithers, Sir W. (Orpington)

    Dugdale, Maj. Sir T. (Richmond).

    Lucas, Major Sir J. (Portsmouth, S.)

    Smyth, Brig. J. G. (Norwood)

    Duncan, Capt. J. A. L

    Lucas, P. B. (Brentford)

    Snadden, W. McN

    Duthie, W. S.

    Lucas-Tooth, Sir H.

    Soames, Capt. C.

    Elliot, Lieut.-Col. Rt Hon. Walter

    Lyttelton, Rt. Hon O

    Spearman, A. C. M

    Erroll, F. J.

    McAdden, S. J.

    Spence, H. R. (Aberdeenshire, W.)

    Fisher, Nigel

    McCallum, Maj. D.

    Spens, Sir P. (Kensington, S.)

    Fletcher, W. (Bury)

    McCorquodale, Rt Hon. M. S

    Stanley, Capt. Hon R. (N. Fylde)

    Stevens, G. P.

    Thorp, Brigadier R. A. F.

    Wheatley, Major M. J. (Poole)

    Steward, W. A. (Woolwich, W.)

    Tilney, John

    White, J. Baker (Canterbury)

    Stewart, J. Henderson (Fife, E.)

    Turton, R. H.

    Williams, C. (Torquay)

    Stoddart-Scott, Col. M.

    Tweedsmuir, Lady

    Williams, Gerald (Tonbridge)

    Storey, S.

    Vane, W. M. F.

    Williams, Sir H. G. (Croydon, E.)

    Strauss, Henry (Norwich, S)

    Vaughan-Morgan, J K

    Wills, G.

    Stuart, Rt. Hon. J. (Moray)

    Vosper, D F.

    Wilson, Geoffrey (Truro)

    Summers G. S

    Wakefield. E. B. (Derbyshire, W.)

    Winterton, Rt. Hon. Sort

    Sutcliffe, H.

    Wakefield, Sir W. W. (St. Marylebone)

    Wood, Hon R.

    Taylor, C. S. (Eastbourne)

    Walker-Smith, D. C.

    York, C.

    Taylor, W. J. (Bradford, N.)

    Ward, Hon. G. R. (Worcester)

    Young, Sir A. S L

    Teeling, William

    Ward, Miss I. (Tynemouth)

    Thompson, K. P. (Walton)

    Waterhouse, Capt. C

    TELLERS FOR THE AYES:

    Thompson, R. H. M. (Croydon, W.)

    Watkinson, H.

    Brigadier Mackeson and

    Thorneycroft, G. E. P. (Monmouth)

    Watt, Sir G. S. Harvie

    Mr. Studholme

    Thornton-Kemsley, C. N.

    Webbe, Sir H. (London)

    NOES

    Acland, Sir Richard

    Delargy, H. J.

    Hughes, Moelwyn (Islington, N.)

    Adams, Richard

    Diamond J.

    Hynd, H. (Accrington)

    Albu, A. H.

    Dodds, N. N.

    Hynd, J. B. (Attercliffe)

    Allen, A. C. (Bosworth)

    Donnelly, D.

    Irvine, A. J. (Edge Hill)

    Anderson, F. (Whitehaven)

    Donovan, T. N

    Irving, W. J. (Wood Green)

    Attlee, Rt Hon. C. R

    Driberg, T. E. N

    Isaacs, Rt. Hon. G. A.

    Awbery, S. S.

    Dugdale, Rt. Hon. J. (W. Bromwich)

    Janner, B.

    Ayles, W. H.

    Dye, S.

    Jay, D. P. T.

    Bacon, Miss A.

    Ede, Rt. Hon. J. C.

    Jeger, G (Goole)

    Baird, J.

    Edelman, M.

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

    Balfour, A.

    Edwards, Rt. Hon. N. (Caerphilly)

    Jenkins, R. H.

    Barnes, Rt. Hon. A. J

    Edwards, W. J. (Stepney)

    Johnson, James (Rugby)

    Bartley, P.

    Edwards, John (Brighouse)

    Johnston, Douglas (Paisley)

    Bellenger, Rt. Hon. F. J.

    Evans, Albert (Islington, S. W.)

    Jones, D. T. (Hartlepool)

    Benson, G.

    Evans, E. (Lowestoft)

    Jones, Frederick Elwyn (West Ham, S.)

    Beswick, F.

    Evans, S. N. (Wednesbury)

    Jones, Jack (Rotherham)

    Bevan, Rt. Hon A (Ebbw Vale)

    Ewart, R.

    Jones, William Elwyn (Conway)

    Bing, G. H. C.

    Fernyhough, E.

    Keenan, W

    Blackburn, A. R.

    Field, Capt. W. J.

    Kenyon, C.

    Blenkinsop, A.

    Finch, H. J.

    Key, Rt. Hon C. W.

    Blyton, W. R.

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

    King, H. M.

    Boardman, H.

    Follick, M.

    Kinghorn, Sqn.-Ldr. E.

    Booth, A.

    Foot, M. M.

    Kinley, J.

    Bottomley, A. G.

    Forman, J. C.

    Lang, Rev. G.

    Bowden, H. W.

    Fraser, T. (Hamilton)

    Lee, F. (Newton)

    Bowles, F. G. (Nuneaton)

    Freeman, J. (Watford)

    Lee, Miss J. (Cannock)

    Braddock, Mrs. E. M.

    Freeman, Peter (Newport)

    Lever, L. M. (Ardwick)

    Brockway, A. Fernner

    Gaitskell, Rt. Hon. H. T. N

    Lewis, A. W. J. (West Ham, N.)

    Brook, D. (Halifax)

    Ganley, Mrs. C. S.

    Lewis, J. (Bolton, W.)

    Brooks, T. J. (Normanton)

    Gibson, C. W.

    Lindgren, G. S.

    Broughton, Dr. A. D. D.

    Gilzean, A.

    Lipton, Lt.-Col. M

    Brown, George (Belper)

    Glanville, J. E. (Consett)

    Logan, D. G.

    Brown, T. J. (Ince)

    Gooch, E. G.

    Longden, F. (Small Heath)

    Burke, W. A.

    Gordon. Walker, Rt. Hon. P. C.

    McAllister, G.

    Burton, Miss E.

    Greenwood, A. W. J. (Rossendale)

    MacColl, J. E.

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

    Greenwood, Rt. Hn. Arthur (Wakefield)

    McGhee, H. G.

    Callaghan, James

    Grenfell, D. R.

    McGovern, J.

    Carmichael, James

    Grey, C. F.

    McInnes, J.

    Castle, Mrs. B. A.

    Griffiths, D. (Rother Valley)

    Mack, J. D.

    Champion, A. J.

    Griffiths, Rt. Hon. J. (Llanelly)

    McKay, J. (Wallsend)

    Chetwynd, G. R.

    Griffiths, W. D. (Exchange)

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

    Clunie, J.

    Gunter, R. J.

    McLeavy, F.

    Cooks, F. S.

    Hale, J. (Rochdale)

    MacMillan, M. K. (Western Isles)

    Coldrick, W.

    Hale, Leslie (Oldham, W.)

    MacPherson, Malcolm (Stirling)

    Collick, P.

    Hall, J. (Gateshead, W.)

    Mainwaring, W. H.

    Collindridge, F.

    Hall, Rt. Hn. W. Glenvil (Colne V'll'v)

    Mallalieu, E. L. (Brigg)

    Cook, T. F.

    Hamilton, W. W.

    Mallalieu, J. P W. (Huddersfield, E.)

    Cooper, G. (Middlesbrough, W.)

    Hannan, W

    Mann, Mrs. J.

    Cooper, J. (Deptford)

    Hardman, D. R

    Manuel, A. C.

    Corbet, Mrs. F. K. (Peckham)

    Hardy, E A.

    Marquand, Rt. Hon. H. A

    Cove, W. G.

    Hargreaves, A.

    Mathers, Rt. Hon. George

    Craddock, George (Bradford, S.)

    Harrison, J.

    Mellish, R. J.

    Crawley, A.

    Hastings, Dr. Somerville

    Messer, F.

    Cripps, Rt. Hon. Sir S

    Hayman, F. H.

    Middleton, Mrs. L.

    Crosland, C. A. R.

    Henderson, Rt. Hon. A. (Rowley Regis)

    Mikardo, Ian

    Cullen, Mrs. A.

    Herbison, Miss M.

    Mitchison, G. R.

    Daines, P.

    Hewitson, Capt. M.

    Moeran, E. W.

    Dalton, Rt. Hon. H.

    Hobson, C. R

    Monslow, W.

    Darling, G. (Hillsboro')

    Holman, P.

    Moody, A. S.

    Davies, A. Edward (Stoke, N.)

    Holmes, H. E (Hemsworth)

    Morgan, Dr. H. B.

    Davies, Ernest (Enfield, E.)

    Hoy, J.

    Morley, R.

    Davies, Harold (Leek)

    Hubbard, T.

    Morris, P. (Swansea, W.)

    Davies, R. J. (Westhoughton)

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

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

    de Freitas, Geoffrey

    Hughes, Emrys (S. Ayr)

    Mort, D. L.

    Deer, G.

    Hughes, Hector (Aberdeen, N.)

    Moyle, A

    690

    691

    Mulley, F. W.

    Robinson, Kenneth (St. Pancras, N.)

    Usborne, Henry

    Murray, J. D.

    Rogers, G. H. R. (Kensington, N.)

    Vernon, Maj. W. F.

    Nally, W.

    Ross, William (Kilmarnock)

    Viant, S. P.

    Neal, H.

    Royle, C.

    Wallace, H. W.

    Noel-Baker, Rt. Hon. P. J.

    Shacketon, E. A. A.

    Watkins, T. E.

    O'Brien, T.

    Shawcross, Rt. Hon. Sir H.

    Webb, Rt. Hon. M (Bradford, C.)

    Oldfield, W. H

    Shinwell, Rt Hon. E.

    Weitzman, D.

    Oliver, G. H.

    Shurmer, P. L. E.

    Wells, P. L. (Faversham)

    Orbach, M.

    Silverman, J. (Erdington)

    Wells, W. T (Walsall)

    Padley, W. E.

    Simmons, C. J

    West, D. G.

    Paling, Rt. Hon. Wilfred (Dearne V'lly)

    Slater, J.

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

    Paling, Will T. (Dewsbury)

    Smith, Ellis (Stoke, S.)

    White, Mrs. E. (E. Flint)

    Pannell, T C.

    Snow, J. W.

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

    Pargiter, G A

    Sorensen, R. W.

    Whiteley, Rt. Hon. W

    Parker, J.

    Soskice, Rt. Hon. Sir F.

    Wigg, George

    Paton, J.

    Steele, T.

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

    Pearson, A

    Stewart, Michael (Fulham, E.)

    Wilkes, L.

    Peart, T. F.

    Stokes, Rt. Hon R. R.

    Willey, F. T (Sunderland)

    Poole, Cecil

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

    Willey, O. G. (Cleveland)

    Price, M. Philips (Gloucestershire, W.)

    Stross, Dr. B.

    Williams, D. J. (Neath)

    Proctor, W. T.

    Summerskill, Rt Hon. Edith

    Williams, Ronald (Wigan)

    Pryde, D. J.

    Sylvester, G. O.

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

    Pursey, Comdr. H.

    Taylor, H. B. (Mansfield)

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

    Rankin, J.

    Taylor, R. J. (Morpeth)

    Wilson, Rt. Hon. J. H. (Huyton)

    Rees, Mrs. D.

    Thomas, D. E. (Aberdare)

    Winterbottom, I. (Nottingham, C.)

    Reeves, J.

    Thomas, George (Cardiff)

    Winterbottom, R. E. (Brightside)

    Reid T. (Swindon)

    Thomas, I O. (Wrekin)

    Wise, Major F. J.

    Reid, W. (Camlachie)

    Thomas, I R. (Rhondda, W.)

    Woods, Rev. G. S.

    Rhodes, H.

    Thorneycroft, Harry (Clayton)

    Wyatt, W. L.

    Richards, R.

    Thurtle, Ernest

    Yates, V. F.

    Robens, A.

    Tomlinson, Rt. Hon. G.

    Younger, Hon. Kenneth

    Roberts, Goronwy (Caernarvonshire)

    Tomney, F.

    Robertson, J. J. (Berwick)

    Turner-Samuels, M

    TELLERS FOR THE NOES:

    Mr. Popplewell and Mr. Sparks.

    Motion made and Question, "That the Chairman do report Progress, and ask leave to sit again"—[Mr. Whiteley]—put and agreed to.

    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    Mr. Geoffrey Hutchinson: Everybody will welcome this Clause. We on this side of the Committee certainly welcome it warmly because this is the sort of thing we have been pressing the right hon. and learned Gentleman to do for some time past. We are glad that he has decided at last to accept the good advice we have offered to him, and we are not without hope that in the future he may accept our advice in other directions.
    If in what I am about to say I appear to be critical of these concessions, I hope the right hon. and learned Gentleman will bear in mind that they are after all substantially the only concessions which he has found it possible to make; and that even they have had to be purchased at the price of a tax which will enter into the budget of every home in the country. Indeed, the right hon. and learned Gentleman—[Interruption]—appears to have got himself into a frame of mind in which he is not able to conceive of any reduction in taxation unless there is some corresponding increase. Therefore, we are bound to look at these remissions of taxation rather critically. [Interruption.]
    10.30 p.m.
    The Chairman: I must ask hon. Members to come to order.
    Mr. Hutchinson: For a moment I thought this enthusiasm was intended for me, but I find it is intended for my right hon. Friend. I was about to say that these concessions are only made at the expense of the taxpayers in other directions. We are bound, therefore, to examine them critically, I hope not unduly critically, and compare them with the cost of which they have been obtained. [Interruption.]
    The Chairman: I must be permitted to hear what the hon. and learned Gentleman says.
    Mr. Hutchinson: I was endeavouring to say, I hope at no great length, that I propose to invite the Committee to examine these tax concessions, of which the right hon. and learned Gentleman is extremely proud, to see what real advantage they will confer on those whom he is most anxious to help. I am not going to investigate the effect which they are likely to have upon the lowest income groups.
    The average earnings of persons employed in industry are about £7 2s. 6d. a week. I propose, therefore, to examine the effect of these concessions upon that average group of industrial workers. First, take a married man, with one child, who earns a weekly wage of £6 17s. 8d. The Income Tax relief which this Clause gives to him amounts to £1 2s. 6d. a year,

    693
    or about 9d. a week. Take a married man with two children, who earns £7 5s. a week; he will receive no benefit at all from these concessions. The most remarkable thing about the method of granting concessions which the right hon. and learned Gentleman has selected is that those persons whose need would appear to be greatest are precisely the persons to whom the smallest benefits are given.
    Take the case of a married man earning £7 10s. weekly, who has no children. He will benefit, through this remission, to the extent of £4 7s. a year, or 1s. 8d. weekly. That is not a great deal. It is perhaps enough to buy him 50 cigarettes, so he is better off than the man who has two children. Now take the case of a single man who earns £6 16s. 2d. a week. I am taking actual cases. He will benefit to the extent of £6 10s. a year, or 2s. 6d. a week. What one of my hon. Friends said is clearly borne out, that the persons whom one would have expected that the right hon. and learned Gentleman was anxious to benefit are precisely those who get the smallest advantage under this arrangement which he has selected. Let me give another case. This man is in the class which will receive the full benefit of these concessions, amounting to £11 a year. He happens to own a motorcar. I asked what was the benefit which he would receive. He said that he calculated that the extra 9d. a gallon on the petrol which he used would cost him exactly £11. So what he gains in one pocket he loses from the other.
    Those are the sort of things which the right hon. and learned Gentleman proposes to do. In his speech earlier this evening the right hon. and learned Gentleman said that a tax reduction of £400 million was something which he could not entertain. If the people of this country are really to enjoy some relief which is worth while from the present burden of taxation, we shall have to find a Chancellor of the Exchequer who is able to contemplate with greater equanimity a tax reduction of this order.
    We welcome these concessions, but there is no reason for the right hon. and learned Gentleman to be unduly proud of them. The Minister for Economic Affairs complained in his speech that my right hon. Friend had described the
    694
    policy of the Chancellor as silly. I really do not see why he should have complained about that. If my right hon. Friend had used a much stronger expression, he would have been fully justified. However, I will content myself with saying that if these remissions of taxation are the best that the Government can give, they are totally inadequate.
    Sir H. Williams: I have a few observations to make on the Clause. I want to draw the Committee's attention to something quite different on which I hope there will be a certain amount of unanimity. The Income Tax law has become so complicated that no ordinary citizen can understand it. We have to hire accountants for every kind of purpose. Hon. Members who read Clauses 17 and 18 will find them quite simple and easy to understand, but now hon. Members opposite have given a vote to the effect that they entirely believe in Clause 19.
    I want to draw attention to the difference in the drafting of subsections (1) and (2). I will read them. Subsection (1) says:
    "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'."
    I think it is an absolute scandal that in due course that will go out to the world and people will go to public libraries and try to understand it. They will fail, because we have a bad system of draftsmanship and fail to consolidate Income Tax law. Under subsection (2) entirely different principles of drafting have been adopted. Subsection (2) may be in the right form, but if so, subsection (1) is in the wrong form. Subsection (2) says:
    "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'."
    In the previous subsection all the previous enactments are specified, but in subsection (2) they are not specified, and therefore if any hon. Member wants to find

    695
    out precisely what the subsection will mean he has to spend many weary hours in the Library trying to find out precisely what enactments there have been which modify subsection (2) of Section 19 of the Finance Act, 1935. That is sloppy, or slipshod, or something. I can only assume that one draftsman drafted subsection (1) and another draftsman drafted subsection (2).
    I do not think it is fair to this Committee or to the nation, that we should draft Acts of Parliament in this quite inconsistent, sloppy way which people do not understand. It is a scandal that our laws are so abstruse. The time has come to spend money in one direction, namely, by increasing very largely the staff of Parliamentary draftsmen, so that we can have first-class work done on this sort of thing and consolidate the law.
    Clause ordered to stand part of the Bill.

    Clause 20.—(SURTAX TO BE CHARGED ON CONSIDERATION FOR CERTAIN RESTRICTIVE COVENANTS, ETC.)
    The Chairman: I have selected the Amendment in the name of the hon. and learned Member for Norwich, South (Mr. H. Strauss)—in page 12, line 36, to leave out "gives" and insert "has after 6th April, 1948 given"—and I hope it will be convenient to the Committee to discuss at the same time the Amendment of the hon. and learned Member for Hove (Mr. Marlowe), in page 13, line 27, to leave out subsection (3) and the Amendment of the hon. and learned Member for Ilford, North (Mr. G. Hutchinson)—in page 13, line 27, at end, insert:
    "payments made by virtue of agreements made after the sixth day of April, nineteen hundred and forty-seven, and to."
    Mr. Marlowe: Without in any way seeking to question your Ruling, Major Milner, may I ask you to consider the diversity of view which occurs between the Amendment of my hon. and learned Friend the Member for Norwich, South (Mr. H. Strauss) and my Amendment? My Amendment seeks to impugn the idea of retrospective legislation altogether. The Amendment in the name of my hon. and learned Friend accepts the idea of retrospective legislation for one year, from the time the Chancellor
    696
    made his announcement. In my submission those Amendments are not such as can conveniently be taken together and, in view of the fact that your Ruling indicates that you have not selected my Amendment, may I ask you to reconsider the matter and that it should be selected separately, in view of the fact that it has the support of more than 95 hon. Members?
    The Chairman: I am much obliged to the hon. and learned Member. I have fully considered those points. It is my duty to expedite the business of the Committee in so far as it is possible. The arguments would be largely the same and I desire to avoid repetition. For that reason, I think it most convenient if the Amendment of the hon. and learned Member for Hove is discussed on the first Amendment on the subject, which is in the name of the hon. and learned Member for Norwich, South (Mr. H. Strauss).
    10.45 p.m.
    Mr. Marlowe: Further to that point of order, Major Milner. May I ask whether this means that the Amendment in my name has not been separately selected? I am not quite sure whether I correctly follow your Ruling, but do I take it that this Amendment has not been accepted for separate discussion and Division?
    The Chairman: The hon. and learned Gentleman appears to be challenging my selection. He has urged another course upon me. I am sorry I cannot agree.
    Mr. Marlowe: I am not challenging your selection, Major Milner, but what I ask is whether I can have a separate Division on my Amendment.
    The Chairman: That is a matter to which I will give consideration when the time comes. The hon. and learned Member cannot ask me to give a decision on that matter until I hear what is said.
    Mr. Molson: May I, with the utmost respect, make this submission? You said, Major Milner, that it was the responsibility of the Chair to seek to expedite business. Will you consider again whether it is with a view to expediting business that the power to choose Amendments has been given to the

    697
    Chair? I venture, again with the greatest respect, to suggest that the purpose of giving this power of discretion to the Chair is to enable all important and relevant matters to be fully discussed. I can recognise how difficult it is for anyone speaking on the spur of the moment to speak in an entirely judicial way, but is it really the case that to expedite business is the matter which has to be borne in mind in selecting Amendments, or whether there are different issues upon which the Committee may express an opinion?
    The Chairman: The hon. Member is substantially correct. I mentioned "expediting business" because, on examination, I thought that the arguments would be largely the same on the Amendment in the name of the hon. and learned Member for Hove (Mr. Marlowe) as on that in the name of the hon. and learned Member for Norwich, South (Mr. H. Strauss) and I thought they might well be discussed together.
    Mr. Pickthorn: I do not for a moment try to argue, which would be both mistaken and improper, but do I understand that the Ruling is that the Amendment in the name of my hon. and learned Friend the Member for Hove (Mr. Marlowe) should be discussed straight away along with that of my hon. and learned Friend the Member for Norwich, South (Mr. H. Strauss), or that the question of whether that Amendment shall, or shall not, be selected is postponed until towards the end of the discussion? I think that that was the impression made by the words from the Chair in the minds of some hon. Members. Is it a correct impression?
    The Chairman: In substance, the first impression of the hon. Member is correct. I have suggested that the two later Amendments shall be discussed under the heading of the selected Amendment in the name of the hon. and learned Member for Norwich, South (Mr. H. Strauss), but I have not yet decided which Amendment shall be selected for a Division.
    Mr. G. Hutchinson: Further to that point of order, Major Milner. May I draw attention to the fact that the date referred to in my Amendment is 6th April, 1947, but ought to be 6th April,
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    1949? It was printed in that way on the Order Paper yesterday.
    The Chairman: I am obliged to the hon. Member. The principle involved in all the Amendments is, in my view, precisely the same.
    Mr. Henry Strauss: I beg to move, in page 12, line 36, to leave out "gives" and to insert:
    "has after the sixth day of April, nineteen hundred and forty-eight, given."
    I shall not, of course, question the Ruling you have given, Major Milner, in any way, but it is only fair, I think, to my hon. and learned Friend, the Member for Hove (Mr. Marlowe), to say that he is quite right in the important distinction between what is involved in his Amendment and mine, in that my Amendment does not question retrospective legislation in toto.
    We have now come to the Clause which has become very well known in popular discussion as the "Retrospective Clause" and it has sometimes been associated with two particular names of gentlemen who have received large sums in consideration of restrictive covenants. It is a Clause that has become, as I say, well-known and has excited a good deal of discussion and correspondence in the Press, particularly in "The Times" and in "The Manchester Guardian."
    I think that all Members of the Committee, in whatever part of the Committee they sit, know that extremely important questions of principle are involved. Although I think there may be important differences between Members in different parts of the Committee, I hope there will be some propositions on which we can all agree. In the course of the correspondence in "The Times," there was a valuable letter from Mr. C. J. Hamson, the Reader in Comparative Law in Cambridge University, from whose letter I should like to quote one passage because I think that the Committee should bear it in mind, and that is has considerable importance:
    "It is of great importance that upon fundamental principles the law of this country should not depart from the norm of civilised nations. It is a part of that norm that laws, particularly involving a penalty, should not be retroactive. To quote only two examples: The principle is enshrined in the constitution of the United States (Art. I, sections 9 & 10), and it is expressly and very categorically de-

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    clared in the French codes as much for civil matters (Code Civil, art. 2) as for criminal (Code Penal, art. 4)."
    While the issues we shall have to discuss are of great interest and importance to lawyers, they are not uninteresting, I think, to laymen. Nor are the principles difficult for laymen to comprehend. None of the Amendments with which my name is associated on the Order Paper—the Amendment which I am now moving, nor the Amendment which immediately follows, in the name of my right hon. and learned Friend the Member for West Derby (Sir. D. Maxwell Fyfe)—is based on the view that no retrospective laws can be tolerated. Although there are many who have taken that view, and it is a view that deserves respect, it is not on that view that our Amendments are based. But I think that the whole of the Committee may agree with me in this, that, if retrospective legislation is ever tolerable, it is tolerable only in certain exceptional circumstances, and certain conditions must be satisfied.
    Let me state what I consider two of these conditions are. First of all, there must have been a warning previously given; secondly, the legislation that contains the retrospective provisions must be in accordance with that warning. I am not saying that satisfaction of those conditions always makes retrospective legislation tolerable or desirable, but without satisfaction of those conditions it is clearly intolerable.
    So far I do not think I have said anything with which the Law Officers of the Crown or the representatives of the Treasury would disagree. The Chancellor of the Exchequer gave his warning in his Budget speech in 1948, and it was quoted by the Financial Secretary to the Treasury in his speech on the Second Reading of the present Finance Bill. The Chancellor's statement was made on 6th April, 1948, which the Committee will notice is the date mentioned in this Amendment. I think it will be fairest to the Chancellor of the Exchequer and to the Government if I read the essential sentences of that speech:
    "Before I leave this subject, I will mention one other device which people may be tempted to adopt. That is to dress up what really is remuneration in a non-taxable capital form; for instance, as compensation for loss of office, or as payment in consideration of a restrictive covenant on an individual's employment. Such
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    devices, by which a man aims to evade paying his fair share of Income Tax, are intolerable in our present state of affairs, and I must give warning that the position will be closely watched, and that the Government will not hesitate to propose legislation, with retrospective effect, to deal with any such devices."— [OFFICIAL REPORT, 6th April, 1948; Vol. 449: c. 70–71.]
    There are then two conditions which must be satisfied if retrospective legislation is not to be intolerable. The first is the warning; and the second, that the provisions are in accordance with that warning. The bulk of what is necessary to bring about the second condition is contained in the Amendment not now under discussion, but which will be moved in due course by my right hon. and learned Friend the Member for West Derby. That Amendment endeavours to bring into this Clause the conditions set out in the warning of the Chancellor of the Exchequer.
    My limited purpose in this first Amendment is to show that the agreements which are hit are agreements made after the warning by the Chancellor of the Exchequer. There is nothing to prevent the Government from accepting the Amendment which I am now moving, because it will not prejudice their obtaining what they want in every case which they have so far described as cases which they want to hit, provided, of course, they are correct in their description of those cases. The provisions, which will enable the court to decide whether any individual case falls within the principle, will be the subject of a subsequent Amendment, but this initial Amendment is to insert in the description of the agreement that falls within this Clause, the fact that it was made after the warning of the right hon. and learned Gentleman. I think that I have explained the reasons for the Amendment which I am moving and I will reserve my further comments on the Clause to a subsequent Amendment.
    11.0 p.m.
    Mr. G. Hutchinson: I understand that the Amendment which stands in my name is to be discussed at the same time as that just moved by my hon. and learned Friend. There is little difference in principle between these two Amendments. I have selected one date after which an agreement out of which payment arises will attract taxation. I have selected the date of the Budget last year. My hon.

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    and learned Friend has selected the date of the warning—namely, the date of the Budget in the previous year. All I need say about my Amendment is that the arguments used by my hon. and learned Friend apply with equal force to the Amendment in my name. Nothing could be more unjust than that an agreement made before any indication has been given by the Chancellor of the Exchequer or anybody else that there will be legislation, should be caught by retrospective legislation. Under the two Amendments now being discussed, that could not happen. It would be a more just and fair method than that which is proposed under this Clause as it now stands.
    Mr. Marlowe: It appears that, by a process that I am not able to follow, I have to talk on an Amendment though I do not know whether it has been selected or not.
    The Temporary Chairman (Mr. Touche): The hon. and learned Gentleman is not bound to talk on any Amendment at all. His Amendment can be discussed with this Amendment, as I understand the Ruling of the Chairman.
    Mr. Marlowe: I am bound to talk on it if I wish to move it. I do not know whether it has been selected or not. That is the difficulty. It was not indicated whether it was to be selected. I understand that we are discussing restrospective legislation, and the Chairman has not decided whether he has selected this Amendment, so we are discussing retrospective selection at the same time.
    The problem I want to put before the Committee is the general one of whether retrospective legislation is ever justified. My hon. and learned Friends, in their Amendments, have accepted the principle that there are certain cases, particularly in fiscal matters, in which the principle is permissible. I hold strongly to the view that retrospective legislation, when it imposes any kind of penalty, is never justified. I emphasise the words "when it carries a penalty" because there is a considerable distinction between penal legislation and an act of indemnity. No one would question an act of indemnity; it may be a very meritorious form of retrospective legislation. But I hold strongly the view that where a penalty is imposed—in this
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    case upon a person who has acted within the law perfectly innocently—it is utterly wrong to go back and punish the man for something which was lawful at the time he did it. It is a principle of our law that no one should be penalised for doing a lawful act.
    I also believe that contracts between adult persons competent to conduct their affairs should not be made the subject of later legislation which undoes the contracts so made. The law has always recognised that there are certain people— infants and lunatics—who need protection, and it may be justified that their contracts should be the subject of subsequent investigation either by the courts or by Parliament, but I think that it is very undesirable that contracts made in this way should be subsequently torn up by the intervention of a political party, which is, of course, what is happening in this case. I only take this case as an example, for I do not seek to defend for one moment the two particular covenants which this Clause hits.
    Mr. Donovan: Is it really right to say the contract has been torn up?
    Mr. Marlowe: I should have thought so. The contract is, as I understand it— and I do not wish to elaborate on this point because I do not defend the practice itself—that these two gentlemen entered into covenants to restrict their future activities in consideration of payments of the sum of £100,000. The contract has been torn up to the extent that, by the action of the Chancellor of the Exchequer, the contract is reduced from £100,000 to £5,000, because taxation amounts to £95,000.
    I am not praising the merits of these particular covenants, nor do I support them. I would support a Clause which stated that this kind of covenant should not be permitted in the future. That I would consider a perfectly proper Clause. What I object to is that, these contracts having been made, there should be retrospective legislation affecting them to the extent that they are virtually nullified.
    The matter would be bad enough if it stopped at contracts, but once the principle is admitted there is no reason whatever why the field of retrospective legislation should not be extended to

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    crime. That has been done in dictatorship countries. It was done regularly in Germany before the war and, as far as I know, is probably regularly done in Russia today. I remember that on the occasion of the "night of the long knives" in the Nazi purge, Hitler claimed afterwards that he was entitled to act as he did because he had declared illegal the acts of those who had offended. What they had done was to offend—exactly as in this case—against the party line. That is exactly what has happened here, and therefore the law is being changed back.
    The justification is that a pronouncement was made in the House by the Chancellor of the Exchequer a year ago. I do not subscribe to the idea that the law of this country is made by the Chancellor of the Exchequer standing up in the House and making a pronouncement. The law is made by Parliament, and not by any pronunciamento by the Chancellor of the Exchequer. He cannot change our law by saying, "Anybody who incurs my displeasure by entering into covenants of this kind will have a penalty imposed on him."
    Mr. Hector Hughes: The hon. and learned Member has admitted that these two contracts are un-meritorious attempts to evade taxation. [HON. MEMBERS: "No."] If that is so, does he not agree that this is a suitable case in which, exceptionally, to apply retrospective legislation?
    Mr. Marlowe: What I have been saying is precisely the reverse of what the hon. and learned Gentleman has just said. The whole of my case is that there is no justification for interfering with these or any other arrangements on this basis. I reaffirm the principle that the law does not allow punishment to be inflicted on a person for an act that was lawful at the time. The hon. and learned Gentleman completely begs the question when he says, "Was not this tax evasion?"; in other words, was not this an offence? The answer is that it was not an offence. It was perfectly lawful. You may call it immoral, if you like; I do not know enough about the terms of the contracts, or the circumstances.
    The point is that at the time of the offences the law permitted them. These two gentlemen and the companies with
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    which they are associated were conforming to the law as it then stood. What I find deplorable is that, after persons have acted within the law, the Government, because it offends their party line, says it was unlawful. It was not. It is an immoral thing for any Government to declare afterwards something unlawful which was perfectly lawful at the time it was done. I speak only for myself and those who have supported me by putting their names on the Order Paper. I do not want it to be thought that in this Amendment I am committing any member of my party to this view. It is purely the view of myself and those who have associated themselves with me.
    It is accepted by my right hon. and learned Friend the Member for West Derby (Sir D. Maxwell Fyfe) that some degree of retrospective legislation is permissible. I disagree with him in that. What is the argument that has been put in favour of this form of retrospective legislation? The only one I have heard, apart from the pronouncement of the Chancellor last year, is that there are precedents. I agree there have been precedents, and it is because of them that it becomes the more necessary for us to take stock and see whether we are going the right way. I have a definite feeling that we are going the wrong way.
    I think it necessary to go back to the principle that nobody should be penalised for doing an act which was lawful at the time it was done. That is the principle to which I adhere. If there have been precedents and they offend against that principle, they become as precedents utterly valueless. It would be unworthy of us if we decided that a principle was right, to say that looking back we found we had offended against that principle and we were, therefore, justified in going on doing so. Nobody of any party would feel justified in following a principle, and violating it merely on the ground that it had been violated before.
    11.15 p.m.
    Again, coming back to the principle which I think it important to see established, the question of precedent becomes even more valueless when we realise the effect of it. Assuming the principle to be correct, every precedent whittles away something from that essential freedom. If this principle that a man should not be punished for doing a lawful act is, as

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    I believe it to be, a basic principle of one of our freedoms, then every time there is another precedent we are taking something away from that freedom, and we can ultimately justify ourselves, by going on from precedent to precedent, in abolishing that freedom altogether. That is one of the reasons which drives me to the belief that it is absolutely necessary to make a stand, and it is for that reason that I have put my Amendment on the Order Paper.
    Now I want to draw the attention of the Committee to the dangers that can come from adhering to these precedents. As a matter of fact, they are not of ancient lineage. The first was in 1926 and was not a case of tax avoidance. It was a Clause in the Finance Bill, 1926, and the Solicitor-General will remember it. It was a Clause in which the Revenue, having lost the case of Whelan v. Henning in the House of Lords sought to gain victory by putting a Clause into the Finance Bill. What they did was to reverse the decision of the House of Lords in that case which related, not to tax avoidance, but to the method of assessment. It could have been said at that time—and this is the danger of these precedents—that there were certain merits in it. It had been assumed over a long period that a method of assessment was so-and-so and, the case in the House of Lords having said it was not so, the Finance Act of 1926 merely sought to reassert the position which everybody had thought to be the case, but it did not penalise anybody.
    That formed the first precedent and that was the danger when, some years later, Sir Kingsley Wood when Chancellor of the Exchequer, wanting to go in for some retrospective legislation, went back to that precedent. Once more, although a tax avoidance case, that was not one which inflicted actual penalty by seeking to recover some money that had not been paid. Then there was a series of of cases. There was another in the 1938 Finance Act where the dates of settlements were ante-dated. Hon. Members will remember that case where there had been settlements in favour of children and in which the date of settlement was assumed to have been before the date of the Act and the tax became leviable from then onwards, whatever the date was. But it did not go back and snatch
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    money which had not, up to that date, been paid.
    The most notable precedent during the war was the 1943 one relating to whisky, on which my right hon. and learned Friend the Member for West Derby can speak with more authority than myself, because it was his Clause. I differ from him in this matter because he considers himself bound by that precedent whereas, if I were in his position, I should have no difficulty in exonerating myself from that past.
    The whole argument against retrospective legislation is that it threatens the rule of law. I do not think a war-time precedent is of any account at all. In time of war the rule of law is in suspense. Many things are done in war-time which offend the rule of law. After all, it is not normally within the rule of law for us to set about killing each other, and it is fair to say that the rule of law is abrogated. I do not think we should feel in the least bound by any war-time precedent in this matter.
    It is essential to come back to the principle which I have expounded. Do we accept or not the idea that a man should be punished for doing an action which is lawful at the time he did it? However much we may regard it as immoral or reprehensible, the law should not be altered backwards to bring that man within its scope. That is a principle to which I feel I must adhere. We find very often in these days cases in which principle is sacrificed to expediency, but I think it would be deplorable in a case like this to say that these two men who have made a good bargain and have more than the rest of us must be punished in this way. That has undoubtedly good political appeal, but I do not believe we should support it because of that. The Committee should come back to this principle and if they accept it as true, take this opportunity of reaffirming it.
    Mr. Quintin Hogg: The hon. and learned Member for Hove (Mr. Marlowe) has rendered a service to the Committee by raising what is undoubtedly an interesting and, some of us might say, not very easy topic. I think it is also a great advantage that he has done it in a form in which it can hardly be used as a matter for a clear-cut party division. It is a matter which the Committee should

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    consider carefully both in relation to this legislation and to further instances of it which may be proposed.
    I think most of us on both sides of the Committee would accept with wholeheartedness the principle upon which my hon. and learned Friend alleged he founded his argument—namely, that people should not be punished for doing that which is lawful at the time. But I imagine that most of us also would feel some doubt whether that principle has actually been infringed in this case, whatever we may think about the advisability or correctness of this particular piece of legislation. I am sure some hon. Members opposite would like it to be infringed. I do not feel it has been infringed. If I thought it had been, I would say so and oppose it on that ground, but there is a great distinction between what is unlawful and what is taxable and between what is a punishment and what is a tax. Nobody is saying, or attempting to say, in this proposed legislation that what is proposed to be taxed is regarded as unlawful or criminal or proved to be such, or to be punished as such.
    Therefore, although it is a valuable principle which has been set up from which I would not desire to depart, I am not sure that it is a fair attack upon this proposal that it infringes that principle. Having said that, I do not think that I have quite overcome all the difficulties about this proposal. I simply have disposed, for my own part, of an argument which I think is an unfair one against it.
    It is not, I think, generally or necessarily desirable that that which is not subject to tax at the time when it is done should be rendered retrospectively subject to tax; and whatever exceptions we may recognise as exceptions from time to time, and whether or not this is a good example of such an exception as we propose to recognise, I think there would be fairly general acceptance on both sides of the Committee that in general, at any rate, it was not desirable to impose taxation retrospectively on completed transactions. Such a course would, I think, render great injustice if it were pursued on an extensive scale, and it would be attended by many practical inconveniences.
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    If the Government propose to answer the speeches which have been made on this Amendment, I hope they will confirm my opinion that, quite irrespective of the merits of this particular proposal, the general principle is that if the transactions are not subject to tax at the time the transactions are completed, they shall not be made subject to tax retrospectively, and it is not the design of this proposal to impugn that, and that the general principle will be accepted. I hope we shall have that assurance and, if we do, I think it will help a great deal to dispel some of the doubts which some of us may feel.
    Next, I think there is a very great deal of confusion about what is meant by tax avoidance and tax evasion. Everyone is entitled in general so to arrange his affairs that they attract to themselves the least possible amount of tax. It is not true to say that one must necessarily travel third class in order not to be able to set off a first-class rail fare as expenses. In general one is entitled to arrange one's affairs in such a way as legitimately to attract to them as little tax as possible. The question is what is legitimate and, if what is done is not considered legitimate, what is the appropriate action of the legislature and the fiscal authorities? For my part, I see a distinction in what was done in the two particular cases which many of us must have in mind in discussing this proposal and what is ordinarily called tax evasion.
    In the whisky case to which my hon. and learned Friend referred, and which I can well remember, a certain amount of attention was drawn during the war to the many elaborate schemes which have been invented from time to time by ingenious persons to avoid the whole purpose and meaning of tax, with varying degrees of success or failure. Personally, I have never felt very much difficulty about supporting, whether in peace or war, the kind of attitude for which a precedent was quoted in the action of my right hon. and learned Friend who was, I think, Attorney-General during the war-time period.
    11.30 p.m.
    I do not see anything in principle objectionable, if people seek to pick a hole in an Act of Parliament deliberately to defy its purposes and deliberately to get

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    round its provisions, to repair the hole retrospectively. I think they must expect Parliament to protect its own policy in that way, at any rate up to a point. But that does not seem to me to be what has happened in this case. What was done in this case may be grossly reprehensible, or not. Whether we think it is or not depends, I suppose, on all kinds of considerations, only some of which would be relevant to this Debate, but there can be no doubt, at least in my opinion—I see on the opposite side of the Committee and in front of me many who are far more qualified to express an opinion on this subject than I am—that the transactions which are rendered subject to tax by these proposed provisions were, in fact, obviously not subject to tax without these proposed provisions.
    Transactions of this kind, although not common, were obviously outside the provisions of tax law previous to the present Budget and I see a distinction, and a distinction of importance, between cases where the Legislature and the Executive propose to protect their own previously declared policy contained in tax law against ingenious evasions of an illegitimate kind, and cases where they propose to protect a series of subjective standards of their own, which may or may not be laudable, against transactions which were obviously not subject to tax at the time when they were completed.
    I feel a certain amount of difficulty about accepting the present proposals in the light of that consideration. I must add this—and I think it is also germane to the topic. It is not only retrospective legislation which is odious. In my opinion that is not always odious; but what is always odious, I think, is if the Legislature picks out for punishment and contumely individuals, as distinct from classes of people, who happen to offend; and, in discussing whether legislation is discriminatory against individuals and not against general classes of persons, regard must be had, not merely to the language or legal form in which the legislation is couched, but to the reality of the case.
    There cannot be a child above the age of five in this country who is in the least interested in public affairs who does not know as a matter of fact that these proposed provisions, although general in
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    form, although in form attacking a particular class of transaction, are in fact directed as a punishment against two named individual cases. I myself find it as beneath the dignity of a Legislature and as politically odious to do that kind of thing, even when, as can be said, I think with a good deal of force in a case of this kind, large classes of persons have been offended and scandalised—to use the word in its literal sense and not in its vituperative sense—by the particular acts to which attention has been drawn.
    It does always savour of tyranny to use the weapon of general legislation in a discriminatory fashion against individuals, and it is none the less tyranny because the action of the individual may have been deplorable and because the political circumstances may make it highly expedient to do so. For my part, I find a certain hypocrisy in the puritans in this matter. I do not myself, to use plain language, see much difference between the cases of Black, Lord and Plummer. I wish I could. [Interruption.] Oh, yes, and there is a difference between the political friends of the three gentlemen, too—a very marked difference, which has not been missed by the country.
    I find it deplorable that the Government, instead of dealing with the question which I think did require to be dealt with, the question of liability to tax of lump sum payments made on account of service agreements and on certain other accounts, whether by way of compensation or damages, or otherwise—a question which does require legislation, or which at least is appropriate for inquiry and which may demand careful scrutiny and most detailed examination in the future— should have selected for action another question. There has been selected a crude, blunt instrument, a form of words, general in character, not designed to remedy a general mischief, but intended to yield to political pressure against two named individuals doing that which was not merely lawful but obviously not taxable at the time it was completed.
    Committee report Progress; to sit again Tomorrow.

  ROAD TRAFFIC PROBLEMS
  Motion made, and Question proposed, "That this House do now adjourn."— [Mr. Royle.]
  11.37 p.m.
  Brigadier Medlicott: We have for some 48 hours been considering the sums of money which the motoring community, among others, contribute to the Exchequer, and it may not be out of place for a few minutes to turn to the question of what the motorist is getting in return. I suggest he is not getting quite the square deal he deserves. I fully realise that in an Adjournment Debate it is not possible to discuss the subject of road traffic as a whole, but there are certain aspects of it which I think are rather urgent, and it is for that reason that I venture to draw attention to them tonight.
  The two subjects on which I desire to concentrate are congestion due to inadequate roads and lack of sufficient parking facilities, and confusion due to inadequate signposting. I will deal with the latter first. Here I suggest that what we ought to do now is to bring up to date the consideration of the matter which was given by two departmental committees in 1933 and 1944. We ought to ask ourselves whether the conclusions arrived at by the 1944 committee are still correct in the light of post-war motoring conditions. We ought also to ask ourselves to what extent the recommendations of the 1944 committee have, in fact, been carried into effect. I ask for some fresh examination of the problem of signposting and I suggest to the Minister that in any such re-examination he tries to give a little more consideration to the practical motorist and to take him as far as possible into consultation.
  The second comment I make on signposting is to suggest that we are very far behind continental standards. I think in many ways that the system laid down by the two committees of 1933 and 1944 is very good. We have an excellent collection of well-designed signs, showing schools, level-crossings, hump-backed bridges, sharp corners and gradients, but the motorist is mainly interested in the problem of getting from one place to another, and it is the absence of adequate place names in our signposting that is
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  our chief weakness. Our system now relies largely upon the adoption of route numbers for our roads. Here I find myself in agreement with the minority view expressed by Colonel Dudley who sat on the 1944 committee, and said:
  "I remain unconvinced that the motoring public desires to travel by the aid of road numbers in preference to place names."
  The system of road numbers involves reference to a map, but the real test of signposting is the extent to which motorists can use it without a map.
  There are many examples. I merely want to give one I came upon myself. It is possible to motor from here to Dorchester, which is, after all, a very important west country town and road junction. For one hundred miles one does not see the word "Dorchester," upon a single signpost. That is very confusing to those without a map and perhaps strange to the country. In an earlier Debate on this subject, I think it was the hon. Member for Hornsey (Mr. Gammans) who said he had once motored from London to Vienna and back and the only time he got lost was between Folkestone and Dover.
  In regard to London, the signposting system is most curious in its defectiveness. One can stand at one point after another —Hyde Park Corner, Trafalgar Square, or outside this Palace of Westminster— and unless one has some knowledge of one's own, it is impossible to tell from any signposting the way to get out of London to any place like Manchester, Dover, York, or other points in the British Isles. The route just cannot be found by signposts because they are simply not there. I suggest, especially with the Festival of Britain coming upon us so soon, that we do want to get away from this distinction London has of being virtually without adequate signposting at all in the centre. On this whole matter of road signposting, particularly in the London area, we need to look at the problem again very urgently and to bring up to date the consideration of the matter given by the 1933 and 1944 Committees.
  I want to give the Minister as long as possible to reply and so I will now turn to the problem of road congestion. The position was summed up a few days ago by "The Motor," from which I will quote a passage:

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  "Britain has never possessed adequate highways in relation to the number of vehicles operating on them at any given period. The combination of unrationed petrol and the great increase in the number of heavy commercial vehicles since the war will, in the near future, produce a state of chaos on the roads quite unacceptable to an industrial nation striving for commercial success in the markets of the world. To keep the traffic flowing in the next few years is one of the most important tasks confronting Britain's administration.
  Unless something is done, and done quickly, millions more gallons of petrol will be burnt in the fruitless mile-an-hour progress of traffic-jammed city areas, and the cost to the nation of lost man-hours and the general slowing down of essential movement would be quite incalculable."
  A calculation has, in fact, been made, and in the County of London Plan in 1943, it was estimated that the loss in man-hours and petrol by traffic jams in London can be put at approximately £70 million a year.
  In this matter of London traffic—and I must concentrate mainly on London, although the problem affects all our great cities to a lesser degree—we are faced with a curious situation. No effective attempt has apparently ever been made to measure the volume of traffic which flows into the city and to relate that volume to the actual extent of parking facilities and garage accommodation in the city. We should not dream of putting on to railway lines more than a carefully ascertained volume of traffic, and yet we allow it to happen on London's roads. There is no restriction of the number of vehicles coming into London or passing through London on a single day, with the result that we are approaching the moment at which the traffic of London is nearing strangulation point.
  Drastic remedies are needed, and I hope the Minister will not shrink from applying them, even though some people may regard them as unpopular. This is a matter in which it is impossible to please everybody. The remedies are two-fold, long term and short term, as most remedies are, and are partly contained in the Trunk Roads Acts of 1936 and 1946, and the Special Roads Act, 1949, which provide machinery for the building up of a great system of national highways for long distance traffic.
  That, of course, does not tackle the real problem of congestion in our towns and cities, and in that connection I hope the Minister is encouraging local authorities in the preparation of their development
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  plans—the matter, of course, is also one for his colleague, the Minister of Town and Country Planning—to give the utmost attention to the problem of providing adequate parking facilities, and to look especially at the idea of underground car parks, which many people regard as the only real solution in our crowded city areas.
  The amount which the motorists are likely to pay in future years towards the revenue has been estimated at £250 million per annum. I understand that hitherto the figure has been the relatively modest one of £137 million, although both these figures are only in general terms. However, it is obvious that what the motorist gets in return is pitifully inadequate to his requirements, and I am wondering if the Minister can say anything about the recent comments of the Minister of Town and Country Planning, which indicate that even the proposal to build the London A ring road has now been abandoned. That was one of the props to the hopes for a better system of road construction for the greater London area, and if that, too, has gone the position is very disappointing indeed.
  I realise that the Minister cannot say much about long-term plans, but I hope he may be able to refer to them in passing, and to say if there is any hope at all that they will be embarked upon, in spite of the difficulties of capital expenditure. It is the short-term remedies that he can do something about, and I suggest that so far as London is concerned, we have been merely tinkering with the problem. The yellow band system is good as far as it goes, but it is no use freeing the traffic in small sections. It is no use moving obstructions from one section, if round the next corner or in the next section the traffic is going to meet obstructions there.
  What we need is a bold, imaginative plan, under which the great main roads in London would be treated, for all practical purposes, as the equivalent of express lines on the railway system. Certain roads should be set aside for fast, through traffic, and certain principles should be laid down in regard to the use of those roads. Those I have in mind are great roads like Oxford Street, the Strand, the Embankment, Euston Road and the like.
  In those roads, if this plan were adopted, there would an an absolute prohibition of parking. No parking would

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  be allowed in any circumstances, and waiting and setting down of passengers and the loading and unloading of trade vehicles would be restricted to certain hours, and all horse-drawn vehicles would be excluded. Right hand turning across the main stream of the traffic would be drastically limited, and perhaps, most important of all, some of these roads would be made one way throughout their whole length. The parking of private cars, added to setting down of passengers and the loading and unloading of commercial vehicles, provide the aggregate volume of this traffic obstruction which is the great problem that the Minister has to face, and even the temporary parking space given by the bombed sites is likely to disappear as more and more of them are built upon.
  I come now to my second point with regard to the freeing of the roads and I want to deal with the subsidiary roads for a moment. Except in the main arteries to which I have referred, there should be a widespread plan of parking on one side of the road. Unilateral parking should be allowed in practically every street in the London area. What happens now when the motorist comes to London is that he leaves his car wherever he can. I suggest that far less obstruction is caused by one hundred cars parked on one side of the road than by only 30 or 40 parked indiscriminately on both sides of the street, just where the motorists care to leave them.
  Some of these temporary measures might well result in the total amount of parking accommodation being actually increased. We must in fact become accustomed to the idea that we cannot expect to leave our cars outside our offices, but may have to go a little further afield, where we shall at least be able to leave our car undisturbed instead of wondering for how many minutes it can safely remain there. We have to bear in mind that in this whole matter, movement must take precedence over parking, and the travelling car or vehicle must have our support over the stationary one.
  There is one final matter, and that is about road repairs, which comes up every year, especially about this time, and adds still further to the problem of road congestion. Here again the motorist does not get a square deal at all, because he never
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  gets any compensation for what he loses in wasted time and petrol by the delays which these repairs cause. It is said that when the vehicles were horse drawn, London or New York could be crossed at 10 miles per hour, whereas the average today, in spite of the fact that the motorcar has arrived, is only just over five miles per hour.
  I think the remedy is fairly simple if we have the courage to apply it. It is that road repairs must be done as No. 1 priority, and done all round the clock. It is exasperating to see the whole length of a road left hour after hour during the night and the week-ends and at holiday times without any work being done. I agree that the cost of doing the work upon a complete shift of 24 hours would be considerably more, but we ought to be able to set that against the tremendous saving to the motoring community of keeping the roads more clear.
  I have had to deal all too briefly with this urgent problem, but I come back to the quotation I gave earlier, and that is that the duty of the administration in the next few years is, in the matter of transport, above all things, to keep the traffic moving fast and free. I hope the Minister is going to give us an assurance that he has this matter well in hand.
  11.55 p.m.
  The Minister of Transport (Mr. Barnes): The hon. and gallant Gentleman said that he has covered the subject only too briefly, but I must remind him that he has dealt with an enormous range of road problems in the time he has taken. I welcome, however, every occasion when the road policy of this country comes under consideration. My only regret is that it comes at the end of two rather hectic sittings, and we have not the general interest of the House.
  I should like to emphasise that in my view this is one of the basic problems we have to consider. While, generally, everyone appreciates the difficulties, it is a fact that Members of Parliament in the aggregate do not give adequate consideration to the road problem, with the result —at least ever since I have been in Parliament, which is approximately a quarter of a century—that we find our road system steadily falling behind the increasing development and growth of road transport.

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  I am only too conscious of the gravity of the situation. With regard to the majority of the hon. Gentleman's points, which I might sum up as palliatives— attempts to mitigate the consequences of that overriding neglect—I can assure him that we have steadily directed our attention to these remedial measures. The yellow band restrictions, one-way streets, unilateral parking, and so forth have been steadily pursued.
  The desire to facilitate the flow of traffic over our main roads in London has received considerable attention, but I want to remind the House that the great number of cross roads that cut across our main London thoroughfares makes that impossible. But in certain avenues of the city, in Oxford Street for example, already restrictions are imposed on horse-drawn traffic during certain hours of the day. All these palliatives have been applied, and they have facilitated traffic and have had a beneficial effect in those areas.
  With regard to signposting, I would recall that during the war the whole of our system was removed, and its restoration and the institution of any new system—and this also applies to problems like car parking—are the responsibility of local authorities. No one regrets more than I do, that even when the authorities come forward with proposals for adequate car parking facilities, sometimes in the centre of the city, I am unable to give approval because of the capital investment problem. Hon. Gentlemen are aware that sums allocated for road construction, improvement, maintenance, and things of that description have been severely curtailed, and often the desires of many authorities are unable to be fulfilled merely because there are not the necessary funds.
  In signposting the Minister of Transport is responsible only for the trunk roads. All other classified roads come under the local authorities. The only area in which the Minister has direct authority is the London traffic area, and that is why we have concentrated on those palliatives and restrictions to which I have referred. When a Committee like that of 1944 has decided on a policy of signposting, and it has got substantially into its stride, it is rather difficult to break into it and reverse the policy. That
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  is what I gathered the hon. and gallant Gentleman was suggesting. He apparently disagrees with the road number principle, and as a practical motorist I have some sympathy with that point of view.
  In many of these matters there appears to be an overwhelming case for following a certain plan as the most simple and efficacious way of accomplishing the purpose. But when you are dealing with the British public you often find that, however desirable your purpose, they just will not follow the direction. My experience as a practical motorist has confirmed that, and there have been many other acknowledgments of it too. The average motorist in this country does not travel on the map. Therefore I am prepared to say that on my own recent experience, I am coming to the conclusion that we may have to re-examine that problem. I am giving no undertaking at the moment, but my mind is receptive in that way.
  The problem of signposting London is a most difficult and complex matter. Recently I directed the attention of the Department to an experiment in through signposting, and we are just completing a signposting system from Dover right through to the centre of the City of London. When it is complete I hope that hon. Members will test it for themselves. Now that petrol is free there should be no difficulty about that, and I shall be very glad of any advice or suggestions that may flow from their practical tests of the system.
  I definitely associated myself with the Minister of Town and Country Planning in deciding that the A ring route was not a practical proposition. If it were possible to carry out a scheme of this description in a relatively short time it would make a great contribution to solving the traffic problem. But the completion of that scheme seemed to be so far ahead in the future, that the inconvenience it would cause in development over so wide an area of London, did not appear to justify the retention of that idea. We are now directing our attention more along the lines which the hon. Member has suggested, of trying to get certain routes, especially from north, south, east and west, which will enable people coming into and going out of London to move with greater freedom. Some of these

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  schemes have already been determined and merely await the necessary finance to bring them into operation.
  The Cromwell Road scheme will bring enormous advantage to air transport traffic from the London airfields, with its fly-over at the end of the Great West Road, right up to Hyde Park; and the schemes we have in connexion with the remodelling of Park Lane and so on would be a great advantage from the point of view of traffic. But these schemes represent an enormous capital expenditure and Parliament so far has not proposed setting aside the necessary funds.
  When mention is made of underground car parks, considering that the economic resources of this country will not even permit local authorities and authorities in London to provide adequate surface parking facilities, the House will recognise immediately the impossibility of holding out any hopes of providing the
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  more expensive underground parking. We have examined different schemes from time to time, and I want to assure hon. Members that we are fully alive to the importance of this problem. The great difficulty, however, is the lack of finance. In this connection I would remind the House that we have passed through five years of war in which there was practically no new road construction, with a similar condition in the five post-war years due to our financial circumstances. So a whole decade has disappeared without our being able to grapple with this ever-growing, difficult problem of road development and traffic in this country.
  The Question having been proposed after Ten o'Clock on Thursday evening and the Debate having continued for half an hour, Mr. DEPUTY-SPEAKER adjourned the House, without Question put, pursuant to the Standing Order.
  Adjourned at Six Minutes past Twelve o'Clock a.m.